MT 20-F Report ended Dec. 31, 2018

¨	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

¨	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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1.	ArcelorMittal Galati S.A. and ArcelorMittal Ostrava a.s. were classified as held for sale as of December 31, 2018.

2.	On November 1, 2018, ArcelorMittal completed the acquisition of Ilva S.p.A. subsequently renamed ArcelorMittal Italia S.p.A. See "Item 4.A—Information on the Company—History and development of the Company— Key transactions and events in 2018. "

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ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE

ITEM 3.	KEY INFORMATION

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1

Basic earnings per common share are computed by dividing net income attributable to equity holders of ArcelorMittal by the weighted average number of common shares outstanding during the periods presented. Diluted earnings per common share include assumed shares from stock options, shares from restricted stock units and convertible debt (if dilutive) in the weighted average number of common shares outstanding during the periods presented. See note 10.3 to the consolidated financial statements for further information.

2

Following the Company’s equity offering in April 2016, the earnings (loss) per share for prior periods have been recast in accordance with IFRS for the years ended December 31, 2015 and 2014, respectively, to include the bonus element derived from the 35% discount to the theoretical ex-right price included in the subscription price. Following the completion of the Company's share consolidation of each three existing shares into one share without nominal value on May 22, 2017, the earnings (loss) per share and corresponding basic and diluted weighted average common shares outstanding for the years ended December 31, 2016, 2015 and 2014, respectively, have been recast in accordance with IFRS.

3

Following the Company’s equity offering in April 2016, the dividends declared per share for prior periods have been recast for the year ended December 31, 2014 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 was $0.20 per issued share as of December 31, 2014. Following the completion of the Company's share consolidation of each three existing shares into one share without nominal value on May 22, 2017, the dividends declared per share for the year ended December 31, 2014 was recast.

4	The Board has agreed on a new dividend policy which was approved by the shareholders at the AGM in May 2018. Given the current deleveraging focus, dividends began at $0.10 per share in 2018 (paid from 2017 results). The Board is proposing an increase in the base dividend for 2019 (paid from 2018 earnings) to $0.20 per share to the shareholders at the annual shareholders meeting in May 2019.

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•	flooding of the open pit;

•	collapse of the open-pit wall;

•	accidents associated with the operation of large open-pit mining and rock transportation equipment;

•	accidents associated with the preparation and ignition of large-scale open-pit blasting operations;

•	production disruptions or difficulties associated with mining in extreme weather conditions;

•	hazards associated with the disposal of mineralized waste water, such as groundwater and waterway contamination; and

•	collapse of tailings ponds dams or dams.

•	underground fires and explosions, including those caused by flammable gas;

•	gas and coal outbursts;

•	cave-ins or falls of ground;

•	discharges of gases and toxic chemicals;

•	flooding;

•	sinkhole formation and ground subsidence; and

•	blasting, removing, and processing material from an underground mine.

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•	establish mineral reserves through drilling;

•	determine appropriate mining and metallurgical processes for optimizing the recovery of saleable product from iron ore and coal reserves;

•	obtain environmental and other licenses or securing surface rights with local communities;

•	construct mining and processing facilities and the infrastructure required for greenfield properties;

•	extract the saleable products from the mined iron ore or coal; and

•	maintain the appropriate blend of ore to ensure the final product qualities expected by the customer are achieved.

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ITEM 4.	INFORMATION ON THE COMPANY

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–	Two iron ore beneficiation plants close to the mines in Kirandul and Dabuna, with slurry pipelines that then transport the beneficiated iron ore slurry to the pellet plants in the Kirandul-Vizag and Dabuna-Paradeep systems;

–	a downstream facility in Pune (including a pickling line, a cold rolling mill, a galvanizing mill, a color coating mill and a batch annealing plant); and

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seven service centers in the industrial clusters of Hazira, Bhuj, Indore, Bahadurgarh, Chennai, Kolkata and Pune. It has a complete range of flat rolled steel products, including value added products, and significant iron ore pellet capacity with two main pellet plant systems in Kirandul-Vizag and Dabuna-Paradeep, which have the potential for expansion. Its facilities are located close to ports with deep draft for movement of raw materials and finished goods.

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•	During 2018, ArcelorMittal completed several debt financing and repayment transactions. Please refer to “Item 5B—Operating and financial review and prospects—Liquidity and capital resources—Financings” for a summary of the transactions.

•	On May 16, 2018, the extraordinary general meeting of shareholders of ArcelorMittal held in Luxembourg approved the resolution on the agenda to change the currency of the share capital from euro to U.S. dollar.

•	On March 26, 2018, ArcelorMittal completed a share buyback program. ArcelorMittal repurchased 7 million shares for a total value €184 million ($226 million) at an average price per share of €26.34.

•	On March 5, 2018, ArcelorMittal announced that Aditya Mittal, CFO of ArcelorMittal and CEO of ArcelorMittal Europe, was appointed as President, ArcelorMittal, in addition to his current responsibilities. This nomination reflects the increasing global strategic role Aditya Mittal has across the group, supporting the Chairman and CEO, Mr.

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•

On February 19, 2019, ArcelorMittal announced the completion of its share buyback program on February 15, 2019 (the "2019 Program"). The Company repurchased 4 million shares for a total value of approximately $90 million (€80 million) at an approximate average price per share of €19.89 ($22.42) pursuant to the 2019 Program that was announced on February 7, 2019. The 2019 Program was completed under the authorization given by the annual general meeting of shareholders held on May 5, 2015 and applicable market abuse regulations. The shares acquired under the 2019 Program are intended to meet ArcelorMittal's obligations arising from employee share programs.

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•	Global scale and scope

•	Unmatched technical capabilities

•	Diverse portfolio of steel and related businesses, particularly mining

•	Financial capability.

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•

Europe: The Company plans to continue its successful asset optimization as an ongoing transformation plan, involving continued optimization, the clustering of finishing sites to remove substantial overhead, centralization of activities (including procurement), improvement of logistics and service and digital transformation. Together with expected higher added value (HAV) mix and volume gains, this targets delivering a $1 billion improvement in operating income over the period.

•	NAFTA: The downstream footprint optimization in the U.S. has been completed with substantial improvements in operating income. The Company has been continuing to ramp-up Calvert to full capacity since 2016. Other projects are expected to boost the HAV mix and generate further improvement.

•	Brazil: The Company plans to execute its value plan and targets an improvement in sales mix including a recovery of a share of higher margin domestic volumes, improved HAV mix by the end of 2020 and cost improvements.

•

ACIS: The Company plans to continue its strategic focus on operational excellence to deliver volumes that will leverage the new competitive cost base it has in the CIS (following competitive currency devaluation), realize savings in Ukraine at the coke oven battery and execute on the improved competitiveness plan in South Africa with a better mix following restart of coke oven battery and higher PCI usage.

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•

Diversified production process. In 2018, approximately 71.8 million tonnes of crude steel were produced through the basic oxygen furnace process, approximately 17.6 million tonnes through the electric arc furnace process and approximately 3.1 million tonnes of crude steel through the open hearth furnace process. This provides ArcelorMittal with greater flexibility in its raw material and energy use, and increased ability to meet varying customer requirements in the markets it serves.

•

Product and geographic diversification. By operating a portfolio of assets diversified across product segments and geographic areas, ArcelorMittal benefits from a number of natural hedges. As a global steel producer with a broad range of high-quality finished and semi-finished steel products, ArcelorMittal is able to meet the needs of diverse markets. Steel consumption and product requirements vary between mature economy markets and developing economy markets. Steel consumption in mature economies is largely from flat products and a higher value-added mix, while developing markets utilize a higher proportion of long products and commodity grades. As developing economies mature and as market needs evolve, local customers will require increasingly advanced steel products. To meet these diverse needs, ArcelorMittal maintains a high degree of product diversification and seeks opportunities to increase the proportion of its product mix consisting of higher value-added products.

•

Upstream integration . ArcelorMittal believes that its own raw material production provides it with a competitive advantage over time. Additionally, ArcelorMittal benefits from the ability to optimize its steel-making facilities’ efficient use of raw materials, its global procurement strategy and the implementation of company-wide knowledge management practices with respect to raw materials. Certain of the Company’s operating units also have access to infrastructure, such as deep-water port facilities, railway sidings and engineering workshops that lower transportation and logistics costs.

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•	Downstream integration . ArcelorMittal’s downstream integration, primarily through its Europe segment for distribution solutions, enables it to provide customized steel solutions to its customers more effectively. The Company’s downstream assets have cut-to-length, slitting and other processing facilities, which provide value additions and help it to maximize operational efficiencies.

•

Europe: The transformation program has progressed well. Savings at the cluster-leading plants continue to be made, with changes to the operating model to restructure and modernize the organization now well embedded. The organization is benefiting from a more integrated, centrally coordinated approach, further reducing costs. Additional gains are being made with enhanced use of and investment in digitalization in the manufacturing process, supply chain and commercial teams. Overall, net volume gains and improved mix contributed with higher hot strip mill production, offset in part by lower volumes caused by operational issues primarily in the long business.

•	NAFTA: Indiana Harbor footprint optimization has been completed: Savings achieved came from headcount rationalization and efficiencies following closure of its 84” hot strip mill ("HSM"), idling of the No.2 steel shop, and ongoing benefits from a new caster at No.3 steel shop. Restoration of the 80” HSM and Indiana Harbor was completed in 2018.

•	NAFTA: Calvert ramp up is advancing with automotive qualifications proceeding and increased capacity utilization.

•	Brazil: Structural cost reductions are being implemented; improved HAV mix from flat business.

•	ACIS: Ukraine benefited from the construction of a new coke oven battery #5 (in 2018) and other PCI/energy saving initiatives.

•	Mining: The business remains focused on service, quality and asset reliability. Cost focus maintained: net cash provided by operating activities and capital expenditures breakeven point remains $40/t China CFR 62% Fe.

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•	A set of Key Performance Indicators ("KPIs") for every business segment to report against, to be verified by third parties and overseen by the Board of Directors;

•	An expectation that each business segment, acting on its understanding of SD trends and through its engagement with stakeholders, develops a plan in pursuit of the 10 SD outcomes;

•	Leading contributions to SD from corporate functions for the benefit of the group, including: progress towards low-carbon steelmaking; innovating steel solutions and steelmaking technologies with a positive SD impact; and developing a ‘mine to metal’ chain of assurance against multi-stakeholder environmental and social standards;

•	A robust articulation of the Company's approach and progress through clear narrative and transparent, third-party-assured reporting.

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•	more and better detection, recording, and understanding of hazards and risks in order to prevent severe incidents;

•	improved safety leadership practices, supported by the launch in 2018 of the Target 21 Safety Leadership Program;

•	the Take Care! training program, rolled out and tracked for workers in every segment;

•	improved communications internally across the workforce using social media techniques; and

•	sharing lessons within the steel and other heavy industries.

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•	increasing the value created by the steelmaking process through re-using and recycling by-products, solids and waste gases; and

•	utilizing obsolete scrap steel as a feedstock for both the basic oxygen furnace ("BOF") and the electric arc furnace ("EAF").

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•	Understand its context and impacts - from land and water use, to air pollution, taxes paid, and employment provided;

•	Listen to communities to understand what they think is important, and how they want to engage;

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•	Develop environmental and social programs that best meet the objectives of the community and the Company's operations; and

•	Communicate regularly with communities in ways they find accessible and trustworthy.

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•	semi-finished flat products such as slabs;

•	finished flat products such as plates, hot- and cold-rolled coils and sheets, hot-dipped and electro-galvanized coils and sheets, tinplate and color coated coils and sheets;

•	semi-finished long products such as blooms and billets;

•	finished long products such as bars, wire-rods, structural sections, rails, sheet piles and wire-products; and

•	seamless and welded pipes and tubes.

•	iron ore lump, fines, concentrate, pellets and sinter feed; and

•	coking, PCI and thermal coal.

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•	Grain-oriented steels are 3% silicon-iron alloys developed with a grain orientation to provide very low power loss and high permeability in the rolling direction, for high efficiency transformers.

•

Non-grain oriented fully processed steels are iron-silicon alloys with varying silicon contents and have similar magnetic properties in all directions in the plane of the sheet. They are principally used for motors, generators, alternators, ballasts, small transformers and a variety of other electromagnetic applications. A wide range of products, including a newly developed thin gauge material for high frequency applications, are available.

•	Non-grain oriented semi-processed steels are largely non-silicon alloys sold in the not finally annealed condition to enhance punchability. Low power loss and good permeability properties are developed after final annealing of the laminations. These materials are sold under the Newcor and Polycor trademarks.

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•	Acquiring and expanding production of certain raw materials, in particular iron ore, coal and manufacturing refractory products and developing diverse third-party customer relationships;

•	With respect to purchasing, pursuing the lowest unit price available based on the principles of total cost of ownership and value-in-use through aggregated purchasing, supply chain and consumption optimization;

•	Exploiting its global purchasing reach; and

•	Leveraging local and low cost advantages on a global scale.

1	Includes coal only for the steelmaking process and excludes steam coal for power generation. ArcelorMittal's consumption of PCI and coal was 9.8 million tonnes and 38.1 million tonnes, respectively, for the year ended December 31, 2018.

2	As of December 31, 2018, the Company does not have any strategic contracts.

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•

Directive 2010/75/EU of November 24, 2010 on Industrial Emissions (the “IED Directive”), which applies common rules for permitting and controlling industrial installations. To receive a permit, installations covered by the IED Directive must ensure that their Emissions Limit Values (“ELV”) do not exceed those associated with the Best Available Techniques (“BAT”), as adopted in the decision of the European Commission on February 28, 2012 establishing the BAT conclusions for iron and steel production under the IED (C(2012)903). Air, soil or water, energy emissions, waste generation, as well as noise, hazards and site closure, are all considered with few possibilities to obtain derogations related to the implementation of BAT and the associated emissions limits values. The implementation of the IED Directive materially impacts ArcelorMittal’s activities in the EU to an amount not yet determined since many issues that ultimately will determine this impact are not yet fixed due to authorities’ delays in implementing decisions and reconsideration of permits. Most of the Member States were expected to update permits and have ELVs achieved by operators in March 2016. Most permits were updated during 2017. However, negotiations and updates are still ongoing in some countries. On July 31, 2017, the European Commission adopted BAT conclusions for large combustion plants under the IED (C(2017)5225). The scope of these BAT reference documents ("BREF") covers the combustion of solid, liquid and gaseous fuels (including iron and steel process gases) in boilers, gas engines and gas turbines with a total rated thermal input of > 50MW (or in case of several units > 15 MW that are aggregated (sharing a common stack) so that the addition of all capacities reaches 50 MW). The main difficulty for the combustion of process gases is the achievement of NOx and SO 2 limits when using mixtures of gases with a high share of coke oven gas. Following the adoption of these BAT conclusions, competent authorities have four years (until August 17, 2021) to review and update the permit conditions accordingly and to ensure that the new ones are compliant. It is important to note that, according to the IED it is only mandatory to update the permit conditions when new BAT conclusions related to the main activity of the installation are published. Nevertheless, competent authorities have relative freedom to launch the review even in cases where it will not be the main activity, hence several facilities may be impacted by this new BREF.

•

Directive 2008/98/EC of November 19, 2008, which establishes the legislative framework for the handling and management of waste in the EU. On December 2, 2015, the Commission adopted an ambitious new Circular Economy Package to stimulate Europe's transition towards a circular economy which will boost global competitiveness. This was intended to contribute to "closing the loop" of product lifecycles with plans to extract the maximum value and use from all raw materials, products and waste, fostering energy savings and reducing greenhouse gas emissions and cover the full lifecycle: from production and consumption to waste management and the market for secondary raw materials. Directive 2008/98/EC was amended by Directive 2018/851 effective May 30, 2018 . This new Directive is intended to prevent waste and, where prevention of waste is not possible, to significantly increase recycling.  The intention is to phase out landfilling and promote the use of economic instruments, such as extended producer responsibility (this is a policy approach under which producers are given a significant responsibility – financial and/or physical – for the treatment or disposal of post-consumer products) schemes. The Directive strengthens the concept of "waste hierarchy" requiring specific measures to prioritize prevention, re-use and recycling above landfilling and incineration.

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Directive 2012/27/EU of October 25, 2012, which repeals prior Directives 2004/8/EC and 2006/32/EC, and brings forward legally binding measures to step up Member States’ efforts to use energy more efficiently at all stages of the energy chain – from the transformation of energy and its distribution to its final consumption. Measures include the legal obligation to establish energy efficiency obligations schemes or policy measures in all Member States. The final target is to achieve energy efficiency improvements of 20%. It is worth noting that most provisions of the texts do not apply to ETS industries and a lot of flexibility is given to the Member States to set up supportive schemes instead of obligatory ones. A political agreement was reached on June 14, 2018 for a revised Renewable Energy Directive. as part of the implementation of a resilient Energy Union and a forward-looking climate change policy. This, along with revised renewable energy targets for the EU for 2030 pursuant to Directive (EU) 2018/844 of the European Parliament and the amendment to Directive 2010/31/EU on the energy performance of buildings, will support Europe's commitment to complete clean energy transition and meet the goals set by the Paris Agreement.

•	“REACH” Regulation (EC) no. 1907/2006 for Registration, Evaluation, Authorization and Restriction of Chemicals, adopted on December 18, 2006, which controls the (chemical) substances used, manufactured in or imported into the

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Directive 2003/87/EC of October 13, 2003 (which has been amended several times and especially by Directive 2009/29/EC) and related directives establishing the ETS in three phases for achieving Kyoto Protocol commitments relating to GHGs for Member States. The ETS works on the “cap and trade” principle. This means there is a “cap”, or limit, on the total amount of certain GHGs that can be emitted by the factories, power plants and other installations subject to the ETS. Within this cap, companies receive emission allowances which they can sell to or buy from one another as needed. The limit on the total number of allowances available ensures that they have a value. At the end of each year, each company must surrender enough allowances to cover all its emissions, otherwise heavy fines are imposed. If a company reduces its emissions, it can keep the spare allowances to cover its future needs or sell them. Phase II of the ETS ended on December 31, 2012, and Phase III covers the period from 2013 to 2020. In Phase III, all CO 2 allowances should be auctioned (as per Regulation (EC) no. 1031/2010 of November 12, 2010 on the timing, administration and other aspects of auctioning of emission allowances). The Commission is implementing Phase III of the ETS in a manner that could increase costs for the Group to obtain sufficient emission allowances for its European operations depending on steel production levels and the market price of emission allowances. Through Commission Decision 2010/2/EU of December 24, 2009, manufacturing of coke oven products, of basic iron and steel, of ferro-alloys and of cast iron tubes have been recognized as exposed to a significant risk of “carbon leakage”. In its decision of April 27, 2011, the Commission determined transitional EU-wide rules for the harmonized free allocation of emission allowances and the benchmark values for the steel industry. The values adopted result in fewer free allocations than those sought by the European steel industry and will lead to additional costs for steel companies in Europe at the point in time when companies have fully utilized their free allocations. Under Commission Decision 2013/448/EU of September 5, 2013, implementation of a so called “Cross Sectoral Correction Factor” will further negatively impact CO 2 free allowances previously announced to the industry based on benchmark values. In 2014, the Commission investigated new possible schemes and mechanisms to regulate and adjust CO 2 prices on the ETS market (CO 2 backloading, or Market Stability Reserve). On October 6, 2015, the Commission published its decision concerning the establishment and operation of a Market Stability Reserve. The reserve is supposed to address the current surplus of allowances and improve the system's resilience to major shocks by adjusting the supply of allowances to be auctioned. In other words, it is meant to address the market imbalances. On October 23, 2014, the Commission agreed on a 2030 greenhouse gas reduction target of at least 40% compared to 1990. This is on top of the other main targets of the Commission’s 2030 policy framework calling for increasing the share of renewable energy to at least 27% and increasing energy efficiency by at least 27%.

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On November 9, 2017, the European Parliament and Council announced a provisional agreement to revise and make the ETS more stringent during the Phase IV period of 2021 to 2030. Among other changes, Phase IV provisions would further accelerate reduction in the current oversupply of allowances in the ETS market (with industry free allowance surpluses expiring) and establish further protections against the risks of carbon leakage. Directive 2018/410 dated March 14, 2018 amends the rules of ETS for the next period, 2021-2030. The Delegated regulation on post 2020 free allocation of emission allowances rules ("FAR") will regulate the free allocation rules for the next period. According to these rules, the benchmarks will be at least 3% lower than the current period regardless of industry performance. Depending on further implementation rules, the lack of significant free allocation in Phase IV could result in an increase of marginal production costs by approximately €50 per tonne (assuming a price of 25€/tCO2), which would put the European steel industry at a significant disadvantage versus global competition.

•	Directive 2008/50/EC of May 21, 2008 on ambient air quality and cleaner air for Europe.

•	Directive 2004/107/EC of December 15, 2004 relating to limit values and target values for pollutants in ambient air, including thresholds on very fine particulates. Several annexes to Directives 2004/107/EC and 2008/50/EC were amended by Directive (EU) 2015/1480 of August 28, 2015.

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The Clean Air Policy Package, Directive (EU) 2016/2284 of December 14, 2016 on the reduction of national emissions of certain atmospheric pollutants. This Directive amends Directive 2003/35/EC and repeals Directive 2001/81/EC. This Directive, ensures that the national emission ceilings (NECs) set in the current Directive 2001/81/EC for 2010 onwards for SO 2 , NOx, NMVOC and NH3 shall apply until 2020 and establishes new national emission

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The new Directive on the control of major accidents hazards involving dangerous substances, also known as SEVESO III 2012/18/UE (repeals Directive 96/82/EC of December 9, 1996), which has been applicable since June 1, 2015. Updates take into account changes in the EU classification of dangerous substances, strengthen provisions on public access to safety information and introduce stricter standards for inspections of installations.

•	Directive (EU) 2015/2193 of November 25, 2015 on the limits of emissions of certain pollutants into the air from medium combustion plants ("MCP").

•	Directive 2011/92/UE concerning the impact assessment of certain public and private projects on the environment. Directive 2009/31/EC of April 23, 2009 on the geological storage of carbon dioxide.

•	Directive 2009/28/EC of April 23, 2009 on the promotion of the use of energy from renewable sources. As part of its ‘Clean Energy for all Europeans’ package, the European Commission proposed in 2016 an update of the Renewable Energy Directive for the period 2021 - 2030 (RED II). A final compromise document was agreed among EU Institutions on June 14, 2018.

•	Directive 2008/68/EC of September 24, 2008 on the inland transport of dangerous goods, by rail, road, and inland waterway and Directive (EU) 2016/2309 of December 16, 2016 adapting for the fourth time the Annexes to Directive 2008/68/EC.

•	Directive 2004/35/EC of April 21, 2004, and Directive 2008/99/EC of November 19, 2008, establishing liability (including criminal liability) for violations of the EU environmental legislation.

•	The new Directive 2013/59/EURATOM of December 5, 2013, establishing basic safety standards for protection from the exposure to ionizing radiation and repealing former EURATOM directives, effective from February 6, 2018.

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–	a charge on fossil fuels which will be administered by the Canada Revenue Agency, and

–	an output-based pricing system ("OBPS") for emission-intense industrial facilities which will be administered by Environment and Climate Change Canada ("ECCC").

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•	formation, support and implementation of state policy in the field of climate changes and the gradation to a low-carbon state development;

•	proper regulations of activity relating to prevention of climate changes due to reduction of anthropogenic emissions and increasing the absorption of the greenhouse gases; and

•	adaptation to climate changes.

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1	Reflects design capacity and does not take into account other constraints in the production process (such as, upstream and downstream bottlenecks and product mix changes). As a result, in some cases, design capacity may be different from the current achievable capacity.

2	Production facility details include the production numbers for each step in the steel-making process. Output from one step in the process is used as input in the next step in the process. Therefore, the sum of the production numbers does not equal the quantity of sellable finished steel products.

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1	Note: n/a = not applicable (no crude steel production).

2	Indiana Harbor.

3	ArcelorMittal USA idled its #2 basic oxygen furnace and its #2 slab caster at Indiana Harbor (East Chicago) in June 2017.

4	ArcelorMittal USA idled its plate rolling unit at the Conshohocken, PA facility in August 2018.

5	ArcelorMittal Dofasco idled the HDG lines #1&#2 in 2017.

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1	Note: n/a = not applicable (no crude steel production)

2	The Cariacica site was divested in May 2018

3	ArcelorMittal acquired Votorantim Siderurgia (subsequently renamed ArcelorMittal Sul Fluminense) in April 2018.

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1	n/a = Not applicable (no crude steel production)

2	Entities (certain downstream facilities in Liège in the case of ArcelorMittal Belgium) classified as held for sale as of December 31, 2018. See also note 2.3.2 to the consolidated financial statements.

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3	ArcelorMittal acquired Ilva (subsequently renamed ArcelorMittal Italia) on November 1, 2018. As a result, production figures relate only to November and December 2018.

4	Assets held for sale as of December 31, 2018

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1	Note: n/a = not applicable (no crude steel production).

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•	Reserves are the part of a mineral deposit that could be economically and legally extracted or produced at the time of the reserve determination.

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Proven reserves are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, working or drill holes; grade and/or quality are computed from the results of detailed sampling; and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.

•	Probable reserves are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.

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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 2018 included the shipping of ore produced in Bosnia, Ukraine Underground and the Kazakh mines which have an iron content ranging between approximately 50% 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 62% in 2018 while the sinter fines produced for external customers in Brazil from the Serra Azul operations averaged approximately 64% and the lumps averaged 56%.

2

The estimated mine life reported in this table corresponds to the duration of the production schedule of each operation based on the 2018 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 2018 production. ArcelorMittal believes that the life of these operations will be maintained as exploration and engineering studies confirm the economic potential of the additional mineralization already known to exist in the vicinity of these iron ore reserve estimates.

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The estimated mine life reported in this table corresponds to the duration of the production schedule of each operation based on the 2018 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 2018 production. ArcelorMittal believes that the life of these operations will be significantly expanded as exploration and engineering studies confirm the economic potential of the additional mineralization already known to exist in the vicinity of these estimated coal reserves.

ITEM 4A.	UNRESOLVED STAFF COMMENTS

ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS

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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.

1.	Includes primarily staff and other holding costs and results from shared service activities.

2.	In 2017, fourth quarter iron ore prices decreased as compared to the fourth quarter of 2016 leading to lower stock margin eliminations.

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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.

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1.	Total of all finished production of fines, concentrate, pellets and lumps.

2.	Includes own mines and share of production from Hibbing (United States, 62.30%) and Peña (Mexico, 50%).

3.	Consists of a long-term supply contract with Cleveland-Cliffs Inc. which expired in the first quarter of 2017.

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•	$432 million of its U.S. dollar denominated 7.00% Notes due October 15, 2039 (the “2039 Notes”) for a total aggregate purchase price (including premiums and accrued interest) of $505 million. Following this purchase, $686 million principal amount of the 2039 Notes remained outstanding.

•	$195 million of its U.S. dollar denominated 6.75% Notes due March 1, 2041 (the “2041 Notes”) for a total aggregate purchase price (including premiums and accrued interest) of $224 million. Following this purchase, $434 million principal amount of the 2041 Notes remained outstanding.

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1	ArcelorMittal may be subject to additional environmental liabilities not included in the table above.

2	The funding contributions to the pension and post-retirement plans are presented for the following year and to the extent known.

ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

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1.	Member of the Audit & Risk Committee.

2.	Member of the Appointments, Remuneration, Corporate Governance and Sustainability Committee.

3.	Non-executive and independent director.

4.	Age as of December 31, 2018.

5.	Date of joining the Board of ArcelorMittal or, if prior to 2006, its predecessor Mittal Steel Company NV.

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1.	Age as of December 31, 2018.

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•	Basic director’s remuneration: €144,720 ($165,704);

•	Lead Independent Director’s remuneration: €204,120 ($233,717);

•	Additional remuneration for the Chair of the Audit & Risk Committee: €28,080 ($32,152);

•	Additional remuneration for the other Audit & Risk Committee members: €17,280 ($19,786);

•	Additional remuneration for the Chairs of the other committees: €16,200 ($18,549); and

•	Additional remuneration for the members of the other committees: €10,800 ($12,366).

1	Chairman and CEO only. Slight differences between the years are possible, due to foreign currency effects.

2	See “Item 6.B—Directors, senior management and employees—Compensation—Remuneration—Long-term incentive plan.”

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1.

Remuneration for non-executive Directors with respect to 2018 (subject to shareholder approval at the annual general meeting to be held on May 7, 2019) will be paid in 2019 and is included in the 2018 column. Remuneration for non-executive Directors with respect to 2017 (paid after shareholder approval at the annual general meeting held on May 9, 2018) is included in the 2017 column. Remuneration for non-executive Directors with respect to 2018 and paid after shareholder approval at the annual general meeting held on May 10, 2017 is included in the 2017 column. Slight differences between the years are possible, due to foreign currency effects.

1.	The options granted in the table above were revised following the completion of the Company's share consolidation of each three existing shares into one share without nominal value on May 22, 2017.

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1.	See “Item 6.B—Directors, senior management and employees—Compensation—Remuneration—Long-term incentive plan", for vesting conditions.

2.	The options granted in the table above were revised following the completion of the Company's share consolidation of each three existing shares into one share without nominal value on May 22, 2017.

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•	review and approve corporate goals and objectives regarding remuneration relevant to the CEO Office and Executive Officers and other members of executive management as deemed appropriate by the committee, and assess performance against goals and objectives;

•	make recommendations to the Board with respect to incentive remuneration plans and equity-based plans;

•	identify candidates qualified to serve as members of the Board, the CEO Office and Executive Officers;

•	recommend candidates to the Board for appointment by the general meeting of shareholders or for appointment by the Board to fulfill interim Board vacancies;

•	develop, monitor and review corporate governance principles applicable to the Company;

•	facilitate the evaluation of the Board;

•	review the succession planning and the executive development of the members of the CEO Office and Executive Officers;

•	submit proposals to the Board on the remuneration of the members of the CEO Office and Executive Officers, and on the appointment of new members thereto and new directors; and

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make recommendations to the Board of Directors in respect of the Company’s framework of remuneration for the members of the CEO Office and Executive Officers and such other members of the executive management as designated by the committee. In making such recommendations, the committee may take into account factors that it deems necessary. This may include a member’s total cost of employment (factoring in equity/long term incentives, any perquisites and benefits in kind and pension contributions).

•	the CEO and the President and CFO; and

•	the other Executive Officers.

•	provide total remuneration competitive with executive remuneration levels of peers of similar size, scope and industry;

•	encourage and reward performance that will lead to long-term enhancement of shareholder value; and

•	promote internal pay equity by providing base pay and total remuneration levels that reflect the role, job size and responsibility as well as the performance and effectiveness of the individual.

•	fixed annual salary;

•	short-term incentives (i.e., performance-based bonus); and

•	long-term incentives (i.e., stock options (prior to May 2011), RSUs and PSUs (after May 2011), PSUs only as from 2016).

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1.	The base salaries of the CEO and President and CFO were increased by 7.5% in 2018, including as a result of the promotion of the CFO and CEO ArcelorMittal Europe to President of ArcelorMittal.

2.	Other benefits comprise benefits paid in cash such as lunch allowances, financial services, gasoline and car allowances. Health insurance and other insurances are also included.

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 President and CFO and Executive Officers was $4 million (net of reversal of expenses relating to unvested PSUs) for the year ended December 31, 2018. The remuneration expenses recognized for the PSUs granted to the CEO and to the President and CFO and Executive Officers was $3 million (net of reversal of expenses relating to unvested PSUs) for the year ended December 31, 2017.

5.	Henri Blaffart is included until March 31, 2018, Robrecht Himpe is included until June 30, 2018.

•	EBITDA at the Group level: 30% (this acts as “circuit breaker” with respect to group-level financial performance

•	FCF at the Group level: 20%;

•	ROCE at the Group level: 20%;

•	Gap to competition at the Group level: 20%; and

•	Health and safety performance at the Group level: 10%.

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•	EBITDA at the Group, segment and / or Business unit level: this acts as the “circuit breaker” with respect to financial performance measures except for Mining where the Mining volume is the “circuit breaker”;

•	FCF at the Group, segment or Business unit level;

•	ROCE at the Group level, segment or Business unit level;

•	Gap to competition at the Group level, segment or Business unit level;

•	Health and safety performance; and

•	Business specific measures for corporate functions.

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•	To consider the comments of shareholders that vesting should not happen below the median and

•	To adapt to Action 2020 (Special grant)

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(a)	he or she is independent within the meaning of the New York Stock Exchange Listed Company Manual, as applicable to foreign private issuers,

(b)	he or she is unaffiliated with any shareholder owning or controlling more than two percent of the total issued share capital of ArcelorMittal, and

(c)	the Board of Directors makes an affirmative determination to this effect.

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•	international and operational experience;

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•	understanding of the industry sectors in which ArcelorMittal operates;

•	knowledge of world capital markets and being a company listed in several jurisdictions; and

•	an understanding of the health, safety, environmental, political and community challenges that ArcelorMittal faces.

•	considers the skills, backgrounds, knowledge, experience and diversity of geographic location, nationality and gender necessary to allow it to meet the corporate purpose;

•	assesses the skills, backgrounds, knowledge, experience and diversity currently represented;

•	identifies any inadequate representation of those attributes and agrees the process necessary to ensure a candidate is selected who brings them to the Board of Directors; and

•	reviews how Board performance might be enhanced, both at an individual director level and for the Board as a whole.

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comprehensive business briefings intended to provide each director with a deeper understanding of the Company’s activities, environment, key issues and strategy of the Company’s segments. These briefings are provided to the Board of Directors by senior executives, including CEO Office members. The briefings provided during the course of 2018 covered health and safety processes, HR, legal and compliance, corporate responsibility, marketing, steel-making, strategy, international trade trends in steel industry in Europe. Certain business briefings were combined with site visits and thus took place on-site and, in other cases, they took place at Board meetings;

•	briefing meetings with Company executives in charge of specific business segments or markets;

•	site visits to plants and R&D centers; and

•	development sessions on specific topics of relevance, such as health and safety, commodity markets, HR, investor relations, accounting, the world economy, changes in corporate governance standards, directors’ duties and shareholder feedback.

•	the Audit & Risk Committee, and

•	the ARCGS Committee.

•	the integrity of the financial reports and other financial information provided by the Company to any governmental body or the public;

•	the Company’s compliance with legal and regulatory requirements;

•	the registered public accounting firm’s (Independent Auditor) qualifications and independence;

•	the Company’s system of internal control regarding finance, accounting, legal compliance, ethics and risk management that management and the Board have established;

•	the Company’s auditing, accounting and financial reporting processes generally; and

•	the identification and management of risks to which the ArcelorMittal group is exposed.

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•	determine, on its behalf and on behalf of the shareholders within agreed terms of reference, ArcelorMittal’s compensation framework, including short and long term incentives for the CEO, the President and CFO and for the five other Executive Officers;

•	review and approve succession and contingency plans for key managerial positions at the level of the Executive Officers;

•	consider any candidate for appointment or reappointment to the Board of Directors at the request of the Board of Directors and provide advice and recommendations to it regarding the same;

•	evaluate the functioning of the Board of Directors and monitor the Board of Directors’ self-evaluation process;

•	assess the roles of the Chairman and CEO and deliberate on the merits of the Board’s leadership structure to ensure that the most efficient and appropriate structure is in place; and

•	develop, monitor and review corporate governance principles and corporate responsibility policies applicable to ArcelorMittal, as well as their application in practice.

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1	The options granted in the table above were revised following the completion of the Company’s share consolidation of each three existing shares into one share without nominal value on May 22, 2017.

1	Any Executive Officer who has been a GMB member is included in the Ex-GMB members in the prior table.

2	The options granted in the table above were revised following the completion of the Company’s share consolidation of each three existing shares into one share without nominal value on May 22, 2017.

1	See “Item 6.B—Directors, senior management and employees—Compensation — Remuneration—Long-term incentives plans”, for vesting conditions.

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1	See note 7.3 to the consolidated financial statements, for vesting conditions.

2	Any Executive Officer who has been a GMB member is included in the Ex-GMB members in the prior table.

ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

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, 2018 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, 2018, Mr. Lakshmi Mittal and his wife, Mrs. Usha Mittal, had direct ownership of ArcelorMittal ordinary shares and beneficial ownership (within the meaning set forth in Rule 13d-3 of the Exchange Act), through the Significant Shareholder, of the outstanding equity 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 63,658,348 ArcelorMittal ordinary shares. Lumen, a limited liability company organized under the laws of Luxembourg, was the owner of 318,288,328 ArcelorMittal ordinary shares. Mr. Mittal was the direct owner of 286,742 ArcelorMittal ordinary shares and held options to acquire an additional 38,833 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 25,500 ArcelorMittal ordinary shares. Mr. Mittal, Mrs. Mittal and the Significant Shareholder shared beneficial ownership of 100% of the outstanding equity 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 382,272,251 ArcelorMittal ordinary shares, Mrs. Mittal was the beneficial owner of 381,972,176 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 382,297,751 ordinary shares. Excluding options, Mr. Lakshmi Mittal and Mrs. Usha Mittal together beneficially owned 382,258,918 ArcelorMittal ordinary shares at such date. As of December 31, 2017 and 2016 , the Significant Shareholder (together with Mr. Mittal and Mrs. Mittal) held 37.41% and 37.40% of the Company’s ordinary shares respectively.

3

Represents ArcelorMittal ordinary shares repurchased pursuant to share repurchase programs, fractional shares returned in various transactions, and the use of treasury shares in various transactions; includes (1) 138,384 stock options that can be exercised by senior management (other than Mr. Mittal) and (2) 38,833 stock options that can be exercised by Mr. Mittal, in each case within 60 days of December 31, 2018, i.e. 0.02% 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.

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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%. Following the reverse stock split in May 2017, the Capital Group Companies Inc. was the owner of 49,107,024 ArcelorMittal shares on December 31, 2018.

5

Includes shares beneficially owned by directors and members of senior management listed in Item 6.E of this annual report; excludes shares beneficially owned by Mr. Mittal. Note that (i) stock options included in this item that are exercisable within 60 days are excluded from “Treasury Shares” above (see also note 3 above) and (ii) ordinary shares included in this item are included in “Other Public Shareholders” above.

a.	ArcelorMittal Registry Shares, which are registered directly on ArcelorMittal’s Luxembourg shareholder register,

b.	shares traded on Euronext Amsterdam, Euronext Paris, the regulated market of the Luxembourg Stock Exchange and the Spanish Stock Exchanges, which are held in Euroclear, or

c.	shares traded on the NYSE, named New York Registry Shares, which are registered (including in the name of the nominee of DTC) in a register kept by or on behalf of ArcelorMittal by its New York transfer agent.

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ITEM 8.	FINANCIAL INFORMATION

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a global amount is allocated to the Board of Directors by way of directors’ fees (“tantièmes”). This amount may not be less than €1,000,000. In the event that the profits are insufficient, the amount of €1,000,000 shall be imputed in whole or in part to charges. The distribution of this amount among the members of the Board of Directors shall be effected in accordance with the Board of Directors’ rules of procedure; and

•	the balance is distributed as dividends to the shareholders or placed in the reserves or carried forward.

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ITEM 9.	THE OFFER AND LISTING

ITEM 10.	ADDITIONAL INFORMATION

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•	to reduce the share capital of the Company without distribution to shareholders, in order to reduce the par value of the shares in the Company to an amount of 10 euro cents per share and

•	to increase the Company’s authorized share capital including the authorization to limit or cancel the shareholders’ preferential subscription rights.

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a.	ArcelorMittal Registry Shares, which are registered directly on ArcelorMittal’s Luxembourg shareholder register,

b.	shares traded on Euronext Amsterdam, Euronext Paris, the regulated market of the Luxembourg Stock Exchange and the Spanish Stock Exchanges, which are held in Euroclear, or

c.	shares traded on the NYSE, named New York Registry Shares, which are registered in a register (including in the name of the nominee of DTC) kept by or on behalf of ArcelorMittal by its New York transfer agent.

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•	to reduce the share capital of the Company without distribution to shareholders, in order to reduce the par value of the shares in the Company to an amount of 10 euro cents per share and

•	to increase the Company’s authorized share capital including the authorization to limit or cancel the shareholders’ preferential subscription rights.

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•	a prior authorization of the general meeting of shareholders setting out the terms and conditions of the proposed repurchase, including the maximum number of shares to be repurchased, the duration of the period for which the authorization is given (which may not exceed five years) and the minimum and maximum consideration per share;

•	the repurchase may not reduce the net assets of ArcelorMittal on a non-consolidated basis to a level below the aggregate of the issued share capital and the reserves that ArcelorMittal must maintain pursuant to Luxembourg law or its Articles of Association;

•	only fully paid-up shares may be repurchased. At December 31, 2018, all of ArcelorMittal’s issued ordinary shares were fully paid-up; and

•	the acquisition offer is made on the same terms and conditions to all the shareholders who are in the same position, it being noted however that listed companies may repurchase their own shares on the stock exchange without an acquisition offer having to be made to the shareholders.

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•	an increase or decrease of the authorized or issued share capital,

•	a limitation or exclusion of existing shareholders’ preemptive rights,

•	the acquisition by any person of 25% or more of the issued share capital of ArcelorMittal,

•	approving a merger or similar transaction such as a spin-off, and

•	any transaction or matter requiring an amendment of the Articles of Association.

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•	any acquisition or disposal of shares resulting in the threshold of 2.5% of voting rights in ArcelorMittal being crossed upwards or downwards,

•	any acquisition or disposal of shares resulting in the threshold of 3.0% of voting rights in ArcelorMittal being crossed upwards or downwards, and

•	with respect to any shareholder holding at least 3.0% of the voting rights in ArcelorMittal, to any acquisition or disposal of shares resulting in successive thresholds of 1.0% of voting rights being crossed upwards or downwards.

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•	voting rights held by a third party with whom that person or entity has concluded an agreement and which obliges them to adopt, by concerted exercise of the voting rights they hold, a lasting common policy towards ArcelorMittal;

•	voting rights held by a third party under an agreement concluded with that person or entity providing for the temporary transfer for consideration of the voting rights in question;

•	voting rights attaching to shares pledged as collateral with that person or entity, provided the person or entity controls the voting rights and declares its intention to exercise them;

•	voting rights attaching to shares in which a person or entity holds a life interest;

•	voting rights which are held or may be exercised within the meaning of the four foregoing points by an undertaking controlled by that person or entity;

•	voting rights attaching to shares deposited with that person or entity which the person or entity may exercise at its discretion in the absence of specific instructions from the shareholders;

•	voting rights held by a third party in its own name on behalf of that person or entity; and

•	voting rights which that person or entity may exercise as a proxy where the person or entity may exercise the voting rights in its sole discretion.

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•	an individual citizen or resident of the United States;

•	a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States, any state thereof, or the District of Columbia; or

•	any other person that is subject to U.S. federal income tax on a net income basis in respect of the ArcelorMittal shares.

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•	the Luxembourg Holder is a legal entity subject to net wealth tax in Luxembourg; or

•	ArcelorMittal shares are attributable to an enterprise or part thereof which is carried on through a permanent establishment or a permanent representative in Luxembourg of a non-resident entity.

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ITEM 11.	QUANTITATIVE AND QUALITATIVE

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ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

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ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

ITEM 15.

•	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of ArcelorMittal;

•	provide reasonable assurance that transactions are recorded, as necessary, to permit preparation of financial statements in accordance with IFRS;

•	provide reasonable assurance that receipts and expenditures of ArcelorMittal are made in accordance with authorizations of ArcelorMittal's management and directors; and

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•	provide reasonable assurance that unauthorized acquisition, use or disposition of ArcelorMittal’s assets that could have a material effect on the financial statements would be prevented or detected on a timely basis.

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ITEM 16A.	AUDIT & RISK COMMITTEE FINANCIAL EXPERT

ITEM 16B.	CODE OF ETHICS

ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

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ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

ITEM 16G.	CORPORATE GOVERNANCE

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ITEM 16H.	MINE SAFETY DISCLOSURE

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ITEM 17.	FINANCIAL STATEMENTS

ITEM 18.	FINANCIAL STATEMENTS

ITEM 19.	EXHIBITS

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*	Previously filed

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1	Following the completion of the Company’s share consolidation of each three existing shares into one share without nominal value on May 22, 2017, the earnings (loss) per common share and corresponding basic and diluted weighted average common shares outstanding for prior periods has been recast in accordance with IFRS. Please refer to note 10 for more information.

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1.

