MT 20-F Report ended Dec. 31, 2019

¨	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

---

---

---

1.	On July 1, 2019, ArcelorMittal Atlantique et Lorraine S.A.S. was merged into ArcelorMittal France S.A.S.

---

---

---

ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE

ITEM 3.	KEY INFORMATION

---

1

Basic (loss) earnings per common share are computed by dividing net (loss) income attributable to equity holders of ArcelorMittal by the weighted average number of common shares outstanding during the periods presented. Diluted (loss) 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 11.3 to the consolidated financial statements for further information.

2

Following the Company’s equity offering in April 2016, the (loss) earnings per share for prior periods was recast in accordance with IFRS for the year ended December 31, 2015, 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 (loss) earnings per share and corresponding basic and diluted weighted average common shares outstanding for the years ended December 31, 2016 and 2015, respectively, have been recast in accordance with IFRS.

3	Given the resilient cash flow and progress towards its net debt target, the Board proposed a base dividend of $0.30 per share for 2020 (in respect of 2019) which will be proposed to the shareholders at the AGM in May 2020.

---

---

---

---

---

---

---

•	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.

---

•	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.

---

---

---

---

---

---

---

---

---

---

---

---

ITEM 4.	INFORMATION ON THE COMPANY

---

---

---

–	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

–

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.

---

---

•

On May 6, 2019, ArcelorMittal announced its intention to temporarily idle production at its steelmaking facilities in Kraków, Poland, reduce production in Asturias and Spain. In addition, the planned increase of shipments at ArcelorMittal Italia to a six million tonne annual run-rate was slowed down following a decision to optimize cost and quality over volume in this environment. Together, these actions resulted in a temporary annualized production reduction of around three million tonnes. On May 29, 2019, the Company announced its decision to take additional steps to adjust its European production levels to further align its production to the current market demand by a further 1.2 million tonnes to take total annualized productions cuts to 4.2 million tonnes in the second half of 2019. As a result, it:

•	Reduced primary steelmaking production at its facilities in Dunkirk, France and Eisenhüttenstadt, Germany;

•	Reduced primary steelmaking production at its facility in Bremen, Germany in the fourth quarter of 2019, where a planned blast furnace stoppage for repair works were extended; and

•	Extended the stoppage planned in the fourth quarter of 2019 to repair a blast furnace at its plant in Asturias, Spain.

•	On July 16, 2019, the Company sold its 30 million shares, representing a stake of 2.6% of preferred shares, held in its investment Gerdau, an equity instrument at fair value through other comprehensive income, for $116 million. See note 2.5 to the consolidated financial statements.

•

In recent periods, the performance of ArcelorMittal South Africa has been challenged by increased electricity, port and rail regulated costs, and uncompetitive raw material sourcing as well as the ongoing weak economic backdrop in South Africa. ArcelorMittal South Africa has undertaken an intensive review of its business focused on cash preservation and cost reduction through an expanded Business Transformation Program. At the same time, a strategic asset footprint review was launched to establish an asset base with an enduring competitive advantage to ensure the long-term sustainability of ArcelorMittal South Africa. Following this review, a large-scale employee reorganization (over 1000 employees) has been finalized with an additional repricing and rescoping of sub-contractor services expected by the end of the first quarter of 2020. During the first phase of the asset review, it has been agreed to orderly and commercially wind-down the Saldanha Works. The process is progressing according to plan and is anticipated to be largely completed by the end of the first quarter of 2020. The second phase of the Asset Review commenced in November 2019, focusing on Newcastle Works and certain of the long steel products rolling facilities in Pretoria and Vereeniging. The objective of this phase of the review is to sustainably improve these operations’ structural cost position and service offerings. The closure of significant long steel product plants is not anticipated in the near future, and notably, primary steel making operations will continue in the short-term at Newcastle Works, although it will now be focused on primarily serving the domestic and Africa Overland markets. Significant organizational configuration opportunities have been identified to improve both operational effectiveness and controllable cost competitiveness of not only the long steel product business, but that of ArcelorMittal South Africa overall.

•

On December 23, 2019, ArcelorMittal announced that it signed a share purchase agreement with DryLog Ltd ("DryLog") for the sale of a controlling 50% stake in Global Chartering Limited ("Global Chartering"), its wholly owned shipping business, and subsequently formed a 50:50 shipping joint venture with DryLog. Accordingly, ArcelorMittal's remaining 50% interest is accounted for under the equity method. Global Chartering operates 28 dry cargo vessels, which range from Supramax to Cape Size, 25 of which are on long-term leases and have been transferred into the joint venture, with the remaining 3 being owned outright. The joint venture will benefit from the combination of the two businesses respective knowledge and expertise, and ArcelorMittal’s extensive annual cargo

---

•

On February 27, 2020, the Mayor of Taranto adopted an order addressed to ArcelorMittal Italia and Ilva related to certain emissions events that appear to have occurred in August 2019 and February 22 and 23, 2020 and that allegedly concern the Taranto plant. The order requires  ArcelorMittal Italia to identify the responsible installations within 30 days, to eliminate any anomalies at such installations causing such emission events within 60 days or, if necessary, to shut down certain installations related to such emissions events. The Mayor of Taranto also alleges that it did not receive adequate responses from the Italian Ministry of the Environment with respect to such emissions events. ArcelorMittal Italia considers the order to be unfounded and will appeal it. Following the order, the Ministry of the Environment requested additional information from the Mayor of Taranto about the events (including the type of emissions and how the events can be connected to the Taranto plant) and has also requested information from certain other industrial companies in Taranto, as to any anomalies, accidents or events that may have occurred on February 22 and 23, 2020. ArcelorMittal Italia  is preparing its responses to the request for information from the Ministry of the Environment, which will also be provided to the Mayor of Taranto.

---

•	Global scale and scope

•	Unmatched technical capabilities

•	Diverse portfolio of steel and related businesses, particularly mining

•	Financial capability.

---

•

Europe: The Company planned 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 targeted delivering a $1 billion improvement in operating income over the period.

•	NAFTA: The downstream footprint optimization in the U.S. was completed with substantial improvements in operating income. The Company continued 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 planned to execute its value plan and targeted 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 planned to continue its strategic focus on operational excellence to deliver volumes that would 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.

---

---

---

---

---

---

•	Global platforms (Big Data, IIoT, Deep Learning developments);

•	Manufacturing digitalization (Production, Quality and Maintenance); and

•	Business digitalization (Procurement, Commercial, Supply Chain, Strategy, Finance).

•	The best product quality, through better prediction using advanced analytics made possible through Big Data and distributed computing. This means production issues can be detected before they happen, enabling adjustments to be made to production parameters to avoid them.

•	Maximizing equipment operational time and avoiding unplanned stoppages via predictive maintenance. The Company is already seeing positive results in several production units in Brazil, Spain and Belgium, and is deploying this solution across the Company.

•

Cost efficiency in production and logistics. For example, R&D has developed a unique, breakthrough technology for line scheduling - inspired by studying and mimicking the movements in ant colonies - that has significantly improved productivity. In addition, the deployment of automated stockyards, linked to line scheduling and transport devices such as autonomous cranes, means less stock is needed and lead times are cut, yielding two major supply chain benefits.

•

Diversified production process. In 2019, approximately 71.3 million tonnes of crude steel were produced through the basic oxygen furnace process, approximately 16.6 million tonnes through the electric arc furnace process and approximately 1.9 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.

•	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 continues to progress well. The gains this year were mainly in the areas of maintenance transformation, procurement and supply chain efficiency gains and optimization of operations. Overall, gains in process and cost improvements were partially offset by lower volumes, driven by difficult market conditions.

•	NAFTA: With the completion of Indiana Harbor optimization in 2018, the gains this year were mainly in the area of operations and procurement with process yields, rejection rates, internal logistics and production planning contributing the bulk of the savings.

•	Brazil: Cost reductions driven by operational excellence program and some footprint actions were the main contributors to the cost savings this year.

•	ACIS: Ukraine continued to benefit from replacement of COB#5 and #6 this year and major restructuring actions were completed in South Africa where the benefits are expected in 2020.

•	Mining: Although the year's performance was impacted by production losses in the Canadian iron ore operations, the business remains focused on service, quality and asset reliability.

---

---

•	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 as a priority, with a set of key performance indicators (“KPIs") established against which they must report quarterly to the ARCGS committee;

•	Corporate functions lead on key areas 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; and

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

---

•

The Safety Leadership program in CIS (Ukraine and Kazakhstan), training the top 100 managers and creating the key platform from which to roll out Take Care! training in the region. This program aims at developing the skills of middle and upper management to influence people's safety behavior and improve the safety culture within their teams. It has been successfully implemented over the past three years across ArcelorMittal’s European operations and long operations in Latin America, where it entered into phase two in 2019;

•	Strengthened health and safety policy on working at heights;

•	Improved detection, recording, and understanding of hazards and risks through PSIFs in order to prevent severe incidents;

•	Improved safety leadership practices, supported by the continuation of the Target 21 Safety Leadership Program, where managers undertake safety training through 21 days of 5-minute e-learning sessions ;

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

•	Sharing lessons within the steel industry through the Company's participation in the Worldsteel Association.

---

---

•

Clean power used as the energy source for hydrogen-based ironmaking and, in the longer term, for direct electrolysis ironmaking, and also as a contributor to other low-emissions technologies. The Company is building a demonstration plant in Hamburg, called H2Hamburg, which will reduce iron ore with hydrogen. It is also collaborating with 11 partners on a project called Siderwin to build a three-meter industrial cell which will test iron ore reduction via electrolysis in Maizières, France.

•

Circular carbon energy sources , including bio-based and plastic wastes from municipal and industrial sources and agricultural and forestry residues. Through a process called Torero, ArcelorMittal will reduce iron ore with waste carbon rather than fossil fuel coal in a demonstration plant in Ghent, Belgium. Meanwhile, the Company’s campus in Dunkirk, France is piloting the IGAR (Injection de Gaz Réformé) project which reforms carbon from the blast furnace, converting it into a synthetic gas to reduce iron ore.

•

Fossil fuels with carbon capture and storage (“CCS”) enabling the continued use of existing iron and steelmaking processes while transforming them to a low-emissions pathway. The Carbon2Value process captures fossil fuel carbon for storage or re-use. The Group's Carbalyst® project, in partnership with LanzaTech, will capture carbon gas and recycle it into chemicals. Pilot plants for both technologies are under construction at the Company’s plant in Ghent, Belgium. Investment in Carbalyst® started in 2018 and is expected to be completed in 2021. the technology will capture approximately 15% of available waste gases at the demonstration plant and convert them into 80 million litres of ethanol annually.

---

•	Access to abundant and affordable clean energy . Policies giving the steel industry access to abundant and affordable renewable electricity will be key to scaling up the clean power pathway. For acceleration of the circular carbon pathway, the steel industry requires priority access to biomass and waste.

•	Facilitating necessary energy infrastructure . In addition to abundant renewable electricity, policies to support investments in hydrogen infrastructure will be needed to advance large-scale hydrogen-based processes. Similarly, for the fossil fuels with CCS pathway, policies are also important to enable and accelerate the development of carbon transport and storage infrastructure and services.

•	Access to sustainable finance for low-emissions steelmaking . The scale of the challenge requires an acceleration of technology development and roll out. Breakthrough steelmaking technologies need to be identified as a key priority area for public funding.

•	Accelerate transition to a circular economy . Materials policy should divert waste streams from landfill and incineration. It should focus on driving recycling and reuse of all waste streams and incentivize the use of waste streams as inputs in manufacturing processes. It should reward products for their reusability and recyclability.

---

---

---

---

---

•	Understanding local communities by conducting social context analyses of local impacts and opportunities, human rights and associated impacts, and trends linked to the local risk profile;

•	Comprehensive planning of human rights assessments, stakeholder engagement, mechanisms to manage community complaints and grievances, and community investment strategies;

•	Effective implementation of development activities through strong leadership, appropriate resource, timely engagement, and robust governance; and

•	Consistent monitoring and evaluation of performance through community perception surveys, analysis of grievances, and annual independent verification of data and social performance.

---

•	Key Performance Indicators. A set of KPIs for every business segment to report against, overseen by the ARCGS;

•	SD-focused Business Plans. An expectation that SD is integrated into each business segment plan, acting on the relevant SD issues material to its business;

•	SD-focused Corporate Initiatives. Corporate initiatives on SD for the benefit of the Group, which include, for example, accelerating progress towards low-carbon steelmaking; innovating steel solutions for a positive SD impact; and developing a ‘mine to metal’ chain of assurances measured against multi-stakeholder environmental and social standards; and

•

SD-focused Reporting. A robust articulation of the Company’s approach and progress through clear narrative and transparent, third-party assured reporting. In 2018, climate change was identified as one of the themes to be overseen by the ARCGS, which then nominated senior officers to take responsibility for its low-carbon transition strategy, its carbon performance, and its work on advocating for the introduction of carbon-related government policies. These senior officers are supported by corporate functions covering strategy, technology, R&D, corporate responsibility and communications, all of which are represented on the Carbon and Environment Group and report to one executive vice-president, who works closely with the CEO and CFO on climate issues. The Company also convenes a number of working groups on particular topics, tracks stakeholder expectations as well as long-term trends and considers their implications for the business.