Amounts are in millions of shares (treasury shares are excluded). On May 22, 2017, ArcelorMittal completed the consolidation of each three existing shares in ArcelorMittal without nominal value into one share without nominal value. As a result of this reverse stock split, the number of outstanding shares decreased from 3,058 to 1,020 and all prior periods have been recast in accordance with IFRS. Please refer to note 10 for further information.

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The preparation of consolidated financial statements in conformity with IFRS recognition and measurement principles and, in particular, making the critical accounting judgments requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Management reviews its estimates on an ongoing basis using currently available information. Changes in facts and circumstances or obtaining new information or more experience may result in revised estimates, and actual results could differ from those estimates.

The following summary provides further information about the Company’s critical accounting policies under which significant judgments, estimates and assumptions are made. It should be read in conjunction with the notes mentioned in the summary:

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Deferred tax assets (note 9.4): The Company assesses the recoverability of deferred tax assets based on future taxable income projections, which are inherently uncertain and may be subject to changes over time. Judgment is required to assess the impact of such changes on the measurement of these assets and the time frame for their utilization. In addition, the Company applies judgment to recognize income tax liabilities when they are probable and can be reasonably estimated depending on the interpretation, which may be uncertain, of applicable tax laws and regulations. ArcelorMittal periodically reviews its estimates to reflect changes in facts and circumstances.

•

Provisions for pensions and other post-employment benefits (note 7.2): Benefit obligations and plan assets can be subject to significant volatility, in particular due to changes in market conditions and actuarial assumptions. Such assumptions differ by plan, take local conditions into account and include discount rates, expected rates of compensation increases, health care cost trend rates, mortality and retirement rates. They are determined following a formal process involving the Company's expertise and independent actuaries. Assumptions are reviewed annually and adjusted following actuarial and experience changes.

•	Provisions (note 8): Provisions, which result from legal or constructive obligations arising as a result of past events, are recognized based on the Company's, and in certain instances, third-party's best estimate of costs when the obligation arises. They are reviewed periodically to take into consideration changes in laws and regulations and underlying facts and circumstances.

•	Impairment of tangible and intangible assets, including goodwill (note 5.3): In the framework of the determination of the recoverable amount of assets, the estimates, judgments and assumptions applied for the value in use calculations relate primarily to growth rates, expected changes to average selling prices, shipments and direct costs.

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Assumptions for average selling prices and shipments are based on historical experience and expectations of future changes in the market. Discount rates are reviewed annually.

•

Business combinations (note 2.2.4): Assets acquired and liabilities assumed as part of a business combination are recorded at their acquisition-date fair values. Similarly, consideration including consideration receivable and contingent consideration is measured at fair value. Determining the fair value of identifiable assets and liabilities requires the use of valuation techniques which may include judgment and estimates and which may affect the allocation of the amount of consideration paid to the assets and liabilities acquired and goodwill or gain from a bargain purchase recorded as part of the business combination.

•

Financial instruments (note 6.1.5) and financial amounts receivable (note 4.6): Certain of the Company's financial instruments are classified as Level 3 as they include unobservable inputs. In particular, the Company uses estimates to compute unobservable historical volatility based on movements of stock market prices for the fair valuation of the call option on the 1,000 mandatory convertible bonds and unobservable inputs such as discounted cash flow model for the fair valuation of financial amounts receivable relating to Uttam Galva and KSS Petron.

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Mining reserve estimates (note 5.2): Proven iron ore and coal reserves are those quantities whose recoverability can be determined with reasonable certainty from a given date forward and under existing government regulations, economic and operating conditions; probable reserves have a lower degree of assurance but high enough to assume continuity between points of observation. Their estimates and the estimates of mine lives have been prepared by ArcelorMittal experienced engineers and geologists and detailed independent verifications of the methods and procedures are conducted on a regular basis by external consultants. Reserves are updated annually and calculated using a 3-year average reference price duly adjusted for quality, ore content, logistics and other considerations. In order to estimate reserves, estimates are required for a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates. Estimating the quantity and/or grade of reserves requires the size, shape and depth of ore bodies to be determined by analyzing geological data such as drilling samples. This process may require complex and difficult geological judgments to interpret the data. Because the economic assumptions used to estimate reserves change from period to period, and because additional geological data is generated during the course of operations, estimates of reserves may change from period to period.

1.3	Accounting standards applied

On January 1, 2018, the Company adopted the following standards which have an impact on the disclosures in the consolidated financial statements of the Company:

•	IFRS 9 “Financial Instruments” issued on July 24, 2014, which replaces IAS 39 and modifies substantially the classification and measurement of financial instruments. The final version of the standard contains requirements in the following areas:

•

Classification and measurement: Financial assets are classified and measured by reference to the business model within which they are held and their contractual cash flow characteristics. Financial liabilities are classified in a similar manner to IAS 39, however there are differences in the requirements regarding the recognition of an entity's own credit risk for financial liabilities designated as FVTPL.

•	Impairment: The standard introduces an 'expected credit loss' model replacing the current incurred loss model for the measurement of the impairment of financial assets; it is therefore no longer necessary for a credit event to have occurred before a credit loss is recognized.

•	Hedge accounting: The standard introduces a new hedge accounting model that is designed to more closely align with how entities undertake risk management activities when hedging financial and non-financial risk exposures, which may result in the increased application of hedge accounting.

•	Derecognition: The requirements for derecognition of financial assets and liabilities are carried forward from IAS 39. Accordingly, the Company has applied the requirements of IFRS 9 to instruments that have not been derecognized at January 1, 2018 and has not applied the requirements to instruments that have already been

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derecognized at January 1, 2018. Comparative amounts in relation to instruments that have not been derecognized at January 1, 2018 have been recast where appropriate.

The classification, measurement and impairment requirements of IFRS 9 have been applied retrospectively while hedge accounting requirements have been applied prospectively. The adoption of IFRS 9 did not result in a material impact on the consolidated financial statements of the Company. Unrealized gains and losses from investments in equity instruments at FVOCI are no longer recycled to the consolidated statement of operations upon disposal. Furthermore, trade receivables subject to programs for sales without recourse (see note 4.3) have changed from loans and receivables measured at amortized cost to fair value through other comprehensive income. Additional required disclosures are presented in note 6. As permitted by the transition provisions of IFRS 9, the Company has not restated comparatives.

•

IFRS 15 “Revenue from Contracts with Customers” issued on May 28, 2014, which provides a unified five-step model for determining the timing, measurement and recognition of revenue. The focus of the new standard is to recognize revenue as performance obligations are met rather than based on the transfer of risks and rewards. IFRS 15 includes a comprehensive set of disclosure requirements including qualitative and quantitative information about contracts with customers to understand the nature, amount, timing and uncertainty of revenue. The standard supersedes IAS 18 “Revenue”, IAS 11 “Construction Contracts” and a number of revenue-related interpretations. On April 12, 2016, the IASB issued amendments to IFRS 15 which clarify how to identify a performance obligation, determine whether a company is a principal or an agent. The Company’s revenue is predominantly derived from the single performance obligation to transfer steel and mining products under arrangements in which the transfer of risks and rewards of ownership and the fulfillment of the Company’s performance obligation occur at the same time. As part of the adoption process, the Company established revised processes and controls and assessed its performance obligations underlying the revenue recognition, estimation of variable considerations including rebates, methods for estimating warranties, customized products and principal versus agent considerations. The adoption of this standard did not have a material impact on the consolidated financial statements of the Company. The additional required disclosures are presented in note 3.4 and 4.1.

On January 1, 2018, the Company adopted the following amendments which did not have any material impact on the consolidated financial statements of the Company:

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Amendments to IFRS 2 “Share-based Payment” issued on June 20, 2016, which clarify the effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments; the treatment of share-based payment transactions with a net settlement feature for withholding tax obligations; and the treatment of a modification to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-settled.

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Amendments to IFRS 4 “Insurance Contracts” issued on September 12, 2016, which propose two approaches (an overlay approach and a deferral approach) in order to address temporary volatility in reported results arising from the timing difference between the implementation of IFRS 9 and IFRS 17 "Insurance Contracts" that will replace IFRS 4. These amendments to IFRS 4 supplement existing options in the standard that can already be used to address the temporary volatility.

•	IFRIC 22 “Foreign Currency Transactions and Advance Consideration” issued on December 8, 2016. This interpretation provides guidance about which exchange rate to use in reporting foreign currency transactions (such as revenue transactions) when payment is made or received in advance.

On January 13, 2016, the IASB issued IFRS 16 “Leases” which will replace IAS 17 “Leases”. This new standard specifies how to recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. This standard is effective for annual periods beginning on or after January 1, 2019, with early application permitted if IFRS 15 "Revenue from Contracts with Customers" has also been applied. At December 31, 2018 and 2017, the Company has non-cancellable operating lease commitments on an undiscounted basis of 1,869 and 1,311 , respectively (see note 8.4). A review and assessment of the Company's lease arrangements indicates that most of these arrangements will meet the definition of a lease under IFRS 16. The Company will apply the modified retrospective transition approach with right-of-use

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assets measured at an amount equal to the lease liability recognized at January 1, 2019. In addition, it will apply the practical expedient to grandfather the definition of a lease on transition and accordingly apply IFRS 16 to all contracts entered into before January 1, 2019 and identified as leases in accordance with IAS 17 and IFRIC 4. Hence, the Company will recognize a right-of-use asset and corresponding liability in respect of the net present value of these leases unless they qualify for short-term leases or relate to low-value assets upon the application of IFRS 16.

As at December 31, 2018 the above mentioned operating lease commitments of 1,869 includes undiscounted amounts of 20 for short-term leases and 58 of leases of low-value assets that will remain being recognized on a straight-line basis as expenses in profit and loss. For the remaining undiscounted operating lease commitments of 1,791 (of which 29 relating to entities presented as held for sale) , the Company expects to recognize on January 1, 2019 additional lease liabilities (discounted at the incremental borrowing rates at that date) and right-of-use assets for an amount of 1.1 billion .

On May 18, 2017, the IASB issued IFRS 17 "Insurance Contracts", which is designed to achieve the goal of a consistent, principle-based accounting for insurance contracts. IFRS 17 requires insurance liabilities to be measured at a current fulfillment value and provides a more uniform measurement and presentation approach for all insurance contracts. IFRS 17 supersedes IFRS 4 "Insurance Contracts" and related interpretations and is effective for periods beginning on or after January 1, 2021, with earlier adoption permitted if both IFRS 15 "Revenue from Contracts with Customers" and IFRS 9 "Financial Instruments" have also been applied. The Company does not expect that the adoption of this interpretation will have a material impact to its consolidated financial statements.

On June 7, 2017, the IASB issued IFRIC 23 “Uncertainty over Income Tax Treatments”. This interpretation addresses the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates when there is uncertainty over income tax treatments under IAS 12. This interpretation is effective for annual periods beginning on or after January 1, 2019, with early application permitted. The Company does not expect that the adoption of this interpretation will have a material impact to its consolidated financial statements.

On October 12, 2017, the IASB issued an amendment to IFRS 9 in respect of prepayment features with negative compensation, which amends the existing requirements in IFRS 9 regarding termination rights in order to allow measurement at amortized cost (or, depending on the business model, at fair value through other comprehensive income) even in the case of negative compensation payments. This amendment is effective for annual periods beginning on or after January 1, 2019, with early application permitted. The Company does not expect that the adoption of this interpretation will have a material impact to its consolidated financial statements.

Also, on October 12, 2017, the IASB issued an amendment to IAS 28 “Investments in Associates and Joint Ventures” in relation to long-term interests in associates and joint ventures. The amendment clarifies that an entity applies IFRS 9 to long-term interests in an associate or joint venture that form part of the net investment in the associate or joint venture but to which the equity method is not applied. This amendment is effective for annual periods beginning on or after January 1, 2019, with early application permitted. The Company does not expect that the adoption of this amendment will have a material impact to its consolidated financial statements.

On December 12, 2017 the IASB issued Annual Improvements 2015–2017 to make amendments to the following standards:

•	IFRS 3 "Business Combinations" clarifies that when an entity obtains control of a business that is a joint operation, it remeasures previously held interests in that business.

•	IFRS 11 "Joint Arrangements" clarifies that when an entity obtains joint control of a business that is a joint operation, the entity does not remeasure previously held interests in that business.

•	IAS 12 "Income Taxes" clarifies that an entity shall recognize the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognized those past transactions or events.

•	IAS 23 "Borrowing Costs" clarifies that if any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalization rate on general borrowings.

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These amendments are effective for annual periods beginning on or after January 1, 2019, with early application permitted. The Company does not expect that the adoption of these amendments will have a material impact to its consolidated financial statements.

On February 7, 2018, the IASB issued amendments to IAS 19 “Employee benefits” which clarify that current service cost and net interest after a remeasurement resulting from a plan amendment, curtailment or settlement should be determined using the assumptions applied for the remeasurement. In addition, the amendments clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling. These amendments are effective for annual periods beginning on or after January 1, 2019, with early application permitted. The Company does not expect that the adoption of these amendments will have a material impact to its consolidated financial statements.

On March 29, 2018, the IASB published its revised 'Conceptual Framework for Financial Reporting', which includes revised definitions of an asset and a liability as well as new guidance on measurement and derecognition, presentation and disclosure. The Company does not expect that the adoption of this amendment, which are effective for annual periods beginning on or after January 1, 2020, will have a material impact to its consolidated financial statements.

On October 22, 2018, the IASB issued amendments to IFRS 3 'Business Combinations', which includes the definition of a business aimed at resolving the difficulties that arise when an entity determines whether it has acquired a business or a group of assets. The Company does not expect that the adoption of these amendments, which are effective for annual periods beginning on or after January 1, 2020, will have a material impact to its consolidated financial statements.

On October 31, 2018, the IASB issued amendments to IAS 1 'Presentation of Financial Statements' and IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' to clarify the definition of ‘material’ and to align the definition used in the Conceptual Framework and the standards themselves. The Company does not expect that the adoption of these amendments, which are effective for annual periods beginning on or after January 1, 2020, will have a material impact to its consolidated financial statements.

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The consolidated financial statements include the accounts of the Company, its subsidiaries and its interests in associated companies and joint arrangements. Subsidiaries are consolidated from the date the Company obtains control (ordinarily the date of acquisition) until the date control ceases. The Company controls an entity when the Company is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Associated companies are those companies over which the Company has the ability to exercise significant influence on the financial and operating policy decisions, which it does not control. Generally, significant influence is presumed to exist when the Company holds more than 20% of the voting rights. Joint arrangements, which include joint ventures and joint operations, are those over whose activities the Company has joint control, typically under a contractual arrangement. In joint ventures, ArcelorMittal exercises joint control and has rights to the net assets of the arrangement. The investment is accounted for under the equity method and therefore recognized at cost at the date of acquisition and subsequently adjusted for ArcelorMittal’s share in undistributed earnings or losses since acquisition, less any impairment incurred. Any excess of the cost of the acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities, and contingent liabilities of the associate or joint venture recognized at the date of acquisition is considered as goodwill. The goodwill, if any, is included in the carrying amount of the investment and is evaluated for impairment as part of the investment. The consolidated statements of operations include the Company’s share of the profit or loss of associates and joint ventures from the date that significant influence or joint control commences until the date significant influence or joint control ceases, adjusted for any impairment losses. Adjustments to the carrying amount may also be necessary for changes in the Company’s proportionate interest in the investee arising from changes in the investee’s equity that have not been recognized in the investee’s profit or loss. The Company’s share of those changes is recognized directly in the relevant reserve within equity.

The Company assesses the recoverability of its investments accounted for under the equity method whenever there is an indication of impairment. In determining the value in use of its investments, the Company estimates its share in the present value of the projected future cash flows expected to be generated by operations of associates and joint ventures. The amount of any impairment is included in income (loss) from investments in associates, joint ventures and other investments in the consolidated statements of operations (see also note 2.6).

For investments in joint operations, in which ArcelorMittal exercises joint control and has rights to the assets and obligations for the liabilities relating to the arrangement, the Company recognizes its assets, liabilities and transactions, including its share of those incurred jointly.

Investments in other entities, over which the Company and/or its operating subsidiaries do not have the ability to exercise significant influence, are accounted for as investments in equity instruments at FVOCI with any resulting gain or loss, net of related tax effect, recognized in the consolidated statements of other comprehensive income. Realized gains and losses from the sale of investments in equity instruments at FVOCI are reclassified from other comprehensive income to retained earnings within equity upon disposal.

While there are certain limitations on the Company’s operating and financial flexibility arising from the restrictive and financial covenants of the Company’s principal credit facilities described in note 6.1.2, there are no significant restrictions resulting from borrowing agreements or regulatory requirements on the ability of consolidated subsidiaries, associates and jointly controlled entities to transfer funds to the parent in the form of cash dividends to pay commitments as they come due.

Intercompany balances and transactions, including income, expenses and dividends, are eliminated in the consolidated financial statements. Gains and losses resulting from intercompany transactions are also eliminated.

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2.2.1 List of subsidiaries

The table below provides a list of the Company’s principal operating subsidiaries at December 31, 2018 . Unless otherwise stated, the subsidiaries listed below have share capital consisting solely of ordinary shares or voting interests in the case of partnerships, 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. The country of incorporation corresponds to their principal place of operations.

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 Long Products Canada G.P.		Canada		100.00 %
Brazil and neighboring countries ("Brazil")
ArcelorMittal Brasil S.A.		Brazil		97.01 %	1
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 %	2
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 %	2
ArcelorMittal Duisburg GmbH		Germany		100.00 %
ArcelorMittal International Luxembourg S.A.		Luxembourg		100.00 %
ArcelorMittal Italia S.p.A.		Italy		94.45 %	3
Africa and Commonwealth of Independent States ("ACIS")
ArcelorMittal South Africa Ltd. ("AMSA")		South Africa		69.22 %
JSC ArcelorMittal Temirtau		Kazakhstan		100.00 %
PJSC ArcelorMittal Kryvyi Rih ("AM Kryvyi Rih")		Ukraine		95.13 %
Mining
ArcelorMittal Mining Canada G.P. and ArcelorMittal Infrastructure G.P.("AMMIC")		Canada		85.00 %
ArcelorMittal Liberia Ltd		Liberia		85.00 %
JSC ArcelorMittal Temirtau		Kazakhstan		100.00 %
PJSC ArcelorMittal Kryvyi Rih		Ukraine		95.13 %

1.	On April 1, 2018, ArcelorMittal Brasil issued preferred shares to Votorantim S.A. representing a 2.99 % ownership interest. See note 2.2.4.

2.	ArcelorMittal Galati S.A. and ArcelorMittal Ostrava a.s. are classified held for sale as of December 31, 2018. See note 2.3.2.

3.	On November 1, 2018, ArcelorMittal completed the acquisition of Ilva S.p.A. subsequently renamed ArcelorMittal Italia S.p.A. See note 2.2.4 .

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The functional currency of ArcelorMittal S.A. is the U.S. dollar. The functional currency of each of the principal operating subsidiaries is the local currency, except for ArcelorMittal México, AMMIC and ArcelorMittal International Luxembourg, whose functional currency is the U.S. dollar and ArcelorMittal Poland, ArcelorMittal Ostrava and ArcelorMittal Galati, whose functional currency is the euro.

Transactions in currencies other than the functional currency of a subsidiary are recorded at the rates of exchange prevailing at the date of the transaction. Monetary assets and liabilities in currencies other than the functional currency are remeasured at the rates of exchange prevailing on the date of the consolidated statements of financial position and the related translation gains and losses are reported within financing costs in the consolidated statements of operations. Non-monetary items that are carried at cost are translated using the rate of exchange prevailing at the date of the transaction. Non-monetary items that are carried at fair value are translated using the exchange rate prevailing when the fair value was determined and the related translation gains and losses are reported in the consolidated statements of comprehensive income.

Upon consolidation, the results of operations of ArcelorMittal’s subsidiaries, associates and joint arrangements whose functional currency is other than the U.S. dollar are translated into U.S. dollars at the monthly average exchange rates and assets and liabilities are translated at the year-end exchange rates. Translation adjustments are recognized directly in other comprehensive income and are included in net income (including non-controlling interests) only upon sale or liquidation of the underlying foreign subsidiary, associate or joint arrangement.

As of July 1, 2018, Argentina has been considered a highly inflationary country and therefore the financial statements of the Company's long production facilities Acindar Industria Argentina de Aceros S.A. ("Acindar") in Argentina, using a historical cost approach, are adjusted prospectively to reflect the changes in the general purchasing power of the local currency before being translated into U.S. dollars at the year end exchange rate. The Company used an estimated general price index (Consumer Price Index "IPC") of 47.9 % for the year ended December 31, 2018 for this purpose. As a result of the inflation-related adjustments on non-monetary items, a gain of 45 was recognized in net financing costs for the year ended December 31, 2018.

Since 2010 Venezuela has been considered a hyperinflationary economy and therefore the financial statements of Unicon are adjusted to reflect the changes in the general purchasing power of the local currency before being translated into U.S. dollars. The Company used estimated general price indices of 213,605 % , 2,056 % and 534 % for the years ended December 31, 2018 , 2017 and 2016 , respectively, for this purpose. As a result of the inflation-related adjustments on non-monetary items, losses of 6 , 31 and 8 were recognized in net financing costs for the years ended December 31, 2018 , 2017 and 2016 , respectively.

Effective January 1, 2016, the Company applied the DICOM rate to translate its Venezuelan operations. As a result of this change, ArcelorMittal’s net equity in Unicon decreased from 628 to 43 at January 1, 2016. The DICOM rate was originally set at 206 bolivars per U.S. dollar on March 10, 2016, before falling to 674 bolivars per U.S. dollar at December 31, 2016. The DICOM rate continued to weaken during 2017 to 3,345 bolivars per U.S. dollar on August 31, 2017, when the Venezuelan government temporarily suspended the sale of U.S. dollars through its DICOM auction system. On February 5, 2018, the Venezuelan government reopened the auction at the new DICOM rate of 30,987 bolivars per euro ( 25,000 bolivars per U.S. dollar). On August 20, 2018, the Venezuelan government launched the new bolivar soberano currency, with one bolivar soberano worth 100,000 previous bolivars.

Business combinations are accounted for using the acquisition method as of the acquisition date, which is the date on which control is transferred to ArcelorMittal. The Company controls an entity when it is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

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The Company measures goodwill at the acquisition date as the total of the fair value of consideration transferred, plus the proportionate amount of any non-controlling interest, plus the fair value of any previously held equity interest in the acquiree, if any, less the net recognized amount (generally at fair value) of the identifiable assets acquired and liabilities assumed.

In a business combination in which the fair value of the identifiable net assets acquired exceeds the cost of the acquired business, the Company reassesses the fair value of the assets acquired and liabilities assumed. If, after reassessment, ArcelorMittal’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess (bargain purchase) is recognized immediately as a reduction of cost of sales in the consolidated statements of operations.

Ilva

On November 1, 2018, ArcelorMittal completed the acquisition of Ilva S.p.A. and certain of its subsidiaries ("Ilva") following the signature on June 28, 2017 of a lease agreement with an obligation to purchase between the Italian Government and AM InvestCo Italy S.r.l. ("AM InvestCo"), a consortium formed by ArcelorMittal and Intesa San Paolo S.p.A. ("ISP") with respective interests of 94.45 % and 5.55 % . The completion of the acquisition followed ArcelorMittal's notification to the European Commission of AM InvestCo's proposed acquisition of Ilva on September 21, 2017 and the submission of commitments on October 19, 2017. The European Commission initiated a Phase II review of AM InvestCo’s proposed acquisition of Ilva on November 8, 2017 and approved the transaction on May 7, 2018 subject to the fulfillment of divestment commitments (see note 2.3.2) and the exit of Marcegaglia from AM InvestCo (Marcegaglia held initially a 15 % interest in AM InvestCo) completed on November 9, 2018 (see note 10.5.2).

Ilva is Europe’s largest single steel site and only integrated steelmaker in Italy with its main production facility based in Taranto. Ilva also has significant steel finishing capacity in Taranto, Novi Ligure and Genova. As a result of the lease agreement, the assets and liabilities subject to the transaction are leased by subsidiaries of AM InvestCo, including ArcelorMittal Italia S.p.A., which combines the sites of Taranto, Novi Ligure and Genova. The nominal purchase price amounts to € 1.8 billion ( 2.1 billion ) subject to certain adjustments including working capital adjustment, with annual leasing costs of € 180 million ( 206 ) to be paid in quarterly installments resulting in a present value of 1,540 at acquisition date. The total consideration includes a 54 liability corresponding to environmental capital expenditures already completed by Ilva and which will be refunded by ArcelorMittal to Ilva. In September 2018, Ilva's trade unions ratified a labour agreement following which ArcelorMittal committed to initially hire 10,700 workers based on their existing contractual terms of employment. In addition, between 2023 and 2025, the Company has committed to hire any workers who remain under Ilva’s extraordinary administration. Ilva’s business units are initially leased with rental payments qualifying as down payments against the purchase price and are part of the Europe reportable segment. The lease period is for a minimum of four years followed by a subsequent purchase obligation . The Company accounted for this transaction as a business combination as it obtained control of the business subject to the lease.

ISP's interest is subject to put and call option arrangements exercisable by ArcelorMittal and ISP between November 1, 2020 and November 1, 2025 and between November 1, 2021 and November 1, 2025, respectively. The Company determined that it has a present ownership interest in the shares subject to the put option. Accordingly, it recognized at acquisition date a 122 financial liability measured at the present value of the redemption amount.

Following the recent closing of the transaction, the acquisition-date fair value of the identifiable assets and liabilities of Ilva has been determined on a provisional basis, in particular with respect to property, plant and equipment, environmental provisions, indemnification asset, tax implications and working capital balances at closing date. The Company expects to complete its accounting during the first half of 2019. ArcelorMittal recognized provisions of 517 in connection with environmental remediation obligations. As the latter will be funded with funds seized by the Italian Government from the former shareholder, the Company recognized an indemnification asset for the same amount, of which 365 classified as non-current assets. Current assets include trade receivables of 439 with gross contract amounts receivable of 503 and contractual cash flows not expected to be collected of 64 . Intangible assets include 201 relating to CO ₂ emission rights held by Ilva at acquisition date (the Company also recognized liabilities of 158 relating to estimated emissions for the first 10 months of 2018) and favorable land lease contracts for 76 . ArcelorMittal recognized a 209 bargain purchase gain in cost of sales mainly as a

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result of the preliminary € 0.4 billion ( 0.5 billion ) working capital reduction while the total fair value of net assets acquired remained substantially driven by the economic obsolescence applied to property, plant and equipment. Revenue and net loss of Ilva since acquisition date were 398 and ( 49 ) , respectively. The Company recognized acquisition-related costs of 25 in selling, general and administrative expenses. The agreement includes industrial capital expenditure commitments of approximately € 1.3 billion ( 1.4 billion ) over a seven -year period focused on blast furnaces, steel shops and finishing lines and environmental capital expenditure commitments of approximately € 0.8 billion ( 0.9 billion ).

Votorantim

On April 1, 2018, ArcelorMittal completed the acquisition of Votorantim Siderurgia (subsequently renamed ArcelorMittal Sul Fluminense "AMSF"), Votorantim S.A.'s long steel business in Brazil pursuant to which Votorantim Siderurgia became a wholly-owned subsidiary of ArcelorMittal Brasil. The combination of ArcelorMittal Brasil's long steel business and AMSF aims to create cost, logistical and operational synergies. The combined operations include ArcelorMittal Brasil’s production sites at Monlevade, Juiz de Fora and Piracicaba, and AMSF’s production sites at Barra Mansa, Resende and its 50 % interest in the joint venture Sitrel in Três Lagoas. On February 7, 2018, the Brazilian antitrust authority CADE approved the transaction, conditioned to the fulfillment of divestment commitments by ArcelorMittal Brasil (see note 2.3).

The acquisition was completed through the issuance of preferred shares to Votorantim S.A. representing a 2.99 % interest in ArcelorMittal Brasil. Pursuant to the shareholders' agreement, such preferred shares are subject to put and call option arrangements exercisable by Votorantim S.A. and ArcelorMittal Brasil between July 1, 2019 and December 31, 2022 and between January 1, 2023 and December 31, 2024, respectively. The Company determined that it has a present ownership interest in the preferred shares subject to the put option. Accordingly, it recognized at acquisition date a 328 financial liability at amortized cost and measured at the present value of the redemption amount. Following the recent closing of the transaction, the acquisition-date fair value of the identifiable assets and liabilities of AMSF has been determined on a provisional basis as of December 31, 2018, in particular with respect to unfavorable contracts and contingent liabilities. Other non-current assets include an 83 indemnification asset towards Votorantim S.A. relating to contingent liabilities of 85 and an 82 investment in Sitrel. Other liabilities include unfavorable contracts for 293 and borrowings of 211 . Current assets include cash and receivables for 13 and 141 , respectively (including trade receivable of 92 with gross contractual amounts of 108 and contractual cash flows not expected to be collected of 16 ). The Company expects to complete its accounting during the first quarter of 2019. Revenue and net loss of AMSF since acquisition date were 285 and ( 108 ) , respectively. The Company recognized acquisition-related costs of 8 in selling, general and administrative expenses.

Revenue and net income attributable to the equity holders of the parent of the Company for the year ended December 31, 2018 were 79,192 and 4,801 respectively, as though the acquisition date for Ilva and Votorantim had been as of January 1, 2018.

Other

On December 21, 2017, the Company acquired from Alcatel Lucent the reinsurance company Electro-Re S.A. for total consideration of € 246 million ( 290 ; cash inflow was 35 net of cash acquired of 325 ).

On June 21, 2017, as a result of the extension of the partnership between ArcelorMittal and Bekaert Group ("Bekaert") in the steel cord business in Brazil, the Company completed the acquisition from Bekaert of a 55.5 % controlling interest in Bekaert Sumaré Ltda. subsequently renamed ArcelorMittal Bekaert Sumaré Ltda. ("Sumaré"), which subsequently merged into Belgo-Mineira Bekaert Artefatos de Arames Ltda. a manufacturer of metal ropes for automotive tires located in the municipality of Sumaré/SP, Brazil. The Company agreed to pay total cash consideration of € 56 million ( 63 ; 49 , net of cash acquired of 14 ) of which € 52 million ( 58 ) settled on closing date and € 4 million ( 5 ) to be paid subsequently upon conclusion of certain business restructuring measures by Bekaert. Sumaré is part of the Brazil reportable segment.

On May 18, 2017, the Company acquired from Crédit Agricole Assurances the reinsurance company Crédit Agricole Reinsurance S.A. for consideration of € 186 million ( 208 ; cash inflow was 20 , net of cash acquired of 228 ). On January 18, 2017, the Company acquired from Parfinada B.V. the reinsurance company Artzare S.A. for total consideration of € 43 million ( 45 ; cash inflow was 5 , net of cash acquired of 50 ) . The reinsurance company is incorporated in Luxembourg and operates through a series of reinsurance agreements with the Company’s subsidiaries.

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On December 21, 2016, ArcelorMittal acquired from Skanska Financial Services AB the reinsurance company SCEM Reinsurance S.A. (“SCEM”) for total consideration of € 54 million ( 56 ; cash inflow was 7 , net of cash acquired of 63 ).

The Company concluded that the acquisitions of Electro-Re S.A., SCEM, Artzare S.A. and Crédit Agricole Reinsurance S.A. were not business combinations mainly as the transactions did not include the acquisition of any strategic management processes, operational processes and resource management processes.

Divestments in 2018

On February 28, 2018, ArcelorMittal completed the sale of Go Steel Frýdek Místek ("Frýdek Místek"), for consideration of 49 (net of cash disposed of 1 ) of which 10 remained outstanding at December 31, 2018. Frýdek Místek was part of the Europe segment. The fair value measurement was determined using the contract price, a Level 3 unobservable input.

On February 7, 2018, the Brazilian Antitrust Authority (CADE) approved the acquisition of Votorantim subject to divestment commitments (see note 2.2.4). Accordingly, in May 2018, ArcelorMittal Brasil disposed of its two production sites Cariacica and Itaúna as well as some wire drawing equipment in Brazil (the “Votorantim remedies”), which were part of the Brazil reportable segment. Prior to the disposal, the Company recorded an impairment charge in cost of sales of 86 to adjust the carrying amount of the disposal group to the sale proceeds of 84 (net of cash disposed of 1 ) of which 58 remained outstanding

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as of December 31, 2018. The fair value measurement of these Votorantim remedies was determined using the contract price, a Level 3 unobservable input.

Divestments in 2017

On December 15, 2017, ArcelorMittal completed the sale of its 100 % shareholding in ArcelorMittal Georgetown Inc. ("Georgetown"), a wire rod mill in Georgetown in the United States for total cash consideration of 19 and the result on disposal was 18 . The fair value measurement of Georgetown, which was part of the NAFTA reportable segment, was determined using the contract price, a Level 3 unobservable input.

On March 13, 2017, ArcelorMittal and the management of ArcelorMittal Tailored Blanks Americas (“AMTBA”), comprising the Company’s tailored blanks operations in Canada, Mexico and the United States, entered into a joint venture agreement following which the Company recognized an investment of 65 in AMTBA accounted for under the equity method. AMTBA was part of the NAFTA reportable segment and was classified as held for sale at December 31, 2016.

On February 10, 2017, ArcelorMittal completed the sale of certain ArcelorMittal Downstream Solutions entities in the Europe segment following its commitment to sell such operations in December 2015. The Company recorded an impairment charge of 18 in cost of sales in 2015. The assets and liabilities subject to the sale were classified as held for sale at December 31, 2016. The fair value measurement of these operations, which were part of the Europe reportable segment, was determined using the contract price, a Level 3 unobservable input.

Divestments in 2016

On September 30, 2016, ArcelorMittal completed the sale of its wholly owned subsidiary ArcelorMittal Zaragoza in Spain to Megasa Siderúrgica S.L. for total consideration of € 80 million ( 89 ). Prior to the disposal, the Company recorded an impairment charge of 49 (of which 2 related to allocated goodwill) in cost of sales to write the net carrying amount down to the net proceeds from the sale. The fair value measurement of ArcelorMittal Zaragoza was determined using the contract price, a Level 3 unobservable input. ArcelorMittal Zaragoza was part of the Europe reportable segment.

On August 7, 2016, ArcelorMittal completed the sale of the Company’s 49 % interest in its associates ArcelorMittal Algérie and ArcelorMittal Tebessa and its 70 % interest in its subsidiary ArcelorMittal Pipes and Tubes Algeria, which was announced on October 7, 2015 as part of an outline agreement for restructuring the shareholding of its Algerian activities. As part of the agreement, ArcelorMittal transferred such interests to IMETAL, an Algerian state-owned entity. ArcelorMittal Pipes and Tubes Algeria and ArcelorMittal Algérie were part of the ACIS reportable segment while ArcelorMittal Tebessa was part of the Mining reportable segment.

On April 4, 2016, ArcelorMittal completed the sale of the LaPlace and Vinton Long Carbon facilities in the United States. The total consideration was 96 and the result on disposal was nil . In 2015, the Company recorded an impairment charge of 231 (of which 13 relating to allocated goodwill) in cost of sales to write the carrying amount of the LaPlace, Steelton and Vinton facilities down to the expected net proceeds from the sale. The fair value measurement of the Long Carbon facilities in the United States was determined using the contract price, a Level 3 unobservable input. These facilities were part of the NAFTA reportable segment. The assets and liabilities of the Steelton facility remained classified as held for sale at December 31, 2017 and 2016 (see note 2.3.2).

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On May 7, 2018, the European Commission approved the acquisition of Ilva (see note 2.2.4). As part of the approval, ArcelorMittal agreed to divest certain of its European assets (“Ilva remedies”) which are part of the Europe reportable segment.

The Ilva remedies are comprised of the following three divestment packages.

The Dudelange and Liège divestment package is composed of ArcelorMittal Dudelange and certain finishing facilities including the hot dipped galvanizing lines 4 and 5 in Flémalle, hot-rolled pickling, cold rolling and tin packaging lines in Tilleur of ArcelorMittal Liège in Belgium.

The Galati divestment package is mainly composed of the integrated steel making site of ArcelorMittal Galati S.A., ArcelorMittal Tubular Products Galati SRL, both in Romania, ArcelorMittal Skopje AD in North Macedonia and ArcelorMittal Piombino S.p.A. in Italy, the Company’s only galvanizing steel plant in Italy.

The Ostrava divestment package is mainly composed of the integrated steel making site of ArcelorMittal Ostrava a.s. and its subsidiaries, ArcelorMittal Tubular Products Ostrava a.s.

On October 12, 2018 and November 2, 2018, ArcelorMittal received two binding offers from Liberty House Group ("Liberty") for the acquisition of the combined Ostrava and Galati divestment package and the Dudelange and Liège divestment package, respectively. The European Commission is currently reviewing revised offers from Liberty submitted by the Company on January 23, 2019. Transaction closing is conditional on EU approval and the conclusion of information consultations with local and European Works Councils.

At December 31, 2018, the carrying amount of assets and liabilities subject to the Ilva remedies was classified as held for sale. Based on the offers received, the Company recorded an impairment charge (see note 5.3) in cost of sales of 888 to adjust the carrying amount of the disposal group to the expected sale proceeds. The fair value measurement was determined using the selling price, a Level 3 unobservable input. The Company expects to complete the disposal of the divestment packages during the first half of 2019.

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In addition, the assets and liabilities of the Steelton facility in the United States remained classified as held for sale at December 31, 2018 (see note 2.3.1).

The details for the entities classified as held for sale as at December 31, 2017, which have been disposed during 2018 are disclosed in note 2.3.1.

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, 2018
		Ilva remedies			Steelton			Total
Current Assets:
Cash and cash equivalents		10			—			10
Trade accounts receivable, prepaid expenses and other current assets		291			28			319
Inventories		1,011			23			1,034
Total Current Assets		1,312			51			1,363
Non-current Assets:								—
Property, plant and equipment		638			78			716
Other assets		32			—			32
Total Non-current Assets		670			78			748
Total Assets		1,982			129			2,111
Current Liabilities:
Trade accounts payables, accrued expenses and other liabilities		542			21			563
Total Current Liabilities		542			21			563
Non-current Liabilities:
Long-term debt		77			—			77
Other long-term liabilities		164			17			181
Total Non-current Liabilities		241			17			258
Total Liabilities		783			38			821

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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:

The carrying amounts of the Company’s investments accounted for under the equity method were as follows:

	December 31,
Category	2018			2017
Joint ventures	1,011			1,249
Associates	2,871			2,854
Individually immaterial joint ventures and associates 1	1,024			981
Total	4,906			5,084

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, 2018 and 2017 , and none of them have a carrying value exceeding 100 at December 31, 2018 and 2017 .

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The following tables summarize the latest available financial information and reconcile it to the carrying value of each of the Company’s material joint ventures , as well as the income statement of the Company’s material joint ventures :

		December 31, 2018
Joint Ventures		Calvert			VAMA			Tameh			Borçelik			Total
Place of incorporation and operation 1		United States			China			Poland			Turkey
Principal Activity		Automotive steel finishing			Automotive steel finishing			Energy production and supply			Manufacturing and sale of steel 2,3,4
Ownership and voting rights at December 31, 2018		50.00 %			50.00 %			50.00 %			50.00 %
Current assets		1,490			329			205			519			2,543
of which cash and cash equivalents		76			85			90			67			318
Non-current assets		1,282			688			540			282			2,792
Current liabilities		824			491			208			398			1,921
of which trade and other payables and provisions		173			180			176			263			792
Non-current liabilities		853			217			226			49			1,345
of which trade and other payables and provisions		—			—			22			—			22
Net assets		1,095			309			311			354			2,069
Company's share of net assets		548			156			156			177			1,037
Adjustments for differences in accounting policies and other		6			—			—			( 32	)		( 26	)
Carrying amount in the statements of financial position		554			156			156			145			1,011
Revenue		3,295			625			467			1,328			5,715
Depreciation and amortization		( 62	)		( 32	)		( 31	)		( 22	)		( 147	)
Interest income		1			1			—			2			4
Interest expense		( 40	)		( 26	)		( 4	)		( 20	)		( 90	)
Income tax benefit (expense)		—			( 1	)		( 8	)		( 18	)		( 27	)
Profit or loss from continuing operations		312			5			30			6			353
Other comprehensive income (loss)		—			—			3			1			4
Total comprehensive income (loss)		312			5			33			7			357
Cash dividends received by the Company		48			—			4			34			86

1.	The country of incorporation corresponds to the country of operation except for Tameh whose country of operation is also the Czech Republic.

2.	Ownership interest in Borçelik was 45.33 % and 50.00 % based on issued shares and outstanding shares, respectively, at December 31, 2018; voting interest was 48.01 % at December 31, 2018 .

3.	The non-current liabilities include 43 deferred tax liability.

4.	Adjustment in Borçelik relates primarily to differences in accounting policies regarding revaluation of fixed assets.

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		December 31, 2017
Joint Ventures		Calvert			Macsteel			VAMA			Tameh			Borçelik			Total
Place of incorporation and operation 1		United States			Netherlands			China			Poland			Turkey
Principal Activity		Automotive steel finishing			Steel trading and shipping			Automotive steel finishing			Energy production and supply			Manufacturing and sale of steel 2, 3
Ownership and voting rights at December 31, 2017		50.00 %			50.00 %			49.00 %			50.00 %			45.33 %
Current assets		1,135			739			283			158			519			2,834
of which cash and cash equivalents		13			95			71			57			7			243
Non-current assets		1,303			389			754			476			296			3,218
Current liabilities		612			404			449			132			357			1,954
of which trade and other payables and provisions		118			235			190			118			244			905
Non-current liabilities		947			43			277			189			46			1,502
of which trade and other payables and provisions		—			3			—			20			—			23
Net assets		879			681			311			313			412			2,596
Company's share of net assets		440			341			152			156			187			1,276
Adjustments for differences in accounting policies and other		6			( 3	)		—			—			( 30	)		( 27	)
Carrying amount in the statements of financial position		446			338			152			156			157			1,249
Revenue		2,870			2,775			489			330			1,234			7,698
Depreciation and amortization		( 62	)		( 1	)		( 30	)		( 27	)		( 22	)		( 142	)
Interest income		—			14			1			—			1			16
Interest expense		( 35	)		( 10	)		( 28	)		4			( 12	)		( 81	)
Income tax benefit (expense)		—			( 5	)		—			( 7	)		( 20	)		( 32	)
Profit or loss from continuing operations		270			31			5			42			65			413
Other comprehensive income (loss)		—			2			—			( 1	)		( 1	)		—
Total comprehensive income (loss)		270			33			5			41			64			413
Cash dividends received by the Company		20			—			—			4			30			54

1.	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 the United States, the United Arab Emirates and China.

2.	The non-current liabilities include 40 deferred tax liability.

3.	Adjustment in Borçelik relates primarily to differences in accounting policies regarding revaluation of fixed assets.

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		December 31, 2016
Joint Ventures		Calvert			Macsteel			Baffinland			VAMA			Tameh			Borçelik			Total
Place of incorporation and operation 1		United States			Netherlands			Canada			China			Poland			Turkey
Principal Activity		Automotive steel finishing			Steel trading and shipping			Extraction of iron ore 2			Automotive steel finishing			Energy production and supply			Manufacturing and sale of steel
Ownership and voting rights at December 31, 2016		50.00 %			50.00 %			44.54 %			49.00 %			50.00 %			45.33 %
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 )
Profit or loss from continuing operations		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

1.	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 the United States, the United Arab Emirates and China.

2.	During 2017, ArcelorMittal lost joint control but maintained significant influence over Baffinland and as such the investment was reclassified to an associate (refer to note 2.4.2)

Macsteel

On May 28, 2018, ArcelorMittal announced the sale of its 50 % shareholding in Macsteel International Holdings B.V. (“Macsteel”), a joint venture between Macsteel Holdings Luxembourg S.à r.l. and ArcelorMittal South Africa, which provided the Company with an international network of traders and trading channels including the shipping of steel. The Company recorded a 132 impairment to adjust the carrying amount of the investment to the expected sale proceeds partially offset by a 142 gain following the recycling upon closing of the sale on October 31, 2018 of accumulated foreign exchange translation gains from other comprehensive income to income (loss) from investments in associates, joint ventures and other investments. The fair value measurement was determined using the contract price, a Level 3 unobservable input.

VAMA

Valin ArcelorMittal Automotive Steel (“VAMA”) is a joint venture between ArcelorMittal and Hunan Valin which produces steel for high-end applications in the automobile industry. VAMA supplies international automakers and first-tier suppliers as well as Chinese car manufacturers and their supplier networks.

Calvert

AM/NS Calvert ("Calvert"), a joint venture between the Company and Nippon Steel & Sumitomo Metal Corporation ("NSSMC"), is a steel processing plant in Calvert, Alabama, United States. Calvert had a 6 -year agreement to purchase 2 million tonnes of slabs annually from ThyssenKrupp Steel USA ("TK CSA"), an integrated steel mill complex located in Rio de Janeiro, Brazil, using a market-based price formula. TK CSA had an option to extend the agreement for an additional 3 years on terms that are more favorable to the joint venture, as compared with the initial 6 -year period. In December 2017 and in connection with the acquisition of TK CSA by Ternium S.A., the agreement was amended to (i) extend the term of the agreement to December 31, 2020, (ii) make a corresponding reduction in the annual slab purchase obligation so that the aggregate slab purchase obligation over the full term of the agreement remained the same and (iii) eliminate TK CSA’s extension option. The remaining slabs for Calvert's operations are sourced from ArcelorMittal plants in the United States, Brazil and Mexico. ArcelorMittal is principally responsible for marketing the product on behalf of the joint venture. Calvert serves the automotive, construction, pipe and tube, service center, and appliance/ HVAC industries.

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Tameh

Tameh is a joint venture between ArcelorMittal and Tauron Group including four energy production facilities located in Poland and the Czech Republic. Tameh’s objective is to ensure energy supply to the Company’s steel plants in these countries as well as the utilization of steel plant gases for energy production processes.

Borçelik

The following table summarizes the financial information and reconciles it to the carrying amount of each of the Company’s material associates , as well as the income statement of the Company’s material associates :

		December 31, 2018
Associates		China Oriental			DHS Group			Gonvarri Steel Industries			Baffinland			Total
Financial statements reporting date		June 30, 2018			September 30, 2018			September 30, 2018			December 31, 2018
Place of incorporation and operation 1		Bermuda			Germany			Spain			Canada
Principal Activity		Iron and steel manufacturing			Steel manufacturing 3			Steel manufacturing 4			Extraction of iron ore 5
Ownership and voting rights at December 31, 2018		37.02 %			33.43 %			35.00 %			28.76 %
Current assets		2,516			1,528			2,183			390			6,617
Non-current assets		1,443			3,062			1,526			1,949			7,980
Current liabilities		1,426			480			1,134			399			3,439
Non-current liabilities		35			1,005			677			694			2,411
Non-controlling interests		45			136			219			—			400
Net assets attributable to equity holders of the parent		2,453			2,969			1,679			1,246			8,347
Company's share of net assets		908			992			588			358			2,846
Adjustments for differences in accounting policies and other		—			27			( 52	)		22			( 3	)
Other adjustments 2		44			( 4	)		( 12	)		—			28
Carrying amount in the statements of financial position		952			1,015			524			380			2,871
Revenue		3,370			1,959			3,544			320			9,193
Profit or loss from continuing operations		474			20			60			( 98	)		456
Other comprehensive income (loss)		—			5			( 37	)		—			( 32	)
Total comprehensive income (loss)		474			25			23			( 98	)		424
Cash dividends received by the Company		92			5			16			—			113

1.	The country of incorporation corresponds to the country of operation except for China Oriental whose country of operation is China.

2.	Other adjustments correspond to the difference between the carrying amount at December 31, 2018 and the net assets situation corresponding to the latest financial statements ArcelorMittal is permitted to disclose as of the reporting dates described in the table above.

3.	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.

4.	Adjustments in Gonvarri Steel Industries primarily relate to differences in accounting policies regarding revaluation of fixed assets.

5.	Adjustments in Baffinland primarily relate to differences in accounting policies regarding revaluation of fixed assets and locally recognized goodwill.

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		December 31, 2017
Associates		China Oriental			DHS Group			Gonvarri Steel Industries			Baffinland			Total
Financial statements reporting date		June 30, 2017			September 30, 2017			September 30, 2017			December 31, 2017
Place of incorporation and operation 1		Bermuda			Germany			Spain			Canada
Principal Activity		Iron and steel manufacturing			Steel manufacturing 3			Steel manufacturing 4			Extraction of iron ore 5
Ownership and voting rights at December 31, 2017		39.02 %			33.43 %			35.00 %			31.07 %
Current assets		1,737			1,699			1,967			355			5,758
Non-current assets		1,336			3,096			1,372			1,698			7,502
Current liabilities		1,261			555			889			302			3,007
Non-current liabilities		119			1,121			446			531			2,217
Non-controlling interests		23			136			220			—			379
Net assets attributable to equity holders of the parent		1,670			2,983			1,784			1,220			7,657
Company's share of net assets		652			997			624			379			2,652
Adjustments for differences in accounting policies and other		—			32			( 54	)		23			1
Other adjustments 2		183			22			( 4	)		—			201
Carrying amount in the statements of financial position		835			1,051			566			402			2,854
Revenue		2,944			1,773			2,862			341			7,920
Profit or loss from continuing operations		275			( 4	)		122			( 20	)		373
Other comprehensive income (loss)		( 1	)		( 5	)		( 9	)		—			( 15	)
Total comprehensive income (loss)		274			( 9	)		113			( 20	)		358
Cash dividends received by the Company		49			—			18			—			67

1.	The country of incorporation corresponds to the country of operation except for China Oriental whose country of operation is China.

2.	Other adjustments correspond to the difference between the carrying amount at December 31, 2017 and the net assets situation corresponding to the latest financial statements ArcelorMittal is permitted to disclose.

3.	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.

4.	Adjustments in Gonvarri Steel Industries primarily relate to differences in accounting policies regarding revaluation of fixed assets.

5.	Adjustments in Baffinland primarily relate to differences in accounting policies regarding revaluation of fixed assets and locally recognized goodwill.

		December 31, 2016
Associates		China Oriental			DHS Group			Gonvarri Steel Industries			Total
Financial statements reporting date		June 30, 2016			September 30, 2016			September 30, 2016
Place of incorporation and operation 1		Bermuda			Germany			Spain
Principal Activity		Iron and steel manufacturing			Steel manufacturing			Steel manufacturing
Ownership and voting rights at December 31, 2016		46.99 %			33.43 %			35.00 %
Revenue		1,751			1,396			2,258			5,405
Profit or loss from continuing operations		83			( 96	)		145			132
Other comprehensive income (loss)		—			( 3	)		4			1
Total comprehensive income (loss)		83			( 99	)		149			133
Cash dividends received by the Company		—			—			16			16

1.	The country of incorporation corresponds to the country of operation except for China Oriental whose country of operation is China.

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China Oriental

China Oriental Group Company Limited (“China Oriental”) is a Chinese integrated iron and steel company listed on the Hong Kong Stock Exchange (“HKEx”). On January 27, 2017, in order to restore the minimum free float requirement, China Oriental issued 586,284,000 new shares resulting in a decrease of the Company’s interest from 46.99 % to 39.02 % . As a result, ArcelorMittal recorded a loss of 67 upon dilution partially offset by a gain of 23 following the recycling of accumulated foreign exchange translation gains from other comprehensive income to income from investments in associates, joint ventures and other investments. The trading of China Oriental’s shares, which had been suspended since April 29, 2014, resumed on February 1, 2017.

In January 2018, China Oriental issued 192 million new shares to fulfill its obligations under its share-based compensation plans. As a result, ArcelorMittal’s interest in China Oriental decreased to 37.02 % . ArcelorMittal recorded a loss of 20 upon dilution partially offset by a gain of 8 following the recycling of accumulated foreign exchange translation gains in income from investments in associates, joint ventures and other investments.

DHS Group

DHS - Dillinger Hütte Saarstahl AG (“DHS Group”), incorporated and located in Germany, is a leading producer of heavy steel plates, cast slag pots and semi-finished products, such as pressings, pressure vessel heads and shell sections in Europe. The DHS Group also includes a further rolling mill operated by Dillinger France in Dunkirk (France).

Gonvarri Steel Industries

Holding Gonvarri SL (“Gonvarri Steel Industries”) is dedicated to the processing of steel. The entity is a European leader in steel service centers and renewable energy components, with strong presence in Europe and Latin America.

Baffinland

The Company has interests in a number of other joint ventures and associates, none of which are regarded as individually material. The following table summarizes the financial information of all individually immaterial joint ventures and associates that are accounted for using the equity method:

		December 31, 2018							December 31, 2017
		Associates		Joint Ventures		Total			Associates		Joint Ventures		Total
Carrying amount of interests in associates and joint ventures		310		714		1,024			337		644		981
Share of:
Income (loss) from continuing operations		8		80		88			16		23		39
Other comprehensive income (loss)		( 5 )		2		( 3	)		—		10		10
Total comprehensive income (loss)		3		82		85			16		33		49

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For the years ended December 31, 2018 and 2017, the Company identified an impairment indicator with respect to its shareholder loans in Al Jubail. Accordingly, it performed a value in use calculation and concluded the carrying amount of the investment and shareholder loans was recoverable. For the remaining investments, the Company concluded there were no impairment triggers.

For the year ended December 31, 2016 , the Company recorded an impairment charge of 14 of its shareholder loan to Kalagadi Manganese (Proprietary) Ltd ("Kalagadi Manganese"). The Company sold its 50 % interest in this joint venture with Kalahari Resource (Proprietary) Ltd that is engaged in exploring, mining, ore processing and smelting manganese in the Kalahari Basin in South Africa in 2017. In addition, the Company recorded an impairment charge of 14 of its 28.24 % interest in Comvex, a deep sea harbor facility on the Black Sea in Romania. For the remaining investments, the Company concluded there were no impairment triggers.

For the year ended December 31, 2016, the Company’s unrecognized share of accumulated losses in Kalagadi Manganese was 9 .

The Company had investments in the following joint operations as of December 31, 2018 and 2017 :

Peña Colorada

Peña Colorada is an iron ore mine located in Mexico in which ArcelorMittal holds a 50.00 % interest. Peña Colorada operates an open pit mine as well as concentrating facility and two-line pelletizing facility.

Hibbing Taconite Mines

The Hibbing Taconite Mines in which the Company holds a 62.31 % interest are iron ore mines located in the USA and operations consist of open pit mining, crushing, concentrating and pelletizing.

I/N Tek

I/N Tek in which the Company holds a 60.00 % interest operates a cold-rolling mill in the United States.

Double G Coatings

ArcelorMittal holds a 50.00 % interest in Double G Coating, a hot dip galvanizing and Galvalume facility in the United States.

Other investments include those investments in equity instruments for which the Company does not have significant influence. Following the adoption of IFRS 9 as of January 1, 2018, the Company irrevocably elected to present the changes in fair value of such equity instruments, which are not held for trading, in other comprehensive income (see detail in note 6.1.

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1). Other investments include the following:

	December 31,
	2018			2017 1
Erdemir	577			—
Stalprodukt S.A.	101			—
Gerdau	115			—
Other investments	62			—
Investments in equity instruments at FVOCI	855			—
Erdemir	—			1,118
Stalprodukt S.A.	—			171
Gerdau	—			112
Other investments	—			43
Available-for-sale securities (at fair value)	—			1,444
Investments in equity instruments at cost	—			27
Total	855			1,471

1. Following the adoption of IFRS 9, available-for-sale investments are classified as investments in equity instruments at FVOCI as of January 1, 2018.

The Company’s significant equity instruments at FVOCI at December 31, 2018 and 2017 are the following:

Ereĝli Demir ve Çelik Fabrikalari T.A.S. (“Erdemir”)

Erdermir is the leading steel producer in Turkey and produces plates, hot and cold rolled, tin chromium and zinc coated flat steel and supplies basic inputs to automotive, white goods, pipes and tubes, rolling, manufacturing, electrics-electronics, mechanical engineering, energy, heating equipment, shipbuilding, defense and packaging industries. Unrealized gains (losses) recognized in other comprehensive income were 127 and 658 for the year ended December 31, 2018 and 2017 , respectively.

Stalprodukt S.A.

Stalprodukt S.A. is a leading manufacturer and exporter of highly processed steel products based in Poland.

Following the sale of 729,643 shares including the subsequent capital reduction of Stalprodukt S.A. during the first six months of 2016, for total cash consideration of 46 , ArcelorMittal’s ownership interest and voting rights in Stalprodukt S.A. decreased from 28.47 % to 21.20 % and from 28.26 % to 11.61 % , respectively.

As of December 31, 2018 and 2017 , the fair value of ArcelorMittal’s stake in Stalprodukt S.A. was 101 and 171 , respectively. Unrealized gains recognized in other comprehensive income were 11 and 77 for the year ended December 31, 2018 and 2017 , respectively.

Gerdau

Gerdau is the largest producer of long steel in the Americas and is headquartered in Brazil. Unrealized gains recognized in other comprehensive income were 48 and 42 for the year ended December 31, 2018 and 2017 , respectively.

Unconsolidated structured entities

ArcelorMittal has operating lease arrangements for two vessels (Panamax Bulk Carriers) involving structured entities whose main purpose is to hold legal title of the two vessels and to lease them to the Company. Such entities are wholly-owned and controlled by a financial institution and are funded through equity instruments by the financial institution. Operating lease arrangements began for one vessel in 2013 and for the second vessel in 2014.

The aforesaid operating leases have been agreed for a 12 year period, during which the Company is obliged to pay the structured entities minimum fees equivalent to approximately 4 per year and per vessel. In addition, ArcelorMittal holds cal

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l options to buy each of the two vessels from the structured entities at pre-determined dates and prices as presented in the table below. The structured entities hold put options enabling them to sell each of the vessels at the end of the lease terms at 6 each to the Company.

	Call option strike prices
Exercise dates	at the 60th month			at the 72nd month			at the 84th month			at the 96th month			at the 108th month			at the 120th month			at the 132nd month			at the 144th month
Amounts per vessel 1
First vessel	29			27			26			24			22			20			17			14
Second vessel	31			30			28			27			26			24			20			14

1. If the actual fair value of each vessel is higher than the strike price at each of the exercise dates, ArcelorMittal is obliged to share 50 % of the gain with the structured entities.

Income (loss) from investments in associates, joint ventures and other investments consisted of the following:

	Year Ended December 31,
	2018			2017			2016
Share in net earnings of equity-accounted companies	567			537			207
Impairment charges	( 132	)		( 26	)		( 28	)
Gain (loss) on disposal	126			( 117	)		377
Dividend income	91			54			59
Total	652			448			615

For the year ended December 31, 2018, impairment charges include 132 relating to Macsteel in connection with the sale completed on October 31, 2018 (see note 2.4.1).

For the year ended December 31, 2017, impairment charges include 17 and 9 relating to the write down of receivables from associates and joint ventures .

For the year ended December 31, 2016, impairment charges include 14 and 14 relating to Kalagadi Manganese and Comvex, respectively (see note 2.4.4).

For the year ended December 31, 2018, gain (loss) on disposal included mainly a 142 gain from the recycling of the currency translation reserve following the sale of Macsteel and a 12 loss on the dilution of the Company's interest from 39.02 % to 37.02 % in China Oriental (see note 2.4).

For the year ended December 31, 2017, gain (loss) on disposal includes a gain of 133 (the cash settlement occurs through three annual installments of 44 of which one is outstanding as of December 31, 2018) on the disposal of the Company's 21 % shareholding in Empire Iron Mining Partnership ("EIMP"), a loss of 44 on dilution of the Company's share in China Oriental (see note 2.4), a loss of 22 on dilution of the Company's interest in Baffinland (see note 2.4), a loss of 187 as a result of the reclassification of the accumulated foreign exchange translation losses from other comprehensive income to the statements of operations following the completion of the sale of the Company's 50 % shareholding in Kalagadi Manganese to Kgalagadi Alloys (Proprietary) Ltd on August 25, 2017. As per sales agreement signed on October 21, 2016, ArcelorMittal received a contingent consideration to be paid during the life of the mine, which is capped at 150 and contingent upon the financial performance of the mine and cash flow availability.

For the year ended December 31, 2016, gain (loss) on disposal mainly includes a gain of 329 relating to the disposal of Gestamp (see note 2.4), a loss of 26 relating to the disposal of Stalprodukt S.A. shares (see note 2.5) and a gain of 74 following

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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 President and CFO, Mr. Aditya Mittal.

These operating segments include the attributable goodwill, intangible assets, property, plant and equipment, and certain 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 sectors: automotive, energy, construction, packaging and appliances and via distributors or processors. 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 and packaging sectors. Europe also produces long products consisting of sections, wire rod, rebar, billets, blooms and wire drawing, and tubular products. In addition, it includes Downstream Solutions, primarily an in-house trading and distribution arm of ArcelorMittal. Downstream 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 and tubular products. Its facilities are located in Africa and the 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 provides the Company's steel operations with high quality and low-cost iron ore and coal reserves and also sells limited amounts of mineral products to third parties.

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The following table summarizes certain financial data for ArcelorMittal’s operations by reportable segments.

	NAFTA			Brazil			Europe			ACIS			Mining			Others 1			Elimination			Total
Year ended December 31, 2016
Sales to external customers	15,769			5,526			28,999			5,675			781			41			—			56,791
Intersegment sales 2	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
Year ended December 31, 2017
Sales to external customers	17,893			6,571			35,825			7,323			985			82			—			68,679
Intersegment sales 2	104			1,184			383			298			3,048			303			( 5,320	)		—
Operating income (loss)	1,185			697			2,359			508			991			( 288	)		( 18	)		5,434
Depreciation and amortization	( 518	)		( 293	)		( 1,201	)		( 313	)		( 416	)		( 27	)		—			( 2,768	)
Impairment	—			—			—			( 206	)		—			—			—			( 206	)
Capital expenditures	466			263			1,143			427			495			25			—			2,819
Year ended December 31, 2018
Sales to external customers	20,145			7,041			40,247			7,506			1,009			85			—			76,033
Intersegment sales 2	187			1,670			241			455			3,202			307			( 6,062	)		—
Operating income (loss)	1,889			1,356			1,632			1,094			860			( 247	)		( 45	)		6,539
Depreciation and amortization	( 522	)		( 298	)		( 1,195	)		( 311	)		( 418	)		( 55	)		—			( 2,799	)
Bargain purchase gain 3	—			—			209			—			—			—			—			209
Impairment	—			( 86	)		( 908	)		—			—			—			—			( 994	)
Capital expenditures	669			244			1,336			534			485			37			—			3,305

1. 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.

2. 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.

3. See note 2.2.4.

The reconciliation from operating income to net income (including non-controlling interests) is as follows:

	Year ended December 31,
	2018			2017			2016
Operating income	6,539			5,434			4,161
Income from investments in associates and joint ventures	652			448			615
Financing costs - net	( 2,210	)		( 875	)		( 2,056	)
Income before taxes	4,981			5,007			2,720
Income tax expense (benefit)	( 349	)		432			986
Net income (including non-controlling interests)	5,330			4,575			1,734

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.

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Sales (by destination)

	Year ended December 31,
	2018			2017			2016
Americas
United States	16,271			14,367			12,284
Brazil	4,982			4,149			3,506
Canada	3,563			3,034			2,818
Mexico	1,970			2,251			1,806
Argentina	960			1,230			858
Others	1,322			1,005			935
Total Americas	29,068			26,036			22,207
Europe
Germany	6,757			5,933			4,768
Poland	4,518			3,746			2,997
France	4,431			4,051			3,655
Spain	4,265			3,751			3,015
Italy	3,333			2,711			2,067
Czech Republic	1,782			1,400			1,107
Turkey	1,683			1,937			1,789
United Kingdom	1,471			1,370			1,159
Belgium	1,309			1,129			929
Netherlands	1,209			1,117			1,030
Russia	1,144			1,204			688
Romania	708			621			526
Others	5,653			4,948			3,886
Total Europe	38,263			33,918			27,616
Asia & Africa
South Africa	2,742			2,560			2,026
Morocco	628			596			498
Egypt	206			310			499
Rest of Africa	1,257			1,033			658
China	608			622			549
Kazakhstan	496			392			350
South Korea	365			259			184
India	92			163			85
Rest of Asia	2,308			2,790			2,119
Total Asia & Africa	8,702			8,725			6,968
Total	76,033			68,679			56,791

Revenues from external customers attributed to the country of domicile (Luxembourg) were 162 , 111 and 88 for the years ended December 31, 2018 , 2017 and 2016 , respectively.

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Non-current assets

	December 31,
	2018			2017
Americas
Canada	5,187			5,368
Brazil	4,259			4,466
United States	4,022			4,029
Mexico	1,163			978
Argentina	252			137
Venezuela	10			100
Others	19			20
Total Americas	14,912			15,098
Europe
France	4,363			4,738
Germany	2,607			2,737
Belgium 3	2,526			2,827
Poland	2,356			2,421
Ukraine	2,219			2,077
Spain	1,971			2,035
Italy 2	1,365			171
Luxembourg	1,229			1,277
Bosnia and Herzegovina	205			202
Romania 3	86			633
Czech Republic 3	24			621
Others	235			264
Total Europe	19,186			20,003
Asia & Africa
Kazakhstan	1,309			1,322
South Africa	625			677
Liberia	148			93
Morocco	93			103
Others	107			119
Total Asia & Africa	2,282			2,314
Unallocated assets	22,394			21,137
Total	58,774			58,552

¹

	December 31,
	2018			2017
Americas
Canada	5,187			5,368
Brazil	4,259			4,466
United States	4,022			4,029
Mexico	1,163			978
Argentina	252			137
Venezuela	10			100
Others	19			20
Total Americas	14,912			15,098
Europe
France	4,363			4,738
Germany	2,607			2,737
Belgium 3	2,526			2,827
Poland	2,356			2,421
Ukraine	2,219			2,077
Spain	1,971			2,035
Italy 2	1,365			171
Luxembourg	1,229			1,277
Bosnia and Herzegovina	205			202
Romania 3	86			633
Czech Republic 3	24			621
Others	235			264
Total Europe	19,186			20,003
Asia & Africa
Kazakhstan	1,309			1,322
South Africa	625			677
Liberia	148			93
Morocco	93			103
Others	107			119
Total Asia & Africa	2,282			2,314
Unallocated assets	22,394			21,137
Total	58,774			58,552

per significant country:

	December 31,
	2018			2017
Americas
Canada	5,187			5,368
Brazil	4,259			4,466
United States	4,022			4,029
Mexico	1,163			978
Argentina	252			137
Venezuela	10			100
Others	19			20
Total Americas	14,912			15,098
Europe
France	4,363			4,738
Germany	2,607			2,737
Belgium 3	2,526			2,827
Poland	2,356			2,421
Ukraine	2,219			2,077
Spain	1,971			2,035
Italy 2	1,365			171
Luxembourg	1,229			1,277
Bosnia and Herzegovina	205			202
Romania 3	86			633
Czech Republic 3	24			621
Others	235			264
Total Europe	19,186			20,003
Asia & Africa
Kazakhstan	1,309			1,322
South Africa	625			677
Liberia	148			93
Morocco	93			103
Others	107			119
Total Asia & Africa	2,282			2,314
Unallocated assets	22,394			21,137
Total	58,774			58,552

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

2.	Increase relates mainly to the Ilva acquisition (see note 2.2.4).

3.	ArcelorMittal Ostrava, ArcelorMittal Galati and certain assets of ArcelorMittal Belgium are classified as held for sale as December 31, 2018 (see note 2.3.2).

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Disaggregated revenue

The tables below summarize the disaggregated revenue recognized from contracts with customers:

Year ended December 31, 2018	NAFTA			Brazil			Europe			ACIS			Mining			Others			Total
Steel sales	19,372			6,582			36,603			6,748			—			—			69,305
Non-steel sales 1	148			31			882			243			968			—			2,272
By-product sales 2	124			115			947			182			—			—			1,368
Other sales 3	501			313			1,815			333			41			85			3,088
Total	20,145			7,041			40,247			7,506			1,009			85			76,033

Year ended December 31, 2017	NAFTA			Brazil			Europe			ACIS			Mining			Others			Total
Steel sales	17,210			6,128			32,676			6,661			—			—			62,675
Non-steel sales 1	121			77			817			188			947			—			2,150
By-product sales 2	98			89			683			159			—			—			1,029
Other sales 3	464			277			1,649			315			38			82			2,825
Total	17,893			6,571			35,825			7,323			985			82			68,679

Year ended December 31, 2016	NAFTA			Brazil			Europe			ACIS			Mining			Others			Total
Steel sales	15,158			5,148			26,134			5,190			—			—			51,630
Non-steel sales 1	84			38			803			160			741			—			1,826
By-product sales 2	92			79			568			105			—			—			844
Other sales 3	435			261			1,494			220			40			41			2,491
Total	15,769			5,526			28,999			5,675			781			41			56,791

1. Non-steel sales mainly relate to iron ore, coal, scrap and electricity;

2. By-product sales mainly relate to slag, waste and coke by-products;

The Company’s revenue is derived from the single performance obligation to transfer primarily steel and mining products under arrangements in which the transfer of control of the products and the fulfillment of the Company’s performance obligation occur at the same time. Revenue from the sale of goods is recognized when the Company has transferred control o

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f the goods to the buyer and the buyer obtains the benefits from the goods, the potential cash flows and the amount of revenue (the transaction price) can be measured reliably, and it is probable that the Company will collect the consideration to which it is entitled to in exchange for the goods.

Whether the customer has obtained control over the asset depends on when the goods are made available to the carrier or the buyer takes possession of the goods, depending on the delivery terms. For the Company’s steel producing operations, generally the criteria to recognize revenue has been met when its products are delivered to its customers or to a carrier who will transport the goods to its customers, this is the point in time when the Company has completed its performance obligations. Revenue is measured at the transaction price of the consideration received or receivable, the amount the Company expects to be entitled to.

Additionally, the Company identifies when goods have left its premises, not when the customer receives the goods. Therefore, the Company estimates, based on its historical experience, the amount of goods in-transit when the transfer of control occurs at the destination and defers the revenue recognition.

The Company’s products must meet customer specifications. A certain portion of the Company’s products are returned or have claims filed against the sale because the products contained quality defects or other problems. Claims may be either of the following:

–	Product Rejection - Product shipped and billed to an end customer that did not meet previously agreed customer specifications. Claims typically result from physical defects in the goods, goods shipped to the wrong location, goods produced with incorrect specifications and goods shipped outside acceptable time parameters.

–	Consequential Damages - Damages reported by the customer not directly related to the value of the rejected goods (for example: customer processing cost or mill down time, sampling, storage, sorting, administrative cost, replacement cost, etc.).

The Company estimates the variable consideration for such claims using the expected value method and reduces the

amount of revenue recognized.

Warranties:

The warranties and claims arise when the product fails on the criteria mentioned above. Sales‑related warranties associated with the goods cannot be purchased separately and they serve as an assurance that the products sold comply with agreed‑upon specifications. Accordingly, the Company accounts for warranties in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets (see note 8) .

Periodically, the Company enters into volume or other rebate programs where once a certain volume or other conditions are met, it refunds the customer some portion of the amounts previously billed or paid. For such arrangements, the Company only recognizes revenue for the amounts it ultimately expects to realize from the customer. The Company estimates the variable consideration for these programs using the most likely amount method or the expected value method, whichever approach best predicts the amount of the consideration based on the terms of the contract and available information and updates its estimates each reporting period.

The Company’s payment terms range from 30 to 90 days from date of delivery, depending on the market and product sold. The Company has applied the practical expedient in IFRS 15 (C5) (d). In 2018 , the Company received 364 as advances from its customers which are classified as unsatisfied performance obligations and recognized as liabilities in line with IFRS 15.  The Company expects 100 % of the unsatisfied performance obligations as of December 31, 2018 to be recognized as revenue during 2019 as the Company’s contracts have an original expected duration of one year or less.

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Cost of sales includes the following components:

	Year ended December 31,
	2018			2017			2016
Materials	46,842			42,813			34,276
Labor costs 1	9,206			8,842			7,572
Logistic expenses	4,974			4,161			3,760
Depreciation and amortization	2,799			2,768			2,721
Gain on bargain purchase 2	( 209	)		—			—
Impairment	994			206			205
Other	2,419			2,086			1,894
Total	67,025			60,876			50,428

1.	In 2016, labor costs included an 832 gain relating to changes in post-employment benefit plans in the United States (see note 7.2).

2.	See note 2.2.4

Trade accounts receivable are initially recorded at their transaction price and do not carry any interest. ArcelorMittal maintains an allowance for lifetime expected credit loss at an amount that it considers to be a reliable estimate of expected credit losses resulting from the inability of its customers to make required payments. In judging the adequacy of the allowance for expected credit losses, ArcelorMittal considers multiple factors including historical bad debt experience, the current and forward looking economic environment and the aging of the receivables. Recoveries of trade receivables previously reserved in the allowance for expected credit losses are recognized as gains in selling, general and administrative expenses.

ArcelorMittal’s policy is to record an allowance for expected lifetime credit losses and a charge in selling, general and administrative expense when a specific account is deemed uncollectible. The Company concluded that a trade receivable is in default when they are overdue by more than 180 days. Based on historical experience and analysis, the Company concluded that there is a risk of default as such receivables are generally not recoverable and therefore provided for, unless it can be clearly demonstrated that the receivable is still collectible.

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Trade accounts receivable and allowance for lifetime

	December 31,
	2018			2017
Gross amount	4,605			4,056
Allowance for lifetime expected credit losses	( 173	)		( 193	)
Total	4,432			3,863

	December 31,
	2018			2017
Gross amount	4,605			4,056
Allowance for lifetime expected credit losses	( 173	)		( 193	)
Total	4,432			3,863

expected credit losses

	December 31,
	2018			2017
Gross amount	4,605			4,056
Allowance for lifetime expected credit losses	( 173	)		( 193	)
Total	4,432			3,863

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

Exposure to credit risk by reportable segment

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

	December 31,
	2018			2017
NAFTA	579			343
Brazil	864			857
Europe	2,348			2,052
ACIS	531			546
Mining	110			65
Total	4,432			3,863

Aging of trade accounts receivable

	December 31,									December 31,
	2018									2017
	Gross			Allowance under lifetime expected credit loss model (IFRS 9)			Total			Gross			Allowance under incurred loss model (IAS 39)			Total
Not past due	3,377			( 3	)		3,374			3,134			( 4	)		3,130
Overdue 1-30 days	691			( 3	)		688			538			( 9	)		529
Overdue 31-60 days	178			( 1	)		177			106			( 1	)		105
Overdue 61-90 days	97			( 1	)		96			34			—			34
Overdue 91-180 days	59			( 4	)		55			46			( 13	)		33
More than 180 days	203			( 161	)		42			198			( 166	)		32
Total	4,605			( 173	)		4,432			4,056			( 193	)		3,863

The movements in the allowance are calculated based on lifetime expected credit loss model for 2018 and incurred loss model for 2017 and 2016. The allowances in respect of trade accounts receivable during the periods presented is as follows:

Balance as of December 31, 2015		Additions		Deductions/ Releases		Foreign exchange and others		Balance as of December 31, 2016
170		34		( 25 )		5		184
Balance as of December 31, 2016		Additions		Deductions/ Releases		Foreign exchange and others		Balance as of December 31, 2017
184		34		( 38 )		13		193
Balance as of December 31, 2017		Additions		Deductions/ Releases		Foreign exchange and others		Balance as of December 31, 2018
193		35		( 29 )		( 26 )		173

The Company has established a number of programs for sales without recourse of trade accounts receivable to various financial institutions (referred to as true sale of receivables (“TSR”)). Through the TSR programs, certain operating subsidiaries

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Inventories are carried at the lower of cost or net realizable value. Cost is determined using the average cost method. Costs of production in process and finished goods include the purchase costs of raw materials and conversion costs such as direct labor and an allocation of fixed and variable production overheads. Raw materials and spare parts are valued at cost, inclusive of freight, shipping, handling as well as any other costs incurred in bringing the inventories to their present location and condition. Interest charges, if any, on purchases have been recorded as financing costs. Costs incurred when production levels are abnormally low are capitalized as inventories based on normal capacity with the remaining costs incurred recorded as a component of cost of sales in the consolidated statements of operations.

Net realizable value represents the estimated selling price at which the inventories can be realized in the normal course of business after allowing for the cost of conversion from their existing state to a finished condition and for the cost of marketing, selling, and distribution. Net realizable value is estimated based on the most reliable evidence available at the time the estimates were made of the amount that the inventory is expected to realize, taking into account the purpose for which the inventory is held.

Previous write-downs are reversed in case the circumstances that previously caused inventories to be written down below cost no longer exist.

Inventories, net of allowance for slow-moving inventory, excess of cost over net realizable value and obsolescence of 1,168 and 1,239 as of December 31, 2018 and 2017 , respectively, are comprised of the following:

	December 31,
	2018			2017
Finished products	7,464			6,321
Production in process	4,596			4,049
Raw materials	6,822			5,883
Manufacturing supplies, spare parts and other 1	1,862			1,733
Total	20,744			17,986

1.	This consists of spare parts of 1.3 billion and 1.3 billion , and manufacturing and other of 0.6 billion and 0.4 billion as of December 31, 2018 and 2017 , respectively.

Note 4.2 discloses the cost of inventories (materials) recognized as an expense during the year.

The movement in the inventory reserve is as follows:

Balance as of December 31, 2015		Additions 1		Deductions / Releases 2		Foreign exchange and others		Balance as of December 31, 2016
1,707		473		( 964 )		( 119 )		1,097
Balance as of December 31, 2016		Additions 1		Deductions / Releases 2		Foreign exchange and others		Balance as of December 31, 2017
1,097		442		( 404 )		104		1,239
Balance as of December 31, 2017		Additions 1		Deductions / Releases 2		Foreign exchange and others		Balance as of December 31, 2018
1,239		423		( 382 )		( 112 )		1,168

1.	Additions refer to write-downs of inventories including those utilized or written back during the same financial year.

2.	Deductions/releases correspond to write-backs and utilizations related to the current and prior periods.

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1.	Other includes mainly advances to employees, accrued interest and other miscellaneous receivables.

Other assets consisted of the following:

	December 31,
	2018			2017
Derivative financial instruments	609			995
Financial amounts receivable	1,679			345
Long-term VAT receivables	322			198
Cash guarantees and deposits	185			190
Receivables from public authorities	172			173
Accrued interest	86			96
Receivables from sale of financial and intangible assets	61			93
Income tax receivable	18			14
Other 1	228			130
Total	3,360			2,234

1.	Other mainly includes assets in pension funds and other amounts receivable .

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The carrying amounts of goodwill and intangible assets are summarized as follows:

	December 31,
	2018			2017
Goodwill on acquisitions	4,986			5,294
Concessions, patents and licenses	293			275
Customer relationships and trade marks	90			118
Other 1	359			50
Total	5,728			5,737

1. Other includes 201 relating to CO2 emission rights and 76 favorable land lease contracts held by Ilva at acquisition date (please refer to note 2.2.4)

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:

	December 31, 2016			Divestments and assets held for sale			Foreign exchange differences and other movements 1			December 31, 2017
NAFTA	2,202			—			47			2,249
Brazil	1,668			—			( 28	)		1,640
Europe	529			—			53			582
ACIS	849			—			( 26	)		823
Total	5,248			—			46			5,294

1. The movements for Brazil includes 2 related to Sumaré acquisition (please refer to note 2.2.4)

	December 31, 2017			Divestments and assets held for sale 2			Foreign exchange differences and other movements 1			December 31, 2018
NAFTA	2,249			—			( 51	)		2,198
Brazil	1,640			( 18	)		( 218	)		1,404
Europe	582			( 16	)		( 16	)		550
ACIS	823			—			11			834
Total	5,294			( 34	)		( 274	)		4,986

1. The movements for Brazil includes 24 related to Votorontim Siderurgia acquisition (please refer to note 2.2.4)

2. See note 2.3.1 and 2.3.2

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 cost of sales.

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ArcelorMittal’s industrial sites which are regulated by the European Directive 2003/87/EC of October 13, 2003 on carbon dioxide (“CO 2 ”) emission rights, effective as of January 1, 2005, are located primarily in Belgium, Czech Republic, France, Germany, Luxembourg, Poland, Romania, Spain and Italy. ArcelorMittal's operations in Ontario, Canada are subject to the “Climate Change Mitigation and Low-carbon Economy Act, 2016”, a cap and trade program regulation effective from July 1, 2016. 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.

Other intangible assets are summarized as follows:

	Concessions, patents and licenses			Customer relationships and trade marks			Other			Total
Cost
At December 31, 2016	676			1,100			56			1,832
Acquisitions	6			21			34			61
Disposals	( 1	)		—			—			( 1	)
Foreign exchange differences	83			97			9			189
Transfers and other movements 1	20			( 1	)		( 3	)		16
Fully amortized intangible assets 2	( 18	)		( 3	)		—			( 21	)
At December 31, 2017	766			1,214			96			2,076
Acquisitions	22			—			39			61
Acquisitions through business combinations (note 2.2.4)	2			—			317			319
Disposal	—			—			( 5	)		( 5	)
Foreign exchange differences	( 61	)		( 83	)		( 4	)		( 148	)
Transfers to assets held for sale (note 2.3)	( 32	)		—			—			( 32	)
Transfers and other movements 1	64			1			—			65
Fully amortized intangible assets 2	( 16	)		( 4	)		—			( 20	)
At December 31, 2018	745			1,128			443			2,316
Accumulated amortization and impairment losses
At December 31, 2016	424			980			25			1,429
Amortization charge	31			31			16			78
Foreign exchange differences	58			89			5			152
Transfers and other movements 1	( 4	)		( 1	)		—			( 5	)
Fully amortized intangible assets 2	( 18	)		( 3	)		—			( 21	)
At December 31, 2017	491			1,096			46			1,633
Amortization charge	47			22			42			111
Foreign exchange differences	( 44	)		( 76	)		( 3	)		( 123	)
Transfers to assets held for sale (note 2.3)	( 27	)		—			—			( 27	)
Transfers and other movements 1	1			—			( 1	)		—
Fully amortized intangible assets 2	( 16	)		( 4	)		—			( 20	)
At December 31, 2018	452			1,038			84			1,574
Carrying amount
At December 31, 2017	275			118			50			443
At December 31, 2018	293			90			359			742

1.	Transfers and other movements correspond mainly to transfer from assets under construction into patents and licenses in 2018 and 2017 .

2.	Fully amortized assets correspond mainly to licenses in 2018 and 2017 .

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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

The Company’s annual review of useful lives leverages on the experience gained from an in-depth review performed every five years, any significant change in the expected pattern of consumption embodied in the asset, and the specialized knowledge of ArcelorMittal’s network of chief technical officers. The chief technical officer network includes engineers with facility-specific expertise related to plant and equipment used in the principal production units of the Company’s operations. The most recent in-depth review took place in 2014, during which the Company performed a review of the useful lives of its assets and determined its maintenance and operating practices enabled an extension of the useful lives of plant and equipment. In performing this review, the Company gathered and evaluated data, including commissioning dates, designed capacities, maintenance records and programs, and asset performance history, among other attributes. In accordance with IAS 16, Property, Plant and Equipment, the Company considered this information at the level of components significant in relation to the total cost of the item of plant and equipment. Other factors the Company considered in its determination of useful lives included the expected use of the assets, technical or commercial obsolescence, and operational factors that led to improvements in monitoring and process control that contribute to longer asset lives. In addition, the Company considered the accumulated technical experience and knowledge sharing programs that allowed for the exchange of best practices within the chief technical officer network and the deployment of these practices across the Company’s principal production units.

Major improvements, which add to productive capacity or extend the life of an asset, are capitalized, while repairs and maintenance are expensed as incurred. Where a tangible fixed asset comprises major components having different useful lives, these components are accounted for as separate items.

Property, plant and equipment under construction is recorded as construction in progress until it is ready for its intended use; thereafter it is transferred to the related class of property, plant and equipment and depreciated over its estimated useful life. Interest incurred during construction is capitalized if the borrowing cost is directly attributable to the construction. Gains and losses on retirement or disposal of assets are recognized in cost of sales.

Property, plant and equipment acquired by way of finance leases is stated at an amount equal to the lower of the fair value and the present value of the minimum lease payments at the inception of the lease. Each lease payment is allocated between the finance charges and a reduction of the lease liability. The interest element of the finance cost is charged to the consolidated statements of operations over the lease period so as to achieve a constant rate of interest on the remaining balance of the liability.

The residual values and useful lives of property, plant and equipment are reviewed at each reporting date and adjusted if expectations differ from previous estimates. Depreciation methods applied to property, plant and equipment are reviewed at each reporting date and changed if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset.

Mining assets comprise:

•	Mineral rights acquired;

•	Capitalized developmental stripping (as described below in “—Stripping and overburden removal costs”).

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Property, plant and equipment used in mining activities is depreciated over its useful life or over the remaining life of the mine, if shorter, and if there is no alternative use. For the majority of assets used in mining activities, the economic benefits from the asset are consumed in a pattern which is linked to the production level and accordingly, assets used in mining activities are primarily depreciated on a units-of-production basis. A unit-of-production is based on the available estimate of proven and probable reserves.

Capitalization of pre-production expenditures ceases when the mining property is capable of commercial production as it is intended by management. General administration costs that are not directly attributable to a specific exploration area are charged to the consolidated statements of operations.

Mining Reserves

Reserves are estimates of the amount of product that can be economically and legally extracted from the Company’s properties. In order to estimate reserves, estimates are required for a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates.

Estimating the quantity and/or grade of reserves requires the size, shape and depth of ore bodies to be determined by analyzing geological data such as drilling samples. This process may require complex and difficult geological judgments to interpret the data.

Because the economic assumptions used to estimate reserves change from period to period, and because additional geological data is generated during the course of operations, estimates of reserves may change from period to period. Changes in reported reserves may affect the Company’s financial results and financial position in a number of ways, including the following:

•	Asset carrying amounts may be affected due to changes in estimated future cash flows.

•	Depreciation, depletion and amortization charged in the consolidated statements of operations may change where such charges are determined by the units of production basis, or where the useful economic lives of assets change.

•	Overburden removal costs recognized in the consolidated statements of financial position or charged to the consolidated statements of operations may change due to changes in stripping ratios or the units of production basis of depreciation.

•	Decommissioning, site restoration and environmental provisions may change where changes in estimated reserves affect expectations about the timing or cost of these activities.

Stripping and overburden removal costs

In open pit and underground mining operations, it is often necessary to remove overburden and other waste materials to access the deposit from which minerals can be extracted. This process is referred to as stripping. Stripping costs can be incurred before the mining production commences (“developmental stripping”) or during the production stage (“production stripping”).

A mine can operate several open pits that are regarded as separate operations for the purpose of mine planning and production. In this case, stripping costs are accounted for separately, by reference to the ore extracted from each separate pit. If, however, the pits are highly integrated for the purpose of mine planning and production, stripping costs are aggregated.

The determination of whether multiple pit mines are considered separate or integrated operations depends on each mine’s specific circumstances. The following factors would point towards the stripping costs for the individual pits being accounted for separately:

•	If mining of the second and subsequent pits is conducted consecutively with that of the first pit, rather than concurrently.

•	If separate investment decisions are made to develop each pit, rather than a single investment decision being made at the outset.

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•	If the pits are operated as separate units in terms of mine planning and the sequencing of overburden and ore mining, rather than as an integrated unit.

•	If expenditures for additional infrastructure to support the second and subsequent pits are relatively large.

•	If the pits extract ore from separate and distinct ore bodies, rather than from a single ore body.

The relative importance of each factor is considered by local management to determine whether the stripping costs should be attributed to the individual pit or to the combined output from several pits.

Developmental stripping costs contribute to the future economic benefits of mining operations when the production begins and so are capitalized as tangible assets (construction in progress), whereas production stripping is a part of on-going activities and commences when the production stage of mining operations begins and continues throughout the life of a mine.

Capitalization of developmental stripping costs ends when the commercial production of the minerals commences.

Production stripping costs are incurred to extract the ore in the form of inventories and/or to improve access to an additional component of an ore body or deeper levels of material. Production stripping costs are accounted for as inventories to the extent the benefit from production stripping activity is realized in the form of inventories. Production stripping costs are recognized as a non-current asset (“stripping activity assets”) to the extent it is probable that future economic benefit in terms of improved access to ore will flow to the Company, the components of the ore body for which access has been improved can be identified and the costs relating to the stripping activity associated with that component can be measured reliably.

All stripping costs assets (either stripping activity assets or capitalized developmental stripping costs) are presented within a specific “mining assets” class of property, plant and equipment and then depreciated on a units-of-production basis.

Exploration and evaluation expenditure

Exploration and evaluation activities involve the search for iron ore and coal resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Exploration and evaluation activities include:

•	researching and analyzing historical exploration data;

•	conducting topographical, geological, geochemical and geophysical studies;

•	carrying out exploratory drilling, trenching and sampling activities;

•	drilling, trenching and sampling activities to determine the quantity and grade of the deposit;

•	examining and testing extraction methods and metallurgical or treatment processes; and

•	detailed economic feasibility evaluations to determine whether development of the reserves is commercially justified and to plan methods for mine development.