---

•	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.

---

---

•	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.

---

•	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 9.6 million tonnes and 36.9 million tonnes, respectively, for the year ended December 31, 2019.

2	Assumes 100% consumption of ArcelorMittal's iron ore and coal production.

---

---

---

---

---

•

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 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 life cycles with plans to extract the maximum value and use

---

•

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 EU and “CLP” Regulation (EC) no. 1272/2008 of December 16, 2008 on the classification, labeling and packaging of substances and mixtures, which complements it.

•

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 has implemented Phase III of the ETS in a manner that increases 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 have already lead or 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” has further negatively impacted the allocation of 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%.

---

•

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.

•	On December 11, 2019, the Commission presented the Communication on The European Green Deal announcing several upcoming legislative proposals for the EU 2050 climate neutrality objective and to increase the EU 2030 GHG emissions reduction target to at least 50% and towards 55% compared to 1990. To achieve this, all relevant climate-related policy instruments will be revised starting from 2020.

•	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.

•

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 reduction commitments (“reduction commitments”) applicable from 2020 and 2030 for SO 2 , NOx, NMVOC, NH3 and fine particulate matter (particulate matter of size 2.5 microns) (“PM2.5").

•

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.

---

---

---

•

by December 15, 2019, the entrepreneurs with mining dams, regardless of the construction method, in operation or inactive, shall complete studies aimed at technical solutions for avoiding the inflow of surface and groundwater into the reservoir, and the implementation of solutions identified by the entrepreneur, shall commence immediately. The Serra Azul mine has engineered and constructed a concrete channel upstream to the dam to divert surface and groundwater away from the reservoir. The construction works were completed in November 2019.

---

•	by September 15, 2021, to complete the works of the existing dam stabilization system or the construction of a new downstream containment structure; and

•	by September 15, 2022, to complete the de-characterization of the dam.

–	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").

---

•	Early 2020: Continued consultations on the design of the regulations and proposed regulations for the liquid fuel class (followed by consultations on the proposal and final regulations planned for early 2021);

•	January 1, 2022: Liquid fuel class regulations come into force;

•	Mid-2021: Proposed regulations for the gaseous and solid fuel classes (followed by consultations on proposal and final regulations planned for 2022.); and

•	January 1, 2023: Gaseous and solid fuel regulations come into force.

---

---

•	Companies that are in the first category of natural resource user (relevant for ArcelorMittal) must obtain complex ecological permits for emissions into the environment starting in 2025, which will not only specify emission standards but also outline measures for reducing emissions (production improvements) that will impose additional costs on ArcelorMittal Temirtau.

•	Industrial monitoring laboratories will be required to be licensed. This will not have an impact on ArcelorMittal.

•	Waste processing requirements will be strengthened. Limits for waste accumulation and waste disposal will be specified in an environmental permit.

---

---

---

---

---

---

•	a quarterly cap of 30% of the HRC global applicable to each country's total import cap for hot rolled coil, and

•	a 30% cap applicable to the last quarter per period of a country's total cap on wire rod and rebar imports, as well as a new requirement that end users (product purchasers) validate any imports of category 4B products (hot dip galvanized products used in the auto industry).

---

---

---

---

---

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.

---

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

2	Indiana Harbor.

3	ArcelorMittal USA idled its #2 steel plant (incl. 2 basic oxygen furnaces and 2 slab casters), its 84’’ hot strip mill, #1 aluminizing line and #5 hot dip galvanizing line at Indiana Harbor in 2016-2017, and subsequently announced permanent closure of these facilities following the full completion of the footprint optimization program in 2018.

4	ArcelorMittal USA temporarily idled its #3 blast furnace at Indiana Harbor in November 2019.

5	AcelorMittal USA idled its plate rolling unit at the Conshohocken, PA facility in August 2018. The facility continues to perform heat treating.

6	The rolling mill in Gary has been permanently idled. The facility does only heat treating.

7	ArcelorMittal Dofasco idled HDG lines #1&2 in 2017 and permanently discontinued their operation in 2019.

---

---

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

2.	ArcelorMittal Tubarão completed the reline of its BF #2 in December 2019. The blast furnace remained temporarily idled due to market conditions.

3.	ArcelorMittal Brasil temporarily idled its electric arc furnaces #1&2, billet caster and long rolling mill #2 at Barra Mansa in February 2019 in response to market conditions.

---

---

2.

Following European commission approval,  ArcelorMittal completed the sale of the steelmaking sites it had committed to sell as part of its acquisition of ArcelorMittal Italia. As of June 30, 2019, the following assets were sold to Liberty House: ArcelorMittal Ostrava; ArcelorMittal Galati; ArcelorMittal Skopje; ArcelorMittal Piombino; ArcelorMittal Dudelange and several finishing lines at ArcelorMittal Liège (coupling mill #1 and hot dipped galvanizing lines #4 and 5 in Flémalle, hot-rolled pickling, cold rolling and tin packaging lines in Tilleur). Production numbers in the table above do not include the production of these assets in 2019 until their disposal (namely, 1.2 million tonnes crude steel produced at ArcelorMittal Galati and 1.0 million tonnes at ArcelorMittal Ostrava for the 6 months of 2019).

3.	ArcelorMittal Eisenhüttenstadt decommissioned its bloom caster in 2019 due to technical obsolescence.

4.	ArcelorMittal España decommissioned its coke oven batteries at Aviles site in Q4 2019.

5.	ArcelorMittal Poland permanently idled its coke oven batteries #3&4 at Zdzieszowice coke plant in April 2019.

6.	The blast furnace, basic oxygen furnaces and slab caster at Krakow were temporarily idled in Q4 2019 due to market conditions.

7.	New organic coating line at Krakow was commissioned in mid-2019.

8.	ArcelorMittal Tubular Products Iasi commissioned a new pipe mill #6 in Q1 2019.

9.	ArcelorMittal Tubular Products Lexy decommissioned its pipe mill #1 at Lexy site in 2019.

---

---

---

---

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

2.	ArcelorMittal Kryvyi Rih temporarily idled its BF #8 in October 2019 for planned maintenance and also in response to market conditions.

3.	ArcelorMittal Kryvyi Rih commissioned its new billet caster #2 in June 2019.

4.	ArcelorMittal South Africa temporarily idled some of its downstream production lines at Vanderbijlpark (batch annealing lines, continuous annealing line, temper mills and the tinning line) in the course of 2019.

5.	ArcelorMittal South Africa restarted the melt shop at Vereeniging in January 2019.

---

---

---

---

---

---

---

---

---

---

1.

On September 28, 2017, ArcelorMittal announced a major $1 billion, investment program at its Mexican operations, which is focused on building ArcelorMittal Mexico’s downstream capabilities, sustaining the competitiveness of its mining operations and modernizing its existing asset base. The program is designed to enable ArcelorMittal Mexico to meet the anticipated increased demand requirements from domestic customers, realize in full ArcelorMittal Mexico’s production capacity of 5.3 million tonnes and significantly enhance the proportion of higher added-value products in its product mix, in-line with the Company’s Action 2020 plan. The main investment will be the construction of a new hot strip mill. Upon completion, the project will enable ArcelorMittal Mexico to produce approximately 2.5 million tonnes of flat rolled steel, approximately 1.8 million tonnes of long steel and the remainder made up of semi-finished slabs. Coils from the new hot strip mill will be supplied to domestic, non-auto, general industry customers. The hot strip mill project commenced late in the fourth quarter of 2017 and is expected to be completed in 2021.

2.	Investment in ArcelorMittal Dofasco (Canada) to modernize the hot strip mill. The project is to install two new state of the art coilers and runout tables to replace three end of life coilers. The strip cooling system will be upgraded and include innovative power cooling technology to improve product capability. The project is expected to be completed in 2021.

3.

In August 2018, ArcelorMittal announced the resumption of the Vega Do Sul expansion to provide an additional 700 thousand tonnes of cold-rolled annealed and galvanized capacity to serve the growing domestic market. The three-year, $0.3 billion investment program to increase rolling capacity with construction of a new continuous annealing line and CGL combiline (and the option to add an approximately 100 thousand tonnes organic coating line to serve construction and appliance segments), and upon completion, will strengthen ArcelorMittal’s position in the fast growing automotive and industry markets through Advanced High Strength Steel products. The investments will look to facilitate a wide range of products and applications whilst further optimizing current ArcelorMittal Vega facilities to maximize site capacity and its competitiveness, considering comprehensive digital and automation technology. Project completion is expected at the end of 2022.

---

4.	Although the Monlevade wire rod expansion project and Juiz de Fora rebar expansion were completed in 2015, both the melt shop expansion (in Juiz de Fora) and the sinter plant, blast furnace and meltshop (in Monlevade) projects are currently on hold and are expected to be completed upon Brazil domestic market recovery.

5.

ArcelorMittal had previously announced a Phase 2 project that envisaged the construction of 15 million tonnes of concentrate sinter fines capacity and associated infrastructure. The Phase 2 project was initially delayed due to the declaration of force majeure by contractors in August 2014 due to the Ebola virus outbreak in West Africa, and then reassessed following rapid iron ore price declines over the ensuing period. ArcelorMittal Liberia is now undertaking the engineering phase of a feasibility study to identify the optimal concentration solution for utilizing the resources at Tokadeh. ArcelorMittal Liberia has completed the detailed feasibility study to identify an optimal concentration solution for utilizing resources at Tokadeh and other deposits and is working on the final investment submission.

---

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

•

Proven reserves are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings 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.

---

---

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 64% to 66%. Exceptions in 2019 included the shipping of ore produced in Bosnia, Ukraine Underground and the Kazakhstan 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 2019 while the sinter fines produced for external customers in Brazil from the Serra Azul operations averaged approximately 63% and the lumps averaged 54%.

2.

The estimated mine life reported in this table corresponds to the duration of the production schedule of each operation based on the 2019 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 2019 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.

---

1.

The estimated mine life reported in this table corresponds to the duration of the production schedule of each operation based on the 2019 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 2019 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

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

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.	Depreciation charges for 2019 include 94 of depreciation of right-of-use assets recognized in property, plant and equipment following the adoption of IFRS 16 "Leases" as of January 1, 2019 with respect to the Company’s shipping business Global Chartering, of which ArcelorMittal sold a 50% controlling interest on December 31, 2019.

---

---

---

---

---

---

---

---

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.

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.

---

---

---

---

---

---

---

---

---

---

–	In the U.S., ASC is expected to grow within a range of +0% to +1% in 2020 (versus an estimated -2% contraction in 2019), with stronger ASC in flat products offsetting an anticipated decline in ASC for long products.

–	In Europe, ASC is expected to grow within a range of +1% to +2% in 2020 (versus over -4% estimated contraction in 2019); although automotive is expected to remain weak, the end of destocking is expected to support improved ASC for flat products, similarly the end of destocking should offset the impact of the slowdown in construction activity for long products ASC.

–	In Brazil, ASC is expected to rebound in 2020 with growth expected in the range of +4% to +5% (versus estimated -2.6% contraction in 2019) following the pronounced destocking of flat products in 2019 and expected growth in construction activity.

–	In the CIS, ASC growth in 2020 is expected to slow but remain positive within a range of +0% to +1% (versus +4% estimated growth in 2019).

–	As a result, overall World ex-China ASC in 2020 is expected to grow within the range of +2% to +2.5% (versus estimated -0.8% contraction in 2019).

–	In China, that in 2020 both GDP and steel demand growth are still likely to be weaker than what was expected prior to the Coronavirus outbreak (Steel demand now expected to grow only 0 to 1% in 2020, down from 1 to 2% previously expected).

---

1	With the adoption of IFRS 16, lease obligations have been shown as part of debt obligations (refer note 1, 6 and 7 to the consolidated financial statements for further details).

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

3	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

---

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, 2019.

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

6.	Mrs. Vanisha Mittal Bhatia is the daughter of Mr. Lakshmi N. Mittal and sister of Mr. Aditya Mittal.

---

---

---

1.	Age as of December 31, 2019.

---

---

---

---

---

•	Basic director’s remuneration: €151,956 ($173,990);

•	Lead Independent Director’s remuneration: €214,326 ($245,403);

•	Additional remuneration for the Chair of the Audit & Risk Committee: €29,484 ($33,759);

•	Additional remuneration for the other Audit & Risk Committee members: €18,144 ($20,775);

•	Additional remuneration for the Chairs of the other committees: €17,010 ($19,476); and

•	Additional remuneration for the members of the other committees: €11,340 ($12,984).

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.”

3	Long-term incentives for the 2015 financial year were 179,320 prior to the 2017 reverse stock split which consolidated each three existing shares in the Company without nominal value into one share without nominal value.

1.

Remuneration for non-executive Directors with respect to 2019 will be paid in 2020 subject to the shareholder approval at the annual general meeting to be held on May 5, 2020. Remuneration for non-executive Directors with respect to 2018, 2017, 2016 and 2015 was paid in 2019, 2018, 2017 and 2016, respectively, following the shareholder approval at the annual general meetings held on May 7, 2019, May 9, 2018, May 10, 2017 and May 4 , 2016, respectively. Slight differences between the years are possible, due to foreign currency effects.