Exploration and evaluation expenditure is charged to the consolidated statements of operations as incurred except in the following circumstances, in which case the expenditure is capitalized: (i) the exploration and evaluation activity is within an area of interest which was previously acquired in a business combination and measured at fair value on acquisition; or (ii) when management has a high degree of confidence in the project’s economic viability and it is probable that future economic benefits will flow to the Company.

Capitalized exploration and evaluation expenditures are generally recorded as a component of property, plant and equipment at cost less impairment charges, unless their nature requires them to be recorded as an intangible asset. As the asset is not available for use, it is not depreciated and all capitalized exploration and evaluation expenditure is monitored for indications of impairment. To the extent that capitalized expenditure is not expected to be recovered, it is recognized as an expense in the consolidated statements of operations.

Cash flows associated with exploration and evaluation expenditure are classified as operating activities when they are related to expenses or as an investing activity when they are related to a capitalized asset in the consolidated statements of cash flows.

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Development expenditure

Development is the establishment of access to the mineral reserve and other preparations for commercial production. Development activities often continue during production and include:

•	sinking shafts and underground drifts (often called mine development);

•	making permanent excavations;

•	developing passageways and rooms or galleries;

•	building roads and tunnels; and

•	advance removal of overburden and waste rock.

Development (or construction) also includes the installation of infrastructure (e.g., roads, utilities and housing), machinery, equipment and facilities.

When reserves are determined and development is approved, expenditures capitalized as exploration and evaluation are reclassified as construction in progress and are reported as a component of property, plant and equipment. All subsequent development expenditures are capitalized and classified as construction in progress. On completion of development, all assets included in construction in progress are individually reclassified to the appropriate category of property, plant and equipment and depreciated accordingly.

Biological assets

Biological assets are part of the Brazil operating segment and consist of eucalyptus forests located in the Brazilian state of Minas Gerais exclusively from renewable plantations and intended for the production of charcoal to be utilized as fuel and a source of carbon in the direct reduction process of pig iron production in some of the Company’s blast furnaces in Brazil.

Biological assets are measured at their fair value, net of estimated costs to sell at the time of harvest. The fair value (level 3 in the fair value hierarchy) is determined based on the discounted cash flow method, taking into consideration the cubic volume of wood, segregated by plantation year, and the equivalent sales value of standing trees. The average sales price was estimated based on domestic market prices. In determining the fair value of biological assets, a discounted cash flow model was used, with a harvest cycle of 6 to 7 years.

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

	Land, buildings and Improvements			Machinery,  equipment and other 2			Construction in progress			Mining Assets			Total
Cost
At December 31, 2016	11,108			43,317			3,257			3,751			61,433
Additions	90			357			2,441			50			2,938
Foreign exchange differences	1,629			5,560			154			—			7,343
Disposals	( 97	)		( 853	)		( 7	)		( 1	)		( 958	)
Divestments (note 2.3)	( 7	)		( 40	)		—			—			( 47	)
Transfers to assets held for sale (note 2.3)	( 21	)		( 95	)		—			—			( 116	)
Other movements 1	143			1,928			( 2,113	)		75			33
At December 31, 2017	12,845			50,174			3,732			3,875			70,626
Additions	36			282			3,064			28			3,410
Acquisitions through business combinations (see note 2.2.4)	358			1,210			58			—			1,626
Foreign exchange differences	( 888	)		( 4,006	)		( 220	)		( 100	)		( 5,214	)
Disposals	( 120	)		( 535	)		( 113	)		( 13	)		( 781	)
Divestments (note 2.3)	( 43	)		( 215	)		( 2	)		—			( 260	)
Transfers to assets held for sale (note 2.3)	( 1,434	)		( 4,532	)		( 143	)		—			( 6,109	)
Other movements 1	125			1,684			( 2,013	)		111			( 93	)
At December 31, 2018	10,879			44,062			4,363			3,901			63,205
Accumulated depreciation and impairment
At December 31, 2016	3,138			19,980			993			2,491			26,602
Depreciation charge for the year	329			2,249			—			112			2,690
Impairment (note 5.3)	10			196			—			—			206
Disposals	( 61	)		( 820	)		( 1	)		—			( 882	)
Foreign exchange differences	940			4,080			18			2			5,040
Divestments (note 2.3)	( 4	)		( 39	)		—			—			( 43	)
Transfers to assets held for sale (note 2.3)	( 18	)		( 64	)		—			—			( 82	)
Other movements 1	22			118			( 22	)		6			124
At December 31, 2017	4,356			25,700			988			2,611			33,655
Depreciation charge for the year	356			2,212			—			120			2,688
Impairment (note 5.3)	21			930			9			—			960
Disposals	( 110	)		( 494	)		—			( 13	)		( 617	)
Foreign exchange differences	( 484	)		( 2,715	)		( 7	)		( 81	)		( 3,287	)
Divestments (note 2.3)	( 31	)		( 181	)		—			—			( 212	)
Transfers to assets held for sale (note 2.3)	( 989	)		( 4,456	)		( 26	)		—			( 5,471	)
Other movements 1	( 6	)		( 158	)		17			( 2	)		( 149	)
At December 31, 2018	3,113			20,838			981			2,635			27,567
Carrying amount
At December 31, 2017	8,489			24,474			2,744			1,264			36,971
At December 31, 2018	7,766			23,224			3,382			1,266			35,638

	Land, buildings and Improvements			Machinery,  equipment and other 2			Construction in progress			Mining Assets			Total
Cost
At December 31, 2016	11,108			43,317			3,257			3,751			61,433
Additions	90			357			2,441			50			2,938
Foreign exchange differences	1,629			5,560			154			—			7,343
Disposals	( 97	)		( 853	)		( 7	)		( 1	)		( 958	)
Divestments (note 2.3)	( 7	)		( 40	)		—			—			( 47	)
Transfers to assets held for sale (note 2.3)	( 21	)		( 95	)		—			—			( 116	)
Other movements 1	143			1,928			( 2,113	)		75			33
At December 31, 2017	12,845			50,174			3,732			3,875			70,626
Additions	36			282			3,064			28			3,410
Acquisitions through business combinations (see note 2.2.4)	358			1,210			58			—			1,626
Foreign exchange differences	( 888	)		( 4,006	)		( 220	)		( 100	)		( 5,214	)
Disposals	( 120	)		( 535	)		( 113	)		( 13	)		( 781	)
Divestments (note 2.3)	( 43	)		( 215	)		( 2	)		—			( 260	)
Transfers to assets held for sale (note 2.3)	( 1,434	)		( 4,532	)		( 143	)		—			( 6,109	)
Other movements 1	125			1,684			( 2,013	)		111			( 93	)
At December 31, 2018	10,879			44,062			4,363			3,901			63,205
Accumulated depreciation and impairment
At December 31, 2016	3,138			19,980			993			2,491			26,602
Depreciation charge for the year	329			2,249			—			112			2,690
Impairment (note 5.3)	10			196			—			—			206
Disposals	( 61	)		( 820	)		( 1	)		—			( 882	)
Foreign exchange differences	940			4,080			18			2			5,040
Divestments (note 2.3)	( 4	)		( 39	)		—			—			( 43	)
Transfers to assets held for sale (note 2.3)	( 18	)		( 64	)		—			—			( 82	)
Other movements 1	22			118			( 22	)		6			124
At December 31, 2017	4,356			25,700			988			2,611			33,655
Depreciation charge for the year	356			2,212			—			120			2,688
Impairment (note 5.3)	21			930			9			—			960
Disposals	( 110	)		( 494	)		—			( 13	)		( 617	)
Foreign exchange differences	( 484	)		( 2,715	)		( 7	)		( 81	)		( 3,287	)
Divestments (note 2.3)	( 31	)		( 181	)		—			—			( 212	)
Transfers to assets held for sale (note 2.3)	( 989	)		( 4,456	)		( 26	)		—			( 5,471	)
Other movements 1	( 6	)		( 158	)		17			( 2	)		( 149	)
At December 31, 2018	3,113			20,838			981			2,635			27,567
Carrying amount
At December 31, 2017	8,489			24,474			2,744			1,264			36,971
At December 31, 2018	7,766			23,224			3,382			1,266			35,638

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 and 36 as of December 31, 2018 and 2017 , respectively, and bearer plants of 38 and 35 as of December 31, 2018 and 2017 , respectively.

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The carrying amount of temporarily idle property, plant and equipment at December 31, 2018 and 2017 was 260 and 325 including 244 and 297 in Brazil, 14 and 6 in NAFTA and 2 and 22 in the Europe segment, respectively.

The carrying amount of property, plant and equipment retired from active use and not classified as held for sale was 51 and 51 at December 31, 2018 and 2017 , respectively. Such assets are carried at their recoverable amount.

Lease arrangements

The Company may enter into arrangements that do not take the legal form of a lease, but may contain a lease. This will be the case if the following two criteria are met:

•	The fulfillment of the arrangement depends on the use of a specific asset and

•	The arrangement conveys a right to use the asset.

Assets under lease arrangements which transfer substantially all of the risks and rewards of ownership to the Company are classified as finance leases. On initial recognition, the leased asset and its related liability are measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset while the minimum lease payments are apportioned between financing costs and reduction of the lease liability.

Assets held under lease arrangements that are not finance leases are classified as operating leases and are not recognized in the consolidated statements of financial position. Payments made under operating leases are recognized in cost of sales in the consolidated statements of operations on a straight-line basis over the lease terms.

The carrying amount of capitalized leases was 363 and 415 as of December 31, 2018 and 2017 , respectively including 232 and 364 related to machinery and equipment, 93 and 51 to buildings and 38 and 0 to land, respectively.

The total future minimum lease payments related to finance leases for the year ended December 31, 2018 were as follows:

2019	121
2020 – 2023	392
2024 and beyond	86
Total minimum lease commitments	599
Less: future finance charges	176
Present value of minimum lease payments	423

The total future minimum lease payments related to finance leases for the year ended December 31, 2017 were as follows:

2018	144
2019 – 2022	440
2023 and beyond	160
Total minimum lease commitments	744
Less: future finance charges	256
Present value of minimum lease payments	488

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Impairment charges recognized, were as follows:

		Year ended December 31,
Type of asset		2018			2017			2016
Goodwill		34			—			—
Tangible assets		960			206			205
Total		994			206			205

Impairment test of goodwill

Goodwill is tested for impairment annually, as of October 1 or whenever changes in circumstances indicate that the carrying amount may not be recoverable, at the level of the groups of cash-generating units (“GCGU”) which correspond to the operating segments representing the lowest level at which goodwill is monitored for internal management purposes. Whenever the cash-generating units comprising the operating segments are tested for impairment at the same time as goodwill, the cash-generating units are tested first and any impairment of the assets is recorded prior to the testing of goodwill. Until the year ended December 31, 2017, the Company performed its annual impairment test of goodwill using October 31 as the measurement date. Effective September 2018, the Company changed its impairment test date to October 1 in order to better align with its internal strategic and financial planning process. The Company believes that this change in dates is preferable under the circumstances and does not result in the delay, acceleration or avoidance of an impairment charge.

The recoverable amounts of the GCGUs are mainly determined based on their value in use. The value in use of each GCGU is determined by estimating future cash flows. The 2018 impairment test of goodwill did not include the GCGU corresponding to the Mining segment as goodwill allocated to this GCGU was fully impaired in 2015 . The key assumptions for the value in use calculations are primarily the discount rates, growth rates, expected changes to average selling prices, shipments and direct costs during the period. Assumptions for average selling prices and shipments are based on historical experience and expectations of future changes in the market. In addition, with respect to raw material price assumptions, the Company applied a range of $ 60 per tonne to $ 65 per tonne for iron ore and $ 130 per tonne to $ 192 per tonne for coking coal. Cash flow forecasts adjusted for the risks specific to the tested assets are derived from the most recent financial plans approved by management for the next five years. Beyond the specifically forecasted period, the Company extrapolates cash flows for the remaining years based on an estimated growth rate of 2 % . This rate does not exceed the average long-term growth rate for the relevant markets.

Management estimates discount rates using pre-tax rates that reflect current market rates for investments of similar risk. The rate for each GCGU was estimated from the weighted average cost of capital of producers, which operate a portfolio of assets similar to those of the Company’s assets.

	NAFTA		Brazil		Europe		ACIS
GCGU weighted average pre-tax discount rate used in 2018 (in %)	12.9		15.5		10.6		15.4
GCGU weighted average pre-tax discount rate used in 2017 (in %)	11.9		15.6		11.0		16.3

Once recognized, impairment losses for goodwill are not reversed.

There was no impairment charge recognized with respect to goodwill following the Company’s impairment test as of October 1, 2018. The total value in use calculated for all GCGUs increased overall in 2018 as compared to 2017 . The Company recognized a 18 and 16 impairment loss in connection with the sale of the Votorantim remedies (see note 2.3.1.) and the intended sale of the Ilva remedies (see note 2.3.2.).

In validating the value in use determined for the GCGUs, the Company performed a sensitivity analysis of key assumptions used in the discounted cash-flow model (such as discount rates, average selling prices, shipments and terminal growth rate).

In 2017, the following changes in key assumptions in projected earnings in every year of initial five-year period and perpetuity, at the GCGU level, assuming unchanged values for the other assumptions, would have caused the recoverab

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le amount to equal respective carrying value as of the impairment test date (i.e.: October 31, 2017).

	2017
	ACIS		Brazil
Excess of recoverable amount over carrying amount	272		1,307
Increase in pre-tax discount rate (change in basis points)	72		140
Decrease in average selling price (change in %)	0.49		1.37
Decrease in shipments (change in %)	2.16		4.11

In 2018, given the overall increase in value in use, the Company did not identify any reasonably possible change in key assumptions which could cause an impairment loss to be recognized.

Impairment test of property, plant and equipment

At each reporting date, ArcelorMittal reviews the carrying amounts of its intangible assets (excluding goodwill) and tangible assets to determine whether there is any indication that the carrying amount of those assets may not be recoverable through continuing use. If any such indication exists, the recoverable amount of the asset (or cash generating unit) is reviewed in order to determine the amount of the impairment, if any. The recoverable amount is the higher of its net selling price (fair value reduced by selling costs) and its value in use.

In estimating its value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset (or cash-generating unit). For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets corresponding to operating units that generate cash inflows. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, an impairment loss is recognized. An impairment loss is recognized as an expense immediately as part of operating income in the consolidated statements of operations.

In the case of permanently idled assets, the impairment is measured at the individual asset level. Otherwise, the Company’s assets are measured for impairment at the cash-generating unit level. In certain instances, the cash-generating unit is an integrated manufacturing facility which may also be an operating subsidiary. Further, a manufacturing facility may be operated in concert with another facility with neither facility generating cash flows that are largely independent from the cash flows of the other. In this instance, the two facilities are combined for purposes of testing for impairment. As of December 31, 2018 , the Company determined it has 61 cash-generating units.

An impairment loss, related to intangible assets other than goodwill and tangible assets recognized in prior years is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. However, the increased carrying amount of an asset due to a reversal of an impairment loss will not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately as part of operating income in the consolidated statements of operations.

Impairment charges relating to property, plant and equipment were as follows for the years ended December 31, 2018 , 2017 and 2016 :

2018

In 2018, the Company recognized a total impairment charge related to property, plant and equipment of 960 including 872 in connection with the intended sale of the Ilva remedies (see note 2.3.2) and 68 in relation to the sale of the Votorantim remedies (see note 2.3.1).

2017

In 2017, the Company recognized a total impairment charge related to property, plant and equipment in AMSA (ACIS) amounting to 206 .

During the six months ended June 30, 2017, management performed a test for impairment relating to the Long Carbon cash-generating unit of ArcelorMittal South Africa as a result of a downward revision of cash flow projections. Accordingly, t

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he Company recognized an impairment charge of 46 consisting of the following:

Cash-Generating Unit

Country

Operating Segment

Impairment Recorded

2017 Pre-Tax Discount Rate

2016 Pre-Tax Discount Rate

Carrying amount of property, plant and equipment as of June 30, 2017

Long Steel Products

South Africa

ACIS

46

17.12

%

16.63

%

325

In connection with management’s annual test for impairment of goodwill, property, plant and equipment was also tested for impairment at that date. As of December 31, 2017, the Company concluded that the value in use of property, plant and equipment in AMSA was lower than its carrying amount in the context of the appreciation of the rand against U.S. dollar and the uncertainties about demand outlook. Accordingly, the Company recognized a total impairment charge of 160 consisting mainly of the following:

Cash-Generating Unit		Country		Operating Segment		Impairment Recorded			2017 Pre-Tax Discount Rate			2016 Pre-Tax Discount Rate			Carrying amount of property, plant and equipment as of December 31, 2017
Vanderbijlpark facility		South Africa		ACIS		86			15.23	%		14.97	%		296
Long Steel Products		South Africa		ACIS		33			15.24	%		15.22	%		306

2016

In 2016, the Company recognized a total impairment charge of property, plant and equipment amounting to 205 .

This charge included 49 in connection with the sale of the ArcelorMittal Zaragoza facility in Spain (Europe segment) on September 30, 2016 (see note 2.3.1).

Financial assets and liabilities mainly comprise:

•	fair values versus carrying amounts (see note 6.1.1)

•	gross debt (see note 6.1.2)

•	cash and cash equivalents, restricted cash and reconciliations of cash flows (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)

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. On January 1, 2018 (the date of initial application of IFRS 9), the Company has assessed which business model applies to the financial assets held

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by the Company and has classified its financial instruments into the appropriate IFRS 9 categories. The Company has applied IFRS 9 in accordance with the transition provisions set out in IFRS 9.

Classification and measurement of financial assets

The date of initial application (i.e. the date on which the Company has assessed its existing financial assets and financial liabilities in terms of IFRS 9 requirements) is January 1, 2018. Accordingly, the Company has applied the requirements of IFRS 9 to instruments that continue to be recognized at January 1, 2018 and has not applied the requirements to instruments that have already been derecognized at January 1, 2018. Comparative amounts in relation to instruments that continue to be recognized at January 1, 2018 have been reclassified where appropriate.

Equity investments previously classified as available-for-sale and at cost

The Company elected to present in OCI changes in the fair value of all its equity investments previously classified as available-for-sale and at cost, because these investments are held as long-term strategic investments that are not expected to be sold in the short to medium term. As a result, on January 1, 2018, assets with a carrying amount of 1,444 and 27 were reclassified from assets available-for-sale and investments at cost, respectively, to financial assets at FVOCI.

Trade accounts receivable previously classified as loans and receivables

Trade receivables subject to TSR programs with a carrying amount of 594 were reclassified on January 1, 2018 from loans and receivables at amortized cost to financial assets at FVOCI (see note 4.3).

The main impact of the adoption of IFRS 9 relates to financial assets as the requirements for financial liabilities remained substantially unchanged from IAS 39. On the date of initial application, the Company’s financial instruments were as follows, with any applicable reclassifications:

	Measurement category				Carrying amount
	Original (IAS 39)		New (IFRS 9)		Original			New			Change
Current financial assets
Trade accounts receivable and other	Loans and receivables		Amortized cost		3,269			3,269			—
Trade accounts receivable and other subject to TSR programs	Loans and receivables		FVOCI		594			594			—
Cash and cash equivalents	Loans and receivables		Amortized cost		2,574			2,574			—
Restricted cash	Loans and receivables		Amortized cost		212			212			—
Prepaid expenses and other current assets	Loans and receivables		Amortized cost		574			574			—
Derivatives	Fair value recognized in profit or loss		Fair value recognized in profit or loss		87			87			—
Non-current financial assets
Other assets	Loans and receivables		Amortized cost		834			834			—
Other investments	Available-for-sale		FVOCI		1,444			1,444			—
Other investments	Investments at cost		FVOCI		27			27			—
Derivatives	Fair value recognized in profit or loss		Fair value recognized in profit or loss		989			989			—

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The following tables summarize assets and liabilities based on their categories .

	December 31, 2018
	Carrying amount in the consolidated statements of financial position			Non-financial assets and liabilities			Assets/Liabilities at amortized cost			Fair value recognized in profit or loss			Fair value recognized in OCI			Derivatives
ASSETS
Current assets:
Cash and cash equivalents	2,172			—			2,172			—			—			—
Restricted cash	182			—			182			—			—			—
Trade accounts receivable and other	4,432			—			3,957			—			475			—
Inventories	20,744			20,744			—			—			—			—
Prepaid expenses and other current assets	2,834			1,405			812			—			—			617
Assets held for sale	2,111			2,111			—			—			—			—
Total current assets	32,475			24,260			7,123			—			475			617
Non-current assets:
Goodwill and intangible assets	5,728			5,728			—			—			—			—
Property, plant and equipment and biological assets	35,638			35,589			—			49			—			—
Investments in associates and joint ventures	4,906			4,906			—			—			—			—
Other investments	855			—			—			—			855			—
Deferred tax assets	8,287			8,287			—			—			—			—
Other assets	3,360			526			1,188			1,037			—			609
Total non-current assets	58,774			55,036			1,188			1,086			855			609
Total assets	91,249			79,296			8,311			1,086			1,330			1,226
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt	3,167			—			3,167			—			—			—
Trade accounts payable and other	13,981			—			13,981			—			—			—
Short-term provisions	539			528			11			—			—			—
Accrued expenses and other liabilities	4,709			1,212			3,307			—			—			190
Income tax liabilities	238			238			—			—			—			—
Liabilities held for sale	821			821			—			—			—			—
Total current liabilities	23,455			2,799			20,466			—			—			190
Non-current liabilities:
Long-term debt, net of current portion	9,316			—			9,316			—			—			—
Deferred tax liabilities	2,374			2,374			—			—			—			—
Deferred employee benefits	6,982			6,982			—			—			—			—
Long-term provisions	1,995			1,984			11			—			—			—
Other long-term obligations	3,019			457			1,854			—			—			708
Total non-current liabilities	23,686			11,797			11,181			—			—			708
Equity:
Equity attributable to the equity holders of the parent	42,086			42,086			—			—			—			—
Non-controlling interests	2,022			2,022			—			—			—			—
Total equity	44,108			44,108			—			—			—			—
Total liabilities and equity	91,249			58,704			31,647			—			—			898

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	December 31, 2017
	Carrying amount in the consolidated statements of financial position			Non-financial assets and liabilities			Assets/Liabilities at amortized cost			Fair value recognized in profit or loss			Available-for-sale assets			Derivatives
ASSETS
Current assets:
Cash and cash equivalents	2,574			—			2,574			—			—			—
Restricted cash	212			—			212			—			—			—
Trade accounts receivable and other	3,863			—			3,863			—			—			—
Inventories	17,986			17,986			—			—			—			—
Prepaid expenses and other current assets	1,931			1,270			574			—			—			87
Assets held for sale	179			179			—			—			—			—
Total current assets	26,745			19,435			7,223			—			—			87
Non-current assets:
Goodwill and intangible assets	5,737			5,737			—			—			—			—
Property, plant and equipment and biological assets	36,971			36,935			—			36			—			—
Investments in associates and joint ventures	5,084			5,084			—			—			—			—
Other investments	1,471			—			—			—			1,471			—
Deferred tax assets	7,055			7,055			—			—			—			—
Other assets	2,234			411			834			—			—			989
Total non-current assets	58,552			55,222			834			36			1,471			989
Total assets	85,297			74,657			8,057			36			1,471			1,076
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt	2,785			—			2,785			—			—			—
Trade accounts payable and other	13,428			—			13,428			—			—			—
Short-term provisions	410			394			16			—			—			—
Accrued expenses and other liabilities	4,505			1,080			3,100			—			—			325
Income tax liabilities	232			232			—			—			—			—
Liabilities held for sale	50			50			—			—			—			—
Total current liabilities	21,410			1,756			19,329			—			—			325
Non-current liabilities:
Long-term debt, net of current portion	10,143			—			10,143			—			—			—
Deferred tax liabilities	2,684			2,684			—			—			—			—
Deferred employee benefits	7,630			7,630			—			—			—			—
Long-term provisions	1,612			1,612			—			—			—			—
Other long-term obligations	963			204			415			—			—			344
Total non-current liabilities	23,032			12,130			10,558			—			—			344
Equity:
Equity attributable to the equity holders of the parent	38,789			38,789			—			—			—			—
Non-controlling interests	2,066			2,066			—			—			—			—
Total equity	40,855			40,855			—			—			—			—
Total liabilities and equity	85,297			54,741			29,887			—			—			669

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The Company classifies the bases used to measure certain assets and liabilities at their fair value. Assets and liabilities carried or measured at fair value have been classified into three levels based upon a fair value hierarchy that reflects the significance of the inputs used in making the measurements.

The levels are as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date;

Level 2: Significant inputs other than within Level 1 that are observable for the asset or liability, either directly (i.e.: as prices) or indirectly (i.e.: derived from prices);

Level 3: Inputs for the assets or liabilities that are not based on observable market data and require management assumptions or inputs from unobservable markets.

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

As of December 31, 2018
		Level 1			Level 2			Level 3			Total
Assets at fair value:
Investments in equity instruments at FVOCI		793			—			62			855
Trade accounts receivable and other subject to TSR programs*		—			—			475			475
Derivative financial current assets		—			617			—			617
Derivative financial non-current assets		—			126			483			609
Total assets at fair value		793			743			1,020			2,556
Liabilities at fair value:
Derivative financial current liabilities		—			75			115			190
Derivative financial non-current liabilities		—			131			577			708
Total liabilities at fair value		—			206			692			898

*The fair value of TSR program receivables equals carrying amount due to the short time frame between the initial recognition and time of sale.

As of December 31, 2017
		Level 1			Level 2			Level 3			Total
Assets at fair value:
Available-for-sale financial assets		1,444			—			—			1,444
Derivative financial current assets		—			87			—			87
Derivative financial non-current assets		—			5			984			989
Total assets at fair value		1,444			92			984			2,520
Liabilities at fair value:
Derivative financial current liabilities		—			247			78			325
Derivative financial non-current liabilities		—			158			186			344
Total liabilities at fair value		—			405			264			669

I nvestments in equity instruments at FVOCI classified as Level 1 refer to listed securities quoted in active markets. A quoted market price in an active market provides the most reliable evidence of fair value and is used without adjustment to measure fair value whenever available, with limited exceptions. The total fair value is either the price of the most recent trade at the time of the market close or the official close price as defined by the exchange on which the asset is most actively traded on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs. The decrease in investments in equity instruments at FVOCI in 2018 is mainly related to the decrease in the share price of Erdemir and China Oriental.

Derivative financial assets and liabilities classified as Level 2 refer to instruments to hedge fluctuations in interest rates, foreign exchange rates, raw materials (base metals), freight, energy and emission rights, see note 6.1.5 for further information.

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Gross debt includes bank debt, debenture loans and finance lease obligations and is 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,
	2018			2017
Short-term bank loans and other credit facilities including commercial paper 1	1,968			1,735
Current portion of long-term debt	1,130			976
Lease obligations	69			74
Total	3,167			2,785

1.	The weighted average interest rate on short-term borrowings outstanding was 1.3 % and 3.1 % as of December 31, 2018 and 2017 , respectively.

In 2014, ArcelorMittal entered into certain short-term committed bilateral credit facilities. The facilities were extended in 2016, 2017 and 2018 . As of December 31, 2018 , the facilities, totaling approximately 0.9 billion , remain fully available.

On January 16, 2018, the Company entered into a fully drawn bilateral term loan due July 16, 2018, for an amount of € 400 million ( 466 ). The bilateral term loan was fully repaid at maturity on July 16, 2018.

On August 10, 2018, the Company entered into a € 300 million ( 344 ) term loan with a financial institution maturing on April 30, 2019.

On December 18, 2018 , ArcelorMittal entered into an agreement for financing with a financial institution for net proceeds of CAD 292 million ( 214 ) with repayment over several dates in 2019 and 2020 . As of December 31, 2018 , CAD 295 million ( 216 ) was outstanding.

Commercial paper

The Company has a commercial paper program enabling borrowings of up to € 1.5 billion . As of December 31, 2018 and 2017, the outstanding amount was 1,295 and 1,125 , respectively.

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6.1.2.2 Long-term debt

Long-term debt is comprised of the following:

							December 31,
	Year of maturity		Type of Interest		Interest rate 1		2018			2017
Corporate
5.5 billion Revolving Credit Facility	2023		Floating				—			—
€500 million Unsecured Notes 2	2018		Fixed		5.75 %		—			400
€400 million Unsecured Notes 3	2018		Floating		1.70 %		—			480
€750 million Unsecured Notes	2019		Fixed		3.00 %		858			897
500 Unsecured Notes	2020		Fixed		5.13 %		324			323
CHF 225 million Unsecured Notes	2020		Fixed		2.50 %		228			230
€600 million Unsecured Notes	2020		Fixed		2.88 %		685			715
1.0 billion Unsecured Bonds	2020		Fixed		5.25 %		623			622
1.5 billion Unsecured Notes	2021		Fixed		5.50 %		754			753
€500 million Unsecured Notes	2021		Fixed		3.00 %		570			597
€750 million Unsecured Notes	2022		Fixed		3.13 %		856			895
1.1 billion Unsecured Notes 4	2022		Fixed		6.25 %		656			655
€500 million Unsecured Notes	2023		Fixed		0.95 %		568			593
500 Unsecured Notes	2025		Fixed		6.13 %		497			497
1.5 billion Unsecured Bonds 4	2039		Fixed		7.00 %		670			1,092
1.0 billion Unsecured Notes 4	2041		Fixed		6.75 %		428			619
Other loans	2019-2021		Fixed		1.25% - 3.46%		114			53
EIB loan	2025		Fixed		1.16 %		401			420
7 billion Term Facility	2020		Floating		3.31 %		1,000			—
Other loans	2019 - 2035		Floating		0.0% - 5.03%		639			672
Total Corporate							9,871			10,513
Americas
Other loans	2019 - 2025		Fixed/Floating		2.25% - 10.00%		84			107
Total Americas							84			107
Europe, Asia & Africa
EBRD Facility	2024		Floating		4.77% - 5.07%		50			—
Other loans	2019 - 2029		Fixed/Floating		0.00% - 2.62%		86			85
Total Europe, Asia & Africa							136			85
Total							10,091			10,705
Less current portion of long-term debt							( 1,130	)		( 976	)
Total long-term debt (excluding lease obligations)							8,961			9,729
Long-term lease obligations 5							355			414
Total long-term debt, net of current portion							9,316			10,143

1.	Rates applicable to balances outstanding a t December 31, 2018 , including the effect of step-downs following rating changes. For debt that has been redeemed in its entirety during 2018 , the interest rates refer to the rates at repayment date.

2.	Amount outstanding was repaid at the original maturity, March 29, 2018.

3.	Amount outstanding was repaid at the original maturity, April 9, 2018.

4.	Bonds or Notes partially repurchased on August 22, 2018 and September 6, 2018, pursuant to cash tender offer.

5.	Net of current portion of 69 and 74 as of December 31, 2018 and 2017 , respectively.

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Corporate

5.5 billion Revolving Credit Facility

On December 19, 2018, ArcelorMittal signed an agreement for a 5.5 billion revolving credit facility (the "Facility"). This Facility amends and restates the 5.5 billion revolving credit facility dated April 30, 2015 and which was amended and extended on December 21, 2016. The new agreement incorporates a single tranche of 5.5 billion maturing on December 19, 2023. The Facility may be used for general corporate purposes. As of December 31, 2018 , the 5.5 billion revolving credit facility was fully available. The Company makes drawdowns from and repayments on this Facility in the framework of its cash management.

Bonds

On March 29, 2018, at maturity, ArcelorMittal repaid the € 334 million ( 411 ) principal amount that remained outstanding,

following the cash tender offers in April 2016 of its € 500 million 4.5 % unsecured bonds.

On April 9, 2018, at maturity, ArcelorMittal repaid its € 400 million ( 491 ) 2018 Floating Rate Notes.

On August 7, 2018, pursuant to cash tender offers and financed with existing cash and liquidity, ArcelorMittal purchased:

•	195 of its U.S. dollar denominated 6.75 % Notes due March 1, 2041 (the “USD 2041 Notes”) for a total aggregate purchase price (including premiums and accrued interest) of 224 . Following this purchase, 434 principal amount of the USD 2041 Notes remained outstanding.

•	432 of its U.S. dollar denominated 7.00 % Notes due October 15, 2039 (the “2039 Notes”) for a total aggregate purchase price (including premiums and accrued interest) of 505 . Following this purchase, 686 principal amount of the USD 2039 Notes remained outstanding.

As a result of the above mentioned early redemptions, net financing costs for the year ended December 31, 2018 included 104 of premiums.

On January 17, 2019, ArcelorMittal issued € 750 million ( 854 ) 2.25 % Notes due 2024. The Notes were issued under ArcelorMittal’s € 10 billion wholesale Euro Medium Term Notes Program.

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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. The following table provides details of the outstanding bonds on maturity, the original coupons and the current interest rates for the bonds impacted by changes in the long-term credit rating:

Nominal value		Date of issuance		Repayment date		Original/Current interest rate 1		Issued at
€750 million Unsecured Notes		Mar 25, 2014		Mar 25, 2019		3.00 %		99.65 %
500 million Unsecured Notes		Jun 1, 2015		Jun 1, 2020		5.13 %		100.00 %
CHF 225 million Unsecured Notes		Jul 3, 2015		Jul 3, 2020		2.50 %		100.00 %
€600 million Unsecured Notes		Jul 4, 2014		Jul 6, 2020		2.88 %		99.18 %
1.0 billion Unsecured Bonds		Aug 5, 2010		Aug 5, 2020		5.25 %		98.46 %
1.5 billion Unsecured Notes		Mar 7, 2011		Mar 1, 2021		5.50 %		99.36 %
€500 million Unsecured Notes		Apr 9, 2015		Apr 9, 2021		3.00 %		99.55 %
€750 million Unsecured Notes		Jan 14, 2015		Jan 14, 2022		3.13 %		99.73 %
1.1 billion Unsecured Notes		Feb 28, 2012		Feb 25, 2022		6.25 %		98.28 %
€500 million Unsecured Notes		Dec 4, 2017		Jan 17, 2023		0.95 %		99.38 %
500 million Unsecured Notes		Jun 1, 2015		Jun 1, 2025		6.13 %		100.00 %
1.0 billion Unsecured Bonds		Oct 8, 2009		Oct 15, 2039		7.00 %		95.20 %
500 million Unsecured Bonds		Aug 5, 2010		Oct 15, 2039		7.00 %		104.84 %
1.0 billion Unsecured Notes		Mar 7, 2011		Mar 1, 2041		6.75 %		99.18 %

1.	Rates applicable at December 31, 2018.

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, 2018 , € 350 million ( 401 ) was fully drawn.

Other loans

On November 20, 2018 , ArcelorMittal entered into a 7 billion term facility agreement with a group of lenders in connection with the acquisition of ESIL. The agreement has a term of one year (until November 20, 2019 ), subject to ArcelorMittal’s option to extend the term by six months . The facility may be used for certain payments by ArcelorMittal as well as by the joint venture through which the Company expects jointly to own and operate ESIL in partnership with Nippon Steel & Sumitomo Metal Corporation (the “Joint Venture”). Any amounts borrowed by the Joint Venture under the agreement are irrevocably and unconditionally guaranteed by ArcelorMittal. The Term Facilities Agreement includes the same Leverage Ratio financial covenant as that included in the Company’s 5.5 billion revolving credit facility. The Term Facilities Agreement is also subject to certain mandatory prepayment events, including the use of proceeds from debt capital market issuances by the Group or capital raising by the JV group and certain disposals, in each case above 1 billion .

On May 14, 2018 , ArcelorMittal entered into a term facility agreement in the amount of 1 billion to make a payment to the financial creditors of Uttam Galva and KSS Petron to clear overdue debts in order that the offer the Company submitted for ESIL on April 2, 2018 would be eligible and considered by ESIL’s Committee of Creditors. The facility was drawn on May 14, 2018 in connection with the payment and was repaid on November 29, 2018 via a drawing under the above-referenced 7 billion term facility.

Other loans relate to various debt with banks and public institutions.

On October 9, 2017, ArcelorMittal completed the offering of a € 300 million ( 344 ) variable rate loan in the German Schuldschein market. The proceeds of the issuance were used to repay or prepay existing indebtedness.

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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, 2018 , the facility is fully available.

Other loans

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

Europe, Asia and Africa

On December 21, 2017, ArcelorMittal Kryvyi Rih entered into a 175 loan agreement with the European Bank for Reconstruction and Development in order to support the upgrade of its production facilities, energy efficiency improvement and environmental impact reduction. The loan agreement also provides for an additional 175 in loan facilities which are currently uncommitted. As of December 31, 2018 , 50 was drawn under the agreement and the remainder remains fully available.

On May 25, 2017, ArcelorMittal South Africa signed a 4.5 billion South African rand revolving borrowing base finance facility maturing on May 25, 2020. Any borrowings under the facility are secured by certain eligible inventory and receivables, as well as certain other working capital and related assets of ArcelorMittal South Africa. The facility is used for general corporate purposes. The facility is not guaranteed by ArcelorMittal. As of December 31, 2018, 0.3 billion South African rand ( 21 ) was drawn.

Other loans

Other loans mainly relate to loans contracted by ArcelorMittal in Spain 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.

Hedge of net investments

As of April 1, 2018 , the Company designated a portfolio of euro denominated debt ( € 5,169 million as of December 31, 2018 ) as a hedge of certain euro denominated investments ( € 7,804 million as of December 31, 2018 ) in order to mitigate the foreign currency risk arising from certain euro denominated subsidiaries' net assets. The risk arises from the fluctuation in spot exchange rates between the U.S. dollar and euro, which causes the amount of the net investments to vary. The hedged risk in the hedge of net investments is a risk of a weakening euro against the U.S. dollar that will result in a reduction in the carrying amount of the Company's net investments in the subsidiaries subject to the hedge. The euro denominated debt is designated as a hedging instrument for the change in the value of the net investments that is attributable to changes in the euro/U.S. dollar spot rate.

To assess the hedge effectiveness, the Company determines the economic relationship between the hedging instrument and the hedged item by comparing changes in the carrying amount of the debt portfolio that are attributable to a change in the spot rate with changes in the net investments in the foreign operations due to movements in the spot rate.

As of December 31, 2018 , the Company recognized 474 foreign exchange gains arising on the translation of the euro denominated debt designated as a hedge of the euro denominated net investments in foreign operations in other comprehensive income within the foreign exchange translation reserve.

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As of December 31, 2018 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
2019		3,167
2020		3,163
2021		1,769
2022		1,690
2023		808
Subsequent years		1,886
Total		12,483

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

	December 31, 2018						December 31, 2017
	Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
Instruments payable bearing interest at fixed rates	8,692			9,078			9,862			11,084
Instruments payable bearing interest at variable rates	1,823			1,759			1,331			1,301
Total long-term debt, including current portion	10,515			10,837			11,193			12,385
Short term bank loans and other credit facilities including commercial paper	1,968			1,967			1,735			1,731

The following tables summarize the Company’s bases used to estimate 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, 2018	Carrying amount			Fair Value
				Level 1			Level 2			Level 3			Total
Instruments payable bearing interest at fixed rates	8,692			8,029			1,049			—			9,078
Instruments payable bearing interest at variable rates	1,823			—			1,759			—			1,759
Total long-term debt, including current portion	10,515			8,029			2,808			—			10,837
Short term bank loans and other credit facilities including commercial paper	1,968			—			1,967			—			1,967

As of December 31, 2017	Carrying amount			Fair Value
				Level 1			Level 2			Level 3			Total
Instruments payable bearing interest at fixed rates	9,862			9,946			1,138			—			11,084
Instruments payable bearing interest at variable rates	1,331			481			820			—			1,301
Total long-term debt, including current portion	11,193			10,427			1,958			—			12,385
Short term bank loans and other credit facilities including commercial paper	1,735			—			1,731			—			1,731

Instruments payable classified as Level 1 refer to the Company’s listed bonds quoted in active markets. The total fair value is the official closing price as defined by the exchange on which the instrument is most actively traded on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs.

Instruments payable classified as Level 2 refer to all debt instruments not classified as Level 1. The fair value of the debt is based on estimated future cash flows converted into U.S. dollar at the forward rate and discounted using current U.S. dollar zero coupon rates and ArcelorMittal’s credit spread quotations for the relevant maturities.

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Cash and cash equivalents consist of cash and short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the time of purchase and are carried at cost plus accrued interest, which approximates fair value.

Significant cash or cash equivalent balances may be held from time to time at the Company’s international operating subsidiaries, including in particular those in France and the United States, where the Company maintains cash management systems under which most of its cash and cash equivalents are centralized. Other subsidiaries which may hold significant cash balances, include those in Brazil, Canada, India, Kazakhstan, South Africa and Ukraine. Some of these operating subsidiaries have debt outstanding or are subject to acquisition agreements that impose restrictions on such operating subsidiaries’ ability to pay dividends, but such restrictions are not significant in the context of ArcelorMittal’s overall liquidity. Repatriation of funds from operating subsidiaries may also be affected by tax and foreign exchange policies in place from time to time in the various countries where the Company operates, though none of these policies are currently significant in the context of ArcelorMittal’s overall liquidity.

Cash and cash equivalents consisted of the following:

	December 31,
	2018			2017
Cash at bank	1,832			1,701
Term deposits	283			297
Money market funds 1	57			576
Total	2,172			2,574

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, cash accounts in connection with environmental obligations and true sale of receivables programs, as well as 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.

The table below details changes in the Company's liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be classified in the Company's consolidated statements of cash flows from financing activities.

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	Long-term debt, net of current portion			Short-term debt and current portion of long term debt
Balance as of December 31, 2016	11,789			1,885
Proceeds from long-term debt	1,407			—
Payments of long-term debt	( 2,691	)		—
Amortized cost	19			22
Unrealized foreign exchange effects	589			190
Proceeds from short-term debt	—			1,859
Payments of short-term debt 1	—			( 2,164	)
Current portion of long-term debt	( 976	)		976
Other movements 2	6			17
Balance as of December 31, 2017 (note 6.1.2)	10,143			2,785
Proceeds from long-term debt	1,138			—
Payments of long-term debt	( 798	)		—
Amortized cost	9			18
Unrealized foreign exchange effects	( 240	)		( 219	)
Proceeds from short-term debt	—			2,319
Payments of short-term debt 1	—			( 2,949	)
Current portion of long-term debt	( 1,130	)		1,130
Debt acquired through business combinations	174			69
Debt classified as held for sale (2.3.2)	( 77	)		—
Other movements 2	97			14
Balance as of December 31, 2018 (note 6.1.2)	9,316			3,167

1.	Cash payments decreasing the outstanding liability relating to finance leases are classified under other financing activities in the Company's consolidated statements of cash flows.

2.	Others movements include non-current and current obligations under finance leases.

The Company monitors its net debt in order to manage its capital. The following tables present the structure of the Company’s net debt by original currency at December 31, 2018 and December 31, 2017 :

As of December 31, 2018	Total USD			EUR			USD			CHF			INR			CAD			Other (in USD)
Short-term debt and current portion of long-term debt	3,167			2,566			338			—			8			151			104
Long-term debt, net of current portion	9,316			3,530			5,405			228			—			69			84
Cash and cash equivalents including restricted cash	( 2,354	)		( 454	)		( 1,017	)		( 2	)		( 307	)		( 29	)		( 545	)
Net debt	10,129			5,642			4,726			226			( 299	)		191			( 357	)

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The Company uses derivative financial instruments principally to manage its exposure to fluctuations in interest rates, exchange rates, prices of raw materials, energy and emission rights allowances arising from operating, financing and investing activities. Derivative financial instruments are classified as current or non-current assets or liabilities based on their maturity dates and are accounted for at the trade date. Embedded derivatives are separated from the host contract and accounted for separately if they are not closely related to the host contract. The Company measures all derivative financial instruments based on fair values derived from market prices of the instruments or from option pricing models, as appropriate. Gains or losses arising from changes in fair value of derivatives are recognized in the consolidated statements of operations, except for derivatives that are designated and qualify for cash flow or net investment hedge accounting.

Changes in the fair value of a derivative that is designated and qualifies as a cash flow hedge are recorded in other comprehensive income. Amounts deferred in equity are recorded in the consolidated statements of operations in the periods when the hedged item is recognized in the consolidated statements of operations and within the same line item (see note 6.3 Cash flow hedges).

The Company formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are effective in offsetting changes in fair values or cash flows of hedged items. When a hedging instrument is sold, terminated, expired or exercised, the accumulated unrealized gain or loss on the hedging instrument is maintained in equity until the forecasted transaction occurs. If the hedged transaction is no longer probable, the cumulative unrealized gain or loss, which had been recognized in equity, is reported immediately in the consolidated statements of operations.