---

1.	The annual remuneration is calculated for the approximately 20 employees with a labor contract with ArcelorMittal S.A.

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

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

---

---

---

•	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

•

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).

---

---

---

---

1.	The base salaries of the CEO and President and CFO were increased by 3.4% in 2019 .

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 nil and $4 million (net of reversal of expenses relating to unvested PSUs) for the year ended December 31, 2019 and December 31, 2018, respectively.

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

6.	Jim Baske was included until June 30, 2016, Davinder Chugh was included until July 20, 2016 and Robrecht Himpe was included as from July 1, 2016.

7.	Long-term incentives for the 2015 financial year were 179,320 for the CEO and 284,985 for the President and CFO and Executive Officers (Other GMB members for 2015) prior to the 2017 reverse stock split which consolidated each three existing shares in the Company without nominal value into one share without nominal value.

•	EBITDA targets at Group level: 30% ;

•	FCF targets at Group level: 20%;

•	ROCE targets at Group level: 20%;

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

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

•	EBITDA targets at Group, segment or Business unit level;

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

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

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

•	Health and safety performance targets at Group, Segment or Business unit level; and

---

•	Business specific measures for corporate functions.

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

---

•	To adapt to Action 2020 (Special grant)

---

---

---

---

(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.

---

---

---

•	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.

---

•

comprehensive business briefings intended to provide the directors 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 2019 covered health and safety processes, cyber security, risk management, corporate responsibility, carbon reduction strategy in steelmaking, capital allocation process, strategy. Business briefings took place at Board and committee 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;

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

---

•	conducting investigations into any matters, including whistleblower complaints, within its scope of responsibility and obtaining advice from outside legal, accounting, or other advisers, as necessary, to perform its duties and responsibilities.

•	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;

---

•	review the company’s sustainable development plan and associated management systems and ensure the group is well positioned to meet the evolving expectations of stakeholders, including investors, customers, regulators, employees and communities.

---

---

---

---

---

---

---

---

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

1	See note 8.3 to the consolidated financial statements, for vesting conditions.

---

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, 2019 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, 2019, 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 18,833 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 382,252,251 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 382,277,751 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, 2018 and 2017 , the Significant Shareholder (together with Mr. Mittal and Mrs. Mittal) held 37.41% and 37.41% 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) 29,250 stock options that can be exercised by senior management (other than Mr. Mittal) and (2) 18,833 stock options that can be exercised by Mr. Mittal, in each case within 60 days of December 31, 2019, i.e. 0.001% of the total amount of outstanding shares. If exercised, the shares underlying these options will either have to be delivered out of Treasury shares or by the issuance of additional shares.

4

Includes shares beneficially owned by directors and members of senior management 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, the ("New York Registry Shares"), which are registered (including in the name of the nominee of DTC) in a New York Share Register kept on behalf of ArcelorMittal by Citibank N.A., its New York transfer agent.

---

ITEM 8.	FINANCIAL INFORMATION

---

•

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.

ITEM 9.	THE OFFER AND LISTING

---

ITEM 10.	ADDITIONAL INFORMATION

---

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, (the "New York Registry Shares"), which are registered (including in the name of the nominee of DTC) in a New York Share Register kept on behalf of ArcelorMittal by Citibank N.A., its New York transfer agent.

---

---

•	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, 2019, 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.

---

•	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.

---

---

---

---

•	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.

•	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.

---

---

---

•	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.

---

---

---

---

•	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.

---

ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

---

---

ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

---

ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

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

ITEM 15.	CONTROLS AND PROCEDURES

---

•	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

•	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.

---

---

ITEM 16A.	AUDIT & RISK COMMITTEE FINANCIAL EXPERT

ITEM 16B.	CODE OF ETHICS

ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

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

ITEM 16H.	MINE SAFETY DISCLOSURE

---

ITEM 17.	FINANCIAL STATEMENTS

ITEM 18.	FINANCIAL STATEMENTS

ITEM 19.	EXHIBITS

---

*	Previously filed

---

---

---

---

•	We tested the effectiveness of internal controls over management’s valuation methodology and assumptions used, and estimates of future cash flows, including controls over the determination of the recoverable amount of the GCGUs and CGUs.

•	We evaluated management’s ability to reasonably estimate future cash flows by comparing actual results to management’s historical forecasts.

•	We evaluated the reasonableness of management’s cash flow forecasts by considering macroeconomic conditions, internal communications of management and the Board of Directors and holding discussions with relevant personnel.

•	We evaluated the impact of any changes in management’s cash flow forecasts from October 1, 2019, the annual measurement date for testing impairment of goodwill, to December 31, 2019.

•	For ArcelorMittal Italia, in addition to the above, our procedures included:

◦	we evaluated the impact of the termination notice on the determination of the CGUs as of December 31, 2019.

---

◦	we considered the terms of the lease purchase agreement and the Company’s communications with legal counsel, ILVA’s Commissioners, and other key stakeholders involved in the negotiations.

◦	with the assistance of our fair value specialists, we evaluated the reasonableness of the discount rate by:

◦	evaluating the reasonableness of the methodology used and the underlying source information used in the Company’s calculation of the discount rate.

◦	testing the mathematical accuracy of the calculation.

◦	developing an independent range of estimates and comparing the discount rate selected by management to our range.

•	We tested the effectiveness of internal controls over management’s valuation of deferred tax assets, including the controls over the assessment of the likelihood of future taxable profits being available and the length of the forecast periods.

•	With the assistance of our tax specialists knowledgeable in Luxembourg-specific and international tax planning matters, we evaluated whether management’s estimates of future taxable income were consistent with available evidence related to management’s assessment of the likelihood of future taxable profits being available and the length of the forecast periods.

•	We evaluated management’s ability to estimate future taxable income by comparing actual results to management’s historical forecasts, and considered the results in evaluating the current-year estimated future taxable income.

•	We evaluated management’s proposed tax planning strategies, potential tax implications of material current year or future planned transactions (acquisitions, divestitures, finance and shareholding restructuring) and the related impact on management’s determination of the forecast periods and amounts of deferred tax assets recognized.

---

---

---

---

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 11 for further information.

---

---

---

NOTE 1: ACCOUNTING PRINCIPLES

1.1 Basis of presentation

1.2 Use of judgment and estimates

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:

•

Deferred tax assets (note 10.4): 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 8.2): 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 9): 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.

---

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 2.2.3): 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.

•

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 life 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 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.

1.3.1 Adoption of new IFRS standards, amendments and interpretations applicable from January 1, 2019

On January 1, 2019, the Company adopted IFRS 16 "Leases", which has an impact on the disclosures in the consolidated financial statements of the Company.

•

IFRS 16 "Leases" was issued on January 13, 2016, and replaced International Accounting Standards "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. The Company adopted IFRS 16 “Leases” as of January 1, 2019, using the modified retrospective transition approach with right-of-use assets measured at an amount equal to the lease liability recognized at January 1, 2019, adjusted by the amount of any prepaid or accrued lease payments relating to those leases. In addition, the Company applied the practical expedient not to reassess whether or not a contract meets the definition of a lease on transition and accordingly applied IFRS 16 to all contracts entered into before January 1, 2019 and identified as leases in accordance with IAS 17 "Leases" and IFRIC 4 "Determining whether an Arrangement contains a lease". Also, the Company used the practical expedient of not recognizing lease liabilities and right-of-use assets for which the lease term ended within twelve months of the date of initial application and corresponding expenses have been recognized as part of short-term lease expenses in the statement of operations. On January 1, 2019, the Company recognized additional lease liabilities (discounted at the incremental borrowing rates at that date) and right of use assets (including reclassifications from intangible assets) for an amount of 1,136 and 1,405 , respectively (see note 7).

---

On January 1, 2019, the Company also adopted the following amendments which did not have a material impact on the consolidated financial statements of the Company:

•	IFRIC 23 “Uncertainty over Income Tax Treatments” issued by the IASB on June 7, 2017. 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 "Income Taxes".

•

Amendment to IFRS 9 "Financial Instruments" issued by the IASB on October 12, 2017 in respect of prepayment features with negative compensation and 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.

•

Amendment to IAS 28 “Investments in Associates and Joint Ventures” also issued on October 12, 2017 in relation to long-term interests in associates and joint ventures. The amendment clarifies that an entity should apply 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.

•

Amendments to IAS 19 “Employee benefits” issued by the IASB on February 7, 2018, 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.

On January 1, 2019, the Company also adopted the Annual Improvements 2015–2017 issued by the IASB on December 12, 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.

1.3.2 New IFRS standards , amendments and interpretations applicable from 2020 onward

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 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 is 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.

On September 26, 2019, the IASB published Interest Rate Benchmark Reform, Amendments to IFRS 9, IAS 39 and IFRS 7 (the amendments). The amendments provide relief from the specific hedge accounting requirements, so that entities would apply those hedge accounting requirements (highly probable forecast transaction and prospective effectiveness test under IFRS 9 which is applied by the Company) assuming that the interest rate benchmark is not altered as a result of the interest rate benchmark reform. Application of the relief is mandatory and is effective for annual periods beginning on or after January 1, 2020, with early application permitted. The requirements must be applied retrospectively. The Company does not expect that the adoption of these amendments will have a material impact to its consolidated financial statements as it is relieving the possible effects of the uncertainty due to the Interest rate benchmark reform "IBOR".

On January 23, 2020, the IASB issued narrow-scope amendments to IAS 1 "Presentation of Financial Statements" to clarify how to classify debt and other liabilities as current or non-current. The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity. The Company does not expect that the adoption of these amendments, which are effective for annual periods beginning on or after January 1, 2022, will have a material impact to its consolidated financial statements.

2.1 Basis of consolidation

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.

---

2.2 Investments in subsidiaries

2.2.1 List of subsidiaries

The table below provides a list of the Company’s principal operating subsidiaries at December 31, 2019 . 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 %
Acindar Industria Argentina de Aceros S.A.		Argentina		100.00 %
Europe
ArcelorMittal France S.A.S.		France		100.00 %	1
ArcelorMittal Belgium N.V.		Belgium		100.00 %
ArcelorMittal España S.A.		Spain		99.85 %
ArcelorMittal Flat Carbon Europe S.A.		Luxembourg		100.00 %
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 Duisburg GmbH		Germany		100.00 %
ArcelorMittal International Luxembourg S.A.		Luxembourg		100.00 %
ArcelorMittal Italia S.p.A.		Italy		94.45 %
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.("AMMC")		Canada		85.00 %
ArcelorMittal Liberia Ltd		Liberia		85.00 %
JSC ArcelorMittal Temirtau		Kazakhstan		100.00 %
PJSC ArcelorMittal Kryvyi Rih		Ukraine		95.13 %

1.	On July 1, 2019, ArcelorMittal Atlantique et Lorraine S.A.S. was merged into ArcelorMittal France S.A.S.

2.2.2 Translation of financial statements denominated in foreign currency

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, AMMC and ArcelorMittal International Luxembourg, whose functional currency is the U.S. dollar and ArcelorMittal Poland, 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.

Since 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") changed by 54.7 % and 47.9 % for the year ended December 31, 2019 and 2018, respectively, for this purpose. As a result of the inflation-related adjustments on non-monetary items, a gain of 64 and 45 was recognized in net financing costs for the year ended December 31, 2019 and 2018, respectively.

2.2.3 Business combinations

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.

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.

2.2.4 Acquisitions

Ilva (renamed ArcelorMittal Italia)

On November 1, 2018, ArcelorMittal completed the acquisition of Ilva S.p.A. and certain of its subsidiaries ("Ilva") following the signing on June 28, 2017 of a lease agreement with a conditional obligation to purchase between the commissioners appointed in the ongoing extraordinary administration proceedings to which the former Ilva business is subject and AM InvestCo Italy S.p.A. ("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 ("EC") of AM InvestCo's proposed acquisition of Ilva on September 21, 2017 and the submission of commitments on October 19, 2017. The EC 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

---

2.3.1) and the exit of Marcegaglia from AM InvestCo (Marcegaglia initially held a 15 % interest in AM InvestCo) completed on November 9, 2018 (see note 11.5.2).

Ilva (now ArcelorMittal Italia) is Europe’s largest single steel site and only integrated steelmaker in Italy with its main production facility based in Taranto. ArcelorMittal Italia 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 amounted 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 included a 54 liability corresponding to environmental capital expenditures already completed by the former Ilva business and which was refunded by ArcelorMittal to the latter. In September 2018, the former Ilva business' trade unions ratified a labor 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 committed to hire any workers who remain under the former Ilva business’ extraordinary administration. The 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 conditional purchase obligation, subject to certain conditions precedent (see note 9.3) . 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 ISP and ArcelorMittal 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 closing of the transaction, the acquisition-date fair value of the identifiable assets and liabilities of ArcelorMittal Italia was determined on a provisional basis as of December 31, 2018, in particular with respect to property, plant and equipment, environmental provisions, indemnification asset, tax implications and working capital balances at closing date. ArcelorMittal finalized the acquisition-date fair values during the fourth quarter of 2019. ArcelorMittal recognized provisions of 397 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 359 was classified as non-current assets. Current assets include trade receivables of 437 with gross contract amounts receivable of 501 and contractual cash flows not expected to be collected of 64 . Intangible assets include 201 relating to CO ₂ emission rights held by the former Ilva business at acquisition date (the Company also recognized liabilities of 158 relating to estimated emissions for 2018) and favorable land lease contracts for 61 . ArcelorMittal recognized a 209 bargain purchase gain in cost of sales in 2018 mainly as a 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. Following the finalization of the acquisition-date fair values, the bargain purchase gain decreased by 28 mainly as a result of the finalization of the environmental provisions ( 118 decrease of both environmental provision and indemnification asset), tax implications ( 74 ) and working capital balances. Property, plant and equipment increased by 92 .

Revenue and net loss of ArcelorMittal Italia for the year ended December 31, 2018 since acquisition date were 398 and ( 49 ) , respectively. The Company recognized acquisition-related costs of 25 in selling, general and administrative expenses for the year ended December 31, 2018. 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 (renamed AMSF)

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 which were completed in May 2018 (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. The Company completed its acquisition-date fair value of the identifiable assets and liabilities of AMSF in the first half of 2019 and recognized an increase of 8 in goodwill and other liabilities following a revised measurement of contingent liabilities. Other non-current assets include an 83 indemnification asset towards Votorantim S.A. relating to contingent liabilities of 93 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 ). Revenue and net loss of AMSF for the year ended December 31, 2018 since acquisition date were 285 and ( 108 ) , respectively. The Company recognized acquisition-related costs of 8 in selling, general and administrative expenses in 2018.

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 ArcelorMittal Italia and AMSF had been as of January 1, 2018.

Other

On June 4, 2019, the Company completed the acquisition of Münker Metallprofile GmbH ("Münker") for total consideration of € 48 million ( 54 ) of which € 44 million ( 46 net of cash acquired of 3 ) was paid at closing and € 4 million ( 5 ) payable contingent upon certain criteria. The acquisition of Münker will strengthen ArcelorMittal Downstream Solutions' construction business within the Europe segment. The Company completed its acquisition-date fair value of the identifiable assets and liabilities of Münker in the second half of 2019. It recognized 6 of goodwill and 34 , 11 and 22 of property, plant and equipment, intangible assets and current assets, respectively, following the final measurement. Revenue and net income since acquisition date were 45 and 2 , respectively.

Revenue and net loss attributable to the equity holders of the parent of the Company, for year ended December 31, 2019 were 70,646 and 2,454 , respectively, as though the acquisition date of Münker had been as of January 1, 2019.

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.

The Company concluded that the acquisitions of Electro-Re 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.

---

The table below summarizes the final acquisition-date fair value of the assets acquired and liabilities assumed in respect of Münker, AMSF and the former Ilva business in 2019:

	Münker			AMSF			Ilva
Current assets	22			262			1,156
Property, plant and equipment	34			600			1,118
Intangible assets	11			19			267
Other non-current assets	—			252			369
Total assets acquired	67			1,133			2,910
Deferred tax liabilities	( 8	)		( 45	)		( 74	)
Other liabilities	( 14	)		( 792	)		( 1,113	)
Total liabilities acquired	( 22	)		( 837	)		( 1,187	)
Net assets acquired	45			296			1,723
Non-controlling interests	—			—			—
Consideration paid, net	46			—			52
Consideration payable	5			328			1,490
Goodwill/(bargain purchase gain)	6			32			( 181	)

2.3 Divestments and assets held for sale

2.3.1 Divestments

Divestments in 2019

ArcelorMittal Italia remedies

On May 7, 2018, the EC approved the acquisition of Ilva (renamed "ArcelorMittal Italia"). As part of the approval, ArcelorMittal agreed to divest certain of its European assets (“ArcelorMittal Italia remedies”) which were part of the Europe reportable segment. The ArcelorMittal Italia remedies included the following three divestment packages.

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

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

On June 30, 2019, ArcelorMittal completed the sale of the ArcelorMittal Italia remedies to Liberty House Group ("Liberty"). The total consideration which consisted of amounts payable upon closing and deferred consideration in part contingent upon certain criteria, net of € 110 million ( 125 ) deposited in escrow was € 740 million ( 842 ) subject to customary

---

closing adjustments. Of this total amount, € 610 million ( 694 ) was received on June 28, 2019. The escrow which was subsequently drawn was to be used by Liberty for certain capital expenditure projects to satisfy commitments given in the EC approval process.

During 2019, prior to the completion of the disposal, the Company recorded an impairment charge in cost of sales of 497 to adjust the carrying amount of the disposal group to the sale proceeds of 692 including a cash consideration of 518 ( 694 , net of cash disposed of 34 , the escrow deposit of 125 and proceeds of 17 paid to a joint venture of the Company) and 174 of deferred consideration (of which 161 outstanding as of December 31, 2019 following subsequent receipt of a portion of the consideration receivable) recognized at present value and fair value of contingent consideration. The Company also assigned receivables of 404 mainly comprised of cash pooling balances to Liberty. The fair value measurement of ArcelorMittal Italia remedies was determined using the contract price, a Level 3 unobservable input, which was revised in the first half of 2019.

Global Chartering

On December 31, 2019, ArcelorMittal completed the sale of a 50 % controlling interest in Global Chartering Ltd. ("Global Chartering") to DryLog Ltd. ("DryLog") for total deferred consideration of 6 . The resulting net gain on disposal was 29 including the reclassification from other comprehensive income to the consolidated statements of operations of 33 foreign exchange translation gains. In connection with the disposal, the Company derecognized right-of-use assets and lease liabilities of 390 and 400 , respectively (see note 7).

Global Chartering is a Mauritius-based shipping company that handles shipping for a portion of the Company's raw materials through the chartering of vessels on a short- to long-term basis. Global Chartering's fleet includes owned and leased Capesize, Panamax and Supramax vessels on a medium- to long-term charter. Simultaneously, ArcelorMittal entered into a joint venture agreement with DryLog to operate jointly the Global Chartering fleet and certain other vessels chartered from DryLog. Accordingly, the Company's remaining 50 % interest in Global Chartering is accounted for under the equity method. The fair value measurement was determined using the selling price, a Level 3 unobservable input. At inception of the joint venture, certain of Global Chartering's lease terms were unfavorable compared to market rates and therefore the Company agreed to indemnify the joint venture for operating losses that could potentially arise within an agreed time frame if market rates do not improve and recognized accordingly in cost of sales a 126 provision (see note 9.1) representing the net present value of the maximum amount agreed.

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 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.

The table below summarizes the significant divestments :

	2019					2018						2017
	ArcelorMittal Italia remedies		Global Chartering Limited			Frýdek Místek			Votorantim remedies			AMTBA			Downstream Solutions Europe			Georgetown
Cash and cash equivalents	—		—			—			—			13			—			—
Other current assets	1,386		14			48			40			46			38			—
Property, plant and equipment	178		517			35			48			55			2			4
Other assets	11		21			—			—			10			17			—
Total assets	1,575		552			83			88			124			57			4
Current liabilities	1,046		229			31			4			52			18			1
Other long-term liabilities	241		311			4			—			7			12			2
Total liabilities	1,287		540			35			4			59			30			3
Total net assets	288		12			48			84			65			27			1
Assigned receivables	404		—			—			—			—			—			—
% of net assets sold	100	%	50	%		100	%		100	%		100	%		100	%		100	%
Total net assets disposed of	692		6			48			84			65			27			1
Cash consideration received, net of escrow deposit and cash disposed	518		( 4	)		39			26			65			6			19
Consideration receivable	174		6			10			58
Reclassification of foreign exchange reserves	72		33			15			—			—			21			—
Gain on disposal	72		29			16			—			—			—			18

---

2.3.2 Assets held for sale

The assets and liabilities of the Steelton facility in the United States ceased to be classified as held for sale at December 31, 2019 as the Company is no longer committed to a sale of the assets.

The table below provides the details for the entities classified as held for sale at December 31, 2018. The ArcelorMittal Italia remedies were disposed during 2019 as disclosed in note 2.3.1.

		December 31, 2018
		ArcelorMittal Italia 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

2.4 Investments in associates and joint arrangements

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

	December 31,
Category	2019			2018
Joint ventures	2,586			1,011
Associates	2,859			2,871
Individually immaterial joint ventures and associates 1	1,084			1,024
Total	6,529			4,906

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, 2019 and 2018 , and none of them have a carrying value exceeding 100 at December 31, 2019 and 2018 .

---

2.4.1 Joint ventures

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, 2019
Joint Ventures		AMNS India			Calvert			VAMA			Tameh			Borçelik			Total
Place of incorporation and operation 1		India			United States			China			Poland			Turkey
Principal Activity		Integrated flat steel producer 5,6			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, 2019		60.00 %			50.00 %			50.00 %			50.00 %			50.00 %
Current assets		2,318			1,604			313			171			508			4,914
of which cash and cash equivalents		444			62			81			75			106			768
Non-current assets		6,295			1,282			637			580			267			9,061
Current liabilities		5,922			984			485			183			378			7,952
of which trade and other payables and provisions		670			144			226			139			274			1,453
Non-current liabilities		189			764			147			244			49			1,393
of which trade and other payables and provisions		46			—			—			26			49			121
Net assets		2,502			1,138			318			324			348			4,630
Company's share of net assets		1,501			569			159			162			174			2,565
Adjustments for differences in accounting policies and other		48			6			—			—			( 33	)		21
Carrying amount in the statements of financial position		1,549			575			159			162			141			2,586
Revenue		—			3,504			772			499			1,141			5,916
Depreciation and amortization		—			( 63	)		( 31	)		( 37	)		( 24	)		( 155	)
Interest income		2			2			1			—			1			6
Interest expense		( 10	)		( 48	)		( 23	)		( 7	)		( 19	)		( 107	)
Income tax benefit (expense)		( 83	)		—			( 22	)		( 7	)		( 10	)		( 122	)
Profit (loss) from continuing operations		( 116	)		156			10			28			19			97
Total comprehensive income (loss)		( 116	)		156			10			28			19			97
Cash dividends received by the Company		—			57			—			9			12			78

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, 2019; voting interest was 48.01 % at December 31, 2019 .

3.	The non-current liabilities include 42 deferred tax liability.

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

5.	Adjustments in AMNS India correspond to transaction costs incurred to set up the joint venture.

6.	Includes AMNS Luxembourg, AMNS India and intermediate holding entities.

---

		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 (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.

---

		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 %			Ownership and voting rights % at **
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 (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.

ESIL (renamed AMNS India)

On December 11, 2019, following the unconditional approval received by the Indian Supreme Court of ArcelorMittal's acquisition plan ("the Resolution Plan") for Essar Steel India Limited ("ESIL") subsequently renamed AMNS India Limited ("AMNS India") on November 15, 2019, ArcelorMittal and Nippon Steel Corporation ("NSC"), Japan’s largest steel producer and the third largest steel producer in the world, created a joint venture to own and operate AMNS India with ArcelorMittal holding a 60 % interest and NSC holding 40 % in accordance with the second amended joint venture formation agreement signed as of December 8, 2019. ArcelorMittal and NSC contributed their respective initial equity funding of 1,362 and 891 into AMNS Luxembourg Holding S.A. ("AMNS Luxembourg"), the parent company of the joint venture. ArcelorMittal's 60 % interest is accounted for under the equity method. ArcelorMittal also transferred 360 cash proceeds (of which 293 recognized in 2019 and the remainder in 2018), including through a 193 equity contribution, into the joint venture following hedging programs entered into to hedge the volatility between the Indian Rupee and the U.S. dollar in relation to the acquisition of AMNS India. The total cash proceeds included 353 designated as cash flow hedge gains and the Company reflected in retained earnings NSC's 40 % entitlement in the amount of 141 in accordance with the final joint venture formation agreement.

---

On December 16, 2019, AMNS Luxembourg completed the acquisition of AMNS India. ArcelorMittal and NSC financed the joint venture for the acquisition of AMNS India through a combination of partnership equity of 2,253 and debt of 3,679 including 2,204 drawn by the joint venture under the 7 billion term facility agreement (see note 6.1.2) and 1,475 shareholder loan from NSC. The joint venture accounted for the acquisition of AMNS India as a business combination. Following the recent closing of the transaction, the acquisition-date fair value of identifiable assets and liabilities of AMNS India has been determined on a provisional basis, in particular with respect to intangible assets, property, plant and equipment, working capital balances, provisions and income taxes at closing date. The joint venture expects to complete its purchase price accounting during 2020.

AMNS India is an integrated flat steel producer, and the largest steel company in western India. AMNS India’s main steel manufacturing facility is located at Hazira, Gujarat in western India. It also has:

–	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

–

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.