Foreign currency differences arising on the translation of a financial liability designated as a hedge of a net investment in a foreign operation are recognized directly as a separate component of equity, to the extent that the hedge is effective. To the extent that the hedge is ineffective, such differences are recognized in the consolidated statements of operations (see note 6.3 Net investment hedge).

The Company manages the counter-party risk associated with its instruments by centralizing its commitments and by applying procedures which specify, for each type of transaction and underlying position, risk limits and/or the characteristics of the counter-party. The Company does not generally grant to or require guarantees from its counterparties for the risks incurred. Allowing for exceptions, the Company’s counterparties are part of its financial partners and the related market transactions are governed by framework agreements (mainly International Swaps and Derivatives Association agreements which allow netting only in case of counterparty default). Accordingly, derivative assets and derivative liabilities are not offset.

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Derivative financial instruments classified as Level 2:

The following tables summarize this portfolio :

	December 31, 2018
	Assets						Liabilities
	Notional Amount			Fair Value			Notional Amount			Fair Value
Foreign exchange rate instruments
Forward purchase contracts	2,005			66			1,258			( 13	)
Forward sale contracts	5,810			252			724			( 9	)
Currency swaps purchases	—			—			—			—
Currency swaps sales	—			—			1,000			( 101	)
Exchange option purchases	2,000			71			43			—
Exchange options sales	234			3			1,000			( 35	)
Total foreign exchange rate instruments				392						( 158	)
Raw materials (base metals), freight, energy, emission rights
Term contracts sales	79			4			24			( 6	)
Term contracts purchases	1,524			347			739			( 42	)
Total raw materials (base metals), freight, energy, emission rights				351						( 48	)
Total				743						( 206	)

	December 31, 2017
	Assets							Liabilities
	Notional Amount			Fair Value		Average Rate 1		Notional Amount			Fair Value		Average Rate 1
Interest rate swaps - fixed rate borrowing/loans	6			—		0.98	%				—		1.01	%
Foreign exchange rate instruments
Forward purchase contracts	586			8				3,939			( 140	)
Forward sale contracts	525			17				774			( 11	)
Currency swaps purchases	—			—				9			( 7	)
Currency swaps sales	—			—				1,000			( 157	)
Exchange option purchases	—			—				338			( 7	)
Exchange options sales	—			—				319			( 5	)
Total foreign exchange rate instruments				25							( 327	)
Raw materials (base metals), freight, energy, emission rights
Term contracts sales	20			1				467			( 38	)
Term contracts purchases	796			65				534			( 40	)
Option sales/purchases	9			1				—			—
Total raw materials (base metals), freight, energy, emission rights				67							( 78	)
Total				92							( 405	)

1. The average rate is determined for fixed rate instruments on basis of the U.S. dollar and foreign currency rates and for variable rate instruments generally

on basis of Euribor or Libor.

Derivative financial assets and liabilities classified as Level 2 refer to instruments to hedge fluctuations in interest rates, foreign exchange rates, raw materials (base metals), freight, energy and emission rights. The total fair value is based on the price a dealer would pay or receive for the security or similar securities, adjusted for any terms specific to that asset or liability. Market inputs are obtained from well-established and recognized vendors of market data and the fair value is calculated using standard industry models based on significant observable market inputs such as foreign exchange rates, commodity prices, swap rates and interest rates.

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Derivative financial instruments classified as Level 3:

Derivative financial non-current assets classified as Level 3 refer to the call option on the 1,000 mandatory convertible bonds (see note 10.2). The fair valuation of Level 3 derivative instruments is established at each reporting date and compared to the prior period. ArcelorMittal’s valuation policies for Level 3 derivatives are an integral part of its internal control procedures and have been reviewed and approved according to the Company’s principles for establishing such procedures. In particular, such procedures address the accuracy and reliability of input data, the accuracy of the valuation model and the knowledge of the staff performing the valuations.

ArcelorMittal establishes the fair valuation of the call option on the 1,000 mandatory convertible bonds through the use of binomial valuation models based on the estimated values of the underlying equity spot price of $ 219 and volatility of 24.33 % . Binomial valuation models use an iterative procedure to price options, allowing for the specification of nodes, or points in time, during the time span between the valuation date and the option’s expiration date. In contrast to the Black-Scholes model, which provides a numerical result based on inputs, the binomial model allows for the calculation of the asset and the option for multiple periods along with the range of possible results for each period.

Observable input data used in the valuations include zero coupon yield curves, stock market prices of Erdemir and China Oriental, European Central Bank foreign exchange fixing rates and Libor interest rates. Unobservable inputs are used to measure fair value to the extent that relevant observable inputs are not available. Specifically the Company computes unobservable volatility data based mainly on the movement of Erdemir and China Oriental stock market prices observable in the active market over 90 working days, which is particularly sensitive for the valuation resulting from the model. A 10% increase or decrease in Hera Ermac share prices would result in a 28 % and 26 % increase and decrease of the fair value of the call option at December 31, 2018 , respectively.

Derivative financial liabilities classified as Level 3 relate to a pellet purchase agreement that contains a special payment that varies according to the price of steel in the United States domestic market (“domestic steel price”). The Company concluded that this payment feature was an embedded derivative not closely related to the host contract. ArcelorMittal establishes the fair valuation of the special payment by comparing the current forecasted domestic steel price to the projected domestic steel price at the inception of the contract. 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. A U.S. dollar one cha nge per metric ton in the price of hot rolled steel would result in a U.S. dollar ten cents per metric ton change in the price of iron ore. Any significant increase in the steel price would result in a significant increase in fair value, and vice versa. As of December 31, 2018, the fair valuation of the pellet purchase agreement was based on the future average US domestic steel price of $ 633 per metric ton.

Derivative financial liabilities classified as Level 3 relate also to the put option granted to ISP in the context of the acquisition of Ilva (see note 2.2.4). The option exercise price is the higher of a reference operating income projection and the net present value of ISP's initial € 100 million equity contribution bearing interest at a contractually agreed rate at the put option exercise date. The fair value of the put option liability is sensitive to unobservable inputs such as ArcelorMittal Italia's future cash flow projections. Observable inputs include ISP's credit rating.

The following table summarizes the reconciliation of the fair value of the conversion option classified as Level 3 with respect to the put option granted to ISP , the call option on the 1,000 mandatory convertible bonds and the fair value of the special payment included in the pellet purchase agreement:

	Put option with ISP 1			Call option on 1,000 mandatory convertible bonds			Special payment in pellet purchase agreement			Total
Balance as of December 31, 2016	—			175			( 33	)		142
Change in fair value	—			809			( 231	)		578
Balance as of December 31, 2017	—			984			( 264	)		720
Change in fair value	( 124	)		( 501	)		( 304	)		( 929	)
Balance as of December 31, 2018	( 124	)		483			( 568	)		( 209	)

1.	The change in fair value was recognized through the business combination (see note 2.2).

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Other non-derivative financial assets and liabilities include cash and cash equivalents and restricted cash (see note 6.1.3), trade and certain other receivables (see note 4.3, 4.5 and 4.6), investments in equity instruments at FVOCI (see note 2.5), trade payables and certain other liabilities (see notes 4.7 and 4.8). These instruments are recognized initially at fair value when the Company becomes a party to the contractual provisions of the instrument. Non-derivative financial assets are derecognized if the Company’s contractual rights to the cash flows from the financial instruments expire or if the Company transfers the financial instruments to another party without retaining control of substantially all risks and rewards of the instruments. Non-derivative financial liabilities are derecognized when they are extinguished (i.e. when the obligation specified in the contract is discharged, canceled or expired).

Impairment of financial assets

In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss (ECL) model as opposed to an incurred credit loss model under IAS 39. The ECL model requires the Group to account for expected credit losses and changes in those ECL at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. In particular, IFRS 9 requires the Group to measure the loss allowance for a financial instrument at an amount equal to the lifetime ECL if the credit risk on that financial instrument has increased significantly since initial recognition.

In the case of investments in equity instruments at FVOCI, all fair value movements, including the difference between the acquisition cost and the current fair value are recorded in OCI and are no longer reclassified to the consolidated statements of operations. Equity investments at FVOCI are exempted from the annual impairment test under IFRS 9 because the fair value of the equity investments recorded in OCI are not recycled to Profit and Loss.

Financing costs - net recognized in the years ended December 31, 2018 , 2017 and 2016 are as follows:

	Year ended December 31,
	2018			2017			2016
Interest expense	( 687	)		( 879	)		( 1,172	)
Interest income	72			56			58
Change in fair value adjustment on call option on mandatory convertible bonds and pellet purchase agreement (note 6.1.5)	( 572	)		578			138
Accretion of defined benefit obligations and other long term liabilities	( 349	)		( 353	)		( 435	)
Net foreign exchange result	( 235	)		546			( 3	)
Other 1	( 439	)		( 823	)		( 642	)
Total	( 2,210	)		( 875	)		( 2,056	)

1.

Other mainly includes expenses related to true sale of receivables (“TSR”) programs and bank fees. It also includes premiums and fees of 104 relating to the bonds early redeemed in 2018 ( 389 and 399 of premiums and fees relating to bonds early redeemed in 2017 and 2016 , respectively). In 2017 , other also includes expenses relating to the extension of the mandatory convertible bonds (see note 10.2) of 92 .

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The Company's operations expose it to a variety of financial risks: interest rate risk, foreign exchange risk, liquidity risk and risks in fluctuations in prices of raw materials, freight and energy. The Company actively monitors and seeks to reduce volatility of these exposures through a diversity of financial instruments, where considered appropriate. The Company has formalized how it manages these risks within the Treasury and Financial Risk Management Policy, which has been approved by Management.

Capital management

The Company's objective when managing capital is to safeguard continuity, maintain a strong credit rating and healthy capital ratios to support its business and provide adequate return to shareholders through continuing growth.

The Company sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments. The funding requirement is met through a combination of equity, bonds and other long-term and short-term borrowings.

The Company monitors capital using a gearing ratio, being the ratio of net debt as a percentage of total equity.

	December 31,
	2018			2017
Total equity	44,108			40,855
Net debt (including 67 cash and debt classified as held for sale as of December 31, 2018)	10,196			10,142
Gearing	23.1	%		24.8	%

Interest rate risk

The Company is exposed to interest rate risk on short-term and long-term floating rate instruments and on refinancing of fixed rate debt. The Company's policy is to maintain a balance of fixed and floating interest rate borrowings, which is adjusted depending on the prevailing market interest rates and outlook. As at December 31, 2018, the long-term debt was comprised of 83 % fixed rate debt and 17 % variable rate debt (note 6.1.2). The Company utilizes certain instruments to manage interest rate risks. Interest rate instruments allow the Company to borrow long-term at fixed or variable rates, and to swap the rate of this debt either at inception or during the lifetime of the borrowing. The Company and its counterparties exchange, at predefined intervals, the difference between the agreed fixed rate and the variable rate, calculated on the basis of the notional amount of the swap. Similarly, swaps may be used for the exchange of variable rates against other variable rates.

Foreign exchange rate risk

The Company is exposed to changes in values arising from foreign exchange rate fluctuations generated by its operating activities. Because a substantial portion of ArcelorMittal’s assets, liabilities, sales and earnings are denominated in currencies other than the U.S. dollar (its reporting currency), ArcelorMittal has an exposure to fluctuations and depreciation in the values of these currencies relative to the U.S. dollar. These currency fluctuations, especially the fluctuation of the value of the U.S. dollar relative to the euro, the Canadian dollar, Brazilian real, Polish Zloty, Kazakh tenge, South African rand and Ukrainian hryvnia, as well as fluctuations in the other countries’ currencies in which ArcelorMittal has significant operations and/or sales, could have a material impact on its financial position, cash flows and results of operations.

ArcelorMittal faces transaction risk, where its businesses generate sales in one currency but incur costs relating to that revenue in a different currency. For example, ArcelorMittal’s non-U.S. subsidiaries may purchase raw materials, including iron ore and coking coal, in U.S. dollars, but may sell finished steel products in other currencies. Consequently, an appreciation of the U.S. dollar will increase the cost of raw materials; thereby having a negative impact on the Company’s operating margins, unless the Company is able to pass along the higher cost in the form of higher selling prices.

Following its Treasury and Financial Risk Management Policy, the Company hedges a portion of its net exposure to foreign exchange rates through forwards, options and swaps.

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ArcelorMittal also faces foreign currency translation risk, which arises when ArcelorMittal translates the statements of operations of its subsidiaries, its corporate net debt (note 6.1.4) and other items denominated in currencies other than the U.S. dollar, for inclusion in the consolidated financial statements. The Company manages translation risk arising from its investments in subsidiaries by monitoring the currency mix of the consolidated statements of financial position. The Company may enter into derivative transactions to hedge the residual exposure, and currently designated an EUR/USD cross currency swap with a notional of 1,000 to hedge euro denominated net investments in foreign operations (see “—Net investment hedge”).

The Company also uses the derivative instruments, described above, at the corporate level to hedge debt recorded in foreign currency other than the functional currency or the balance sheet risk associated with certain monetary assets denominated in a foreign currency other than the functional currency.

In October 2018, the Company entered into hedging programs including non deliverable forwards and non deliverable options for a nominal amount of $ 5.9 billion in order to hedge the volatility between Indian Rupee and U.S. dollar in relation to the proposed acquisition of ESIL.

Foreign currency sensitivity analysis

As of December 31, 2018, the Company is mainly subject to foreign exchange exposure relating to the euro, Brazilian real, Canadian dollar, Kazakhstani tenge, South African rand, Mexican peso, Polish zloty, Argentine peso and Ukranian hryvnia against the U.S. dollar resulting from its trade payables and receivables.

	December 31, 2018
	Trade receivables			Trade payables
USD	1,115			5,723
EUR	1,630			5,585
BRL	656			686
CAD	76			488
KZT	43			106
ZAR	166			424
MXN	94			96
UAH	54			129
PLN	135			323
ARS	73			—
Other (non-USD)	390			421
Total	4,432			13,981

The sensitivity analysis carried out by the Company considers the effects on its trade receivables and trade payables of a 10 % increase or decrease between the relevant foreign currencies and the U.S. dollar.

	10% increase						10% decrease
	Trade receivables			Trade payables			Trade receivables			Trade payables
EUR	1,793			6,144			1,467			5,027
BRL	722			755			590			617
CAD	84			537			68			439
KZT	47			117			39			95
ZAR	183			466			149			382
MXN	103			106			85			86
UAH	59			142			49			116
PLN	149			355			122			291
ARS	80			—			66			—

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The use of a 10 % sensitivity rate is used when reporting foreign currency exposure internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes trade receivables and trade payables denominated in a currency other than the U.S. dollar and adjusts their translation at the period end for a 10 % change in foreign currency rates. A positive number indicates an increase in profit, and a negative number a decrease in profit.

Hedge accounting policy

The Company determines the economic relationship between the hedged item and the hedging instrument by analyzing the critical terms of the hedge relationship. In case critical terms do not match and fair value changes in the hedging instrument cannot be expected to perfectly offset changes in the fair value of the hedged item, further qualitative analysis may be performed. Such analysis serves to establish whether the economic relationship is sufficiently strong to comply with the Company’s risk management policies.

The hedge ratio is set out in the Company's risk management strategy and may be individually tailored for each hedging program in the risk management objective. Hedge ratios below 100% would usually be applied on hedging of forecast exposures with the hedge ratio typically reducing where there is uncertainty due to long hedging tenors or volatility in the underlying exposure.

The most frequent sources of hedge ineffectiveness relate to changes in the hedged item (such as maturity, volume and pricing indices), basis spread and significant changes in the credit risk. Such sources are analyzed at hedge initiation and monitored throughout the life of a hedge.

Liquidity Risk

Liquidity risk is the risk that the Company may encounter difficulties in meeting its obligations associated with financial liabilities that are settled by delivering cash. ArcelorMittal Treasury is responsible for the Company's funding and liquidity management. ArcelorMittal’s principal sources of liquidity are cash generated from its operations, its credit lines at the corporate level and various working capital credit lines at the level of its operating subsidiaries. The Company actively manages its liquidity. Following the Company's Treasury and Financial Risk Management Policy, the levels of cash, credit lines and debt are closely monitored and appropriate actions are taken in order to comply with the covenant ratios, leverage, fixed/floating ratios, maturity profile and currency mix.

The contractual maturities of the below financial liabilities include estimated loan repayments, interest payments and settlement of derivatives, excluding any impact of netting agreements. The cash flows are calculated based on market data as of December 31, 2018, and as such are sensitive to movements in mainly forex exchange rates and interest rates. The cash flows are non-discounted, except for derivative financial liabilities where the cash flows equal their fair values.

	December 31, 2018
	Carrying amount			Contractual Cash Flow			2019			2020			from 2021 to 2023			After 2023
Non-derivative financial liabilities
Bonds	( 7,807	)		( 10,277	)		( 1,200	)		( 2,166	)		( 3,898	)		( 3,013	)
Loans over 100	( 2,322	)		( 2,505	)		( 639	)		( 1,153	)		( 629	)		( 84	)
Trade and other payables	( 13,981	)		( 13,999	)		( 13,999	)		—			—			—
Other loans	( 2,354	)		( 2,456	)		( 1,783	)		( 228	)		( 310	)		( 135	)
Total	( 26,464	)		( 29,237	)		( 17,621	)		( 3,547	)		( 4,837	)		( 3,232	)
Derivative financial liabilities
Equity contracts (Put options)	( 124	)		( 124	)		—			—			( 124	)		—
Foreign exchange contracts	( 158	)		( 158	)		( 52	)		( 41	)		( 3	)		( 62	)
Other commodities contracts 1	( 616	)		( 616	)		( 138	)		( 148	)		( 217	)		( 113	)
Total	( 898	)		( 898	)		( 190	)		( 189	)		( 344	)		( 175	)

1.	Commodity contracts include base metals, freight, energy and emission rights.

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	December 31, 2017
	Carrying amount			Contractual Cash Flow			2018			2019			from 2020 to 2022			After 2022
Non-derivative financial liabilities
Bonds	( 9,458	)		( 13,514	)		( 1,309	)		( 1,306	)		( 5,658	)		( 5,241	)
Loans over 100	( 1,371	)		( 1,546	)		( 549	)		( 118	)		( 676	)		( 203	)
Trade and other payables	( 13,428	)		( 13,448	)		( 13,448	)		—			—			—
Other loans	( 2,099	)		( 2,232	)		( 1,444	)		( 263	)		( 258	)		( 267	)
Total	( 26,356	)		( 30,740	)		( 16,750	)		( 1,687	)		( 6,592	)		( 5,711	)
Derivative financial liabilities
Foreign exchange contracts	( 327	)		( 327	)		( 170	)		—			( 64	)		( 93	)
Other commodities contracts 1	( 342	)		( 342	)		( 156	)		( 37	)		( 68	)		( 81	)
Total	( 669	)		( 669	)		( 326	)		( 37	)		( 132	)		( 174	)

1.	Commodity contracts include base metals, freight, energy and emission rights.

The sensitivity analysis carried out by the Company considers the effects on its trade receivables and trade payables of a 10 % increase or decrease between the relevant foreign currencies and the U.S. dollar.

The use of a 10 % sensitivity rate is used when reporting foreign currency exposure internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes trade receivables and trade payables denominated in a currency other than the U.S. dollar and adjusts their translation at the period end for a 10 % change in foreign currency rates. A positive number indicates an increase in profit, and a negative number a decrease in profit.

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Cash flow hedges

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

	December 31, 2018
	Assets/ (liabilities)			(Outflows)/inflows
	Fair value			3 months and less			3-6 months			6-12 months			2020			After 2020
Foreign exchange contracts	329			329			4			—			( 1	)		( 3	)
Commodities	( 20	)		( 8	)		( 1	)		—			( 3	)		( 8	)
Emission rights	317			—			—			206			111			—
Total	626			321			3			206			107			( 11	)

	December 31, 2017
	Assets/ (liabilities)			(Outflows)/inflows
	Fair value			3 months and less			3-6 months			6-12 months			2019			After 2019
Foreign exchange contracts	( 118	)		( 83	)		( 25	)		( 10	)		—			—
Commodities	20			9			4			6			1			—
Emission rights	( 37	)		—			—			( 37	)		—			—
Total	( 135	)		( 74	)		( 21	)		( 41	)		1			—

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 table presents 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, 2018
	Assets/ (liabilities)			(Expense)/income
	Carrying amount			3 months and less			3-6 months			6-12 months			2020			After 2020
Foreign exchange contracts	4			—			—			4			—			—
Commodity contracts	( 390	)		( 34	)		( 32	)		( 59	)		( 115	)		( 150	)
Emission rights	778			46			47			93			87			505
Total	392			12			15			38			( 28	)		355

	December 31, 2017
	Assets/ (liabilities)			(Expense)/income
	Carrying amount			3 months and less			3-6 months			6-12 months			2019			After 2019
Foreign exchange contracts	( 141	)		( 95	)		( 26	)		( 20	)		—			—
Commodity contracts	19			9			4			5			1			—
Emission rights	84			—			—			7			33			44
Total	( 38	)		( 86	)		( 22	)		( 8	)		34			44

The following tables summarize the effect of hedge accounting on ArcelorMittal’s consolidated statement of financial position, statement of comprehensive income and statement of changes in equity.

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	December 31, 2018
Hedging Instruments	Nominal amount of the hedging instrument			Assets carrying amount			Liabilities carrying amount			Line item in the statement of financial position where the hedging instrument is located		Changes in fair value used for calculated hedge ineffectiveness			Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness
Cash flow hedges
Foreign exchange risk - Option/Forward contracts	7,465			332			—			Prepaid expenses and other current assets		—			n/a
Price risk - Commodities forwards	350			—			( 124	)		Accrued expenses and other liabilities		—			n/a
Price risk - Commodities forwards	491			—			( 454	)		Other long-term obligations		—			n/a
Price risk - Energy forwards	765			—			( 9	)		Other long-term obligations		—			n/a
Price risk - Emission rights forwards	1,091			205			—			Prepaid expenses and other current assets		( 1	)		Financing costs - net
Price risk - Emission rights forwards	79			112			—			Other assets		—			n/a
Total	10,241			649			( 587	)				( 1	)

	December 31, 2018
Hedging Instruments	Hedging gains or losses of the reporting period that were recognized in OCI			Change in value used for calculating hedge ineffectiveness for 2018			Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness		Cash flow hedge reserve
Cash flow hedges
Foreign exchange risk - Option/Forward contracts	469			—			n/a		282
Price risk - Commodities forwards	( 28	)		—			n/a		( 9	)
Price risk - Energy forwards	( 9	)		—			n/a		( 9	)
Price risk - Emission rights forwards	694			( 1	)		Financing costs - net		778
Total	1,126			( 1	)				1,042

	December 31, 2017
Hedging Instruments	Nominal amount of the hedging instrument			Assets carrying amount			Liabilities carrying amount			Line item in the statement of financial position where the hedging instrument is located		Changes in fair value used for calculated hedge ineffectiveness			Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness
Cash flow hedges
Foreign exchange risk - Option contracts	4,460			—			( 113	)		Accrued expenses and other liabilities		—			n/a
Price risk - Option/Commodities forwards	317			—			( 23	)		Accrued expenses and other liabilities		—			n/a
Price risk - Emission rights forwards	484			—			( 37	)		Accrued expenses and other liabilities		( 2	)		Financing costs - net
Total	5,261			—			( 173	)				( 2	)

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	December 31, 2017
Hedging Instruments	Hedging gains or losses of the reporting period that were recognized in OCI			Change in value used for calculating hedge ineffectiveness for 2017			Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness		Cash flow hedge reserve
Cash flow hedges
Foreign exchange risk - Option contracts	( 198	)		—			n/a		( 141	)
Price risk - Commodities forwards	( 1	)		—			n/a		18
Price risk - Emission rights forwards	62			( 2	)		Financing costs - net		84
Total	( 137	)		( 2	)				( 39	)

Net investment hedge

In December 2014, the Company entered into euro/U.S. dollar cross currency swaps (“CCS”) to hedge an euro denominated net investment in foreign operations amounting to € 303 million , and designated them as a net investment hedge. The euro/U.S. dollar 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.

On May 27, 2015, the Company entered into additional euro/U.S. dollar CCS with a notional of 1,000 to hedge an euro denominated net investment in foreign operations amounting to € 918 million , and designated them as a net investment hedge. As of December 31, 2018 and 2017 , the euro/U.S. dollar CCS have a fair value loss of 101 , net of a deferred tax of 28 , and a fair value loss of 157 , net of a deferred tax of 44 , respectively. Fair value movements have been recorded in the consolidated statements of other comprehensive income. The fair value of the CCS is included in other long-term obligations in the consolidated statements of financial position. The CCS is categorized as Level 2.

As of April 1, 2018, the Company designated a portfolio of euro denominated debt ( € 5,169 million as of December 31, 2018 ) as a hedge of certain euro denominated investments ( € 7,804 million as of December 31, 2018 ) in order to mitigate the foreign currency risk arising from certain euro denominated subsidiaries net assets. The risk arises from the fluctuation of the euro/U.S dollar spot rate, which causes the amount of the net investments to vary. The euro denominated debt is designated as hedging instrument for the change in the value of the net investments that is attributable to changes in the euro/U.S dollar spot rate. As of December 31, 2018 , the Company recognized 474 foreign exchange gains ari sing on the translation of the euro denominated debt designated as a hedge of the euro denominated net investments in foreign operations in other comprehensive income within the foreign exchange translation reserve. The hedge is categorized as Level 2.

Hedging instruments in net investment hedges are as follows:

		December 31, 2018
Derivatives		Notional amount		Date traded		Fair value at December 31, 2017		Change in fair value		Fair value as of December 31, 2018 1
CCS 5Y		500		May 27, 2015		( 64 )		29		( 35 )
CCS 10Y		300		May 27, 2015		( 56 )		17		( 39 )
CCS 10Y		160		May 27, 2015		( 30 )		9		( 21 )
CCS 10Y		40		May 27, 2015		( 7 )		1		( 6 )
Total		1,000				( 157 )		56		( 101 )

1.	The net investment hedges were fully effective. As such, the change in fair value is entirely recorded in other comprehensive income.

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	December 31, 2018
Hedging Instruments	Nominal amount of the hedging instrument			Assets carrying amount			Liabilities carrying amount			Line item in the statement of financial position where the hedging instrument is located		Change in value used for calculating hedge ineffectiveness for 2018			Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness		Cash flow hedge reserve
Net investment hedges
Foreign exchange risk - Cross Currency Swap	1,000			—			( 101	)		Other long-term obligations		—			n/a		28
Foreign exchange risk - EUR debt	5,931			—			( 5,918	)		Short-term debt and current portion of long-term debt; long-term debt, net of current portion		—			n/a		474
Total	6,931			—			( 6,019	)				—					502

		December 31, 2017
Derivatives		Notional amount		Date traded		Fair value at December 31, 2016		Change in fair value		Fair value as of December 31, 2017 1
CCS 5Y		500		May 27, 2015		3		( 67 )		( 64 )
CCS 10Y		300		May 27, 2015		( 14 )		( 42 )		( 56 )
CCS 10Y		160		May 27, 2015		( 8 )		( 22 )		( 30 )
CCS 10Y		40		May 27, 2015		( 2 )		( 5 )		( 7 )
Total		1,000				( 21 )		( 136 )		( 157 )

1.	The net investment hedges were fully effective. As such, the change in fair value is entirely recorded in other comprehensive income.

	December 31, 2017
Hedging Instrument	Nominal amount of the hedging instrument			Assets carrying amount			Liabilities carrying amount			Line item in the statement of financial position in which the hedged item is located		Change in value used for calculating hedge ineffectiveness for 2017			Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness		Cash flow hedge reserve
Net investment hedge
Foreign exchange risk - Cross Currency Swap	1,000			—			( 157	)		Other long-term obligations		—			n/a		( 56	)
Total	1,000			—			( 157	)				—					( 56	)

Raw materials, freight, energy risks and emission rights

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

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Fair values of raw material, freight, energy and emission rights instruments categorized as Level 2 are as follows:

	December 31,
	2018		2017
Base metals	( 9 )		26
Freight	—		—
Energy (oil, gas, electricity)	( 5 )		—
Emission rights	317		( 37 )
Total	303		( 11 )
Derivative assets associated with raw materials, energy, freight and emission rights	351		67
Derivative liabilities associated with raw materials, energy, freight and emission rights	( 48 )		( 78 )
Total	303		( 11 )

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 mainly related to the New York Mercantile Exchange energy index (NYMEX), the European Energy Exchange (EEX) power indexes, the powernext gas indexes). 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, as amended by the European Directive 2009/29/EC of April 23, 2009, 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, 2018 and 2017 , the Company had a net notional position of 1,170 with a net positive fair value of 317 and a net notional position of 484 with a net negative fair value of 37 , 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.

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 2018 and 2017 .

	December 31, 2018
	Income		Other Equity
10% strengthening in U.S. dollar	132		( 422 )
10% weakening in U.S. dollar	( 148 )		674

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	December 31, 2017
	Income		Other Equity
10% strengthening in U.S. dollar	( 24 )		497
10% weakening in U.S. dollar	13		( 511 )

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, 2018
	Floating porting of net debt 1		Interest Rate Swaps/Forward Rate Agreements
100 bp increase	1		—
100 bp decrease	( 1 )		—

	December 31, 2017
	Floating porting of net debt 1		Interest Rate Swaps/Forward Rate Agreements
100 bp increase	11		—
100 bp decrease	( 11 )		—

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, 2018
	Income		Other Equity Cash Flow Hedging Reserves
+10% in prices
Base Metals	( 1 )		19
Iron Ore	—		1
Freight	3		—
Emission rights	—		149
Energy	—		75
-10% in prices
Base Metals	1		( 19 )
Iron Ore	—		( 1 )
Freight	( 3 )		—
Emission rights	—		( 149 )
Energy	—		( 75 )

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As of December 31, 2018 , 2017 and 2016, ArcelorMittal had approximately 209,000 , 197,000 and 199,000 employees, respectively, and the total annual compensation of ArcelorMittal’s employees in 2018 , 2017 and 2016 was as follows:

	Year Ended December 31,
Employee Information	2018			2017			2016
Wages and salaries	8,176			7,912			7,675
Pension cost (see note 7.2)	264			265			124
Loss/(gain) following new labor agreement in the U.S. (see note 7.2)	15			—			( 832	)
Other staff expenses	2,004			1,791			1,591
Total	10,459			9,968			8,558

The total annual compensation of ArcelorMittal’s key management personnel , including its Board of Directors, expensed in 2018 , 2017 and 2016 was as follows:

	Year Ended December 31,
	2018		2017		2016
Base salary and directors fees	8		8		12
Short-term performance-related bonus	8		7		2
Post-employment benefits	1		1		1
Share-based compensation	4		3		2

The fair value of the stock options granted and shares allocated based on Restricted Share Unit (“RSU”) and Preference Share Unit (“PSU”) plans to the ArcelorMittal’s key management personnel is recorded as an expense in the consolidated statements of operations over the relevant vesting periods.

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ArcelorMittal’s operating subsidiaries sponsor different types of pension plans for their employees. Also, some of the operating subsidiaries offer other post-employment benefits, that are principally post-retirement healthcare plans. These benefits are broken down into defined contribution plans and defined benefit plans.

Defined contribution plans are those plans where ArcelorMittal pays fixed or determinable contributions to external life insurance or other funds for certain categories of employees. Contributions are paid in return for services rendered by the employees during the period. Contributions are expensed as incurred consistent with the recognition of wages and salaries.

Defined benefit plans are those plans that provide guaranteed benefits to certain categories of employees, either by way of contractual obligations or through a collective agreement. For defined benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out each fiscal year.

The retirement benefit obligation recognized in the consolidated statements of financial position represents the present value of the defined benefit obligation less the fair value of plan assets. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension obligation. In countries where there is no deep market in such bonds, the market rates on government bonds are used. Remeasurement arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income in the period in which they arise. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the plan.

Current service cost, which is the increase of the present value of the defined benefit obligation resulting from the employee service in the current period, is recorded as an expense as part of cost of sales and selling, general and administrative expenses in the consolidated statements of operations. The net interest cost, which is the change during the period in the net defined benefit liability or asset that arises from the passage of time, is recognized as part of financing costs net in the consolidated statements of operations.

The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs. The gain or loss on settlement comprises any resulting change in the fair value of plan assets and any change in the present value of the defined benefit obligation. Past service cost is the change in the present value of the defined benefit obligation resulting from a plan amendment or a curtailment. Past service cost is recognized immediately in the consolidated statements of operations in the period in which it arises.

Voluntary retirement plans primarily correspond to the practical implementation of social plans or are linked to collective agreements signed with certain categories of employees.

Early retirement plans are those plans that primarily correspond to terminating an employee’s contract following the decision of the employee before the normal retirement date. Liabilities for early retirement plans are recognized when the affected employees have formally been informed and when amounts owed have been determined using an appropriate actuarial calculation. Liabilities relating to the early retirement plans are calculated annually on the basis of the number of employees that have taken or contractually agreed to take early retirement and are discounted using an interest rate that corresponds to that of high quality bonds that have maturity dates similar to the terms of the Company’s early retirement obligations. Termination benefits are provided in connection with voluntary separation plans. The Company recognizes a liability and expense when it can no longer withdraw the offer or, if earlier, when it has a detailed formal plan which has been communicated to employees or their representatives.

Other long-term employee benefits include various plans that depend on the length of service, such as long service and sabbatical awards, disability benefits and long-term compensated absences such as sick leave. The amount recognized as a liability is the present value of benefit obligations at the consolidated statements of financial position date, and all changes in the provision (including actuarial gains and losses or past service costs) are recognized in the consolidated statements of operations in the period in which they arise.

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The expense associated with the above pension plans and post-employment benefits, as well as the carrying amount of the related liability/asset on the consolidated statements of financial position are based on a number of assumptions and factors such as discount rates, expected rate of compensation increase, healthcare cost trend rates, mortality rates and retirement rates.

•	Discount rates – The discount rate is based on several high quality corporate bond indexes and yield curves in the appropriate jurisdictions (rated AA by a recognized rating agency). In countries where there is no deep market in such bonds, the market rates on government bonds are used. Nominal interest rates vary worldwide due to exchange rates and local inflation rates.

•	Rate of compensation increase – The rate of compensation increase reflects actual experience and the Company’s long-term outlook, including contractually agreed wage rate increases for represented hourly employees.

•	Healthcare cost trend rate – The healthcare cost trend rate is based on historical retiree cost data, near-term healthcare outlook, including appropriate cost control measures implemented by the Company, and industry benchmarks and surveys.

•	Mortality and retirement rates – Mortality and retirement rates are based on actual and projected plan experience.

Statements of Financial Position

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

	December 31,
	2018			2017
Pension plan benefits	3,034			3,067
Other post-employment benefits	3,600			4,140
Early retirement benefits	222			280
Defined benefit liabilities	6,856			7,487
Termination benefits	126			143
Total	6,982			7,630

The early retirement benefits and termination benefits are mainly related to European countries (Belgium, Spain, Germany and Luxembourg).

Pension plans

A summary of the significant defined benefit pension plans is as follows:

U.S.

ArcelorMittal USA’s pension plan is a non-contributory defined benefit plan covering approximately 13 % of its employees. Certain non-represented salaried employees hired before 2003 receive pension benefits which are determined under a “Cash Balance” formula as an account balance which grows with interest credits and allocations based on a percentage of pay. Certain wage and salaried employees represented by a union hired before November 2005 receive a monthly benefit at retirement based on a fixed rate and years of service. These plans are closed to new participants.

Represented employees hired after November 2005 and employees at locations which were acquired from International Steel Group Inc. receive defined pension benefits through a multi-employer pension plan that is accounted for as a defined contribution plan, due to the limited information made available to each of the 483 (as of December 31, 2017 ) different participating employers. ArcelorMittal USA’s labor agreement with the United Steelworkers (“USW”) on September 1, 2018 increased the contributions to the multi-employer plan to $ 3.50 per contributory hour from $ 2.80 . Changes to the defined pension plan under the new labor agreement, principally for a higher monthly benefit rate for certain periods of service, resulted in an expense of 25 recorded in cost of sales in the consolidated statements of operations in 2018 .

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Canada

The primary pension plans are those of ArcelorMittal Dofasco, AMMIC and ArcelorMittal Long Products Canada.

The ArcelorMittal Dofasco pension plan is a hybrid plan providing the benefits of both a defined benefit and defined contribution pension plan. The defined contribution component is financed by both employer and employee contributions. The employer’s defined contribution is based on a percentage of company profits. The defined benefit pension plan was closed for new hires on December 31, 2010 and replaced by a new defined contribution pension plan with contributions related to age, service and earnings.

At the end of 2012, ArcelorMittal Dofasco froze and capped benefits for the majority of its hourly and salaried employees who were still accruing service under the defined benefit plan and began transitioning these employees to the new defined contribution pension plan for future pension benefits.

The AMMIC defined benefit plan provides salary related benefit for non-union employees and a flat dollar pension depending on an employee’s length of service for union employees. This plan was closed for new non-union hires on December 31, 2009 and replaced by a defined contribution pension plan with contributions related to age and service. Effective January 1, 2015, AMMIC implemented a plan to transition its non-union employees who were still benefiting under the defined benefit plan to a defined contribution pension plan. Transition dates can extend up to January 1, 2025 depending on the age and service of each member.

ArcelorMittal Long Products Canada sponsors several defined benefit and defined contribution pension plans for its various groups of employees, with most defined benefit plans closed to new entrants several years ago. The primary defined benefit pension plan sponsored by ArcelorMittal Long Products Canada provides certain unionized employees with a flat dollar pension depending on an employee’s length of service.

ArcelorMittal Long Products Canada entered into a six-year collective labor agreement during the third quarter of 2014 with its Contrecoeur-West union group. The defined benefit plan was closed to new hires. A new defined contribution type arrangement was established for new hires.

Brazil

The primary defined benefit plans, financed through trust funds, have been closed to new entrants. Brazilian entities have all established defined contribution plans that are financed by employer and employee contributions. On December 28, 2018, the Brazilian Autarchy that oversees pension funds called PREVIC (Complementary Pension National Superintendence) approved a planned settlement of the major defined benefit plans. This settlement is expected to be effective in 2019 .

Europe

Certain European operating subsidiaries maintain primarily unfunded defined benefit pension plans for a certain number of employees. Benefits are based on such employees’ length of service and applicable pension table under the terms of individual agreements. Some of these unfunded plans have been closed to new entrants and replaced by defined contribution pension plans for active members financed by employer and employee contributions.

As from December 2015 new Belgian legislation modifies the minimum guaranteed rates of return applicable to Belgian defined contribution plans. For insured plans, the rates of 3.25 % on employer contributions and 3.75 % on employee contributions will continue to apply to the accumulated pre-2016 contributions. For contributions paid as from January 1, 2016, a new variable minimum guaranteed rate of return applies. For 2016, 2017 and 2018, the minimum guaranteed rate of return was 1.75 % and this is also the best estimate for 2019. Due to the statutory minimum guaranteed return, Belgian defined contribution plans do not meet the definition of defined contribution plans under IFRS. Therefore, the Belgian defined contribution plans are classified as defined benefit plans.

On April 25, 2016, the Company agreed with unions in France to cap the annual indexation of the IRUS pension plan until 2026 and to pay a lump sum amount to cover the indexation obligation for subsequent years. These changes resulted in a gain of 96 recorded in cost of sales and selling, general and administrative expenses in the statements of operations.

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Others

A very limited number of defined benefit plans are in place in other countries (such as South Africa, Mexico, Kazakhstan, Ukraine and Morocco).

On January 1, 2018, ArcelorMittal South Africa settled its defined benefit plan.  This discontinued its participation in the fund and, therefore, ArcelorMittal South Africa no longer has any financial obligation to ensure the funding of the remaining plan. Accordingly, the related benefit obligation, the plan assets and unrecoverable surplus were derecognized from the 2018 consolidated statements of financial position. The only remaining pension plans for ArcelorMittal South Africa are defined contribution pension plans that are financed by employer and employee contributions.

The majority of the funded defined benefit pension plans described earlier provide benefit payments from trustee-administered funds. ArcelorMittal also sponsors a number of unfunded plans where the Company meets the benefit payment obligation as it falls due. Plan assets held in trusts are legally separated from the Company and are governed by local regulations and practice in each country, as is the nature of the relationship between the Company and the governing bodies and their composition. In general terms, governing bodies are required by law to act in the best interest of the plan members and are responsible for certain tasks related to the plan (e.g. setting the plan's investment policy).

In case of the funded pension plans, the investment positions are managed within an asset-liability matching ("ALM") framework that has been developed to achieve long-term investments that are in line with the obligations of the pension plans.

A long-term investment strategy has been set for ArcelorMittal’s major funded pension plans, with its asset allocation comprising of a mixture of equity securities, fixed income securities, real estate and other appropriate assets. This recognizes that different asset classes are likely to produce different long-term returns and some asset classes may be more volatile than others. The long-term investment strategy ensures, in particular, that investments are adequately diversified.