The Resolution Plan which was approved for the acquisition of AMNS India included an upfront payment of 6.0 billion towards AMNS India’s debt resolution, with a further 1.1 billion of capital injection into AMNS India to support operational improvements, increase production levels and deliver enhanced levels of profitability. The Company provided a 0.6 billion performance guarantee in connection with the execution of the Resolution Plan, which terminated on December 31, 2019. In addition, the Resolution Plan includes a capital expenditure plan of 2.6 billion to be implemented in two stages over six years .

In the context of the creation of the AMNS India joint venture, the Company transferred the Uttam Galva Steels Ltd. payments (see note 4.6) to the joint venture. ArcelorMittal and NSC financed such payments through a combination of equity contributions into the joint venture of 173 and 115 , respectively, and debt of 597 including 367 drawn by the joint venture under the 7 billion term facility agreement and a 230 shareholder loan from NSC. The joint venture used such proceeds to repay the loan granted by ArcelorMittal for an amount of 680 on December 31, 2019.

On February 13, 2020 and pursuant to the follow-on funding requirement in accordance with the second amended joint venture formation agreement, AMNS Luxembourg completed an additional equity injection into AMNS India of 840 mainly through an additional 475 drawn under the 7 billion term facility agreement and a 325 shareholder loan from NSC.

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 NSC, 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.

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 Poland and external customers in the Czech Republic as well as the utilization of steel plant gases for energy production processes.

Borçelik

2.4.2 Associates

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, 2019
Associates		China Oriental			DHS Group			Gonvarri Steel Industries			Baffinland			Total
Financial statements reporting date		June 30, 2019			September 30, 2019			September 30, 2019			December 31, 2019
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, 2019		37.02 %			33.43 %			35.00 %			25.70 %
Current assets		2,920			1,385			2,062			479			6,846
Non-current assets		1,797			2,794			1,628			2,403			8,622
Current liabilities		1,837			402			1,038			663			3,940
Non-current liabilities		150			979			795			891			2,815
Non-controlling interests		44			122			218			—			384
Net assets attributable to equity holders of the parent		2,686			2,676			1,639			1,328			8,329
Company's share of net assets		994			895			574			341			2,804
Adjustments for differences in accounting policies and other		—			43			( 49	)		7			1
Other adjustments 2		5			27			22			—			54
Carrying amount in the statements of financial position		999			965			547			348			2,859
Revenue		3,102			1,795			3,724			454			9,075
Profit (loss) from continuing operations		249			( 116	)		82			( 72	)		143
Other comprehensive income (loss)		—			8			( 7	)		—			1
Total comprehensive income (loss)		249			( 108	)		75			( 72	)		144
Cash dividends received by the Company		57			—			13			—			70

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, 2019 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.

---

		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 (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.

---

		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 (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 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.

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.

B affinland

2.4.3 Other associates and joint ventures that are not individually material

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, 2019							December 31, 2018
		Associates		Joint Ventures		Total			Associates		Joint Ventures		Total
Carrying amount of interests in associates and joint ventures		304		780		1,084			310		714		1,024
Share of:
Income from continuing operations		26		87		113			8		80		88
Other comprehensive income (loss)		1		2		3			( 5 )		2		( 3	)
Total comprehensive income		27		89		116			3		82		85

During 2019, the Company converted 31 of shareholders loans into equity and made an additional cash injection of 30 to its joint venture ArcelorMittal Tubular Products Jubail (“Al Jubail”) to maintain 40.80 % interest in the joint venture in line with shareholding restructuring, which resulted in an increase of carrying amount of the investment from nil as of December 31, 2018 to 26 as of December 31, 2019 including the Company's share of accumulated net losses, which were recognized against shareholder loans as of December 31, 2018 (as carrying amount of investment was nil). The Company had outstanding shareholder loans given to Al Jubail for 109 and 131 as of December 31, 2019 and 2018, respectively.

2.4.4 Impairment of associates and joint ventures

For the years ended December 31, 2019 and 2018, the Company identified an impairment indicator with respect to its investment and 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.

---

The Company had investments in the following joint operations as of December 31, 2019 and 2018 :

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. The Company assumed the managing partner role of Hibbing Taconite company in August 2019 following the resignation of Cleveland-Cliffs without changes in the ownership group.

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.

2.5 Other investments

Other investments include those investments in equity instruments for which the Company does not have significant influence. 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, because these investments are held as long-term strategic investments that are not expected to be sold in the short to medium term. Other investments include the following:

	December 31,
	2019			2018
Erdemir	642			577
Stalprodukt S.A.	57			101
Powercell Sweden	23			12
Gerdau	—			115
Others	50			50
Investments in equity instruments at FVOCI	772			855

The Company’s significant investments in equity instruments at FVOCI at December 31, 2019 and 2018 are the following:

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

Erdemir 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 recognized in other comprehensive income were 196 and 127 for the year ended December 31, 2019 and 2018 , respectively.

---

Stalprodukt S.A.

Stalprodukt S.A. is a leading manufacturer and exporter of highly processed steel products based in Poland. Unrealized (losses) gains recognized in other comprehensive income were ( 32 ) and 11 for the year ended December 31, 2019 and 2018 , respectively.

Powercell Sweden AB

Powercell Sweden AB is the leading developer and producer of fuel cell stacks and systems, powered by hydrogen, and produce electricity and heat with no emissions other than water. In 2019 the Company sold in aggregate 3.4 million shares of Powercell Sweden AB for total consideration of 36 . The accumulated gain recognized in other comprehensive income of 19 was transferred to retained earnings. The remaining share of ownership after disposal is equal to 3.9 % .

Gerdau

Gerdau is the largest producer of long steel in the Americas and is headquartered in Brazil. The accumulated gain recognized in other comprehensive income was 48 at December 31 2018 . On July 16, 2019, the Company sold its 30 million shares, representing a 2.6 % stake of preferred shares for 116 in line with Company's ongoing efforts to optimize and unlock value from its asset portfolio that no longer coincides with the Company's investment strategy. The accumulated gain recognized in other comprehensive income of 51 was transferred to retained earnings.

Unconsolidated structured entities

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

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

	Year Ended December 31,
	2019			2018			2017
Share in net earnings of equity-accounted companies	252			567			537
Impairment charges	—			( 132	)		( 26	)
Gain (loss) on disposal	( 4	)		126			( 117	)
Dividend income	99			91			54
Total	347			652			448

For the year ended December 31, 2019, the loss on disposal include loss on dilution of the Company's interest in Baffinland (see note 2.4.2).

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, 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).

---

3.1 Reportable segments

The Company is organized in five operating and reportable segments, which are components engaged in business activities from which they 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. The Company's CODM is the CEO Office - comprising the Chairman and Chief Executive Officer, Mr. Lakshmi N. Mittal and the President and Chief Financial Officer of ArcelorMittal, 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, Ukraine 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.

---

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, 2019
Sales to external customers	18,478				6,927			37,487			6,487			1,165			71			—			70,615
Intersegment sales 2	77				1,186			234			350			3,672			353			( 5,872	)		—
Operating income (loss)	( 1,259	)			846			( 1,107	)		( 25	)		1,215			( 295	)		( 2	)		( 627	)
Depreciation and amortization	( 570	)			( 274	)		( 1,256	)		( 364	)		( 448	)		( 155	)		—			( 3,067	)
Impairment	( 1,300	)			—			( 525	)		( 102	)		—			—			—			( 1,927	)
Capital expenditures	727				328			1,353			513			480			171			—			3,572
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
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

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,
	2019			2018			2017
Operating (loss)/income	( 627	)		6,539			5,434
Income from investments in associates and joint ventures	347			652			448
Financing costs - net	( 1,652	)		( 2,210	)		( 875	)
(Loss) income before taxes	( 1,932	)		4,981			5,007
Income tax expense (benefit)	459			( 349	)		432
Net (loss) income (including non-controlling interests)	( 2,391	)		5,330			4,575

3.2 Geographical information

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

---

Sales (by destination)

	Year ended December 31,
	2019			2018			2017
Americas
United States	15,238			16,271			14,367
Brazil	5,094			4,982			4,149
Canada	3,004			3,563			3,034
Mexico	1,941			1,970			2,251
Argentina	814			960			1,230
Others	1,195			1,322			1,005
Total Americas	27,286			29,068			26,036
Europe
Germany	5,694			6,757			5,933
Poland	3,957			4,518			3,746
France	4,114			4,431			4,051
Spain	3,855			4,265			3,751
Italy	4,317			3,333			2,711
Czech Republic	1,244			1,782			1,400
Turkey	1,499			1,683			1,937
United Kingdom	1,434			1,471			1,370
Belgium	1,617			1,309			1,129
Netherlands	1,142			1,209			1,117
Russia	876			1,144			1,204
Romania	720			708			621
Others	4,899			5,653			4,948
Total Europe	35,368			38,263			33,918
Asia & Africa
South Africa	2,260			2,742			2,560
Morocco	583			628			596
Egypt	309			206			310
Rest of Africa	1,278			1,257			1,033
China	676			608			622
Kazakhstan	470			496			392
South Korea	380			365			259
India	95			92			163
Rest of Asia	1,910			2,308			2,790
Total Asia & Africa	7,961			8,702			8,725
Total	70,615			76,033			68,679

Revenues from external customers attributed to the country of domicile (Luxembourg) were 151 , 162 and 111 for the years ended December 31, 2019 , 2018 and 2017 , respectively.

---

Non-current assets ¹ per significant country:

	December 31,
	2019			2018
Americas
Canada	5,336			5,187
Brazil	4,254			4,259
United States	2,878			4,022
Mexico	1,408			1,163
Argentina	266			252
Venezuela	17			10
Others	16			19
Total Americas	14,175			14,912
Europe
France	4,293			4,363
Germany	2,665			2,607
Belgium 2	2,695			2,526
Poland	2,508			2,356
Ukraine	2,674			2,219
Spain	1,920			1,971
Italy	1,488			1,365
Luxembourg	1,231			1,229
Bosnia and Herzegovina	188			205
Romania 2	62			86
Czech Republic 2	31			24
Others	165			235
Total Europe	19,920			19,186
Asia & Africa
Kazakhstan	1,519			1,309
South Africa	568			625
Liberia	157			148
Morocco	92			93
Others	128			107
Total Asia & Africa	2,464			2,282
Unallocated assets	22,733			22,394
Total	59,292			58,774

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.	ArcelorMittal Ostrava, ArcelorMittal Galati and certain assets of ArcelorMittal Belgium were classified as held for sale at December 31, 2018 and sold in 2019 (see note 2.3.1 and 2.3.2).

---

3.3 Sales by type of products

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

	Year ended December 31,
	2019			2018			2017
Flat products	43,633			46,734			43,065
Long products	13,706			15,751			13,685
Tubular products	2,044			2,158			1,810
Mining products	1,165			1,009			985
Others	10,067			10,380			9,134
Total	70,615			76,033			68,679

3.4 Disaggregated revenue

Disaggregated revenue

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

Year ended December 31, 2019	NAFTA			Brazil			Europe			ACIS			Mining			Others			Total
Steel sales	17,669			6,467			33,759			5,789			—			—			63,684
Non-steel sales 1	122			66			1,130			239			1,117			—			2,674
By-product sales 2	114			93			816			135			—			—			1,158
Other sales 3	573			301			1,782			324			48			71			3,099
Total	18,478			6,927			37,487			6,487			1,165			71			70,615

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

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;

3. Other sales are mainly comprised of shipping and other services.

---

4.1 Revenue

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 of 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 9) .

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 received 354 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, 2019 to be recognized as revenue during 2020 as the Company’s contracts have an original expected duration of one year or less.

---

The tables below summarize the movements relating to the Company's trade receivable and other for the years ended December 31, 2019, 2018 and 2017.

	Year ended December 31,
	2019			2018			2017
Trade accounts receivable and other - opening balance	4,432			3,863			2,974
Performance obligations satisfied	70,615			76,033			68,679
Payments received	( 71,559	)		( 75,387	)		( 68,059	)
Impairment of receivables (net of write backs and utilization)	9			( 8	)		—
Reclassification of the period-end receivables to held for sale	—			( 182	)		—
Additions through business combinations	4			532			33
Foreign exchange and others	68			( 419	)		236
Trade accounts receivable and other - closing balance	3,569			4,432			3,863

4.2 Cost of sales

Cost of sales includes the following components:

	Year ended December 31,
	2019			2018			2017
Materials	47,809			46,842			42,813
Labor costs	9,094			9,206			8,842
Logistic expenses	4,951			4,974			4,161
Depreciation and amortization	3,067			2,799			2,768
Gain on bargain purchase 1	—			( 209	)		—
Impairment	1,927			994			206
Other	2,039			2,419			2,086
Total	68,887			67,025			60,876

1. See note 2.2.4

4.3 Trade accounts receivable and other

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. Trade receivables and the associated allowance are written off when ArcelorMittal has exhausted its recovery efforts and enforcement options.