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

	Year ended December 31, 2018
	Total			United States			Canada			Brazil			Europe			Other
Change in benefit obligation
Benefit obligation at beginning of the period	10,835			3,508			3,481			766			2,990			90
Current service cost	136			31			25			3			68			9
Interest cost on DBO	360			120			110			68			42			20
Past service cost - Plan amendments	25			25			—			—			—			—
Plan participants’ contribution	3			—			1			—			2			—
Settlements	( 76	)		—			( 61	)		—			—			( 15	)
Actuarial (gain) loss	( 290	)		( 159	)		( 72	)		50			( 104	)		( 5	)
Demographic assumptions	20			9			1			—			10			—
Financial assumptions	( 311	)		( 163	)		( 75	)		38			( 92	)		( 19	)
Experience adjustment	1			( 5	)		2			12			( 22	)		14
Benefits paid	( 671	)		( 259	)		( 203	)		( 48	)		( 144	)		( 17	)
Termination benefits	6			—			—			—			6			—
Foreign currency exchange rate differences and other movements	( 456	)		—			( 280	)		( 115	)		( 144	)		83
Benefit obligation at end of the period	9,872			3,266			3,001			724			2,716			165
Change in plan assets
Fair value of plan assets at beginning of the period	7,822			2,993			3,167			723			924			15
Interest income on plan assets	267			92			97			63			15			—
Return on plan assets greater/(less) than discount rate	( 333	)		( 197	)		( 142	)		20			( 15	)		1
Employer contribution	151			42			59			6			44			—
Plan participants’ contribution	3			—			1			—			2			—
Settlement	( 78	)		—			( 63	)		—			—			( 15	)
Benefits paid	( 550	)		( 254	)		( 203	)		( 48	)		( 45	)		—
Foreign currency exchange rate differences and other movements	( 405	)		—			( 252	)		( 109	)		( 43	)		( 1	)
Fair value of plan assets at end of the period	6,877			2,676			2,664			655			882			—
Present value of the wholly or partly funded obligation	( 8,537	)		( 3,238	)		( 2,988	)		( 723	)		( 1,500	)		( 88	)
Fair value of plan assets	6,877			2,676			2,664			655			882			—
Net present value of the wholly or partly funded obligation	( 1,660	)		( 562	)		( 324	)		( 68	)		( 618	)		( 88	)
Present value of the unfunded obligation	( 1,335	)		( 28	)		( 13	)		( 1	)		( 1,216	)		( 77	)
Prepaid due to unrecoverable surpluses	( 27	)		—			( 21	)		( 3	)		( 3	)		—
Net amount recognized	( 3,022	)		( 590	)		( 358	)		( 72	)		( 1,837	)		( 165	)
Net assets related to funded obligations	12			—			9			—			3			—
Recognized liabilities	( 3,034	)		( 590	)		( 367	)		( 72	)		( 1,840	)		( 165	)
Change in unrecoverable surplus
Unrecoverable surplus at beginning of the period	( 34	)		—			( 23	)		( 3	)		( 6	)		( 2	)
Interest cost on unrecoverable surplus	( 1	)		—			( 1	)		—			—			—
Change in unrecoverable surplus in excess of interest	6			—			2			( 1	)		3			2
Exchange rates changes	2			—			1			1			—			—
Unrecoverable surplus at end of the period	( 27	)		—			( 21	)		( 3	)		( 3	)		—

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	Year ended December 31, 2017
	Total			United States			Canada			Brazil			Europe			Other
Change in benefit obligation
Benefit obligation at beginning of the period	10,054			3,627			3,053			704			2,582			88
Current service cost	125			32			26			4			60			3
Interest cost on DBO	397			142			119			79			46			11
Past service cost - Plan amendments	14			—			13			—			1			—
Plan participants’ contribution	3			—			1			—			2			—
Actuarial (gain) loss	323			( 28	)		237			40			72			2
Demographic assumptions	( 131	)		( 130	)		1			—			( 2	)		—
Financial assumptions	418			154			188			22			54			—
Experience adjustment	36			( 52	)		48			18			20			2
Benefits paid	( 656	)		( 265	)		( 197	)		( 49	)		( 130	)		( 15	)
Foreign currency exchange rate differences and other movements	575			—			229			( 12	)		357			1
Benefit obligation at end of the period	10,835			3,508			3,481			766			2,990			90
Change in plan assets
Fair value of plan assets at beginning of the period	7,048			2,768			2,795			684			777			24
Interest income on plan assets	292			94			107			75			15			1
Return on plan assets greater/(less) than discount rate	468			274			169			16			17			( 8	)
Employer contribution	249			117			83			8			41			—
Plan participants’ contribution	3			—			1			—			2			—
Benefits paid	( 545	)		( 260	)		( 196	)		( 49	)		( 37	)		( 3	)
Foreign currency exchange rate differences and other movements	307			—			208			( 11	)		109			1
Fair value of plan assets at end of the period	7,822			2,993			3,167			723			924			15
Present value of the wholly or partly funded obligation	( 9,352	)		( 3,477	)		( 3,463	)		( 765	)		( 1,635	)		( 12	)
Fair value of plan assets	7,822			2,993			3,167			723			924			15
Net present value of the wholly or partly funded obligation	( 1,530	)		( 484	)		( 296	)		( 42	)		( 711	)		3
Present value of the unfunded obligation	( 1,483	)		( 31	)		( 18	)		( 1	)		( 1,355	)		( 78	)
Prepaid due to unrecoverable surpluses	( 34	)		—			( 23	)		( 3	)		( 6	)		( 2	)
Net amount recognized	( 3,047	)		( 515	)		( 337	)		( 46	)		( 2,072	)		( 77	)
Net assets related to funded obligations	20			—			17			—			3			—
Recognized liabilities	( 3,067	)		( 515	)		( 354	)		( 46	)		( 2,075	)		( 77	)
Change in unrecoverable surplus
Unrecoverable surplus at beginning of the period	( 34	)		—			( 18	)		( 3	)		( 4	)		( 9	)
Interest cost on unrecoverable surplus	( 1	)		—			( 1	)		—			—			—
Change in unrecoverable surplus in excess of interest	2			—			( 3	)		—			( 2	)		7
Exchange rates changes	( 1	)		—			( 1	)		—			—			—
Unrecoverable surplus at end of the period	( 34	)		—			( 23	)		( 3	)		( 6	)		( 2	)

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

	Year ended December 31, 2018
Net periodic pension cost (benefit)	Total			United States			Canada			Brazil			Europe			Others
Current service cost	136			31			25			3			68			9
Past service cost - Plan amendments	25			25			—			—			—			—
Past service cost - Settlements	2			—			2			—			—			—
Cost of termination benefits	6			—			—			—			6			—
Net interest cost/(income) on net DB liability/(asset)	94			28			14			5			27			20
Total	263			84			41			8			101			29

	Year ended December 31, 2017
Net periodic pension cost (benefit)	Total			United States			Canada			Brazil			Europe			Others
Current service cost	125			32			26			4			60			3
Past service cost - Plan amendments	14			—			13			—			1			—
Net interest cost/(income) on net DB liability/(asset)	106			48			13			4			31			10
Total	245			80			52			8			92			13

	Year ended December 31, 2016
Net periodic pension cost (benefit)	Total			United States			Canada			Brazil			Europe			Others
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

Other post-employment benefits and other long-term employee benefits ("OPEB")

ArcelorMittal’s principal operating subsidiaries in the United States, Canada, Europe and certain other countries, provide other post-employment benefits and other long-term employee benefits, including medical benefits and life insurance benefits, work medals and retirement indemnity plans, to employees and retirees. Substantially all union-represented ArcelorMittal USA employees hired before June 2016 are covered under post-employment life insurance and medical benefit plans that require a level of cost sharing 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.

ArcelorMittal’s USA labor agreement with the United Steelworkers (“USW”) was ratified in 2016. This labor agreement is 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 after the first quarter of 2018. The changes resulted in a gain of 832 recorded in cost of sales in the consolidated statements of operations in 2016.

ArcelorMittal’s USA new labor agreement with the USW was ratified in 2018. This labor agreement is in effect until September 1, 2022. There were minor changes for OPEB in the new contract mainly related to healthcare post-employment premiums paid by participants. The changes resulted in a gain of 10 recorded in cost of sales in the consolidated statement of operations in 2018 .

The Company has significant assets mostly in the VEBA post-employment benefit plan. These assets consist of 71 % in fixed income and 29 % in equities. The total fair value of the assets in the VEBA trust was 451 as of December 31, 2018 .

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

	Year ended December 31, 2018
	Total			United States			Canada			Europe			Others
Change in benefit obligation
Benefit obligation at beginning of the period	4,686			3,269			679			579			159
Current service cost	85			49			10			25			1
Interest cost on DBO	155			120			21			12			2
Past service cost - Plan amendments	( 13	)		( 10	)		( 1	)		( 2	)		—
Past service cost - Curtailments	( 2	)		—			—			( 2	)		—
Plan participants’ contribution	32			32			—			—			—
Actuarial (gain) loss	( 395	)		( 365	)		( 32	)		3			( 1	)
Demographic assumptions	( 11	)		( 14	)		2			1			—
Financial assumptions	( 320	)		( 285	)		( 24	)		( 8	)		( 3	)
Experience adjustment	( 64	)		( 66	)		( 10	)		10			2
Benefits paid	( 266	)		( 188	)		( 34	)		( 41	)		( 3	)
Foreign currency exchange rate differences and other movements	( 184	)		—			( 52	)		( 43	)		( 89	)
Benefit obligation at end of the period	4,098			2,907			591			531			69
Change in plan assets
Fair value of plan assets at beginning of the period	546			538			—			8			—
Interest income on plan assets	17			17			—			—			—
Return on plan assets greater/(less) than discount rate	( 33	)		( 32	)		—			( 1	)		—
Employer contribution	( 3	)		( 3	)		—			—			—
Plan participants’ contribution	32			32			—			—			—
Benefits paid	( 63	)		( 61	)		—			( 2	)		—
Foreign currency exchange rate differences and other movements	2			—			—			2			—
Fair value of plan assets at end of the period	498			491			—			7			—
Present value of the wholly or partly funded obligation	( 589	)		( 528	)		—			( 61	)		—
Fair value of plan assets	498			491			—			7			—
Net present value of the wholly or partly funded obligation	( 91	)		( 37	)		—			( 54	)		—
Present value of the unfunded obligation	( 3,509	)		( 2,379	)		( 591	)		( 470	)		( 69	)
Net amount recognized	( 3,600	)		( 2,416	)		( 591	)		( 524	)		( 69	)

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	Year ended December 31, 2017
	Total			United States			Canada			Europe			Others
Change in benefit obligation
Benefit obligation at beginning of the period	5,400			4,183			592			492			133
Current service cost	100			58			9			26			7
Interest cost on DBO	226			181			23			11			11
Past service cost - Plan amendments	4			—			1			2			1
Plan participants’ contribution	29			29			—			—			—
Actuarial (gain) loss	( 942	)		( 1,005	)		45			7			11
Demographic assumptions	( 153	)		( 168	)		2			3			10
Financial assumptions	( 680	)		( 728	)		40			9			( 1	)
Experience adjustment	( 109	)		( 109	)		3			( 5	)		2
Benefits paid	( 258	)		( 177	)		( 32	)		( 42	)		( 7	)
Foreign currency exchange rate differences and other movements	127			—			41			83			3
Benefit obligation at end of the period	4,686			3,269			679			579			159
Change in plan assets
Fair value of plan assets at beginning of the period	599			592			—			7			—
Interest income on plan assets	22			22			—			—			—
Return on plan assets greater/(less) than discount rate	17			15			—			2			—
Employer contribution	( 44	)		( 44	)		—			—			—
Plan participants’ contribution	12			12			—			—			—
Benefits paid	( 61	)		( 59	)		—			( 2	)		—
Foreign currency exchange rate differences and other movements	1			—			—			1			—
Fair value of plan assets at end of the period	546			538			—			8			—
Present value of the wholly or partly funded obligation	( 757	)		( 689	)		—			( 68	)		—
Fair value of plan assets	546			538			—			8			—
Net present value of the wholly or partly funded obligation	( 211	)		( 151	)		—			( 60	)		—
Present value of the unfunded obligation	( 3,929	)		( 2,580	)		( 679	)		( 511	)		( 159	)
Net amount recognized	( 4,140	)		( 2,731	)		( 679	)		( 571	)		( 159	)

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

	Year ended December 31, 2018
Components of net periodic OPEB cost (benefit)	Total			United States			Canada			Europe			Others
Current service cost	85			49			10			25			1
Past service cost - Plan amendments	( 13	)		( 10	)		( 1	)		( 2	)		—
Past service cost - Curtailments	( 2	)		—			—			( 2	)		—
Net interest cost/(income) on net DB liability/(asset)	138			103			21			12			2
Actuarial (gains)/losses recognized during the year	7			—			—			7			—
Total	215			142			30			40			3

	Year ended December 31, 2017
Components of net periodic OPEB cost (benefit)	Total			United States			Canada			Europe			Others
Current service cost	100			58			9			26			7
Past service cost - Plan amendments	4			—			1			2			1
Net interest cost/(income) on net DB liability/(asset)	204			159			23			11			11
Actuarial (gains)/losses recognized during the year	2			—			—			2			—
Total	310			217			33			41			19

	Year ended December 31, 2016
Components of net periodic OPEB cost (benefit)	Total			United 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

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

	Year ended December 31,
	2018			2017			2016
Net periodic pension cost	263			245			134
Net periodic OPEB cost	215			310			( 527	)
Total	478			555			( 393	)
Cost of sales	212			220			( 725	)
Selling, general and administrative expenses	34			23			—
Financing costs - net	232			312			332
Total	478			555			( 393	)

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Plan Assets

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

	December 31, 2018
	United States			Canada			Brazil			Europe
Equity Securities	35	%		42	%		—			3	%
- Asset classes that have a quoted market price in an active market	12	%		33	%		—			3	%
- Asset classes that do not have a quoted market price in an active market	23	%		9	%		—			—
Fixed Income Securities (including cash)	46	%		50	%		78	%		72	%
- Asset classes that have a quoted market price in an active market	—			44	%		78	%		67	%
- Asset classes that do not have a quoted market price in an active market	46	%		6	%		—			5	%
Real Estate	5	%		6	%		1	%		—
- Asset classes that have a quoted market price in an active market	—			—			1	%		—
- Asset classes that do not have a quoted market price in an active market	5	%		6	%		—			—
Other	14	%		2	%		21	%		25	%
- Asset classes that have a quoted market price in an active market	4	%		2	%		21	%		4	%
- Asset classes that do not have a quoted market price in an active market	10	%		—			—			21	%	1
Total	100	%		100	%		100	%		100	%

1. The percentage consists primarily of assets from insurance contracts in Belgium.

	December 31, 2017
	United States			Canada			Brazil			Europe			Others
Equity Securities	53	%		56	%		—			3	%		41	%
- Asset classes that have a quoted market price in an active market	26	%		47	%		—			3	%		41	%
- Asset classes that do not have a quoted market price in an active market	27	%		9	%		—			—			—
Fixed Income Securities (including cash)	34	%		42	%		97	%		71	%		49	%
- Asset classes that have a quoted market price in an active market	4	%		33	%		97	%		67	%		49	%
- Asset classes that do not have a quoted market price in an active market	30	%		9	%		—			4	%		—
Real Estate	—			2	%		1	%		—			2	%
- Asset classes that have a quoted market price in an active market	—			—			1	%		—			2	%
- Asset classes that do not have a quoted market price in an active market	—			2	%		—			—			—
Other	13	%		—			2	%		26	%		8	%
- Asset classes that have a quoted market price in an active market	4	%		—			2	%		3	%		8	%
- Asset classes that do not have a quoted market price in an active market	9	%		—			—			23	%	1	—
Total	100	%		100	%		100	%		100	%		100	%

1.	The percentage consists primarily of assets from insurance contracts in Belgium.

These assets include investments in ArcelorMittal stock of approximately 1 , but not in property or other assets occupied or used by ArcelorMittal. These assets may also include ArcelorMittal shares held by mutual fund investments. The invested assets produced an actual loss of 82 in 2018 and a return of 799 in 2017.

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 investme

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nt strategy within control ranges agreed upon.

	December 31, 2018
	United States			Canada			Brazil			Europe
Equity Securities	38	%		49	%		—			3	%
Fixed Income Securities (including cash)	45	%		44	%		78	%		72	%
Real Estate	3	%		6	%		1	%		—
Other	14	%		1	%		21	%		25	%	1
Total	100	%		100	%		100	%		100	%

1.	The percentage consists primarily of assets from insurance contracts in Belgium.

Assumptions used to determine benefit obligations at December 31,

	Pension Plans						Other Post-employment Benefits
	2018		2017		2016		2018		2017		2016
Discount rate
Range	1.75% - 16.00%		1.50% - 15.00%		1.60% - 16.00%		1.75% - 9.50%		1.30% - 7.65%		0.90% - 7.65%
Weighted average	3.80 %		3.45 %		3.92 %		3.98 %		3.60 %		4.19 %
Rate of compensation increase
Range	2.00% - 10.00%		1.80% - 9.00%		1.80% - 10.00%		2.00% - 4.80%		2.00% - 4.50%		2.00% - 32.00%
Weighted average	2.85 %		2.81 %		3.11 %		3.24 %		3.32 %		3.38 %

	Other Post-employment Benefits
	2018		2017		2016
Healthcare cost trend rate assumed
Range	1.80% - 8.00%		1.80% - 5.00%		1.80% - 5.60%
Weighted average	4.46 %		4.48 %		4.51 %

Cash contributions and maturity profile of the plans

In 2019, the Company expects its cash contributions to amount to 194 for pension plans, 231 for other post-employment benefits plans, 116 for defined contribution plans and 67 for United States multi-employer plans. Cash contributions to defined contribution plans and to United States multi-employer plans sponsored by the Company, were respectively 123 and 65 in 2018.

At December 31, 2018, the weighted average duration of the liabilities related to the pension and other post-employment benefits plans were 12 years (2017: 12 years ) and 14 years (2017: 14 years ), respectively.

Risks associated with defined benefit plans

Through its defined benefit pension plans and OPEB plans, ArcelorMittal is exposed to a number of risks, the most significant of which are detailed below:

Changes in bond yields

A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings.

Asset volatility

The plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if plan assets underperform this yield, this will create a deficit. In most countries with funded plans, plan assets hold a significant portion of equities, which are expected to outperform corporate bonds in the long-term but contribute to volatility and risk in the short-term. As the plans mature, ArcelorMittal intends to reduce the level of investment risk by investing more in assets that better

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match the liabilities. However, ArcelorMittal believes that due to the long-term nature of the plan liabilities, a level of continuing equity investment is an appropriate element of a long-term strategy to manage the plans efficiently.

Life expectancy

Most plans provide benefits for the life of the covered members, so increases in life expectancy will result in an increase in the plans’ benefit obligations.

Assumptions regarding future mortality rates have been set considering published statistics and, where possible, ArcelorMittal’s own experience. In 2017, ArcelorMittal USA updated the company specific tables it uses to value most of its postretirement liabilities. These tables were projected forward using the most recent projection scales issued by the Society of Actuaries. Use of these new mortality assumptions resulted in reducing the 2017 pension and OPEB liabilities by 95 and 51 , respectively.

The current longevities at retirement underlying the values of the defined benefit obligation were approximately 22 .

Healthcare cost trend rate

The majority of the OPEB plans’ benefit obligations are linked to the change in the cost of various health care components. Future healthcare cost will vary based on several factors including price inflation, utilization rate, technology advances, cost shifting and cost containing mechanisms. A higher healthcare cost trend would lead to higher OPEB plan benefit obligations.

In 2017, the Company changed its provider of insured coverage of Medicare eligible participants in the United States. This resulted in significantly lowering the premiums and resulted in reducing the OPEB defined benefit obligations by 1,061 . In 2017, the healthcare cost trend rate assumption in the United States was adjusted, which resulted in increasing the OPEB defined benefit obligations by 117 .

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, 2018, the defined benefit obligation for pension plans was 9,872 ):

	Effect on 2019 Pre-Tax Pension Expense (sum of service cost and interest cost)		Effect on December 31, 2018 DBO
Change in assumption
100 basis points decrease in discount rate	( 42 )		1,204
100 basis points increase in discount rate	33		( 987 )
100 basis points decrease in rate of compensation	( 14 )		( 173 )
100 basis points increase in rate of compensation	15		177
1 year increase of the expected life of the beneficiaries	11		250

The following table illustrates the sensitivity to a change of the significant actuarial assumptions related to ArcelorMittal’s OPEB plans (as of December 31, 2018 the defined benefit obligation for post-employment benefit plans was 4,098 ):

	Effect on 2019 Pre-Tax OPEB Expense (sum of service cost and interest cost)		Effect on December 31, 2018 DBO
Change in assumption
100 basis points decrease in discount rate	—		610
100 basis points increase in discount rate	2		( 487 )
100 basis points decrease in healthcare cost trend rate	( 27 )		( 407 )
100 basis points increase in healthcare cost trend rate	39		506
1 year increase of the expected life of the beneficiaries	9		142

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.

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Multi-employer plans

ArcelorMittal issues equity-settled share-based payments to certain employees, including stock options, RSUs and PSUs. Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a graded vesting basis over the vesting period, based on the Company’s estimate of the shares that will eventually vest and adjusted for the effect of non market-based vesting conditions. For stock options, RSUs and PSUs, fair value is measured using the Black-Scholes-Merton pricing model and the market value of the shares at the date of the grant after deduction of dividend payments during the vesting period, respectively. Where the fair value calculation requires modeling of the Company’s performance against other market index, fair value is measured using the Monte Carlo pricing model to estimate the forecasted target performance goal for the company and its peer companies. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioral considerations. In addition, the expected annualized volatility has been set by reference to the implied volatility of options available on ArcelorMittal shares in the open market, as well as, historical patterns of volatility. For the RSUs and PSUs, the fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight line method over the vesting period and adjusted for the effect of non market-based vesting conditions.

On May 22, 2017, ArcelorMittal completed the consolidation of each three existing shares in ArcelorMittal without nominal value into one share without nominal value. As a result of this reverse stock split, the outstanding number of stock options, PSUs and RSUs per employee has been recast for prior periods.

Stock Option Plans

Prior to the May 2011 annual general shareholders’ meeting adoption of the ArcelorMittal Equity Incentive Plan described below, ArcelorMittal’s equity-based incentive plan took the form of a stock option plan known as the Global Stock Option Plan.

Under the terms of the ArcelorMittal Global Stock Option Plan 2009-2018 (which replaced the ArcelorMittal Shares plan that expired in 2009), ArcelorMittal may grant options to purchase common shares to senior management of ArcelorMittal and its associates for up to 100,000,000 ( 33,333,333 shares after reverse stock split) shares of common shares. The exercise price of each option equals not less than the fair market value of ArcelorMittal shares on the grant date, with a maximum term of 10 years . Options are granted at the discretion of ArcelorMittal’s Appointments, Remuneration and Corporate Governance ("ARCG") Committee, or its delegate. The options vest either ratably upon each of the first three anniversaries of the grant date, or, in total, upon the death, disability or retirement of the participant.

Date of grant	Exercise prices (per option)
August 2010	$ 91.98
August 2009	109.14

No options were granted during the years ended December 31, 2018 , 2017 , and 2016 .

The compensation expense recognized for stock option plans was nil for each of the years ended December 31, 2018 , 2017 and 2016 .

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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, 2018 , 2017 and 2016 :

	Number of Options			Range of Exercise Prices (per option)		Weighted Average Exercise Price (per option)
Outstanding, December 31, 2015	5,730,800			63.42 – 235.32		148.06	Outstanding,
Expired	( 1,048,266	)		91.98 – 235.32		125.17
Outstanding, December 31, 2016	4,682,534			63.42 – 235.32		153.19	Outstanding,
Expired	( 1,397,659	)		63.42 – 235.32		170.40
Outstanding, December 31, 2017	3,284,875			63.42 – 235.32		145.86	Outstanding,
Expired	( 1,295,500	)		63.42 – 235.32		215.77
Outstanding, December 31, 2018	1,989,375			91.98 – 109.14		100.33	Outstanding,
Exercisable, December 31, 2016	4,682,534			63.42 – 235.32		153.19	Exercisable,
Exercisable, December 31, 2017	3,284,875			63.42 – 235.32		145.86	Exercisable,
Exercisable, December 31, 2018	1,989,375			91.98 – 109.14		100.33	Exercisable,

The following table summarizes information about total stock options of the Company outstanding as of December 31, 2018 :

Options Outstanding
Exercise Prices (per option)		Number of options			Weighted average contractual life (in years)		Options exercisable (number of options)			Maturity
$ 91.98		1,021,058			1.59		1,021,058			August 3, 2020
109.14		968,317			0.59		968,317			August 4, 2019
$91.98 - $109.14		1,989,375			1.11		1,989,375

Long-Term Incentives: Equity-Based Incentives (Share Unit Plans)

On May 10, 2011, the annual general meeting of shareholders approved the ArcelorMittal Equity Incentive Plan, a new equity-based incentive plan that replaced the Global Stock Option Plan. The ArcelorMittal Equity Incentive Plan is intended to align the interests of the Company’s shareholders and eligible employees by allowing them to participate in the success of the Company. The ArcelorMittal Equity Incentive Plan provides for the grant of RSUs and PSUs to eligible Company employees (including the Executive Officers) and is designed to incentivize employees, improve the Company’s long-term performance and retain key employees. On May 8, 2013, the annual general meeting of shareholders approved the GMB PSU Plan, which provides for the grant of PSUs to GMB members (and is now applicable to the CEO Office). Until the introduction of the GMB PSU Plan in 2013, GMB members were eligible to receive RSUs and PSUs under the ArcelorMittal Equity Incentive Plan. In 2016, a special grant was approved in order to align the grant with the Action 2020 plan put in place by ArcelorMittal.

The maximum number of PSUs (and RSUs previously) available for grant during any given year is subject to the prior approval of the Company’s shareholders at the annual general meeting. The annual shareholders’ meeting on May 4, 2016 approved the maximum to be granted until the next annual shareholders’ meeting. For the period from the May 2016 annual general shareholders’ meeting to the May 2017 annual general shareholders’ meeting, a maximum of 30,000,000 PSUs ( 10,000,000 PSU's after the reverse stock split) may be allocated to eligible employees under the ArcelorMittal Equity Incentive Plan and the GMB PSU Plan combined. The 2017 Cap for the number of PSUs that may be allocated to the CEO Office and other retention based grants below the CEO Office level was approved at the annual shareholders' meeting on May 10, 2017 at a maximum of 3,000,000 shares. The 2018 Cap for the number of PSUs that may be allocated to the CEO Office and other retention based grants below the CEO Office level, was approved at the annual shareholders’ meeting on May 9, 2018 at a maximum of 1,500,000 shares.

ArcelorMittal Equity Incentive Plan

RSUs granted under the ArcelorMittal Equity Incentive Plan are designed to provide a retention incentive to eligible employees. RSUs are subject to “cliff vesting” after three years , with 100 % of the grant vesting on the third anniversary of the grant contingent upon the continued active employment of the eligible employee within the Company.

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The grant of PSUs under the ArcelorMittal Equity Incentive Plan aims to serve as an effective performance-enhancing scheme based on the employee’s contribution to the eligible achievement of the Company’s strategy. Awards in connection with PSUs are subject to the fulfillment of cumulative performance criteria (such as return on capital employed ("ROCE"), total shareholders return ("TSR"), earnings per share ("EPS") and gap to competition) over a three year period from the date of the PSU grant. The employees eligible to receive PSUs are a sub-set of the group of employees eligible to receive RSUs. The target group for PSU grants initially included the Chief Executive Officer and the other GMB members. However, from 2013 onwards, the Chief Executive Officer and other GMB members (and in 2016, the CEO Office) received PSU grants only under the GMB PSU Plan instead of the ArcelorMittal Equity Incentive Plan.

Conditions of the 2018 grant were as follows:

		CEO Office					Executive Officers and other qualifying employees
2018 Grant	l	PSUs with a three year performance period					PSUs with a three year performance period
	l	Value at grant 100% of base salary for the CEO and the President and CFO
	l	Vesting conditions:					Vesting conditions
				Threshold	Target					Target
		TSR/EPS vs. peer group		100% median	≥120% median		ROCE			100% target 100% vesting
		TSR vs. S&P 500		Performance equal to Index	≥Performance equal to Index + 2% outperformance		Gap to competition (where applicable)			100% target 100% vesting
		Vesting percentage		50%	100%

Awards made in previous financial years which have not yet reached the end of the vesting period

The Company's Long-Term Incentive Plan for senior management including Executive Officers follows the Company's strategy.

In 2014 and 2015, the Company's goal was to achieve ROCE and Mining volume for the Mining segment and therefore the target was based on these performance measures.

In 2016, in order to ensure achievement of the Action 2020 plan, ArcelorMittal made a special grant (“Special Grant”) to qualifying employees (including the Executive Officers), instead of the standard grant. The value of the Special Grant at grant date is based generally on a specified percentage of the base salary depending on the position of the employee at grant date. The vesting is subject to continued active employment within the ArcelorMittal group and to yearly performance of ROCE targets and other strategic objectives within the business units.

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The plans in 2017, 2016 and 2015 are summarized below:

CEO Office

Other Executive Officers

2015 Grant

l

PSUs with a three-year performance period

l

RSUs with a three-year vesting period (2015 grant vested in December 2018)

l

Performance criteria: 50% TSR (½ vs. S&P 500 and ½ vs. peer group) and 50% EPS vs. peer group

l

PSUs with a three-year performance period

l

Value at grant: 100% of base salary for the CEO and 80% for the President and CFO

l

Performance target: mainly ROCE and mining volume plan for the Mining segment

l

One PSU can give right to 0 up to 1.5 share

l

Vesting conditions:

l

Vesting conditions:

Threshold

Target

Stretch

Performance

Threshold

Target

Stretch

TSR/EPS vs. peer group

80% median

100% median

≥120% median

Performance

80%

100%

≥120%

TSR vs. S&P 500

Performance equal to 80% of Index

Performance equal to Index

≥Performance equal to Index + 2% outperformance

Vesting

50%

100%

150%

Vesting percentage

50%

100%

150%

2016 Special Grant

l

PSUs with a five-year performance period, 50% vesting after three-year performance period and 50% after additional two-year performance period

l

PSUs with a five-year performance period, 50% vesting after three-year performance period and 50% after additional two-year performance period

l

Performance criteria: 50% TSR (½ vs. S&P 500 and ½ vs. peer group) and 50% EPS vs. peer group

l

Performance criteria: ROCE and Gap to competition in some areas one target grant: a share will vest if performance is met at target one overperformance grant: a share will vest if performance exceeds 120%

l

Value at grant: 150% of base salary for the CEO and the President and CFO

l

Vesting conditions:

l

Vesting conditions:

Threshold

Target

Performance

100%

≥120%

TSR/EPS vs. peer group

100% median

≥120% median

Target award vesting

100%

100%

TSR vs. S&P 500

Performance equal to Index

≥Performance equal to Index + 2% outperformance

Overperformance award (=20% of target award)

-

100%

Vesting percentage

50%

100%

2017 Grant

l

PSUs with a three-year performance period

l

PSUs with a three-year performance period

l

Performance criteria: 50% TSR (½ vs. S&P 500 and ½ vs. peer group) and 50% EPS vs. peer group

l

Performance criteria: TSR and Gap to competition in some areas

l

Value at grant: 100% of base salary for the CEO and the President and CFO

l

Vesting conditions:

l

Vesting conditions:

Threshold

Target

Threshold

Target

TSR/EPS vs. peer group

100% median

≥120% median

TSR vs. peer group

100% median 50% vesting

≥120% median 100% vesting

TSR vs. S&P 500

Performance equal to Index

≥Performance equal to Index + 2% outperformance

Gap to competition (where applicable)

-

100% target 100% vesting

Vesting percentage

50%

100%

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The following table summarizes the Company’s share unit plans outstanding December 31, 2018 :

At Grant date														Number of shares issued as of December 31, 2018
Grant date		Type of plan		Number of shares			Number of beneficiaries			Maturity		Fair value per share		Shares outstanding			Shares exited			Shares forfeited
December 20, 2018		PSU		1,358,750			524			January 1, 2022		21.31		1,358,750			—			—
December 20, 2018		CEO Office		134,861			2			January 1, 2022		16.58		134,861			—			—
December 20, 2017		PSU		1,081,447			527			January 1, 2021		18.42		1,046,816			—			34,631
December 20, 2017		CEO Office		90,084			2			January 1, 2021		22.85		90,084			—			—
June 30, 2016		PSU II		3,472,355			554			January 1, 2021		13.17		3,105,045			—			367,310
June 30, 2016		CEO PSU II		153,268			2			January 1, 2022		16.62		153,268			—			—
June 30, 2016		PSU I		3,472,355			554			January 1, 2019		13.74		3,105,045			—			367,310
June 30, 2016		CEO PSU I		153,268			2			January 1, 2020		10.68		153,268			—			—
December 18, 2015		PSU		295,935			322			January 1, 2019		11.49		223,323			—			72,612
Total				10,212,323								$10.68 – $22.85		9,370,460			—			841,863

The compensation expense recognized for RSUs and PSUs was 31 , 31 and 13 for the years ended December 31, 2018 , 2017 and 2016 .

Share unit plan activity is summarized below as of and for each year ended December 31, 2018 , 2017 and 2016 :

	RSUs					PSUs
	Number of shares			Fair value per share		Number of shares			Fair value per share
Outstanding, December 31, 2015	1,320,654			28.78		1,370,675			33.32
Granted 2	—			—		7,252,814			13.46
Exited	( 564,679	)		38.24		( 19,816	)		37.11
Forfeited	( 105,721	)		26.12		( 564,179	)		37.76
Outstanding, December 31, 2016	650,254			21.00		8,039,494			15.08
Granted 2	—			—		1,199,338			19.25
Exited	( 303,550	)		30.69		( 204,855	)		43.34
Forfeited	( 40,699	)		20.32		( 437,141	)		18.33
Outstanding, December 31, 2017	306,005			11.49		8,596,836			14.83
Granted 1	—			—		1,577,865			21.32
Exited	( 288,721	)		11.49		( 412,893	)		28.98
Forfeited	( 17,284	)		11.49		( 391,348	)		16.41
Outstanding, December 31, 2018	—					9,370,460			15.34

1.	Including 56,606 over-performance shares granted for the targets achievement of the PSU grant September 17, 2014 and 27,648 of the GMB PSU grant June 30, 2015

2.	Including 27,807 over-performance shares granted for the targets achievement of the PSU grant September 27, 2013 in 2017 ( 1,567 over-performance shares for the PSU grant March 29, 2013 in 2016).

ArcelorMittal recognizes provisions for liabilities and probable losses that have been incurred when it has a present legal or constructive obligation as a result of past events, it is probable that the Company will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a financing cost. Future operating expenses or losses are excluded from recognition as provisions as they do not meet the definition of a liability. Contingent assets and contingent liabilities are excluded from recognition in the consolidated statements of financial position.

Provisions for onerous contracts are recorded in the consolidated statements of operations when it becomes known that the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received.

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Assets dedicated to the onerous contracts are tested for impairment before recognizing a separate provision for the onerous contract.

Provisions for restructuring are recognized when and only when a detailed formal plan exists and a valid expectation in those affected by the restructuring has been raised, by starting to implement the plan or announcing its main features.

ArcelorMittal records asset retirement obligations (“ARO”) initially at the fair value of the legal or constructive obligation in the period in which it is incurred and capitalizes the ARO by increasing the carrying amount of the related non-current asset. The fair value of the obligation is determined as the discounted value of the expected future cash flows. The liability is accreted to its present value through net financing cost and the capitalized cost is depreciated in accordance with the Company’s depreciation policies for property, plant and equipment. Subsequently, when reliably measurable, ARO is recorded on the consolidated statements of financial position increasing the cost of the asset and the fair value of the related obligation. Foreign exchange gains or losses on AROs denominated in foreign currencies are recorded in the consolidated statements of operations.

ArcelorMittal is subject to changing and increasingly stringent environmental laws and regulations concerning air emissions, water discharges and waste disposal, as well as certain remediation activities that involve the clean-up of soil and groundwater. ArcelorMittal is currently engaged in the investigation and remediation of environmental contamination at a number of its facilities. Most of these are legacy obligations arising from acquisitions.

Environmental costs that relate to current operations or to an existing condition caused by past operations, and which do not contribute to future revenue generation or cost reduction, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable and the cost can be reliably estimated based on ongoing engineering studies, discussions with the environmental authorities and other assumptions relevant to the nature and extent of the remediation that may be required. The ultimate cost to ArcelorMittal is dependent upon factors beyond its control such as the scope and methodology of the remedial action requirements to be established by environmental and public health authorities, new laws or government regulations, rapidly changing technology and the outcome of any potential related litigation. Environmental liabilities are discounted if the aggregate amount of the obligation and the amount and timing of the cash payments are fixed or reliably determinable.

The estimates of loss contingencies for environmental matters and other contingencies are based on various judgments and assumptions including the likelihood, nature, magnitude and timing of assessment, remediation and/or monitoring activities and the probable cost of these activities. In some cases, judgments and assumptions are made relating to the obligation or willingness and ability of third parties to bear a proportionate or allocated share of cost of these activities, including third parties who sold assets to ArcelorMittal or purchased assets from it subject to environmental liabilities. ArcelorMittal also considers, among other things, the activity to date at particular sites, information obtained through consultation with applicable regulatory authorities and third-party consultants and contractors and its historical experience with other circumstances judged to be comparable. Due to the numerous variables associated with these judgments and assumptions, and the effects of changes in governmental regulation and environmental technologies, both the precision and reliability of the resulting estimates of the related contingencies are subject to substantial uncertainties. As estimated costs to remediate change, the Company will reduce or increase the recorded liabilities through write backs or additional provisions in the consolidated statements of operations. ArcelorMittal does not expect these environmental issues to affect the utilization of its plants, now or in the future.

ArcelorMittal is currently and may in the future be involved in litigation, arbitration or other legal proceedings. Provisions related to legal and arbitration proceedings are recorded in accordance with the principles described above.

Most of these claims involve highly complex issues. Often these issues are subject to substantial uncertainties and, therefore, the probability of loss and an estimation of damages are difficult to ascertain. Consequently, ArcelorMittal may be unable to make a reliable estimate of the expected financial effect that will result from ultimate resolution of the proceeding. In those cases, ArcelorMittal has disclosed information with respect to the nature of the contingency. ArcelorMittal has not accrued a provision for the potential outcome of these cases.

For cases in which the Company was able to make a reliable estimate of the expected loss or range of probable loss and has accrued a provision for such loss, it believes that publication of this information on a case-by-case basis would seriously prejudice the Company’s position in the ongoing legal proceedings or in any related settlement discussions. Accordingly, in these cases, the Company has disclosed information with respect to the nature of the contingency, but has not disclosed its estimate of the range of potential loss.

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In the cases in which quantifiable fines and penalties have been assessed, the Company has indicated the amount of such fine or penalty or the amount of provision accrued that is the estimate of the probable loss.

	Balance at December 31, 2016			Additions 1			Deductions/ Payments				Effects of foreign exchange and other movements				Balance at December 31, 2017
Environmental (see note 8.3)	745			64			( 57	)			63				815
Asset retirement obligations (see note 8.3)	358			60			( 9	)			18				427
Site restoration	43			—			( 9	)			6				40
Staff related obligations	168			48			( 41	)			8				183
Voluntary separation plans	79			22			( 44	)			22				79
Litigation and other (see note 8.3)	413			64			( 173	)			24				328
Tax claims	211			11			( 109	)			13				126
Other legal claims	202			53			( 64	)			11				202
Commercial agreements and onerous contracts	26			18			( 22	)	3		2				24
Other	115			39			( 37	)			9				126
	1,947			315			( 392	)			152				2,022
Short-term provisions	426														410
Long-term provisions	1,521														1,612
	1,947														2,022

1.	Additions exclude provisions reversed or utilized during the same year.

2.	Other movements primarily relate to the provisions in connection with environmental remediation obligations in Italy (see note 8.3).

3.	Deductions and payments for commercial agreements and onerous contracts reflect the increase in raw materials and steel prices.

There are uncertainties regarding the timing and amount of the provisions above. Changes in underlying facts and circumstances for each provision could result in differences in the amounts provided for and the actual outflows. In general,

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provisions are presented on a non-discounted basis due to the uncertainties regarding the timing or the short period of their expected consumption.

Environmental provisions have been estimated based on internal and third-party estimates of contaminations, available remediation technology, and environmental regulations. Estimates are subject to revision as further information develops or circumstances change.

Provisions for site restoration are related to costs incurred for dismantling of site facilities, mainly in France. In the fourth quarter of 2018, the agreement between ArcelorMittal and the French government regarding a six year idling period of the Florange liquid phase expired. The Company will proceed with the definitive closure of the facility and recorded accordingly a 113 provision for the dismantling of the facility.

Provisions for staff related obligations primarily concern the United States and Brazil and are related to various employees’ compensation.

Provisions for voluntary separation plans primarily concern plans in Spain, Czech Republic, Belgium and the United States which are expected to be settled within one year.

Provisions for litigation include losses relating to a present legal obligation that are considered to be probable. Further detail regarding legal matters is provided in note 8.3.

	December 31,
	2018			2017
Derivative financial instruments	708			344
Payable from acquisitions	1,506			35
Unfavorable contracts	217			—
Other	588			584
Total	3,019			963

Derivative financial instruments include 124 as of December 31, 2018 relating to the fair value of the put option granted to ISP in the framework of the acquisition of Ilva (see note 2.2.4).

Payable from acquisitions include 1,245 relating to the non-current portion of the consideration payable with respect to the acquisition of Ilva and 253 relating to the financial liability with respect to the acquisition of Votorantim (see note 2.2.4).

Environmental Liabilities

ArcelorMittal’s operations are subject to a broad range of laws and regulations relating to the protection of human health and the environment at its multiple locations and operating subsidiaries. As of December 31, 2018 , excluding asset retirement obligations, ArcelorMittal had established provisions of 1,228 for environmental remedial activities and liabilities. The provisions for all operations by geographic area were 930 in Europe, 132 in the United States, 135 in South Africa and 31 in Canada. In addition, ArcelorMittal and the previous owners of its facilities have expended substantial amounts to achieve or maintain ongoing compliance with applicable environmental laws and regulations. ArcelorMittal expects to continue to expend resources in this respect in the future.

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United States

ArcelorMittal’s operations in the United States have environmental provisions of 132 (exclusive of asset retirement obligations) to address existing environmental liabilities, of which 15 is expected to be spent in 2019. The environmental provisions principally relate to the investigation, monitoring and remediation of soil and groundwater at ArcelorMittal’s current and former facilities. ArcelorMittal USA continues to have significant environmental provisions relating to investigation and remediation at Indiana Harbor, Lackawanna, and its closed coal mining operations in southwestern Pennsylvania. ArcelorMittal USA’s environmental provisions also include 33 , with anticipated spending of 2 during 2019, to specifically address the removal and disposal of asbestos-containing materials and polychlorinated biphenyls (“PCBs”).

All of ArcelorMittal’s major operating and former operating sites in the United States are or may be subject to a corrective action program or other laws and regulations relating to environmental remediation, including projects relating to the reclamation of industrial properties. In some cases, soil or groundwater contamination requiring remediation is present at both currently operating and historical sites where ArcelorMittal has a continuing obligation. In other cases, ArcelorMittal USA is required to conduct studies to determine the extent of contamination, if any, that exists at these sites.

ArcelorMittal USA’s Indiana Harbor facility was party to a lawsuit filed by the United States Environmental Protection Agency (the “EPA”) under the United States Resource Conservation and Recovery Act (“RCRA”). An ArcelorMittal USA predecessor company entered into a Consent Decree, which, among other things, requires facility-wide RCRA Corrective Action and sediment assessment and remediation in the adjacent Indiana Harbor Ship Canal. ArcelorMittal USA entered into a Consent Decree Amendment defining the objectives for limited sediment assessment and remediation of a small portion of the Indiana Harbor Ship Canal. The provisions for environmental liabilities include 7 for such sediment assessment and remediation, and 5 for RCRA Corrective Action at the Indiana Harbor facility itself. Remediation ultimately may be necessary for other contamination that may be present at Indiana Harbor, but the potential costs of any such remediation cannot yet be reasonably estimated at this time.

ArcelorMittal USA’s properties in Lackawanna, New York are subject to an Administrative Order on Consent with the EPA requiring facility-wide RCRA Corrective Action. The Administrative Order requires the Company to perform a Remedial Facilities Investigation (“RFI”), a Corrective Measures Study, to implement appropriate interim and final remedial measures, and to perform required post-remedial closure activities. The New York State Department of Environmental Conservation and the EPA conditionally approved the RFI. ArcelorMittal USA has executed Orders on Consent to perform certain interim corrective measures while advancing the Corrective Measures Study. These include installation and operation of a ground water treatment system and dredging of a local waterway known as Smokes Creek. A Corrective Measure Order on Consent was executed for other site remediation activities. ArcelorMittal USA’s provisions for environmental liabilities include 29 for anticipated remediation and post-remediation activities at this site. The provisioned amount is based on the extent of soil and groundwater contamination identified by the RFI and the CMS remedial measures likely to be required, including excavation and consolidation of containment structures in an on-site landfill and continuation of groundwater pump and treatment systems.

ArcelorMittal USA is required to prevent acid mine drainage from discharging to surface waters at its closed mining operations in southwestern Pennsylvania. ArcelorMittal USA entered into a revised Consent Order and Agreement outlining a schedule for implementation of capital improvements and requiring the establishment of a treatment trust, estimated by the PaDEP to be the net present value of all future treatment cost. ArcelorMittal USA has been funding the treatment trust, which reached the target value in 2017. This target value is based on average spending over the last three years. The trust had a market value of 45 as of December 31, 2018 . ArcelorMittal can be reimbursed from the fund for the continuing cost of treatment of acid mine drainage. ArcelorMittal USA’s provisions for environmental liabilities include 32 for this matter.

In 2011, the United States EPA Region V issued Notices of Violations ("NOVs") to Indiana Harbor, Burns Harbor and Cleveland alleging operational noncompliance based primarily on self-reported Title V permit concerns. Comprehensive settlement discussions with the United States EPA and affected state agencies involving all NOVs are ongoing and a comprehensive settlement with the United States EPA and affected state agencies, which is anticipated to encompass self-reported non-compliance through September 30, 2018 was finalized pending approvals by the government parties which are anticipated in early 2019. The settlement will include payment of penalties and injunctive relief. Liabilities associated with this comprehensive settlement are estimated at 7 .

In 2014, the ArcelorMittal Monessen coke plant was re-started after having been idled since 2008. Since re-start, state regulatory authorities (“PADEP”) issued numerous NOVs, the majority of which concerns Clean Air Act violations. United States EPA Region 3 also issued an NOV and, in addition, issued an information request seeking detailed testing and

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information concerning air compliance related issues. PADEP issued a proposed penalty assessment of 1 for alleged violations occurring from April 2014 through May 2015. Penalties were finalized as part of comprehensive Consent Decree negotiations with PADEP and United States EPA enforcement officials and with Penn Environment, a local environmental group which filed a Citizen Suit under the Clean Air Act in 2015. The litigation was stayed in 2016. A Consent Decree was executed on February 2, 2018 requiring civil penalty payment and injunctive relief. The total payment of 2 was paid and injunctive relief requirements, including a caustic scrubber demonstration, are being performed.

Europe

Environmental provisions for ArcelorMittal’s operations in Europe total 930 and are mainly related to the investigation and remediation of environmental contamination at current and former operating sites in France ( 74 ), Belgium ( 229 ), Luxembourg ( 47 ), Poland ( 25 ), Germany ( 25 ), Italy ( 523 ) and Spain ( 7 ). This investigation and remediation work relates to various matters such as decontamination of water discharges, waste disposal, cleaning water ponds and remediation activities that involve the clean-up of soil and groundwater. These provisions also relate to human health protection measures such as fire prevention and additional contamination prevention measures to comply with local health and safety regulations.

France

In France, there is an environmental provision of 74 , principally relating to the remediation of former sites, including several coke plants, and the capping and monitoring of landfills or basins previously used for residues and secondary materials.

The remediation of the coke plants concerns mainly the Thionville, Moyeuvre Grande, Homecourt, Hagondange and Micheville sites, and is related to treatment of soil and groundwater. At Moyeuvre Petite, the recovery process of the slag is ongoing and ArcelorMittal is responsible for closure and final rehabilitation of the rest of the site. At other sites, ArcelorMittal is responsible for monitoring the concentration of heavy metals in soil and groundwater.

ArcelorMittal Atlantique et Lorraine has an environmental provision that principally relates to the remediation and improvement of storage of secondary materials, the disposal of waste at different ponds and landfills and an action plan for removing asbestos from the installations and mandatory financial guarantees to cover risks of major accident hazard or for gasholders and waste storage. Most of the provision relates to the stocking areas at the Dunkirk site that will need to be restored to comply with local law and to the mothballing of the liquid phase in Florange (prior to the dismantling of the facility see note 8.1), including study and surveillance of soil and water to prevent environmental damage, treatment and elimination of waste and financial guarantees demanded by Public Authorities. The environmental provisions also include treatment of slag dumps at Florange and Dunkirk sites as well as removal and disposal of asbestos-containing material at the Dunkirk and Mardyck sites.

ArcelorMittal Atlantique et Lorraine also has an environmental provision that principally relates to the remediation and improvement of storage of secondary materials, the disposal of waste at different ponds and landfills: the stocking areas at the Dunkirk site need to be restored to comply with local law.

Industeel France has an environmental provision that principally relates to ground remediation at the Le Creusot site and to the rehabilitation of waste disposal areas at the Châteauneuf site.

Belgium

In Belgium, there is an environmental provision of 229 of which the most significant elements are legal site remediation obligations linked to the closure of the primary installations at ArcelorMittal Belgium (Liège). The provisions also concern the external recovery and disposal of waste, residues or by-products that cannot be recovered internally on the ArcelorMittal Gent and Liège sites and the removal and disposal of asbestos-containing material.

Luxembourg

In Luxembourg, there is an environmental provision of 47 , which relates to the post-closure monitoring and remediation of former production sites, waste disposal areas, slag deposits and mining sites.

In 2007, ArcelorMittal Luxembourg sold the former Ehlerange slag deposit ( 93 hectares) to the State of Luxembourg. ArcelorMittal Luxembourg is contractually liable to clean the site and move approximately 400,000 cubic meters of material to other sites. ArcelorMittal Luxembourg also has an environmental provision to secure, stabilize and conduct waterproofing treatment on mining galleries and entrances and various dumping areas in Mondercange, Differdange and Dommeldange. In

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addition, ArcelorMittal Luxembourg has secured the disposal of laddle slag, sludge and certain other residues coming from different sites at the Differdange dump for a total volume of 1,300,000 cubic meters until mid 2023. A provision of 40 covers these obligations.

ArcelorMittal Belval and Differdange has an environmental provision of 7 to clean historical landfills in order to meet the requirements of the Luxembourg Environment Administration and to cover dismantling and soil cleaning costs of the former PRIMOREC installation.

Poland

ArcelorMittal Poland S.A.’s environmental provision of 25 mainly relates to the obligation to reclaim a landfill site and to dispose of the residues which cannot be internally recycled or externally recovered. The provision also concerns the storage and disposal of iron-bearing sludge which cannot be reused in the manufacturing process under the new environmental law; waste storage time cannot exceed 1 year.

Germany

In Germany, the environmental provision of 25 essentially relates to ArcelorMittal Bremen’s post-closure obligations mainly established for soil remediation, groundwater treatment and monitoring at the Prosper coke plant in Bottrop.

Italy

In Italy, ArcelorMittal Italia has environmental provisions of 523 .

A provision of 309 relates to remediation activities to be carried out in the site of Taranto derived from obligations on the previous operator that have been transferred to ArcelorMittal Italia through the environmental permit, the most significant elements being the waterproofing of certain areas to confine historical pollution, the removal of historical accumulation of process materials mainly consisting of blast furnace ("BF") and basic oxygen furnace ("BOF") dusts and sludges and scales, an action plan for the removal and disposal of asbestos-containing materials present on site, the dismantling of several installations no longer in operation, the dredging of the discharge channel and disposal of the sludge removed, the decontamination of high depth groundwater in the primary yards area and the capping of an exhausted landfill.

Provisions of 214 are allocated to the implementation of preventive measures, permanent safety measures and clean up measures in relation to historical pollution of soil and groundwater, not derived from obligations in the environmental permit, but that ArcelorMittal Italia undertook to implement as a contractual obligation vis-a-vis the previous operator.

Spain

In Spain, ArcelorMittal España has environmental provisions of 7 due to obligations of sealing landfills basically located in the Asturias site and post-closure obligations in accordance with national legislation. These obligations include the collection and treatment of leachates that can be generated during the operational phase and a period of 30 years after the closure.

South Africa

AMSA has environmental provisions of 135 to be used over 18 years, mainly relating to environmental remediation obligations attributable to historical or legacy settling/evaporation dams and waste disposal activities. An important determinant in the final timing of the remediation work relates to the obtaining of the necessary environmental authorizations.

A provision of 37 relates to the decommissioned Pretoria Works site. This site is in a state of partial decommissioning and rehabilitation with one coke battery and a small-sections rolling facility still in operation. AMSA transformed this old plant into an industrial hub for light industry since the late 1990s. Particular effort is directed to landfill sites, with sales of slag from legacy disposal sites to vendors in the construction industry continuing unabated, but other remediation works continued at a slow pace as remediation actions for these sites are long-term in nature due to a complex legal process that needs to be followed with authorities and surrounding landowners.

The Vanderbijlpark Works site, the main flat carbon steel operation of AMSA , contains a number of legacy facilities and areas requiring remediation. The remediation entails the implementation of rehabilitation and decontamination measures of waste disposal sites, waste water dams, ground water and historically contaminated open areas. 19 of the provision is allocated to this site.

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The Newcastle Works site is the main long carbon steel operation of AMSA . A provision of 20 is allocated to this site. As with all operating sites of AMSA, the above retirement and remediation actions dovetail with numerous large capital expenditure projects dedicated to environmental management. In the case of the Newcastle site, the major current environmental capital project is for air quality improvements.

A provision of 51 relates to the environmental rehabilitation of the Thabazimbi Mine. On November 1, 2018, the Thabazimbi mine was acquired from Sishen Iron Ore Company (Pty) Ltd, enabling AMSA to control the environmental rehabilitation process. In terms of the sales agreement, AMSA is liable for all environmental remediation obligations. The acquisition did not have a significant impact on the environmental obligations of AMSA as it has always been contractually responsible for the majority of the rehabilitation cost relating to the Thabazimbi Mine. As part of the acquisition, AMSA acquired an asset in the form of an environmental trust which holds investments for a value of 22 . These investments will be used for rehabilitation purposes .

The remainder of the obligation of 8 relates to Vereeniging site for the historical pollution that needs to be remediated at waste disposal sites, waste water dams and groundwater aquifers.

Canada

In Canada, ArcelorMittal Dofasco has an environmental provision of 27 for the expected cost of remediating toxic sediment located in the Company’s East Boatslip site, of which 5 is expected to be spent in 2019. ArcelorMittal Long Products Canada has an environmental provision of 4 for future disposal of sludge left in ponds after flat mills closure at Contrecoeur.

Asset Retirement Obligations (“AROs”)

AROs arise from legal requirements and represent management’s best estimate of the present value of the costs that will be required to retire plant and equipment or to restore a site at the end of its useful life. As of December 31, 2018 , ArcelorMittal had established provisions for asset retirement obligations of 422 , including mainly 42 for Ukraine, 121 for Canada, 80 for the United States, 57 for Mexico, 15 for Belgium, 37 for Germany, 14 for South Africa, 12 for Spain, 13 for Brazil, 12 for Kazakhstan and 17 for Liberia.

The AROs in Ukraine are legal obligations for site rehabilitation at the iron ore mining site in Kryvyi Rih, upon closure of the mine pursuant to its restoration plan.

The AROs in Canada are legal obligations for site restoration and dismantling of the facilities near the mining sites in Mont-Wright and Fire Lake, and the accumulation area of mineral substances at the facility of Port-Cartier in Quebec, upon closure of the mine pursuant to the restoring plan of the mines.

The AROs in the United States principally relate to mine closure costs of the Hibbing and Minorca iron ore mines and Princeton coal mines.

The AROs in Mexico relate to the restoration costs following the closure of the Las Truchas, El Volcan and the joint operation of Pena Colorada iron ore mines.

In Belgium, the AROs are to cover the demolition costs for primary facilities at the Liège sites.

In Spain, the AROs relate to the discontinuance of the activities of various assets within the upstream installations.

In Germany, AROs principally relate to the Hamburg site, which operates on leased land with the contractual obligation to remove all buildings and other facilities upon the termination of the lease, and to the Prosper coke plant in Bottrop for filling the basin, restoring the layer and stabilizing the shoreline at the harbor.

The AROs in South Africa are for the Pretoria, Vanderbijlpark, Saldanha, Newcastle as well as the Coke and Chemical sites, and relate to the closure and clean-up of the plant associated with decommissioned tank farms, tar plants, chemical stores, railway lines, pipelines and defunct infrastructure.

In Brazil, the AROs relate to legal obligations to clean and restore the mining areas of Serra Azul and Andrade, both located in the State of Minas Gerais. The related provisions are expected to be settled in 2024 and 2029, respectively.

In Kazakhstan, the AROs relate to the restoration obligations of the iron ore and coal mines.

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In Liberia, the AROs relate to iron ore mine and associated infrastructure and mine related environmental damage and compensation. They cover the closure and rehabilitation plan under both the current operating phase and the not yet completed Phase 2 expansion project.

Tax Claims

ArcelorMittal is a party to various tax claims. As of December 31, 2018 , ArcelorMittal had recorded provisions in the aggregate of 120 for tax claims in respect of which it considers the risk of loss to be probable. Set out below is a summary description of the tax claims (i) in respect of which ArcelorMittal had recorded a provision as of December 31, 2018 , (ii) that constitute a contingent liability, (iii) that were resolved in 2018 or (iv) that were resolved and had a financial impact in 2017 or 2016, in each case involving amounts deemed material by ArcelorMittal. The Company is vigorously defending against the pending claims discussed below.

Brazil

In 2003, the Federal Revenue Service granted ArcelorMittal Brasil (through its predecessor company, then known as CST) a tax benefit for certain investments. ArcelorMittal Brasil had received certificates from SUDENE, the former Agency for the Development of the Northeast Region of Brazil, confirming ArcelorMittal Brasil’s entitlement to this benefit. In September 2004, ArcelorMittal Brasil was notified of the annulment of these certificates. ArcelorMittal Brasil has pursued its right to this tax benefit through the courts against both ADENE, the successor to SUDENE, and against the Federal Revenue Service. The Federal Revenue Service issued a tax assessment in this regard for 451 in December 2007. In December 2008, the administrative tribunal of first instance upheld the amount of the assessment. ArcelorMittal Brasil appealed to the administrative tribunal of second instance, and, on August 8, 2012, the administrative tribunal of the second instance found in favor of ArcelorMittal invalidating the tax assessment, thereby ending this case except for 6 , which is still pending a final decision. On April 16, 2011, ArcelorMittal Brasil received a further tax assessment for the periods of March, June and September 2007, which, taking into account interest and currency fluctuations, amounted to 163 as of December 31, 2018 . In October 2011, the administrative tribunal of first instance upheld the tax assessment received by ArcelorMittal Brasil on April 16, 2011, but decided that no penalty (amounting to 77 at that time) was due. Both parties have filed an appeal with the administrative tribunal of second instance. In February 2018, the administrative tribunal of second instance found in favor of ArcelorMittal Brasil and, in June 2018, the Federal Revenue Service filed an appeal with the administrative tribunal of the third instance. In January 2019, the administrative tribunal of the third instance found in favor of ArcelorMittal Brasil.

In 2011, ArcelorMittal Brasil (at the time SOL Coqueria Tubarão S.A.) received 21 tax assessments from the Revenue Service of the State of Espirito Santo for ICMS (a value-added tax) in the total amount of 30 relating to a tax incentive (INVEST) it used. The dispute concerns the definition of fixed assets. In August 2015, the administrative tribunal of first instance upheld 21 of the tax assessments. In September 2015, ArcelorMittal Brasil filed appeals with respect to each of the administrative tribunal’s decisions. As of December 31, 2018 , there have been final unfavorable decisions at the administrative tribunal level in 15 of the 21 cases, each of which ArcelorMittal Brasil has appealed to the judicial instance. In March 2018, the administrative tribunal of third instance found in favor of ArcelorMittal Brasil sending the six other cases back to the administrative tribunal of second instance.

In 2011, ArcelorMittal Brasil received a tax assessment for corporate income tax (known as IRPJ) and social contributions on net profits (known as CSL) in relation to (i) the amortization of goodwill on the acquisition of Mendes Júnior Siderurgia (for the 2006 and 2007 fiscal years), (ii) the amortization of goodwill arising from the mandatory tender offer (MTO) made by ArcelorMittal to minority shareholders of Arcelor Brasil following the two-step merger of Arcelor and Mittal Steel N.V. (for the 2007 tax year), (iii) expenses related to pre-export financing used to finance the MTO, which were deemed by the tax authorities to be unnecessary for ArcelorMittal Brasil since the expenses were incurred to buy shares of its own company and (iv) CSL over profits of controlled companies in Argentina and Costa Rica. The amount claimed totals 524. On January 31, 2014, the administrative tribunal of first instance found in partial favor of ArcelorMittal Brasil, reducing the penalty component of the assessment from, according to ArcelorMittal Brasil’s calculations, 266 to 141 (as calculated at the time of the assessment), while upholding the remainder of the assessment. The Federal Revenue Service has appealed the administrative tribunal’s decision to reduce the amount of the original penalty. ArcelorMittal Brasil has also appealed the administrative tribunal’s decision to uphold the tax authority’s assessment (including the revised penalty component). In September 2017, the administrative tribunal of second instance found largely in favor of the Federal Revenue Service. In January 2018, ArcelorMittal Brasil filed a motion for clarification of this decision. In February 2018, the motion for clarification was rejected and, in March 2018, an appeal was filed to the administrative tribunal of third instance.

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In 2013, ArcelorMittal Brasil received a tax assessment in relation to the 2008-2010 tax years for IRPJ and CSL in relation to (i) the amortization of goodwill on the acquisition of Mendes Júnior Siderurgia, Dedini Siderurgia and CST, (ii) the amortization of goodwill arising from the mandatory tender offer made by ArcelorMittal to minority shareholders of Arcelor Brasil following the two-step merger of Arcelor and Mittal Steel N.V. and (iii) CSL and IRPJ over profits of controlled companies in Argentina, Costa Rica, Venezuela and the Netherlands. The amount claimed totals 457 . In October 2014, the administrative tribunal of first instance found in favor of the Federal Revenue Service and ArcelorMittal Brasil filed its appeal in November 2014. In September 2017, the administrative tribunal of second instance found in favor of the Federal Revenue Service. ArcelorMittal Brasil filed a motion for clarification with respect to this decision, which was denied, and thereafter filed an appeal to the administrative tribunal of third instance.

In April 2016, ArcelorMittal Brasil received a tax assessment in relation to (i) the amortization of goodwill resulting from Mittal Steel’s mandatory tender offer to the minority shareholders of Arcelor Brasil following Mittal Steel’s merger with Arcelor in 2007 and (ii) the amortization of goodwill resulting from ArcelorMittal Brasil’s acquisition of CST in 2008. While the assessment, if upheld, would not result in a cash payment as ArcelorMittal Brasil did not have any tax liability for the fiscal years in question (2011 and 2012), it would result in the write-off of 249 worth of ArcelorMittal Brasil’s net operating loss carryforwards and as a result could have an effect on net income over time. In May 2016, ArcelorMittal Brasil filed its defense, which was not accepted at the first administrative instance. On March 10, 2017, ArcelorMittal Brasil filed an appeal to the second administrative instance.

In December 2018, ArcelorMittal Brasil received a tax assessment for 151 for the 2013-2014 tax years, principally in relation to the amortization of goodwill resulting from Mittal Steel’s mandatory tender offer to the minority shareholders of Arcelor Brasil following Mittal Steel’s merger with Arcelor in 2007. ArcelorMittal Brasil filed a defense in the first administrative instance in January 2019.

In 2013, ArcelorMittal Brasil filed a lawsuit against the Federal Revenue Service disputing the basis of calculation of a tax called additional freight for the renewal of the Brazilian Merchant Navy ("AFRMM"), amounting to 55 . The dispute is related to the inclusion of the unloading and land transport costs of the imported goods after landing to calculate AFRMM. In June 2013, ArcelorMittal Brasil obtained a preliminary decision allowing the Company not to pay such amount until a final decision was rendered . In February 2017, ArcelorMittal Brasil obtained a favorable decision at the judicial first instance but this decision is subject to further mandatory review. In November 2018, a related tax assessment was received from the Federal Revenue Service claiming 22 as a penalty for alleged failure to comply with formal requirements in the import declarations delivered by the Company in the years 2013-2018, which were the subject matter of the preliminary decision of June 2013. In December 2018, ArcelorMittal Brasil presented its defense in the first administrative instance. In February 2019, the Judicial Court of Appeals upheld the favorable first instance decision. The decision is subject to further appeals.

For over 18 years, ArcelorMittal Brasil has been challenging the basis of the calculation of the Brazilian COFINS and PIS social security taxes (specifically, whether Brazilian VAT may be deducted from the base amount on which the COFINS and PIS taxes are calculated), in an amount of 4 . ArcelorMittal Brasil deposited the disputed amount in escrow with the relevant Brazilian judicial branch when it became due. Since the principal amount bears interest at a rate applicable to judicial deposits, the amount stood at 49 as of December 31, 2018 . In March 2017, the Supreme Court decided a separate case, not involving ArcelorMittal Brasil, on the same subject in favor of the relevant taxpayers. Such separate Supreme Court decision, which is of binding precedential value with respect to all similar cases, including those of ArcelorMittal Brasil, is being appealed by the Federal Revenue Service. In July 2018, the second judicial instance found in favor of ArcelorMittal Brasil after applying the Supreme Court’s precedent. In December 2018, the Federal Revenue Service brought an appeal of the second judicial instance’s decision to the Supreme Court.

In the period from 2014 to 2018, ArcelorMittal Brasil received four tax assessments from the Federal Revenue Service in the amount of 51 disputing its use of credits for PIS and COFINS social security taxes in 2010, 2011 and 2013. The dispute relates to the concept of production inputs in the context of these taxes. In 2017, in the first and second cases, the administrative tribunal of second instance found partially in favor of ArcelorMittal Brasil, and ArcelorMittal Brasil filed an appeal to the administrative tribunal of third instance. In the third case, the administrative tribunal of first instance upheld the tax assessment, and ArcelorMittal Brasil appealed to the administrative tribunal of second instance. In the fourth case, ArcelorMittal Brasil filed a defense in March 2018. In March, 2018, the Superior Court decided a leading case, not involving ArcelorMittal Brasil, that established that the restrictive concept of inputs adopted by the tax authorities is illegal and that credits over inputs must be accepted on the basis of the criteria of essentiality or relevance towards the production process of each taxpayer. In September 2018, the Federal Union published an internal orientation for its attorneys, expressing a restrictive view of the Superior Court’s decision and determining that each individual case would be analyzed in order to decide whether the items are essential or not.

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In that sense, ArcelorMittal Brasil’s cases will be submitted for review by the Federal Union Attorney’s office before further decisions are taken.

In May 2014, ArcelorMittal Comercializadora de Energia received a tax assessment from the state of Minas Gerais alleging that the Company did not correctly calculate tax credits on interstate sales of electricity from February 2012 to December 2013. The amount claimed totals 51 . ArcelorMittal Comercializadora de Energia filed its defense in June 2014. Following an unfavorable administrative decision in November 2014, ArcelorMittal filed an appeal in December 2014. In March 2015, there was a further unfavorable decision at the second administrative level. Following the conclusion of this proceeding at the administrative level, the Company received the tax enforcement notice in December 2015 and filed its defense in February 2016. In April 2016, ArcelorMittal Comercializadora de Energia received an additional tax assessment in the amount, after taking account of a reduction of fines mentioned below, of 57 , regarding the same matter, for infractions which allegedly occurred during the 2014 to 2015 period, and filed its defense in May 2016. In May 2017, there was a further unfavorable decision at the second administrative level in respect of the tax assessment received in April 2016. In June 2017, ArcelorMittal Comercializadora de Energia filed an appeal to the second administrative instance. This appeal was rejected in August 2017. In October and November 2017, the Company appealed in relation to both tax assessments to the judicial instance. In November 2017, the Company received a notice from the tax authority informing it of the reduction of the fines element by 18 , due to the retroactive application of a new law.

In the period from May to July 2015, ArcelorMittal Brasil received nine tax assessments from the state of Rio Grande do Sul alleging that the Company, through its branches in that state, had not made advance payments of ICMS on sales in that state covering the period from May 2010 to April 2015. The amount claimed totals 88 . The administrative tribunal of first instance upheld the tax assessments in each of the nine cases, and ArcelorMittal Brasil appealed each of the administrative tribunal’s decisions. Each case was decided unfavorably to ArcelorMittal Brasil at the administrative tribunal of second instance, and ArcelorMittal Brasil has appealed the cases to the judicial instance.

On May 17, 2016, ArcelorMittal Brasil received a tax assessment from the state of Santa Catarina in the amount of 138 alleging that it had used improper methods to calculate the amount of its ICMS credits. ArcelorMittal Brasil filed its defense in July 2016. In December 2016, ArcelorMittal Brasil received an unfavorable decision at the first administrative level, in respect of which it filed an appeal. In March 2018, the administrative tribunal of second instance found against ArcelorMittal Brasil and, in April 2018, ArcelorMittal Brasil filed an appeal to the administrative tribunal of third instance.

France

Following audits for 2006, 2007 and 2008 of ArcelorMittal France and other French ArcelorMittal entities, URSSAF, the French body responsible for collecting social contributions, commenced formal proceedings for these years alleging that the French ArcelorMittal entities owe 69 in social contributions on various payments, the most significant of which relate to profit sharing schemes, professional fees and stock options. Proceedings were commenced in relation to the 2006 claims in December 2009. Proceedings were commenced in relation to the 2007 and 2008 claims in February and March 2010, respectively. In three decisions dated December 10, 2012, the arbitration committee hearing the matter found that social contributions in an amount of 17 , 11 and 5 are due in respect of profit-sharing schemes, stock options and professional fees, respectively. These amounts cover the audits for 2006, 2007 and 2008. In March 2013, the Company filed appeals against the decisions relating to the profit-sharing schemes and stock options.

Following audits for 2009, 2010 and 2011 of ArcelorMittal France and other French ArcelorMittal entities, URSSAF commenced formal proceedings in December 2012 for these years alleging that these entities owe 150 in social contributions (including interest and late fees relating thereto) on various payments, the most significant of which relate to voluntary separation schemes, profit sharing schemes, professional fees and stock options. In its decision dated April 24, 2013, the arbitration committee reduced the amount claimed by 29 . The dispute then entered into a judicial phase before the Tribunal des Affaires de Sécurité Sociale (“TASS”). At a hearing on January 12, 2017 before the TASS, the parties signed a conciliation agreement settling the audits covered by the above two cases.

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Mexico

In 2015, the Mexican Tax Administration Service issued a tax assessment to ArcelorMittal Mexico, alleging that ArcelorMittal Mexico owes 160 with respect to 2008, principally due to improper interest deductions relating to certain loans, and unpaid corporate income tax for interest payments that the tax authority has categorized as profit. In November 2015, ArcelorMittal Mexico filed an administrative appeal in respect of this assessment, which was dismissed by the tax authority. In November 2017, ArcelorMittal Mexico filed an annulment complaint before a Federal Administrative and Tax Justice Court, which has not been determined.

With respect to 2007 and 2009, the Mexican Tax Administration Service also challenged the interest deduction related to the aforementioned loans and issued tax assessments to ArcelorMittal Mexico for 21 and 25 , respectively. In November 2018, a Federal Administrative and Tax Justice Court ruled against the annulment complaint filed by ArcelorMittal Mexico in relation to the 2007 tax assessment and in December 2018, ArcelorMittal Mexico filed an appeal before the Collegiate Tribunal For Administrative Matters. With respect to the 2009 tax assessment, in November 2016 ArcelorMittal Mexico filed an administrative appeal before the Administrative Authority on Federal Tax Matters, which has not been determined.

In 2013, the Mexican Tax Administration Service issued a tax assessment to ArcelorMittal Las Truchas, alleging that ArcelorMittal Las Truchas owes 63 in respect of (i) non-payment of withholding tax on capitalized interest, (ii) non-deduction of accrued interest regarding certain loans, and (iii) reduction of assets tax taxable basis in 2007. In 2015, ArcelorMittal Las Truchas filed an administrative appeal in respect of the aforementioned assessment, which the tax authority dismissed. In October 2015, ArcelorMittal Las Truchas filed an annulment complaint before the Federal Administrative and Tax Justice Court, which ruled in favor of ArcelorMittal Las Truchas in October 2018. The tax authority filed an application for judicial review in January 2019.

In October 2018, the Mexican Tax Administration Service issued a tax assessment to ArcelorMittal Las Truchas, alleging that ArcelorMittal Las Truchas owes 85 with respect to 2013 due to: (i) improper interest deductions relating to certain loans and (ii) non-deduction of advanced rent payments. In November 2018, ArcelorMittal Las Truchas filed an administrative appeal before the Administrative Authority on Federal Tax Matters.

Competition/Antitrust Claims

ArcelorMittal is a party to various competition/antitrust claims. As of December 31, 2018 , ArcelorMittal had not recorded any provisions in respect of such claims. Set out below is a summary description of competition/antitrust claims (i) that constitute a contingent liability, (ii) that were resolved in 2018 or (iii) that were resolved and had a financial impact in 2017 or 2016, in each case involving amounts deemed material by ArcelorMittal. The Company is vigorously defending against each of the pending claims discussed below.

Brazil

In September 2000, two construction trade organizations filed a complaint with Brazil’s Administrative Council for Economic Defense (“CADE”) against three long steel producers, including ArcelorMittal Brasil. The complaint alleged that these producers colluded to raise prices in the Brazilian rebar market, thereby violating applicable antitrust laws. In September 2005, CADE issued its final decision against ArcelorMittal Brasil, imposing a fine of 58 . ArcelorMittal Brasil appealed the decision to the Brazilian Federal Court. In September 2006, ArcelorMittal Brasil offered a guarantee letter and obtained an injunction to suspend enforcement of this decision pending the court’s judgment. In September 2017, the Court found against ArcelorMittal Brasil. In October 2017, ArcelorMittal Brasil filed a motion for clarification of this decision, which was dismissed. In December 2017, ArcelorMittal Brasil filed an appeal to the second judicial instance.

There is also a related class action commenced by the Federal Public Prosecutor of the state of Minas Gerais against ArcelorMittal Brasil for damages in an amount of 62 based on the alleged violations investigated by CADE.

A further related lawsuit was commenced in February 2011 by four units of Sinduscons, a civil construction trade organization, in federal court in Brasilia against, inter alia , ArcelorMittal Brasil claiming damages based on an alleged cartel in the rebar market as investigated by CADE and as noted above.

Romania

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In 2010 and 2011, ArcelorMittal Galati entered into high volume electricity purchasing contracts with Hidroelectrica, a partially state-owned electricity producer. Following allegations by Hidroelectrica’s minority shareholders that ArcelorMittal Galati (and other industrial electricity consumers) benefited from artificially low tariffs, the European Commission opened a formal investigation into alleged state aid in April 2012. The European Commission announced on June 12, 2015 that electricity supply contracts signed by Hidroelectrica with certain electricity traders and industrial customers (including the one entered by ArcelorMittal Galati) did not involve state aid within the meaning of the EU rules. In March 2017, the European Commission's decision was officially published. As no challenge was filed within two months of publication, the decision has become definitive.

South Africa

In February 2007, the complaint previously filed with the South African Competition Commission by Barnes Fencing, a South African producer of galvanized wire, alleging that ArcelorMittal South Africa, as a “dominant firm”, discriminated in pricing its low carbon wire rod was referred to the Competition Tribunal. The Competition Commission sought an order declaring that ArcelorMittal South Africa’s pricing in 2000-2003 in respect of low carbon wire rod amounted to price discrimination and an order that ArcelorMittal South Africa cease its pricing discrimination. In March 2008, the Competition Tribunal accepted the claimants’ application for leave to intervene. In November 2012, a second complaint alleging price discrimination regarding the same product over the 2004 to 2006 period was referred by the Competition Commission to the Competition Tribunal. ArcelorMittal is unable to assess the outcome of these proceedings or the amount of ArcelorMittal South Africa’s potential liability, if any.

On September 1, 2009, the South African Competition Commission referred a complaint against four producers of long carbon steel in South Africa, including ArcelorMittal South Africa, and the South African Iron and Steel Institute to the Competition Tribunal. The complaint referral followed an investigation into alleged collusion among the producers initiated in April 2008, on-site inspections conducted at the premises of some of the producers and a leniency application by Scaw South Africa, one of the producers under investigation. The Competition Commission recommended that the Competition Tribunal impose an administrative penalty against ArcelorMittal South Africa, Cape Gate and Cape Town Iron Steel Works in the amount of 10 % of their annual revenues in South Africa (in the year preceding any final decision) and exports from South Africa for 2008. ArcelorMittal filed an application to access the file of the Competition Commission that was rejected. ArcelorMittal appealed the decision to reject the application, and applied for a review of that decision and a suspension of the obligation to respond to the referral on the substance pending final outcome on the application for access to the documents. The appeal was upheld by the Competition Appeals Court (CAC) and the matter was referred back to the Competition Tribunal for a determination of confidentiality and scope of access to the documents. The Competition Commission appealed the decision of the CAC, and, on May 31, 2013, the Supreme Court of Appeal dismissed the appeal of the Competition Commission and confirmed the decision of the CAC. In 2014, ArcelorMittal South Africa requested the documents from the Competition Commission, which provided an index thereof. On July 7, 2011, ArcelorMittal filed an application before the Competition Tribunal to set aside the complaint referral based on procedural irregularities but this application was withdrawn by notice dated August 7, 2014.

In March 2012, the South African Competition Commission referred to the Competition Tribunal an allegation that ArcelorMittal South Africa and steel producer Highveld acted by agreement or concerted practice to fix prices and allocate markets in respect of certain flat carbon steel products over a period of 10 years (1999-2009) in contravention of the South African Competition Act.

In August 2013, the South African Competition Commission referred a complaint against four scrap metal purchasers in South Africa, including ArcelorMittal South Africa, to the South African Competition Tribunal for prosecution. The complaint alleged collusion among the purchasers to fix the price and other trading conditions for the purchase of scrap over a period from 1998 to at least 2008.

In relation to all these cases, following an extensive engagement, ArcelorMittal South Africa reached an agreement on an overall settlement with the Competition Commission for an amount of 1.5 billion South African rand (approximately 110 ). In October 2016, Barnes Fencing filed an application with the Competition Tribunal to review and set aside the said settlement agreement in respect of the Barnes matters. In addition, Barnes filed an objection to the settlement agreement and an application to stay. The settlement agreement, as amended to exclude the Barnes case referred to above, was approved, subject to minor amendments, by the Competition Tribunal, on November 16, 2016.

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Germany

In the first half of 2016, the German Federal Cartel Office carried out unannounced investigations of ArcelorMittal Ruhrort GmbH and ArcelorMittal Commercial Long Deutschland GmbH following alleged breaches of antitrust rules. ArcelorMittal Ruhrort GmbH and ArcelorMittal Commercial Long Deutschland GmbH cooperated with the German Federal Cartel Office in its investigation and, in July 2018, as a result of a settlement process, the Company and the Federal Cartel Office reached agreement as to a 146 fine to be paid by ArcelorMittal Commercial Long Deutschland GmbH. The fine was paid in August 2018 ending the investigation as concerns the ArcelorMittal entities.

In August 2017, the German Federal Cartel Office carried out unannounced investigations of ArcelorMittal Bremen, ArcelorMittal Eisenhüttenstadt GmbH and ArcelorMittal Berlin Holding GmbH principally relating to alleged breaches of antitrust rules concerning (i) agreement between flat steel producers regarding extras from June 2006 - March 2016 (ii) impermissible exchanges of sensitive information between competitors from 1986 - 2016 and (iii) agreement to continue market and price structure introduced by the European Coal and Steel Community from 2002-2016. ArcelorMittal has not, to the date of this annual report, received subsequent communications from the German Federal Cartel Office in this respect.

Other Legal Claims

ArcelorMittal is a party to various other legal claims. As of December 31, 2018 , ArcelorMittal had recorded provisions of 249 for other legal claims in respect of which it considers the risk of loss to be probable. Set out below is a summary description of the other legal claims (i) in respect of which ArcelorMittal had recorded a provision as of December 31, 2018 , (ii) that constitute a contingent liability, (iii) that were resolved in 2018, or (iv) that were resolved and had a financial impact in 2017 or 2016, in each case involving amounts deemed material by ArcelorMittal. The Company is vigorously defending against each of the claims discussed below that remain pending.

Argentina

Over the course of 2007 to 2018, the Argentinian Customs Office Authority (Aduana) notified Acindar, the Company's Argentinian subsidiary, of certain inquiries that it was conducting with respect to prices declared by Acindar related to iron ore imports. The Customs Office Authority was seeking to determine whether Acindar incorrectly declared prices for iron ore imports from several different Brazilian suppliers and from ArcelorMittal Sourcing originally on 39 different claims concerning several shipments made between 2002 and 2014. The investigations are subject to the administrative procedures of the Customs Office Authority and are at different procedural stages depending on the filing date of the investigation. In March 2018, the Customs Office Authority issued a general instruction that orders customs to withdraw current claims related to the difference between import prices in Argentina and export prices of iron ore when exiting Brazil. This will have a material impact on the claims made against Acindar although the exact impact cannot be quantified at this stage. As of February 2019 , the aggregate amount claimed by the Customs Office Authority in respect of all iron ore shipments is 139 in 26 different cases. Of these 26 cases, 8 are still in the administrative branch of the Customs Office Authority and the other 18 cases, in which the administrative branch of the Customs Office Authority ruled against Acindar, have been appealed to the Argentinian National Fiscal Court.

Canada

In April 2011, a proceeding was commenced before the Ontario (Canada) Superior Court of Justice under the Ontario Class Proceedings Act, 1992, against ArcelorMittal, Baffinland, and certain other parties relating to the January 2011 take-over of Baffinland by ArcelorMittal, Nunavut Iron Ore Holdings and 1843208 Ontario Inc. The action alleges that the tender offer document contained certain misrepresentations and seeks damages in an aggregate amount of 734 (CAD 1 billion ) or rescission of the transfer of the Baffinland securities by members of a class comprised of all Baffinland securities holders who tendered their Baffinland securities, and whose securities were taken up, in connection with the take-over between September 22, 2010 and February 17, 2011, or otherwise disposed of their Baffinland securities on or after January 14, 2011. The class certification hearings were held in January 2018, and the court certified the class in a decision dated May 18, 2018. The court also certified the statutory circular misrepresentation, insider trading, unjust enrichment and oppression claims. The court included in the class persons who tendered their Baffinland securities to the take-over bid and, for purposes of the oppression claims only, persons who sold their Baffinland securities in the secondary market after January 13, 2011. The court excluded from the class those persons who disposed of their Baffinland securities pursuant to a court ordered plan of arrangement.

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Italy

In January 2010, ArcelorMittal received notice of a claim filed by Finmasi S.p.A. relating to a memorandum of agreement (“MoA”) entered into between ArcelorMittal Distribution Services France (“AMDSF”) and Finmasi in 2008. The MoA provided that AMDSF would acquire certain of Finmasi’s businesses for an amount not to exceed 106 , subject to the satisfaction of certain conditions precedent, which, in AMDSF’s view, were not fulfilled. Finmasi sued for (i) enforcement of the MoA, (ii) damages of 16 to 27 or (iii) recovery costs plus quantum damages for Finmasi’s alleged lost opportunity to sell to another buyer. In September 2011, the court rejected Finmasi’s claims other than its second claim. The court appointed an expert to determine the quantum of damages. In May 2013, the expert’s report was issued and valued the quantum of damages in the range of 47 to 68 . ArcelorMittal appealed the decision on the merits. In May 2014, the Court of Appeal issued a decision rejecting ArcelorMittal’s appeal. On June 20, 2014, ArcelorMittal filed an appeal of the Court of Appeal’s judgment with the Italian Court of Cassation. On April 11, 2018, the Court of Cassation rejected the appeal on the merits and upheld the Court of Appeal’s decision. On December 18, 2014, the Court of Milan issued a decision on the quantum of the damages and valued the quantum of damages in the sum of 27 plus interest. In June 2015, both parties served appeals of the decision on the quantum, with ArcelorMittal also seeking the suspension of the enforceability of the decision. On July 1, 2015, Finmasi formally notified to AMDSF the declaration of enforcement of the decision of December 18, 2014. On July 28, 2015, AMDSF filed an appeal against such declaration with the Court of Appeal of Reims in France. At a hearing on December 1, 2015, the Italian Court of Appeal accepted the suspension of the enforcement of the decision of December 18, 2014, following the agreement of AMDSF to provide a guarantee for its value. In March 2016, on the joint application of the parties, the Court of Appeal of Reims ordered the suspension of the proceedings. On July 19, 2018, the Court of Appeal upheld the Court of Milan’s decision on quantum dated December 18, 2014. In September 2018, ArcelorMittal filed an appeal to the Court of Cassation. In January 2019, Finmasi called on the AMDSF guarantee issued in the context of the enforcement proceedings that were suspended in 2015.

Luxembourg

In June 2012, the Company received writs of summons in respect of claims made by 59 former employees of ArcelorMittal Luxembourg. The claimants allege that they are owed compensation based on the complementary pension scheme that went into effect in Luxembourg in January 2000. The aggregate amount claimed by such former employees (bearing in mind that other former employees may bring similar claims) is 68 . Given the similarities in the claims, the parties agreed to limit the pending proceedings to four test claims. In April 2013, the Esch-sur-Alzette labor court rejected two of these test claims. The relevant plaintiffs are appealing these decisions. In November 2013, the Luxembourg city labor court rejected the two other test claims, which are also being appealed.

France

Certain subsidiaries of the ArcelorMittal group are parties to proceedings, dating from 2010, against Engie and Engie Thermique France which claim damages in the amount of 156 or alternatively 165 for an alleged wrongful termination of a contract for the transformation of steel production gas into electricity. The ArcelorMittal subsidiaries have filed a counterclaim in the amount of 139. The contract had been entered into in 2006 for a term of 20 years. ArcelorMittal Méditerranée terminated it in July 2010 on the basis that Engie was solely responsible for the delay in the commissioning of the power plant (which suffered from significant malfunctions) constructed for the transformation of steel production gas into electricity. Engie claims that ArcelorMittal was in breach of the contract at the time of the termination due to certain alleged issues with the furnishing and quality of its steel production gas, and therefore unable to terminate the contract based on the sole breaches of Engie. The case is before the Commercial Court of Nanterre. ArcelorMittal is vigorously defending itself in this matter and vigorously pursuing its counterclaim.

Retired and current employees of certain French subsidiaries of the former Arcelor have initiated lawsuits to obtain compensation for asbestos exposure in excess of the amounts paid by French social security (“Social Security”). Asbestos claims in France initially are made by way of a declaration of a work-related illness by the claimant to the Social Security authorities resulting in an investigation and a level of compensation paid by Social Security. Once the Social Security authorities recognize the work-related illness, the claimant, depending on the circumstances, can also file an action for inexcusable negligence ( faute inexcusable ) to obtain additional compensation from the company before a special tribunal. Where procedural errors are made by Social Security, it is required to assume full payment of damages awarded to the claimants. Due to fewer procedural errors made by Social Security, changes in the regulations and, consequently, fewer rejected cases, ArcelorMittal has been required to pay some amounts in damages since 2011.

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The number of claims outstanding for asbestos exposure at December 31, 2018 was 367 as compared to 404 at December 31, 2017 . The range of amounts claimed for the year ended December 31, 2018 was $ 35,000 to $ 745,000 . The aggregate costs and settlements for the year ended December 31, 2018 were 7.67 , of which 0.27 represented legal fees and 7.4 represented damages paid to the claimant. The aggregate costs and settlements for the year ended December 31, 2017 were 6.4 , of which 0.25 represented legal fees and 6.1 represented damages paid to the claimant .

Minority Shareholder Claims Regarding the Exchange Ratio in the Second-Step Merger of ArcelorMittal into Arcelor

ArcelorMittal is the company that results from the acquisition of Arcelor by Mittal Steel N.V. in 2006 and a subsequent two-step merger between Mittal Steel and ArcelorMittal and then ArcelorMittal and Arcelor. Following completion of this merger process, several former minority shareholders of Arcelor or their representatives brought legal proceedings regarding the exchange ratio applied in the second-step merger between ArcelorMittal and Arcelor and the merger process as a whole.

ArcelorMittal believes that the allegations made and claims brought by such minority shareholders are without merit and that the exchange ratio and merger process complied with the requirements of applicable law, were consistent with previous guidance on the principles that would be used to determine the exchange ratio in the second-step merger and that the merger exchange ratio was relevant and reasonable to shareholders of both merged entities.

Set out below is a summary of ongoing matters in this regard. Several other claims brought before other courts and regulators were dismissed and are definitively closed.

On January 8, 2008, ArcelorMittal received a writ of summons on behalf of four hedge fund shareholders of Arcelor to appear before the civil court of Luxembourg. The summons was also served on all natural persons sitting on the Board of Directors of ArcelorMittal at the time of the merger and including Mr. Lakshmi Mittal, as well as on Mrs. Usha Mittal, among other parties. The plaintiffs alleged in particular that, based on Mittal Steel’s and Arcelor’s disclosure and public statements, investors had a legitimate expectation that the exchange ratio in the second-step merger would be the same as that of the secondary exchange offer component of Mittal Steel’s June 2006 tender offer for Arcelor (i.e., 11 Mittal Steel shares for 7 Arcelor shares), and that the second-step merger did not comply with certain provisions of Luxembourg company law. They claimed, inter alia, the cancellation of certain resolutions (of the Board of Directors and of the Shareholders meeting) in connection with the merger, the grant of additional shares, or damages in an amount of 216 . By judgment dated November 30, 2011, the Luxembourg civil court declared all of the plaintiffs’ claims inadmissible and dismissed them. The judgment was appealed in May 2012. By judgment dated February 15, 2017, the Luxembourg Court of Appeal declared all but one of the plaintiffs’ claims inadmissible, remanded the proceedings on the merits to the lower court with respect to the admissible claimant and dismissed all other claims. In June 2017, the plaintiffs filed an appeal of this decision to the Court of Cassation. The Court of Cassation confirmed the Court of Appeal’s judgment on May 18, 2018. The proceedings remain pending before the lower court with the admissible claimant who claims inter alia, the cancellation of certain resolutions (of the Board of Directors and of the Shareholders meeting) in connection with the merger, the grant of additional shares, or damages in an amount of 25.

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Purchase commitments

Purchase commitments consist primarily of major agreements for procuring iron ore, coking coal, coke and hot metal. The Company also has a number of agreements for electricity, industrial and natural gas, scrap and freight. In addition to those purchase commitments disclosed above, the Company enters into purchasing contracts as part of its normal operations which have minimum volume requirements but for which there are no take-or-pay or penalty clauses included in the contract. The Company does not believe these contracts have an adverse effect on its liquidity position.

Purchase commitments include commitments given to associates for 405 and 520 as of December 31, 2018 and 2017 , respectively. Purchase commitments include commitments given to joint ventures for 2,246 and 1,550 as of December 31, 2018 and 2017 , respectively. Commitments given to joint ventures include 1,489 and 1,481 related to purchase of the output from Tameh as of December 31, 2018 and 2017 respectively, and 711 related to purchase of the output from Enerfos as of December 31, 2018 .

Purchase commitments include commitments given by Ilva remedies classified as held for sale for 910 as of December 31, 2018.