---

Trade accounts receivable and allowance for lifetime expected credit losses

	December 31,
	2019			2018
Gross amount	3,698			4,605
Allowance for lifetime expected credit losses	( 129	)		( 173	)
Total	3,569			4,432

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,
	2019			2018
NAFTA	285			579
Brazil	702			864
Europe	1,983			2,348
ACIS	523			531
Mining	76			110
Total	3,569			4,432

Aging of trade accounts receivable

	December 31,									December 31,
	2019									2018
	Gross			Allowance			Total			Gross			Allowance			Total
Not past due	2,851			( 11	)		2,840			3,377			( 3	)		3,374
Overdue 1-30 days	452			( 2	)		450			691			( 3	)		688
Overdue 31-60 days	85			( 1	)		84			178			( 1	)		177
Overdue 61-90 days	43			—			43			97			( 1	)		96
Overdue 91-180 days	67			( 4	)		63			59			( 4	)		55
More than 180 days	200			( 111	)		89			203			( 161	)		42
Total	3,698			( 129	)		3,569			4,605			( 173	)		4,432

The movements in the allowance are calculated based on lifetime expected credit loss model for 2019 and 2018 following the adoption of IFRS 9 and incurred loss model for 2017. The allowances in respect of trade accounts receivable during the periods presented is as follows:

	Year ended December 31,
	2019			2018			2017
Allowance - opening balance	173			193			184
Additions	18			35			34
Write backs / utilization	( 27	)		( 29	)		( 38	)
Foreign exchange and others	( 35	)		( 26	)		13
Allowance - closing balance	129			173			193

---

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 of ArcelorMittal surrender the control, risks and benefits associated with the accounts receivable sold; therefore, the amount of receivables sold is recorded as a sale of financial assets and the balances are derecognized from the consolidated statements of financial position at the moment of sale. The Company classifies trade receivables subject to TSR programs as financial assets that are held to collect or to sell and recognized them at FVOCI (see note 6). The fair value measurement is determined based on the invoice amount net of TSR expense payable, a Level 3 unobservable input. The TSR expense is insignificant due to the rate applicable and the short timeframe between the time of sale and the invoice due date. Any loss allowance for these trade receivables is recognized in OCI.

4.4 Inventories

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 1,760 and 1,168 as of December 31, 2019 and 2018 , respectively, are comprised of the following:

	December 31,
	2019			2018
Finished products	5,821			7,464
Production in process	4,165			4,596
Raw materials	5,101			6,822
Manufacturing supplies, spare parts and other 1	2,209			1,862
Total	17,296			20,744

1.	Including spare parts of 1.6 billion and 1.3 billion , and manufacturing and other of 0.6 billion and 0.6 billion as of December 31, 2019 and 2018 , respectively.

Movements in the inventory reserve are as follows:

	Year ended December 31,
	2019			2018			2017
Inventory reserve - opening balance	1,168			1,239			1,097
Additions 1	726			423			442
Deductions / Releases 2	( 212	)		( 382	)		( 404	)
Foreign exchange and others	78			( 112	)		104
Inventory reserve - closing balance	1,760			1,168			1,239

1.	Additions in 2019 refer to write-downs of inventories excluding those utilized or written back during the same financial year. The additions in 2018 and 2017 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 prior periods in 2019 and correspond to write-backs and utilizations related to the current and prior periods in 2018 and 2017.

---

4.5 Prepaid expenses and other current assets

	December 31,
	2019			2018
VAT receivables	941			1,049
Prepaid expenses and non-trade receivables	696			416
Financial amounts receivable	350			304
Income tax receivable	102			106
Receivables from public authorities	137			125
Receivables from sale of financial and intangible assets	153			149
Derivative financial instruments	268			617
Other 1	109			68
Total	2,756			2,834

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

4.6 Other assets

Other assets consisted of the following:

	December 31,
	2019			2018
Derivative financial instruments	130			609
Financial amounts receivable	594			1,679
Long-term VAT receivables	285			322
Cash guarantees and deposits	164			185
Receivables from public authorities	51			172
Accrued interest	65			86
Receivables from sale of financial and intangible assets	131			61
Income tax receivable	25			18
Other 1	203			228
Total	1,648			3,360

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

Following the Indian Supreme Court ruling dated October 4, 2018, ArcelorMittal completed a series of payments to the financial creditors of Uttam Galva ("UG") and KSS Petron to clear overdue debts so that the Company's offer submitted for AMNS India remained eligible and could be considered by ESIL's Committee of Creditors. At December 31, 2018, financial amounts receivable incl uded 844 and 193 related to such payments to UG and KSS Petron, respectively, measured at fair value recognized in profit or loss as of December 31, 2018 (a Level 3 fair value estimate). In 2019, ArcelorMittal made additional payments of 83 . The fair value of the UG payments was determined on the basis of market multiples and a discounted cash flow model including market participant synergies. Unobservable inputs were used to measure fair value to the extent that relevant observable inputs were not available and include primarily the discount rate, growth rate, expected changes to average selling prices, shipments and direct costs. Assumptions for average selling prices and shipments were based on historical experience and expectations of future changes in the market.

On December 11, 2019, ArcelorMittal derecognized the UG payments as they were transferred to the AMNS India joint venture (see note 2.4.1).

---

4.7 Trade accounts payable and other

4.8 Accrued expenses and other liabilities

Accrued expenses and other liabilities are comprised of the following as of :

	December 31,
	2019			2018
Accrued payroll and employee related expenses	1,560			1,613
Accrued interest and other payables	927			976
Payable from acquisition of intangible, tangible & financial assets	1,559			1,332
Other amounts due to public authorities	507			540
Derivative financial instruments 1	308			190
Unearned revenue and accrued payables	49			58
Total	4,910			4,709

1.	Derivative financial instruments include 125 as of December 31, 2019 relating to the fair value of the put option granted to ISP in the framework of the acquisition of ArcelorMittal Italia. As of December 31, 2018 the option’s fair value of 124 was included in long-term liabilities (note 9.2).

5.1 Goodwill and intangible assets

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

	December 31,
	2019			2018
Goodwill on acquisitions	5,104			4,986
Concessions, patents and licenses	197			293
Customer relationships and trade marks	95			90
Other 1	36			359
Total	5,432			5,728

1. In 2018, o ther included 201 relating to CO2 emission rights, which were surrendered in 2019, and 77 related to favorable land lease contracts in ArcelorMittal Italia, which were reclassified as right-of-use assets upon adoption of IFRS 16 as of January 1, 2019 (see note 7)

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, 2017			Divestments and assets held for sale 1			Foreign exchange differences and other movements 2			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. See note 2.3.1 and 2.3.2

2. Other movements for Brazil include 24 related to the acquisition of AMSF (see note 2.2.4)

	December 31, 2018			Divestments and assets held for sale			Foreign exchange differences and other movements 1			December 31, 2019
NAFTA	2,198			—			35			2,233
Brazil	1,404			—			( 51	)		1,353
Europe	550			—			( 5	)		545
ACIS	834			—			139			973
Total	4,986			—			118			5,104

1. Other movements for Europe include 6 relating to the acquisition of Münker and 8 for Brazil relating to the increase in goodwill following the completion of the acquisition-date fair value of AMSF (see note 2.2.4).

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.

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, France, Germany, Luxembourg, Poland, 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, in South Africa, a CO ₂ tax system was introduced in 2019 and in Kazakhstan, the Emission Trading Scheme restarted operation on January 1, 2018. 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, 2017	766			1,214			96			2,076
Acquisitions	22			—			39			61
Acquisitions through business combinations (note 2.2.4)	2			—			317			319
Disposals	—			—			( 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
Acquisitions	17			—			65			82
Acquisitions through business combination (note 2.2.4)	—			12			—			12
Disposal	—			—			( 6	)		( 6	)
Foreign exchange differences	( 8	)		( 11	)		( 4	)		( 23	)
Transfers and other movements 1	( 107	)		4			( 351	)		( 454	)
Fully amortized intangible assets 2	( 17	)		—			—			( 17	)
At December 31, 2019	630			1,133			147			1,910
Accumulated amortization and impairment losses
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
Amortization charge	53			11			30			94
Foreign exchange differences	( 7	)		( 11	)		( 2	)		( 20	)
Transfers and other movements 1	( 48	)		—			( 1	)		( 49	)
Fully amortized intangible assets 2	( 17	)		—			—			( 17	)
At December 31, 2019	433			1,038			111			1,582
Carrying amount
At December 31, 2018	293			90			359			742
At December 31, 2019	197			95			36			328

1.

In 2019, transfers and other movements mainly relate to CO2 emission rights utilized from the acquisition of ArcelorMittal Italia amounting to 158 (see note 2.2.4) and favorable land lease contracts from the acquisition of ArcelorMittal Italia and advances for land use which were transferred to right-of-use assets upon implementation of IFRS 16 (see notes 1 and 7). In 2018, transfers and other movements correspond mainly to transfer from assets under construction into patents and licenses.

2.	Fully amortized assets correspond mainly to licenses in 2019 and 2018 .

5.2 Property, plant and equipment and biological assets

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

---

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

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 2019, during which the Company performed a review of the useful lives of its assets and determined there were no material changes to 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. 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.

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”).

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.

•	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.

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.

---

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

	Land, buildings and Improvements			Machinery,  equipment and other 2			Construction in progress			Right-of-use assets 4			Mining Assets			Total
Cost
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 (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 2.3.1)	( 43	)		( 215	)		( 2	)		—			—			( 260	)
Transfers (to)/ from assets held for sale (note 2.3.2)	( 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
Adoption of IFRS 16 (notes 1 and 7) 3	—			( 921	)		—			2,365			—			1,444
At January 1, 2019	10,879			43,141			4,363			2,365			3,901			64,649
Additions	35			471			3,245			259			26			4,036
Acquisitions through business combinations (note 2.2.4)	24			10			—			—			—			34
Foreign exchange differences	( 99	)		( 98	)		50			( 7	)		38			( 116	)
Disposals	( 66	)		( 654	)		( 16	)		( 4	)		( 19	)		( 759	)
Divestments (note 2.3.1)	—			( 130	)		—			( 484	)		—			( 614	)
Other movements 1	124			1,888			( 2,152	)		( 37	)		167			( 10	)
At December 31, 2019	10,897			44,628			5,490			2,092			4,113			67,220
Accumulated depreciation and impairment
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 2.3.1)	( 31	)		( 181	)		—			—			—			( 212	)
Transfers (to)/ from assets held for sale (note 2.3.2)	( 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
Adoption of IFRS 16 (notes 1 and 7) 3	—			( 558	)		—			597			—			39
At January 1, 2019	3,113			20,280			981			597			2,635			27,606
Depreciation charge for the year	338			2,171			—			343			121			2,973
Impairment (note 5.3)	154			1,202			9			65			—			1,430
Disposals	( 45	)		( 614	)		—			( 3	)		( 17	)		( 679	)
Foreign exchange differences	( 58	)		( 112	)		( 4	)		4			24			( 146	)
Divestments (note 2.3.1)	—			( 3	)		—			( 94	)		—			( 97	)
Other movements 1	( 14	)		( 35	)		5			( 55	)		1			( 98	)
At December 31, 2019	3,488			22,889			991			857			2,764			30,989
Carrying amount
At December 31, 2018	7,766			23,224			3,382			—			1,266			35,638
At December 31, 2019	7,409			21,739			4,499			1,235			1,349			36,231

1. Other movements predominantly represent transfers from construction in progress to other categories and retirement of fully amortized assets. In 2019, other movement also include 92 relating to finalization of acquisition date fair values of AM Italia (refer note 2.2.4).

2. Machinery, equipment and other includes biological assets of 59 and 49 as of December 31, 2019 and 2018 , respectively, and bearer plants of 38 and 38 as of December 31, 2019 and 2018 , respectively.

3. Includes additions due to implementation of IFRS 16 amounting to 1,136 as well as favorable terms of operating leases of ArcelorMittal Italia and amounts prepaid for the right of use of land, both reclassified from intangible assets (refer note 7).

4. Right-of-use assets as of December 31, 2018 include 921 of cost of assets and 558 of accumulated depreciation previously recognized under IAS 17 and presented within machinery, equipment and other. Upon implementation of IFRS 16, the right-of-use assets are presented separately in the table above.

---

The carrying amount of temporarily idle property, plant and equipment at December 31, 2019 and 2018 was 332 and 260 including 228 and 244 in Brazil, 14 and 14 in NAFTA, 88 and 2 in the Europe segment and 2 and 0 in the ACIS segment respectively.

The carrying amount of property, plant and equipment retired from active use and not classified as held for sale was 47 and 51 at December 31, 2019 and 2018 , respectively. Such assets are carried at their recoverable amount.

Assets pledged as security

Refer note 9.4 for information on assets pledged as security by the Company.

Capital commitments

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

Impairment charges recognized were as follows:

		Year ended December 31,
Type of asset		2019			2018			2017
Goodwill		—			34			—
Tangible assets		1,927			960			206
Total		1,927			994			206

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 date 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 2019 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 $ 63 per tonne to $ 80 per tonne for iron ore and $ 145 per tonne to $ 170 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 2019 (in %)	10.8		15.0		9.1		14.5
GCGU weighted average pre-tax discount rate used in 2018 (in %)	12.9		15.5		10.6		15.4

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, 2019. The total value in use calculated for all GCGUs decreased overall in 2019 as compared to 2018 . In 2018, the Company recognized a 18 and 16 impairment loss relating to goodwill in connection with the sale of the Votorantim remedies and the intended sale of the ArcelorMittal Italia remedies (see note 2.3.1).

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 and shipments). The Company believes that reasonably possible changes in key assumptions could cause an impairment loss to be recognized in respect of the NAFTA and ACIS segments.

ACIS produces a combination of flat and long products. Its facilities are located in Africa, Ukraine and the Commonwealth of Independent States. ACIS is significantly self-sufficient in raw materials. The Company believes that sales volumes, prices and discount rates are the key assumptions most sensitive to change. ACIS is also exposed to export markets and international steel prices which are volatile, reflecting the cyclical nature of the global steel industry, developments in particular steel consuming industries and macroeconomic trends of emerging markets, such as economic growth. Discount rates may be affected by changes in countries’ specific risks. The ACIS value in use model anticipates an increase in sales volumes in 2020 and 2021 compared to 2019 ( 11.5 million tonnes for the year ended December 31, 2019) followed by stable volumes thereafter. Average selling prices in the model are expected to increase in 2020 due to higher international raw material prices and stabilize subsequently in line with such long-term prices.

The NAFTA segment produces a combination of flat, long and tubular products. Its facilities are located in North America including Canada, the USA and Mexico. The segment is primarily focused on the domestic automotive industry in Canada, the USA while in Mexico a major investment program has been launched to build downstream capabilities in order to anticipate increased demand from domestic customers for flat and long products. The Company believes that sales volumes, prices and discount rates are the key assumptions most sensitive to change. The NAFTA model anticipates a decrease in sales volumes in 2020 compared to 2019 ( 20.9 million tonnes for the year ended December 31, 2019) followed by an increase in 2021 and stable volumes thereafter. Average steel selling prices in the model are expected to decrease slightly and stabilize after 2022.

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 cause the recoverable amount to equal respective carrying value as of the impairment test date (i.e.: October 1, 2019).

	2019
	NAFTA		ACIS
Excess of recoverable amount over carrying amount	789		152
Increase in pre-tax discount rate (change in basis points)	65		27
Decrease in average selling price (change in %)	0.37		0.29
Decrease in shipments (change in %)	1.06		1.00

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, 2019 , the Company determined it has 61 cash-generating units.

In the context of the termination notice sent to the Ilva Commissioners indicating ArcelorMittal's intent to withdraw from or terminate the lease and purchase agreement, which was followed by subsequent negotiations (see note 9.3), the Company determined that ArcelorMittal Italia represented a separate cash-generating unit as of December 31, 2019 with a carrying amount of 1,970 (including property, plant and equipment of 1,477 ) . In estimating its value in use, key assumptions impacting significantly the cash flow projections included the discount rate reflecting uncertainty associated with the ongoing negotiations, selling prices, shipments and direct costs resulting from the execution of the industrial plan as contractually agreed at inception of the lease.

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, 2019 , 2018 and 2017 :

2019

In 2019, the Company recognized a total impairment charge related to property, plant and equipment amounting to 1,927 , of which 1,300 relating to ArcelorMittal USA (NAFTA), 102 to ArcelorMittal South Africa (ACIS), and 525 in Europe, including 497 related to ArcelorMittal Italia remedies (see note 2.3.1).

During the six months ended June 30, 2019, the Company recognized an impairment charge for property, plant and equipment amounting to 600 relating to ArcelorMittal USA as a result of a downward revision of cash flow projections in particular with respect to near-term steel selling prices as follows:

Cash-Generating Unit

Country

Operating Segment

Impairment Recorded

2019 Pre-Tax Discount Rate

2018 Pre-Tax Discount Rate

Carrying amount of property, plant and equipment as of June 30, 2019

ArcelorMittal USA

USA

NAFTA

600

13.98

%

16.91

%

3,213

In the second half of 2019 , in connection with management’s annual test for impairment of goodwill, property, plant and equipment was also tested for impairment at that date. The Company recognized an impairment charge for property, plant and equipment amounting to 700 relating to ArcelorMittal USA in the NAFTA operating segment as a result of a downward revision of cash flow projections in particular with respect to near-term steel selling prices consisting of the following:

---

Cash-Generating Unit

Country

Operating Segment

Impairment Recorded

2019 Pre-Tax Discount Rate

2018 Pre-Tax Discount Rate

Carrying amount of property, plant and equipment as of December 31, 2019

ArcelorMittal USA

USA

NAFTA

700

10.17

%

16.91

%

2,568

In the same context, the Company recognized a impairment charge for property, plant and equipment of 75 relating to the Long Steel Products facility of Newcastle in ArcelorMittal South Africa as a result of a lower domestic volumes as follows:

Cash-Generating Unit

Country

Operating Segment

Impairment Recorded

2019 Pre-Tax Discount Rate

2018 Pre-Tax Discount Rate

Carrying amount of property, plant and equipment as of December 31, 2019

Long Steel Products

South Africa

ACIS

75

13.87

%

15.13

%

163

In addition, the Company recorded impairment charges for property, plant and equipment of ArcelorMittal South Africa of 27 including 20 with respect to the closure of the Saldanha facility.

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 ArcelorMittal Italia remedies 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 ArcelorMittal South Africa (ACIS) amounting to 206 .

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

---

6.1 Financial assets and liabilities

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)

6.1.1 Fair values versus carrying amounts

The estimated fair values of certain financial instruments have been determined using available market information or other valuation methodologies that require judgment in interpreting market data and developing estimates. The following table summarizes assets and liabilities based on their categories at December 31, 2019 :

---

	December 31, 2019
	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	4,867			—			4,867			—			—			—
Restricted cash	128			—			128			—			—			—
Trade accounts receivable and other	3,569			—			3,146			—			423			—
Inventories	17,296			17,296			—			—			—			—
Prepaid expenses and other current assets	2,756			1,305			1,047			136			—			268
Total current assets	28,616			18,601			9,188			136			423			268
Non-current assets:
Goodwill and intangible assets	5,432			5,432			—			—			—			—
Property, plant and equipment and biological assets	36,231			36,172			—			59			—			—
Investments in associates and joint ventures	6,529			6,529			—			—			—			—
Other investments	772			—			—			—			772			—
Deferred tax assets	8,680			8,680			—			—			—			—
Other assets	1,648			388			1,130			—			—			130
Total non-current assets	59,292			57,201			1,130			59			772			130
Total assets	87,908			75,802			10,318			195			1,195			398
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt	2,869			—			2,869			—			—			—
Trade accounts payable and other	12,614			—			12,614			—			—			—
Short-term provisions	516			485			31			—			—			—
Accrued expenses and other liabilities	4,910			1,075			3,527			—			—			308
Income tax liabilities	378			378			—			—			—			—
Total current liabilities	21,287			1,938			19,041			—			—			308
Non-current liabilities:
Long-term debt, net of current portion	11,471			—			11,471			—			—			—
Deferred tax liabilities	2,331			2,331			—			—			—			—
Deferred employee benefits	7,343			7,343			—			—			—			—
Long-term provisions	2,475			2,465			10			—			—			—
Other long-term obligations	2,518			501			1,779			—			—			238
Total non-current liabilities	26,138			12,640			13,260			—			—			238
Equity:
Equity attributable to the equity holders of the parent	38,521			38,521			—			—			—			—
Non-controlling interests	1,962			1,962			—			—			—			—
Total equity	40,483			40,483			—			—			—			—
Total liabilities and equity	87,908			55,061			32,301			—			—			546

---

	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

---

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, 2019
		Level 1			Level 2			Level 3			Total
Assets at fair value:
Investments in equity instruments at FVOCI		699			—			73			772
Trade accounts receivable and other subject to TSR programs*		—			—			423			423
Derivative financial current assets		—			268			—			268
Derivative financial non-current assets		—			3			127			130
Total assets at fair value		699			271			623			1,593
Liabilities at fair value:
Derivative financial current liabilities		—			144			164			308
Derivative financial non-current liabilities		—			101			137			238
Total liabilities at fair value		—			245			301			546

*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, 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.

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 2019 is mainly related to the sale of Gerdau (see note 2.5).

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.

---

Derivative financial assets and liabilities classified as Level 3 are described in note 6.1.5.

6.1.2 Gross debt

Gross debt includes bank debt, debenture loans and 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,
	2019			2018
Short-term bank loans and other credit facilities including commercial paper 1	1,838			1,968
Current portion of long-term debt	770			1,130
Lease obligations 2	261			69
Total	2,869			3,167

1.	The weighted average interest rate on short-term borrowings outstanding was 1.1 % and 1.3 % as of December 31, 2019 and 2018 , respectively.

2.	On January 1, 2019, the Company adopted IFRS 16 and recognized additional lease liabilities (discounted at the incremental borrowing rates at that date). In 2018, lease obligations corresponded to finance leases under IAS 17. See note 7.

In 2014, ArcelorMittal entered into certain short-term committed bilateral credit facilities. The facilities were subsequently extended annually. As of December 31, 2019 , the facilities, totaling approximately 0.9 billion , remain fully available.

On April 26, 2019, the Company amended a € 300 million term loan with a financial institution to extend the maturity to April 30, 2020. As of December 31, 2019, € 300 million ( 337 ) was outstanding.

On April 1, 2019 , ArcelorMittal entered into an agreement for financing with a financial institution for net proceeds of CAD 197 million ( 151 ) with repayment over several dates in 2020 and 2021 . As of December 31, 2019 , CAD 202 million ( 155 ) was outstanding.

Commercial paper

The Company has a commercial paper program enabling borrowings of up to € 1.5 billion . As of December 31, 2019 and 2018, the outstanding amount was 1,200 and 1,295 , respectively.

---

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		2019			2018
Corporate
5.5 billion Revolving Credit Facility 4	2023-2024		Floating				—			—
€750 million Unsecured Notes	2019		Fixed		3.00 %		—			858
500 Unsecured Notes	2020		Fixed		5.13 %		—			324
CHF 225 million Unsecured Notes	2020		Fixed		2.50 %		233			228
€600 million Unsecured Notes	2020		Fixed		2.88 %		316			685
1.0 billion Unsecured Bonds	2020		Fixed		5.25 %		—			623
1.5 billion Unsecured Notes	2021		Fixed		5.50 %		—			754
€500 million Unsecured Notes	2021		Fixed		3.00 %		320			570
€750 million Unsecured Notes	2022		Fixed		3.13 %		841			856
1.1 billion Unsecured Notes	2022		Fixed		6.25 %		657			656
€500 million Unsecured Notes	2023		Fixed		0.95 %		558			568
€750 million Unsecured Notes	2023		Fixed		1.00 %		838			—
€1 billion Unsecured Notes	2024		Fixed		2.25 %		1,131			—
750 Unsecured Notes	2024		Fixed		3.60 %		746			—
500 Unsecured Notes	2025		Fixed		6.13 %		498			497
€750 million Unsecured Notes	2025		Fixed		1.75 %		834			—
750 Unsecured Notes	2026		Fixed		4.55 %		745			—
500 Unsecured Notes	2029		Fixed		4.25 %		493			—
1.5 billion Unsecured Bonds	2039		Fixed		7.00 %		671			670
1.0 billion Unsecured Notes	2041		Fixed		6.75 %		428			428
Other loans	2021		Fixed		3.10% - 3.46%		151			114
EIB loan	2025		Fixed		1.16 %		344			401
7.0 billion Term Facility 3	2020		Floating		3.09 %		—			1,000
Other loans	2021 - 2035		Floating		0.35% - 4.06%		1,218			639
Total Corporate							11,022			9,871
Americas
Other loans	2020 - 2030		Fixed/Floating		0.0% - 10.0%		81			84
Total Americas							81			84
Europe, Asia & Africa
EBRD Facility	2024		Floating		3.8% - 4.1%		175			50
Other loans	2020 - 2029		Fixed/Floating		0.0% - 5.8%		97			86
Total Europe, Asia & Africa							272			136
Total							11,375			10,091
Less current portion of long-term debt							( 770	)		( 1,130	)
Total long-term debt (excluding lease obligations)							10,605			8,961
Long-term lease obligations 2							866			355
Total long-term debt, net of current portion							11,471			9,316

1.	Rates applicable to balances outstanding a t December 31, 2019 . For debt that has been redeemed in its entirety during 2019 , the interest rates refer to the rates at repayment date.

2.	Net of current portion of 261 and 69 as of December 31, 2019 and December 31, 2018, respectively. Further information regarding leases is provided in note 7.

3.	Amount outstanding in 2018 was repaid on March 22, 2019 and March 29, 2019.

4.	On November 27, 2019 , ArcelorMittal exercised the option to extend the maturity by one year to December 19, 2024 . The commitments are 5.5 billion until December 19, 2023 and 5.4 billion until December 19, 2024 .

---

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 incorporated initially a single tranche of 5.5 billion maturing on December 19, 2023. The Facility may be used for general corporate purposes. On November 27, 2019, all lenders except one approved a one year extension request. The new maturity date is December 19, 2024. The commitments are 5.5 billion until December 19, 2023 and 5.4 billion until December 19, 2024. As of December 31, 2019 , 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.