Guarantees, pledges and other collateral

Guarantees related to financial debt and credit lines given on behalf of third parties were 235 and 266 as of December 31, 2018 and 2017 , respectively. Additionally, 7 and 13 were related to guarantees given on behalf of associates as of December 31, 2018 and 2017 , respectively. Guarantees of 1,079 and 1,022 were given on behalf of joint ventures as of December 31, 2018 and 2017 , respectively. Guarantees given on behalf of joint ventures include 348 and 406 for the guarantees issued on behalf of Calvert and 397 and 382 for the guarantees issued on behalf of Al Jubail as of December 31, 2018 and 2017 , respectively. Due to the failure of other shareholders to provide requisite equity funding by December 31, 2018, the Al Jubail joint venture’s indebtedness became technically in default as of such date. ArcelorMittal’s guarantee of such indebtedness has not been called by the lenders, and ArcelorMittal does not currently expect it to be called. ArcelorMittal is working with the other shareholders in the joint venture to resolve the situation through their contribution of the requisite equity and currently expects the technical default to be cured in the near term. The technical default relates only to the indebtedness of the joint venture and is not expected to affect the availability or maturity of any borrowings of ArcelorMittal.

Pledges and other collateral mainly relate to inventories and receivables pledged to secure the South African Rand revolving borrowing base finance facility for the amount drawn of 21 , ceded bank accounts to secure environmental obligations, true sale of receivables programs and the revolving base finance facility in South Africa of 122 and mortgages entered into by the Company’s operating subsidiaries. Pledges of property, plant and equipment were 225 and 282 as of December 31, 2018 and 2017 , respectively. Other sureties, first demand guarantees, letters of credit, pledges and other collateral included 380 and 419 of commitments given on behalf of associates as of December 31, 2018 and 2017 , respectively . Other sureties, first demand guarantees, letters of credit, pledges and other collateral included 154 and 164 of commitments given on behalf of joint ventures as of December 31, 2018 and 2017 , respectively.

In addition, other sureties, first demand guarantees, letters of credit, pledges and other collateral included 567 in relation to a performance guarantee provided by the Company for the execution of the ESIL resolution plan as of December 31, 2018 .

Other sureties, first demand guarantees, letters of credit, pledges and other collateral include commitments given by Ilva remedies classified as held for sale for 18 as of December 31, 2018.

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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, 2018 and 2017 according to maturity periods are as follows:

	December 31,
	2018			2017
Less than 1 year	322			315
1-3 years	414			412
4-5 years	262			252
More than 5 years	871			332
Total	1,869			1,311

Non-cancellable operating leases include time charter arrangements for shipping activities and usufruct of land in Poland. The operating leases expense was 564 , 542 and 521 in 2018 , 2017 and 2016 , respectively out of which 77 , 42 and 98 are related to contingent rents. The non-cancellable operating leases commitments at December 31, 2018 are related to plant, machinery and equipment ( 778 ), buildings ( 181 ), land ( 871 ) and other ( 39 ).

Capital expenditure commitments

Capital expenditure commitments mainly relate to commitments associated with investments in expansion and improvement projects by various subsidiaries.

In 2016, AMSA committed to an investment program in connection with the competition commission settlement. The remaining capital expenditure commitment was 171 as of December 31, 2018 .

Capital expenditure commitments also include 413 for the 1,000 three -year investment program at the Company's Mexican operations announced in 2017, which is focused on building ArcelorMittal Mexico’s downstream capabilities. The main investment will be the construction of a new hot strip mill with capacity of approximately 2.5 million tonnes.

Other commitments

Other commitments given comprise mainly commitments incurred for gas supply to electricity suppliers.

As of September 21, 2018 an Environmental Commitment Agreement ("ECA") has been executed between ArcelorMittal Brasil, local government and the Brazilian environmental authorities. ArcelorMittal Brasil committed to carry out, over the next 5 years, a series of environmental operational and capital investments with the aim to reduce atmospheric emissions from the Company's Tubarão site. To comply with the ECA requirements, ArcelorMittal Brasil may need to acquire new equipment and change some of its current operating methods and processes. The underlying costs to implement those investments are still being estimated by ArcelorMittal Brasil and the outcome of this estimate could be material. The non-compliance with ECA would lead to fines amounting to a maximum of 26 .

The agreement relating to the Ilva acquisition includes 1,439 industrial capital expenditure commitments over a seven-year period focused on blast furnaces, steel shops and finishing lines and 917 environmental capital expenditure commitments.

Commitments to sell

The current tax payable (recoverable) is based on taxable profit (loss) for the year. Taxable profit differs from profit as reported in the consolidated statements of operations because it excludes items of income or expense that are taxable or deductible in other years or are never taxable or deductible. The Company’s current income tax expense (benefit) is calculat

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ed using tax rates that have been enacted or substantively enacted as of the date of the consolidated statements of financial position.

Tax is charged or credited to the consolidated statements of operations, except when it relates to items charged or credited to other comprehensive income or directly to equity, in which case the tax is recognized in other comprehensive income or in equity.

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities, in the consolidated financial statements and the corresponding tax basis used in the computation of taxable profit, and is accounted for using the statements of financial position liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences and net operating loss carry forwards to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the taxable temporary difference arises from the initial recognition of non-deductible goodwill or if the differences arise from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the profit reported in the consolidated statements of operations.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, except if the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which the benefits of the temporary differences can be utilized and are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted at the consolidated statements of financial position date. The measurement of deferred tax assets and liabilities reflects the tax consequences that would result from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

The carrying amount of deferred tax assets is reviewed at each consolidated statements of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to enable all or part of the asset to be recovered. The Company reviews the deferred tax assets in the different jurisdictions in which it operates to assess the possibility of realizing such assets based on projected taxable profit, the expected timing of the reversals of existing temporary differences, the carry forward period of temporary differences and tax losses carried forward and the implementation of planning strategies. Due to the numerous variables associated with these judgments and assumptions, both the precision and reliability of the resulting estimates of the deferred tax assets are subject to substantial uncertainties.

The components of income tax expense (benefit) are summarized as follows:

	Year Ended December 31,
	2018		2017		2016
Total current tax expense (benefit)	928		583		255
Total deferred tax expense (benefit)	( 1,277 )		( 151 )		731
Total income tax expense (benefit)	( 349 )		432		986

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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,
	2018			2017			2016
Net income (loss) (including non-controlling interests)	5,330			4,575			1,734
Income tax expense (benefit)	( 349	)		432			986
Income (loss) before tax	4,981			5,007			2,720
Tax expense (benefit) at the statutory rates applicable to profits (losses) in the countries 1	1,043			1,407			677
Permanent items	( 421	)		( 522	)		( 5,940	)
Rate changes	—			( 94	)		593
Net change in measurement of deferred tax assets	( 1,301	)		( 281	)		5,344
Tax effects of foreign currency translation	( 47	)		( 157	)		73
Tax credits	( 17	)		( 66	)		( 21	)
Other taxes	151			90			126
Others	243			55			134
Income tax expense (benefit)	( 349	)		432			986

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 Brazil and Mexico, which have a structurally higher corporate income tax rate.

Permanent items

	Year Ended December 31,
	2018			2017			2016
Tax deductible write-downs on shares and receivables	( 498	)		( 652	)		( 5,971	)
Juros sobre o Capital Próprio (“JSCP”)	( 73	)		( 4	)		( 2	)
Non taxable gain on bargain purchase	( 60	)		—			—
Taxable income (tax loss) of AMTFS	47			( 34	)		20
Taxable dividends	—			65			19
Other permanent items	163			103			( 6	)
Total permanent items	( 421	)		( 522	)		( 5,940	)

Tax deductible write-downs on shares and receivables: in connection with the Company's impairment test for goodwill and property, plant and equipment (“PP&E”), the recoverability of the carrying amounts of investments in shares and intragroup receivables is also reviewed annually, resulting in tax deductible write-downs of the values of loans and shares of consolidated subsidiaries in Luxembourg.

Juros sobre o Capital Próprio (“JSCP”): Corporate taxpayers in Brazil, which distribute a dividend can benefit from a tax

deduction corresponding to an amount of interest calculated as a yield on capital. The deduction is determined as the lower of the interest as calculated by application of the Brazilian long term interest rate on the opening balance of capital and reserves, and 50% of the income for the year or accumulated profits from the previous year. For book purposes, this distribution of interest on capital is regarded as a dividend distribution, while for Brazilian tax purposes it is regarded as tax deductible interest.

Non taxable gain on bargain purchase: in 2018 ArcelorMittal recognized a 209 gain on bargain purchase upon acquisition of Ilva (see note 2.2.4).

Taxable income of AMTFS: ArcelorMittal Treasury Financial Services S.à r.l. (“AMTFS”), a subsidiary of ArcelorMittal Treasury Americas LLC (“AMTAUS”), is a limited liability company organized under the laws of Luxembourg

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subject to taxation in Luxembourg on its worldwide income. AMTFS has filed an election to be treated as a disregarded entity for United States federal income tax purposes.

Taxable dividends: the dividends received from some of the ArcelorMittal subsidiaries are subject to tax in the receiving countries with the corresponding (foreign) tax credits available.

Rate changes

The 2017 tax benefit from rate changes of ( 94 ) is mainly due to the impact of the decrease in the future income tax rate on deferred tax liabilities in Belgium ( 60 ), France ( 31 ), Argentina and USA .

The 2016 tax expense from rate changes of 593 is mainly due to the impact of the decrease in the future income tax rate on deferred tax assets in Luxembourg resulting in tax expense of 647 , partly offset by a tax benefit of ( 50 ) in France.

Net change in measurement of deferred tax assets

The 2018 net change in measurement of deferred tax assets of ( 1,301 ) primarily consists of tax benefit of ( 1,842 ) due to additional recognition of deferred tax assets for losses and other deductible temporary differences of previous years, and a tax expense of 541 due to non-recognition and derecognition of other deferred tax assets in other tax jurisdictions. In 2018, the Company recognized 1.3 billion of previously unrecognized deferred tax assets relating to the Luxembourg tax integration. The recognition in Luxembourg includes a 0.8 billion increase in projections of future taxable income in Luxembourg driven primarily by the higher operational and financial income, and 0.6 billion effect of the elimination of the current USD exposure of Luxembourgish deferred tax assets denominated in euro.

The 2017 net change in measurement of deferred tax assets of ( 281 ) primarily consists of tax expense of 652 due to the unrecognized part of deferred tax assets on write-downs of the value of shares and loans of consolidated subsidiaries in Luxembourg, tax expense of 364 due to non-recognition and derecognition of other deferred tax assets in other tax jurisdictions, partially offset by an additional recognition of deferred tax assets for losses and other deductible temporary differences of previous years of ( 1,297 ) . In 2017, the Company recognized 1.1 billion of previously unrecognized deferred tax assets relating to the Luxembourg tax integration. The recognition in Luxembourg includes a 0.3 billion increase in projections of future taxable income in Luxembourg driven primarily by the improved market conditions of the steel industry and higher financial income mainly from further reduction in the forecasted interest expense following improved credit rating.

The 2016 net change in measurement of deferred tax assets of 5,344 primarily consists of tax expense of 5,971 due to the unrecognized part of deferred tax assets on write-downs of the value of shares and loans of consolidated subsidiaries in Luxembourg, tax expense of 285 due to non-recognition and derecognition of other deferred tax assets in other tax jurisdictions, partially offset by additional recognition of deferred tax assets for losses and other deductible temporary differences of previous years of ( 912 ) . In 2016, the Company recognized 0.4 billion of previously unrecognized deferred tax assets relating to the Luxembourg tax integration. The recognition in Luxembourg includes a 0.8 billion increase in projections of future taxable income in Luxembourg driven primarily by the improved market conditions of the steel industry and higher interest income from favorable foreign exchange rate relating to the funding of the Group subsidiaries as well as further reduction in the forecasted interest expense following debt repayment. This recognition is partially offset by a derecognition of 0.7 billion related to revised expectations of euro denominated deferred tax assets recoverability in U.S. dollars terms.

Tax effects of foreign currency translation

The tax effects of foreign currency translation of ( 47 ) , ( 157 ) and 73 at December 31, 2018 , 2017 and 2016 respectively, refer mainly to deferred tax assets and liabilities of certain entities with a different functional currency than the currency applied for tax filing purposes. The 2018 effect is impacted by the elimination of the currency exposure on the deferred tax assets in ArcelorMittal parent company following the change in the currency denomination of the tax losses. In 2017, the effects are mainly due to the depreciation of the U.S. dollar against the euro.

Tax credits

The tax credits are mainly attributable to the Company’s operating subsidiaries in Brazil, Mexico and Spain. They relate to credits claimed on foreign investments, credits for research and development and tax sparing credits.

Other taxes

Other taxes mainly include withholding taxes on dividends, services, royalties and interests as well as mining duties in Canada and Mexico, and state tax and Base Erosion and Anti-Abuse Tax ("BEAT") in the United States.

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Others

	Year Ended December 31,
	2018			2017			2016
Tax contingencies/settlements	183			7			149
Prior period taxes	21			( 7	)		( 18	)
Others	39			55			3
Total	243			55			134

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

	Assets						Liabilities						Net
	2018			2017			2018			2017			2018			2017
Intangible assets	29			63			( 744	)		( 869	)		( 715	)		( 806	)
Property, plant and equipment	271			235			( 5,098	)		( 5,334	)		( 4,827	)		( 5,099	)
Inventories	286			291			( 251	)		( 179	)		35			112
Financial instruments	124			129			( 424	)		( 559	)		( 300	)		( 430	)
Other assets	460			203			( 572	)		( 336	)		( 112	)		( 133	)
Provisions	1,728			1,577			( 512	)		( 424	)		1,216			1,153
Other liabilities	461			359			( 331	)		( 225	)		130			134
Tax losses and other tax benefits carried forward	10,384			9,381			—			—			10,384			9,381
Tax credits carried forward	104			127			—			—			104			127
Untaxed reserves	—			—			( 2	)		( 68	)		( 2	)		( 68	)
Deferred tax assets / (liabilities)	13,847			12,365			( 7,934	)		( 7,994	)		5,913			4,371
Deferred tax assets													8,287			7,055
Deferred tax liabilities													( 2,374	)		( 2,684	)

The deferred tax assets recognized by the Company as of December 31, 2018 are analyzed as follows:

	Gross amount		Total deferred tax assets		Recognized deferred tax assets		Unrecognized deferred tax assets
Tax losses and other tax benefits carried forward	110,769		28,642		10,384		18,258
Tax credits carried forward	722		722		104		618
Other temporary differences	16,923		4,117		3,359		758
Total			33,481		13,847		19,634

The deferred tax assets recognized by the Company as of December 31, 2017 are analyzed as follows:

	Gross amount		Total deferred tax assets		Recognized deferred tax assets		Unrecognized deferred tax assets
Tax losses and other tax benefits carried forward	111,880		28,569		9,381		19,188
Tax credits carried forward	778		778		127		651
Other temporary differences	17,417		3,978		2,857		1,121
Total			33,325		12,365		20,960

As of December 31, 2018 , the majority of the deferred tax assets not recognized relates to tax losses carried forward attributable to various subsidiaries located in different jurisdictions (primarily Germany, Luxembourg, Spain, South Africa and the United States) with different statutory tax rates. As of each reporting date, ArcelorMittal considers existing evidence, both positive and negative, including the earnings history and results of recent operations, reversals of deferred tax liabilities, projected future taxable income, and planning strategies, that could impact the view with regard to future realization of these deferred tax assets. Given the current and anticipated future earnings of the ArcelorMittal U.S. operations, there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow ArcelorMittal to reach a conclusion that a significant portion of the unrecognized deferred tax assets of the U.S. operations, related to tax losses and temporary differences, may be recognized.

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The amount of the total deferred tax assets is the aggregate amount of the various deferred tax assets recognized and unrecognized at the various subsidiaries and not the result of a computation with a given blended rate. The utilization of tax losses carried forward is restricted to the taxable income of the subsidiary or tax consolidation group to which it belongs. The utilization of tax losses carried forward also may be restricted by the character of the income, expiration dates and limitations on the yearly use of tax losses against taxable income.

As at December 31, 2018 , the total amount of accumulated tax losses in Luxembourg with respect to the main tax consolidation amounted to approximately 80.6 billion , of which 34.1 billion was considered realizable, resulting in the recognition of 8.9 billion of deferred tax assets at the applicable income tax rate in Luxembourg. As at December 31, 2017 , the total amount of accumulated tax losses in Luxembourg with respect to the main tax consolidation amounted to approximately 80.8 billion , of this amount 30.8 billion was considered realizable, resulting in the recognition of 7.6 billion of deferred tax assets at the applicable income tax rate in Luxembourg. Under the Luxembourg tax legislation, tax losses generated before 2017 can be carried forward indefinitely and are not subject to any specific yearly loss utilization limitations. The tax losses carried forward relate primarily to tax deductible write-down charges taken on investments in shares of consolidated subsidiaries recorded by certain of ArcelorMittal’s holding companies in Luxembourg. Of the total tax losses carried forward, 28.8 billion may be subject to recapture in the future if the write-downs that caused them are reversed creating taxable income unless the Company converts them to permanent through sales or other organizational restructuring activities.

The Company believes that it is probable that sufficient future taxable profits will be generated to support the recognized deferred tax asset for tax losses carried forward in Luxembourg. As part of its recoverability assessment the Company has taken into account (i) its most recent forecast approved by management and the Board of Directors, (ii) the likelihood that the factors that have contributed to past losses in Luxembourg will not recur, (iii) the fact that ArcelorMittal in Luxembourg is the main provider of funding to the Company’s consolidated subsidiaries, leading to significant amounts of taxable interest income, (iv) the implementation of an Industrial Franchising Arrangement between ArcelorMittal and numerous worldwide operating subsidiaries, and (v) other significant and reliable sources of operational income earned from ArcelorMittal’s European and worldwide operating subsidiaries for centralized distribution and procurement activities performed in Luxembourg. In performing the assessment, the Company estimates at which point in time its earnings projections are no longer reliable, and thus taxable profits are no longer probable. Accordingly, the Company has established consistent forecast periods for its different income streams for estimating probable future taxable profits, against which the unused tax losses can be utilized in Luxembourg.

At December 31, 2018 , based upon the level of historical taxable income and projections for future taxable income over the periods in which the deductible temporary differences are anticipated to reverse, management believes it is probable that ArcelorMittal will realize the benefits of the deferred tax assets of 8.3 billion recognized. The amount of future taxable income required to be generated by ArcelorMittal’s subsidiaries to utilize the deferred tax assets of 8.3 billion is at least 32 billion . Historically, the Company has been able to generate sufficient taxable income and believes that it will generate sufficient levels of taxable income in the coming years to allow the Company to utilize tax benefits associated with tax losses carried forward and other deferred tax assets that have been recognized in its consolidated financial statements. Where the Company has had a history of recent losses, it relied on convincing other evidence such as the character of (historical) losses and planning opportunities to support the deferred tax assets recognized.

At December 31, 2018 , the Company had total estimated tax losses carried forward and other tax benefits of 110.8 billion .

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This includes net operating losses and other tax benefits of 7.5 billion primarily related to subsidiaries in Basque Country in Spain, Liberia, Luxembourg, Switzerland and the United States, which expire as follows:

Year expiring		Recognized		Unrecognized		Total
2019		32		68		100
2020		46		268		314
2021		4		872		876
2022		2		628		630
2023		6		490		496
2024 - 2038		90		5,021		5,111
Total		180		7,347		7,527

The remaining tax losses carried forward and other tax benefits for an amount of 103.3 billion (of which 39.3 billion are recognized and 64 billion 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, 2018 , the Company also had total estimated tax credits carried forward of 722 .

Such amount includes tax credits of 568 primarily attributable to subsidiaries in Basque Country in Spain of which 49 recognized and 519 unrecognized, which expire as follows:

Year expiring		Recognized		Unrecognized		Total
2019		—		5		5
2020		—		3		3
2021		—		2		2
2022		—		2		2
2023		—		1		1
2024 - 2038		49		506		555
Total		49		519		568

The remaining tax credits for an amount of 154 (of which 55 are recognized and 99 are unrecognized) are indefinite and primarily attributable to the Company’s operations in Brazil, Spain and the United States.

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On May 22, 2017, ArcelorMittal completed the consolidation of each three existing shares in ArcelorMittal without nominal value into one share without nominal value. As a result of this reverse stock split, the number of issued shares decreased from 3,065,710,869 to 1,021,903,623 and all prior periods have been recast in accordance with IFRS.

The Company’s shares consist of the following:

	December 31, 2016			Movement in year			December 31, 2017			Movement in year			December 31, 2018
Issued shares	1,021,903,623			—			1,021,903,623			—			1,021,903,623
Treasury shares	( 2,407,480	)		420,644			( 1,986,836	)		( 6,348,529	)		( 8,335,365	)
Total outstanding shares	1,019,496,143			420,644			1,019,916,787			( 6,348,529	)		1,013,568,258

On January 15, 2016, following the maturity of the mandatorily convertible notes (see 10.2 below), the Company increased share capital by € 570 million ( 622 ) from € 6,883 million ( 10,011 ) to € 7,453 million ( 10,633 ) through the issuance of 137,967,116 ( 45,989,039 after reverse stock split) new shares fully paid up. The aggregate number of shares issued and fully paid up increased to 1,803,359,338 ( 601,119,779 after reverse stock split).

Following the extraordinary general meeting held on March 10, 2016, ArcelorMittal decreased share capital by € 7,273 million ( 10,376 ) from € 7,453 million ( 10,633 ) to € 180 million ( 257 ) through a reduction of the accounting par value per share to € 0.10 without any distribution to shareholders, the balance being allocated to additional paid-in capital.

On April 8, 2016, ArcelorMittal completed an equity offering with net proceeds of 3,115 (net of transaction costs of 40 ) by way of the issuance of 1,803,359,338 ( 601,119,779 after reverse stock split) non-statutory preferential subscription rights with a subscription price of € 2.20 per share at a ratio of 7 shares for 10 rights subsequently to the adoption of enabling resolutions by the extraordinary general meeting of shareholders on March 10, 2016. The Company increased share capital by € 126 million ( 144 ) from € 180 million ( 257 ) to € 306 million ( 401 ) through the issuance of 1,262,351,531 ( 420,783,844 after reverse stock split) new shares fully paid up. The aggregate number of shares issued and fully paid up increased to 3,065,710,869 ( 1,021,903,623 after reverse stock split).

Authorized shares

At the Extraordinary General Meeting held on May 8, 2012, the shareholders approved an increase of the authorized share capital of ArcelorMittal by € 643 million represented by 156 million shares ( 52 after reverse stock split), or approximately 10 % of ArcelorMittal’s outstanding capital. Following this approval, which is valid for 5 years, the total authorized share capital was € 7.7 billion represented by 1,773,091,461 ( 591,030,487 after reverse stock split) shares without par value.

At the Extraordinary General Meeting held on May 8, 2013, the shareholders approved an increase of the authorized share capital of ArcelorMittal by € 524 million represented by 223 million shares ( 74 after reverse stock split), or approximately 8 % of ArcelorMittal’s outstanding capital. Following this approval, which is valid for five years , the total authorized share capital was € 8.2 billion represented by 1,995,857,213 ( 665,285,738 after reverse stock split) shares without par value.

At the Extraordinary General Meeting held on March 10, 2016, the shareholders approved a decrease of the authorized share capital of the Company by € 8,049 million through a reduction of the accounting par value per share to € 0.10 and a subsequent increase by € 3 billion . Following the completion of the equity offering on April 8, 2016, the Company’s authorized share capital was decreased by € 2.9 billion . As a result of the approval given by the shareholders on March 10, 2016 and which is valid for five years , the total authorized share capital was € 337 million represented by 3,372,281,956 ( 1,124,093,985 after reverse stock split) shares without par value .

At the Extraordinary General Meeting held on May 10, 2017, the shareholders approved a reverse stock split and an increase of the authorized share capital to € 345 million . Following this approval, on May 22, 2017 ArcelorMittal completed the consolidation of each three existing shares in ArcelorMittal without nominal value into one share without nominal value. As a result, the authorized share capital increased with a decrease in representative shares from € 337 million represented by 3,372,281,956 ordinary shares without nominal value as of December 31, 2016 to € 345 million represented by 1,151,576,921 ordinary shares without nominal value.

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At the Extraordinary General Meeting of shareholders held on May 16, 2018, the shareholders approved the change of currency of the Company's share capital from euro to U.S. dollar. Following this approval, the authorized share capital amounts to 411 represented by 1,151,576,921 ordinary shares without nominal value. As a result of this change, the issued share capital amounts to 364 as of December 31, 2018, based on the exchange rate published by the European Central Bank on May 15, 2018. The difference has been transferred to additional paid-in capital. There was no change in the aggregate number of shares issued and fully paid up which continues to amount to 1,021,903,623 as of December 31, 2018 and December 31, 2017.

Share buyback

On March 26, 2018, ArcelorMittal completed a share buyback program under the authorization given at the annual general meeting of shareholders held on May 5, 2015. ArcelorMittal repurchased 7 million shares for a total value of € 184 million ( 226 ) at an average price per share of € 26.34 (equivalent to $ 32.36 ). The buyback shares as part of buyback program are accounted as the part of the treasury share.

Treasury shares

Mandatorily convertible notes

Mandatorily convertible notes issued by the Company were accounted for as compound financial instruments. The net present value of the coupon payments at issuance date was recognized as a long-term obligation and carried at amortized cost. The value of the equity component was determined based upon the difference of the cash proceeds received from the issuance of the notes and the net present value of the financial liability component on the date of issuance and was included in equity.

On January 16, 2013, ArcelorMittal issued mandatorily convertible subordinated notes (“MCNs”) with net proceeds of 2,222 . The notes had a maturity of 3 years , were issued at 100 % of the principal amount and were mandatorily converted into ordinary shares of ArcelorMittal at maturity unless converted earlier at the option of the holders or ArcelorMittal or upon specified events in accordance with the terms of the MCNs. The MCNs paid a coupon of 6.00 % per annum, payable quarterly in arrears. The minimum conversion price of the MCNs was set at $ 16.75 (prior to reverse stock split), corresponding to the placement price of shares in the concurrent ordinary shares offering as described above, and the maximum conversion price was set at approximately 125 % of the minimum conversion price (corresponding to $ 20.94 , prior to reverse stock split). The minimum and maximum conversion prices were subject to adjustment upon the occurrence of certain events, and were, as of December 31, 2015, $ 15.98 and $ 19.98 , respectively (prior to reverse stock split). The Company determined the notes met the definition of a compound financial instrument and as such determined the fair value of the financial liability component of the bond was 384 on the date of issuance and recognized it as a long-term obligation. The value of the equity component of 1,838 was determined based upon the difference of the cash proceeds received from the issuance of the bond and the fair value of the financial liability component on the date of issuance and was included in equity.

During the fourth quarter of 2015, the Company delivered 2,275,026 treasury shares ( 758,342 after reverse stock split) against 1,817,869 notes converted at the option of their holders. As a result of such voluntary conversions, the carrying amount of MCNs decreased by 38 . On January 15, 2016, upon final maturity of the MCNs, the remaining outstanding 88,182,131 notes were converted into 137,967,116 new common shares ( 45,989,039 after reverse stock split). Accordingly, share capital and additional paid-in-capital increased by 622 and 1,178 , respectively and the carrying amount of MCNs decreased by 1,800 .

Mandatory convertible bonds

On December 28, 2009, the Company issued through Hera Ermac, a wholly-owned subsidiary, 750 unsecured and unsubordinated bonds mandatorily convertible into preferred shares of such subsidiary. The bonds were placed privately with a Luxembourg affiliate of Crédit Agricole (formerly Calyon) and are not listed. The Company has the option to call the mandatory convertible bonds until 10 business days before the maturity date. Hera Ermac invested the proceeds of the bonds issuance and an equity contribution by the Company in notes issued by subsidiaries of the Company linked to the values of shares of Erdemir and China Oriental. On April 20, 2011, the Company signed an agreement for an extension of the conversion date of the mandatory convertible bonds to January 31, 2013. On September 27, 2011, the Company increased the mandatory

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convertible bonds from 750 to 1,000 . The Company further extended the conversion date for the mandatory convertible bonds on December 18, 2012 and January 17, 2014 to January 31, 2014 and January 29, 2016, respectively.

On November 20, 2015, the conversion date of the 1,000 mandatory convertible bonds was extended from January 29, 2016 to January 31, 2018. The other main features of the mandatory convertible bonds remained unchanged. The Company determined that this transaction led to the extinguishment of the existing compound instrument and the recognition of a new compound instrument including non-controlling interests for 880 (net of cumulative tax and fees) and other liabilities for 106 . The derecognition of the previous instrument and the recognition at fair value of the new instrument resulted in a 79 expense included in financing costs-net in the consolidated statement of operations and a 20 decrease in non-controlling interests.

Basic earnings per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the year. Net income (loss) attributable to ordinary shareholders takes into consideration dividend rights of preferred shareholders such as holders of subordinated perpetual capital securities. Diluted earnings per share is computed by dividing income (loss) available to equity holders by the weighted average number of common shares and potential common shares from share unit plans and outstanding stock options as well as potential common shares from the conversion of certain convertible bonds whenever the conversion results in a dilutive effect.

On April 8, 2016, the Company issued 1,262,351,531 ( 420,783,844 after reverse stock split) new shares at a subscription price of € 2.20 (prior to reverse stock split) per share representing a 35 % discount compared to the theoretical ex-right price (“TERP”) of € 3.40 (prior to reverse stock split) based on the closing price of ArcelorMittal’s shares on Euronext Amsterdam on March 10, 2016. In accordance with IFRS, such a rights issue includes a bonus element increasing the number of ordinary shares outstanding to be used in calculating basic and diluted earnings per share for all periods before the rights issue.

On May 22, 2017, ArcelorMittal completed the consolidation of each three existing shares in ArcelorMittal without nominal value into one share without nominal value. As a result of this reverse stock split, the number of outstanding shares for the prior periods have been recast in accordance with IFRS.

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 and generates its own profit mostly from financing activities and the management fees / industrial franchise agreements within Group Companies. Accordingly, it can only pay dividends or distributions to the extent it is entitled to receive cash dividend distributions from its subsidiaries’ recognized gains, profit generated by its own activities, from the sale of its assets or records share premium from the issuance of common shares.

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Dividends are declared in U.S. dollars and are payable in either U.S. dollars or in euros.

Description	Approved by		Dividend per share (in $)		Payout date		Total (in millions of $)
Dividend for financial year 2015	Annual General Shareholders’ meeting on May 4, 2016		—		—		—
Dividend for financial year 2016	Annual General Shareholders’ meeting on May 4, 2017		—		—		—
Dividend for financial year 2017	Annual General Shareholders’ meeting on May 9, 2018		0.10		June 13, 2018		101

The tables below provide a list of the principal subsidiaries which include non-controlling interests at December 31, 2018 and 2017 and for the years ended December 31, 2018 , 2017 and 2016 .

Name of Subsidiary		Country of incorporation and operation		% of non-controlling interests and non- controlling voting rights at December 31, 2018		% of non-controlling interests and non- controlling voting rights at December 31, 2017		Net income (loss) attributable to non- controlling interests for the year ended December 31, 2018			Non-controlling interests at December 31, 2018			Net income (loss) attributable to non- controlling interests for the year ended December 31, 2017			Non-controlling interests at December 31, 2017			Net income (loss) attributable to non- controlling interests for the year ended December 31, 2016
AMSA		South Africa		30.78 %		30.78 %		29			170			( 124	)		195			( 103	)
Sonasid 1		Morocco		67.57 %		67.57 %		2			107			3			107			( 5	)
ArcelorMittal Kryvyi Rih		Ukraine		4.87 %		4.87 %		15			182			10			164			5
Belgo Bekaert Arames ("BBA")		Brazil		45.00 %		45.00 %		28			136			25			146			23
Hera Ermac 2		Luxembourg		—		—		—			797			—			797			—
AMMIC 3		Canada		15.00 %		15.00 %		91			484			91			479			28
Arceo 4		Belgium		62.86 %		62.86 %		4			158			4			168			5
ArcelorMittal Liberia Ltd		Liberia		15.00 %		15.00 %		( 2	)		( 268	)		( 11	)		( 266	)		( 5	)
Other								14			256			9			276			7
Total								181			2,022			7			2,066			( 45	)

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 29, 2021 (see note 10.2) .

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 % .

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The tables below provide summarized statements for the above-mentioned subsidiaries of financial position as of December 31, 2018 and 2017 and the summarized statements of operations and summarized statements of cash flows for the year ended December 31, 2018 , 2017 and 2016 .

Summarized statements of financial position

	December 31, 2018
	AMSA			Sonasid			AM Kryvyi Rih			BBA			Hera Ermac			AMMIC			Arceo			AM Liberia
Current assets	1,307			194			1,408			240			251			1,144			93			113
Non-current assets	672			100			2,947			158			2,492			3,113			166			114
Total assets	1,979			294			4,355			398			2,743			4,257			259			227
Current liabilities	1,056			106			535			109			84			331			2			1,816
Non-current liabilities	372			34			308			28			335			539			1			41
Net assets	551			154			3,512			261			2,324			3,387			256			( 1,630	)

Summarized statements of operations

	December 31, 2018
	AMSA			Sonasid			AM Kryvyi Rih			BBA			Hera Ermac			AMMIC			Arceo			AM Liberia
Revenue	3,440			396			2,497			771			—			2,396			—			132
Net income (loss)	95			4			340			59			( 555	)		636			6			( 12	)
Total comprehensive income (loss)	( 40	)		5			331			62			( 555	)		642			6			( 12	)

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Summarized statements of cash flows

	December 31, 2018
	AMSA			Sonasid			AM Kryvyi Rih			BBA			Hera Ermac			AMMIC			Arceo			AM Liberia
Net cash provided by / (used in) operating activities	69			22			313			47			38			735			10			( 18	)
Net cash provided by / (used in) investing activities	132			( 5	)		( 346	)		( 14	)		( 38	)		( 134	)		14			( 29	)
Net cash provided by / (used in) financing activities	( 260	)		—			50			( 27	)		—			( 579	)		( 9	)		47
Impact of currency movements on cash	( 10	)		—			( 4	)		—			—			—			( 1	)		—
Cash and cash equivalents:
At the beginning of the year	141			38			60			5			—			158			13			—
At the end of the year	72			55			73			11			—			180			27			—
Dividend to non-controlling interests	—			—			—			( 18	)		—			( 87	)		( 7	)		—

Summarized statements of financial position

	December 31, 2017
	AMSA			Sonasid			AM Kryvyi Rih			BBA			Hera Ermac			AMMIC			Arceo			AM Liberia
Current assets	1,457			181			1,228			220			210			1,050			56			107
Non-current assets	1,047			108			2,801			190			3,350			3,135			213			93
Total assets	2,504			289			4,029			410			3,560			4,185			269			200
Current liabilities	1,399			100			598			93			67			316			2			1,783
Non-current liabilities	470			34			266			21			616			555			1			35
Net assets	635			155			3,165			296			2,877			3,314			266			( 1,618	)

Summarized statements of operations

	December 31, 2017
	AMSA			Sonasid			AM Kryvyi Rih			BBA			Hera Ermac			AMMIC			Arceo			AM Liberia
Revenue	2,926			371			2,486			698			—			1,943			—			56
Net income (loss)	( 403	)		6			209			52			1,130			617			6			( 71	)
Total comprehensive income (loss)	( 421	)		4			210			52			1,130			613			6			( 71	)

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Summarized statements of cash flows

	December 31, 2017
	AMSA			Sonasid			AM Kryvyi Rih			BBA			Hera Ermac			AMMIC			Arceo			AM Liberia
Net cash provided by / (used in) operating activities	( 119	)		( 7	)		194			63			( 12	)		947			10			( 69	)
Net cash provided by / (used in) investing activities	( 193	)		( 3	)		( 234	)		( 9	)		12			( 301	)		3			( 63	)
Net cash provided by / (used in) financing activities	330			( 4	)		—			( 61	)		—			( 656	)		( 8	)		132
Impact of currency movements on cash	13			1			( 2	)		—			—			—			1			—
Cash and cash equivalents:
At the beginning of the year	110			51			102			12			—			168			7			—
At the end of the year	141			38			60			5			—			158			13			—
Dividend to non-controlling interests	—			( 2	)		—			( 26	)		—			( 98	)		( 5	)		—

Summarized statements of operations

	December 31, 2016
	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	)

Acquisitions of non-controlling interests, which do not result in a change of control, are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognized as a result of such transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in thei

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r relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the parent.

Transactions with non-controlling interests in 2018 were as follows:

On November 9, 2018, ArcelorMittal completed the acquisition of Marcegaglia's 15 % non-controlling interest in AM InvestCo and 11 % non-controlling interest in BRE.M.A Warmwalz GmbH & Co KG for a 28 and 40 consideration, respectively. The Company recorded a decrease of 55 directly in equity.

Transactions with non-controlling interests in 2016 were as follows:

AMSA

On January 15, 2016, AMSA completed a rights offering fully underwritten by ArcelorMittal. The total cash proceeds amounted to ZAR 4.5 billion . ArcelorMittal subscribed the capital increase through repayment of an outstanding intragroup loan of ZAR 3.2 billion and an additional cash injection of ZAR 0.5 billion . As a result of the rights issue, ArcelorMittal’s shareholding in AMSA increased from 52 % to 70.55 % and non-controlling interests decreased by 80 .

Effective October 17, 2016, ArcelorMittal’s interest in AMSA decreased to 69.22 % . In the framework of AMSA’s transformation initiatives in order to maximize its score under the Broad-Based Black Economic Empowerment (“B-BBEE”) Codes of Good Practice, it launched on October 1, 2015 an employee share ownership plan following which the Ikageng Broad-Based Employee Share Trust obtained an ownership interest of 1.33 % in AMSA to be attributed to qualifying employees upon vesting date of the plan.

In addition, on September 28, 2016, AMSA announced that it had entered into agreements to implement a transaction which includes the issuance of a 17 % shareholding in AMSA using a new class of notionally funded shares to a special purpose vehicle owned by Likamva Resources Proprietary Limited (“Likamva”). Likamva has undertaken to introduce broad-based social and community development organizations as shareholders to hold an effective 5 % interest (of the 17 % , leaving Likamva with a 12 % shareholding) within 24 months. The transaction also includes the issuance of a 5.1 % shareholding in AMSA using another new class of notionally funded shares to the ArcelorMittal South Africa Employee Empowerment Share Trust for the benefit of AMSA employees and AMSA management. All the shares have certain restrictions on disposal for a period of 10 years thereby promoting long-term sustainable B-BBEE in AMSA. The shares were issued on December 7, 2016. The Company concluded that the transaction does not correspond to a share issue but qualifies as an in substance option (resulting in the recognition of an expense of 63 , which is recognized in financing costs - net and corresponds to the fair value at inception). The shares give the holders rights to notional dividends which will be used to repay the notional funding and voting rights for up to 10 years , resulting in a decrease of ArcelorMittal's voting rights to 53.92 % . The Company will recognize non-controlling interests at the end of the 10 year period depending on the value of the shares based on a pre-defined formula.

	2016
Non-controlling interests	80
Purchase price (selling price), net 1	( 56		)
Adjustment to equity attributable to the equity holders of the parent	136

1.	Amount paid in by non-controlling shareholders in AMSA following the rights issue

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. Transactions between the parent company, its subsidiaries and joint operations 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.

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1.	Gonvarri Steel Industries includes ArcelorMittal Gonvarri Brasil Productos Siderúrgicos which is a joint venture.

2.	The joint venture Tuper S.A. was acquired on October 6, 2016.

3.	WDI includes Westfälische Drahtindustrie Verwaltungsgesellschaft mbH & Co. KG and Westfälische Drahtindustrie GmbH.

4.	Macsteel was sold on October 31, 2018 .

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			Year Ended December 31,									December 31,
			Purchases									Trade payables
Related parties and their subsidiaries where applicable	Category		2018			2017			2016			2018			2017
Tameh	Joint Venture		344			286			236			2			45
Baffinland 1	Associate		28			142			75			16			22
Aperam	Other		85			94			65			6			11
Calvert	Joint Venture		107			65			15			23			11
CFL Cargo S.A.	Associate		59			60			58			9			13
Exeltium S.A.S.	Associate		54			53			71			—			—
Baycoat Limited Partnership	Joint Venture		43			42			41			5			5
EIMP 2	Other		—			36			310			—			—
Gonvarri Steel Industries 3	Associate		35			19			146			31			51
Other			361			236			373			109			102
Total			1,116			1,033			1,390			201			260

1.	Baffinland was classified as an associate as of October 31, 2017 (see note 2).

2.	In addition to trade payables and purchases with related parties as defined by IAS 24, the Company also discloses this information for EIMP due to the close relationship with this entity. The Company's 21 % stake in the EIMP was disposed of on August 7, 2017.

3.	Gonvarri Steel Industries includes ArcelorMittal Gonvarri Brasil Productos Siderúrgicos which is a joint venture.

At December 31, 2018, the shareholder loans granted by the Company to Al Jubail, with various maturity dates , had a carrying value of 131 (see note 2.4.3).

As of March 13, 2017, the Company granted a credit facility to AMTBA bearing compound interest (Libor 3 months + margin) maturing on February 28, 2018 for a maximum aggregated amount of 35 . The facility was fully repaid during the year.

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, 2018 , the loans amounted to 149 including accrued interest. The loans bear interest from 3 % to 3.95 % and have various maturity dates range from less than 1 to 25 years .

In May 2014, ArcelorMittal entered into a 5 -year off take agreement with its associate Baffinland (the "AM Sourcing Contract"), 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 AM Sourcing Contract has been extended to December 31, 2021 and the maximum quantity shall increase to the lesser of 50 % of the annual quantity of iron ore produced by Baffinland or 4 million tonnes per contract year, after completion of the Rail Expansion project. The purchase price includes a premium to reference prices based on high iron ore content. ArcelorMittal paid advances to Baffinland for an amount equivalent to the value of iron ore stockpiled by Baffinland outside the salable season until August 31, 2017. From September 1, 2017 to December 31, 2021, ArcelorMittal will not pay advances to Baffinland anymore as payments for the purchases will occur upon loading on vessel for shipment at port of Milne.

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 salable season and 2.3 million tonnes in any contract year. This agreement expired on the extended maturity at October 20, 2017. On December 1, 2017, Baffinland entered into a new agreement with a bank to finance up to 4 million tonnes at 78 % of the value of the iron ore produced and hauled to the por

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On March 2, 2018, ArcelorMittal signed a joint venture formation agreement with NSSMC in relation to its offer to acquire ESIL, which was subsequently amended and restated on January 22, 2019. On April 2, 2018, ArcelorMittal submitted an offer in the re-bidding process for ESIL. The offer has faced various legal challenges at the National Company Law Tribunal and more recently at the National Company Law Appellate Tribunal ("NCLAT").

On October 26, 2018, ArcelorMittal announced that ESIL Committee of Creditors (‘CoC’) has voted to approve the Company’s acquisition of ESIL. ESIL’s Resolution Professional, on behalf of the CoC, issued the Company with a Letter of Intent (''LOI'') stating that the Company has been identified as the ‘Successful Applicant’. Further to ArcelorMittal being named the H1 Resolution Applicant (the preferred bidder) on October 19, 2018, ESIL’s CoC approved the Company’s acquisition plan for ESIL (the "Resolution Plan"), with the ''LOI'' identifying it as the ‘Successful Resolution Plan’. The Resolution Plan set out a detailed industrial plan for ESIL aimed at improving its performance and profitability and ensuring it can participate in the anticipated growth of steel demand in India. It includes an upfront payment of 42,000 crore rupees (approx. $ 5.7 billion ) towards ESIL’s debt resolution, with a further 8,000 crore rupees (approx. $ 1.1 billion ) of capital injection into ESIL to support operational improvement, increase production levels and deliver enhanced levels of profitability.

The process to restore ESIL would involve a multi-staged approach: initial steps would be to stabilize the operations and increase production of finished steel goods to 6.5 million tonnes per annum in the medium-term followed by an increase to 8.5 million tonnes per annum by the end of 2024 and ultimately have long-term aspirations to produce between 12 - 15 million tonnes per annum.

In line with ESIL’s corporate insolvency process, ArcelorMittal’s Resolution Plan must now be formally accepted by India’s National Company Law Tribunal (“NCLT”) before completion. The NCLT has completed hearing the CoC's application for the approval of the Resolution Plan, as well as objections and challenges from different parties, including creditors of ESIL and the current shareholder. While it is difficult to predict the timing of an NCLT approval, a decision is expected in the first quarter of 2019 and the amounts of debt payment and capital injection specified in the Resolution Plan would become payable promptly after such approval is obtained.