On September 30, 2010, ArcelorMittal entered into 500 revolving multi-currency letter of credit facility (the "Letter of Credit Facility"). The Letter of Credit Facility is used by the Company and its subsidiaries for the issuance of letters of credit and other instruments. The terms of the letters of credit and other instruments contain certain restrictions as to duration. The Letter of Credit Facility was amended on October 26, 2012 and September 30, 2014 to reduce its amount to 450 and to 350 , respectively. On July 31, 2019, the Company refinanced its Letter of Credit Facility by entering into a 350 revolving multi-currency letter of credit facility, which matures on July 31, 2022.

Bonds

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 ("EMTN Program"). The proceeds of the issuance were used for general corporate purposes.

On March 11, 2019, ArcelorMittal issued 750 4.55 % Notes due 2026 under the Company's automatic shelf registration statement filed with the U.S. Securities and Exchange Commission. The proceeds of the issuance were used towards repayment of existing debt including the 1 billion then outstanding under the 7 billion term facilities agreement entered into in connection with the acquisition of AMNS India through the joint venture with NSC (see below).

On March 25, 2019, at maturity, ArcelorMittal repaid its € 750 million ( 854 ) Fixed Rate Notes.

On July 4, 2019, ArcelorMittal completed the issuance of € 250 million ( 285 ) of 2.25 % Fixed Rate Notes due 2024, which were consolidated and formed a single series with the existing € 750 million 2.25 % Fixed Rate Notes due 2024 originally issued on January 17, 2019 under its € 10 billion EMTN Program. The proceeds of the issuance were used for general corporate purposes.

On July 16, 2019, ArcelorMittal issued 750 of 3.6 % Notes due 2024 and 500 of 4.25 % Notes due 2029. The proceeds were used for general corporate purposes including repayments of existing indebtedness and to partially pre-fund commitments under the AMNS India acquisition.

On August 30, 2019, ArcelorMittal redeemed all of the outstanding 324 of its 500 5.125 % Notes due June 1, 2020 and the outstanding 626 of its 1 billion 5.25 % Notes due August 5, 2020 for a total aggregate purchase price including accrued interest and premium on early repayment of 981 , which was financed with existing cash and liquidity.

On November 19, 2019, ArcelorMittal issued € 750 million ( 830 ) of 1 % Notes due May 19, 2023 and € 750 million ( 830 ) of 1.75 % Notes due November 19, 2025.

On December 11, 2019, pursuant to cash tender offers, ArcelorMittal repurchased:

- € 318 million ( 352 ) of its 2.875 % Notes due July 6, 2020 (the “2020 Notes”) for a total aggregate purchase price (including premiums and accrued interest) of € 328 million ( 363 ). Following this purchase, € 282 million ( 312 ) principal amount of the 2020 Notes remained outstanding.

- € 214 million ( 238 ) of its 3 % Notes due April 9, 2021 (the “2021 Notes”) for a total aggregate purchase price (including premiums and accrued interest) of € 227 million ( 252 ). Following this purchase, € 286 million ( 316 ) principal amount of the 2021 Notes remained outstanding.

---

On December 27, 2019, ArcelorMittal redeemed all of the outstanding 756 of its 5.5 % Notes due March 1, 2021, for a total aggregate purchase price including accrued interest and premium on early repayment of 800 , which was financed with existing cash resources, including the proceeds of its Eurobond offering that closed on November 19, 2019.

On February 5, 2020, ArcelorMittal gave notice to redeem all of the outstanding 659 of its 6.25 % Notes due February 25, 2022 on March 9, 2020.

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		Interest rate 1		Issued at
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 %
€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 %
€750 million Unsecured Notes		Nov 19, 2019		May 19, 2023		1.00 %		99.89 %
€250 million Unsecured Notes		Jul 4, 2019		Jan 17, 2024		2.25 %		105.59 %
€750 million Unsecured Notes		Jan 17, 2019		Jan 17, 2024		2.25 %		99.72 %
750 Unsecured Notes		Jul 16, 2019		Jul 16, 2024		3.60 %		99.86 %
500 Unsecured Notes		Jun 1, 2015		Jun 1, 2025		6.13 %		100.00 %
€750 million Unsecured Notes		Nov 19, 2019		Nov 19, 2025		1.75 %		99.41 %
750 Unsecured Notes		Mar 11, 2019		Mar 11, 2026		4.55 %		99.72 %
500 Unsecured Notes		Jul 16, 2019		Jul 16, 2029		4.25 %		99.00 %
1.0 billion Unsecured Bonds		Oct 8, 2009		Oct 15, 2039		7.00 %		95.20 %
500 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, 2019.

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, predominantly in France, Belgium and Spain, but also in Poland and Luxembourg. This operation benefits from a guarantee from the European Union under the European Fund for Strategic Investments. As of December 31, 2019 , € 306 million ( 344 ) was outstanding.

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 AMNS India. The agreement had an initial term of one year (until November 20, 2019 ), subject to ArcelorMittal’s option to extend the term by six months . The agreement includes the same leverage ratio financial covenant as that included in the Company’s 5.5 billion revolving credit facility. The facility may be used for certain payments by ArcelorMittal as well as by AMNS Luxembourg, the parent company of the AMNS India joint venture in partnership with NSC (see note 2.4.1) . Any amounts borrowed by AMNS Luxembourg under the agreement are irrevocably and unconditionally guaranteed by ArcelorMittal. On November 29, 2018, 1 billion was drawn under this term facility agreement by ArcelorMittal and subsequently repaid in March 2019. On June 12, 2019, the contractual maturity date was extended to June 30, 2020 with one extension possible until December 31, 2020. AMNS Luxembourg has drawn under the facility to finance the portion of the initial funding requirement beyond the shareholders’ equity contributions and NSC’s share of the debt financing. On December 9, 2019, 2,571 was drawn under the facilities agreement by AMNS Luxembourg and was outstanding on December 31, 2019. On February 10, 2020, an additional 475 was drawn under the facility by AMNS Luxembourg, increasing the outstanding amount as of such date to 3,046 .

---

On December 21, 2018, the Company entered into a facility agreement with a group of lenders for € 235 million to finance the construction of a new hot strip mill in Mexico. This facility became effective upon issuance of a guarantee by the Oesterreichische Kontrollbank AG in March 2019. The last installment under this agreement is due 8½ years after the starting date of the credit facility (which means the earlier of (a) the date of issue of the provisional acceptance certificate for the hot strip mill and (b) June 30, 2021). The outstanding amount in total as of December 31, 2019 was € 126 million ( 142 ).

On May 21, 2019, ArcelorMittal entered into a bilateral term loan due May 20, 2022. The bilateral term loan was fully drawn on June 3, 2019 and was outstanding as of December 31, 2019 for an amount of € 125 million ( 142 ).

On July 1, 2019, ArcelorMittal completed the offering of a € 450 million ( 512 ) variable rate loan in the German Schuldschein market. The proceeds of the issuance were used for general corporate purposes.

On December 20, 2019, ArcelorMittal entered into a € 100 million bilateral term loan due June 20, 2023. The bilateral term loan was fully available as of December 31, 2019. On January 30, 2020, € 100 million ( 110 ) bilateral term loan was fully drawn.

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

Americas

1 billion senior secured asset-based revolving credit facility

On May 23, 2016, ArcelorMittal USA LLC signed a 1 billion senior secured asset-based revolving credit facility maturing on May 23, 2021. The facility was amended and extended on August 22, 2019 and now matures on August 21, 2024. 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, 2019 , the facility was fully available.

Other loans

Other loans relate mainly to loans contracted by ArcelorMittal subsidiaries in Mexico 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, 2019 , 175 was drawn under the agreement.

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. The facility was amended and extended on July 26, 2019 and now matures on July 26, 2022. 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, 2019, 1.2 billion South African rand ( 81 ) was drawn.

Other loans

Other loans mainly relate to loans contracted by ArcelorMittal subsidiaries 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 ( € 6,922 million as of December 31, 2019 ) as a hedge of certain euro denominated investments ( € 8,070 million as of December 31, 2019 ) 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, 2019 , the Company recognized 109 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.

Maturity profile

As of December 31, 2019 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
2020		2,869
2021		994
2022		1,956
2023		2,185
2024		2,062
Subsequent years		4,274
Total		14,340

Fair value

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, 2019	Carrying amount			Fair Value
				Level 1			Level 2			Level 3			Total
Instruments payable bearing interest at fixed rates	10,999			9,963			1,747			—			11,710
Instruments payable bearing interest at variable rates	1,503						1,501			—			1,501
Total long-term debt, including current portion	12,502			9,963			3,248			—			13,211
Short term bank loans and other credit facilities including commercial paper	1,838			—			1,854			—			1,854

---

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

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.

6.1.3 Cash and cash equivalents, restricted cash and reconciliations of cash flows

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 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, 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,
	2019			2018
Cash at bank	3,443			1,832
Term deposits	246			283
Money market funds 1	1,178			57
Total	4,867			2,172

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.

---

Reconciliation of liabilities arising from financing activities

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.

	Long-term debt, net of current portion			Short-term debt and current portion of long term debt
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 (note 2.3.2)	( 77	)		—
Other movements 2	97			14
Balance as of December 31, 2018 (note 6.1.2)	9,316			3,167
Adoption of IFRS 16 (notes 1 and 7)	893			243
Balance as of January 1, 2019	10,209			3,410
Proceeds from long-term debt	5,772			—
Payments of long-term debt	( 3,299	)		—
Amortized cost	7			13
Unrealized foreign exchange effects	( 78	)		( 42	)
Proceeds from short-term debt	—			600
Payments of short-term debt	—			( 1,811	)
Payments of principal portion of lease liabilities (note 7)	( 10	)		( 310	)
Additions to lease liabilities (notes 5.2 and 7)	185			74
Current portion of long-term debt	( 1,031	)		1,031
Derecognition of lease liabilities following the divestment of Global Chartering (note 2.3.1)	( 311	)		( 89	)
Other movements	27			( 7	)
Balance as of December 31, 2019 (note 6.1.2)	11,471			2,869

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

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

---

6.1.4 Net debt

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, 2019 and December 31, 2018 :

As of December 31, 2019	Total USD			EUR			USD			CHF			PLN			CAD			Other (in USD)
Short-term debt and current portion of long-term debt	2,869			1,966			248			233			20			174			228
Long-term debt, net of current portion	11,471			6,240			4,754			—			239			106			132
Cash and cash equivalents including restricted cash	( 4,995	)		( 2,986	)		( 1,383	)		( 2	)		( 64	)		( 32	)		( 528	)
Net debt	9,345			5,220			3,619			231			195			248			( 168	)

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	)

6.1.5 Derivative financial instruments

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.

Derivative financial instruments classified as Level 2:

The following tables summarize this portfolio :

	December 31, 2019
	Assets						Liabilities
	Notional Amount			Fair Value			Notional Amount			Fair Value
Foreign exchange rate instruments
Forward purchase contracts	1,187			29			2,633			( 36	)
Forward sale contracts	1,716			42			705			( 4	)
Currency swaps sales	—			—			500			( 41	)
Exchange option purchases	2,317			38			1,030			( 4	)
Exchange options sales	1,213			10			1,418			( 5	)
Total foreign exchange rate instruments				119						( 90	)
Raw materials (base metals), freight, energy, emission rights
Term contracts sales	250			29			182			( 7	)
Term contracts purchases	419			117			1,479			( 142	)
Options sales/purchases	12			6			10			( 6	)
Total raw materials (base metals), freight, energy, emission rights				152						( 155	)
Total				271						( 245	)

	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 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	)

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.

---

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 11.2). 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 $ 162 and volatility of 24 % . 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 computed unobservable volatility data during 2019 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. Following the repayment of notes issued by subsidiaries to the Company which were linked to the value of Erdemir shares in 2019 as described in note 11.2, the unobservable volatility data from the movement of Erdemir shares will no longer impact the valuation. A 10% increase or decrease in Hera Ermac share prices would result in a 83 % and 73 % increase and decrease of the fair value of the call option at December 31, 2019 , 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 change per metric ton in the price of hot rolled steel would result in a 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, 2019, the fair valuation of the pellet purchase agreement was based on the future average US domestic steel price of $ 566 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 ArcelorMittal Italia (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, 2017	—			984			( 264	)		720
Change in fair value	( 124	)		( 501	)		( 304	)		( 929	)
Balance as of December 31, 2018	( 124	)		483			( 568	)		( 209	)
Change in fair value	( 1	)		( 356	)		392			35
Balance as of December 31, 2019	( 125	)		127			( 176	)		( 174	)

1.	The change in fair value in 2018 was recognized through the business combination (see note 2.2).

---

6.1.6 Other non-derivative financial assets and liabilities

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. 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.

All fair value movements for investments in equity instruments at FVOCI, including the difference between the acquisition cost and the current fair value, are recorded in OCI and are not reclassified to the consolidated statements of operations. Investments in equity instruments at FVOCI are exempt from the impairment test under IFRS 9 because the fair value of the investment is recorded in OCI and not recycled to profit and loss.

Financing costs - net recognized in the years ended December 31, 2019 , 2018 and 2017 are as follows:

	Year ended December 31,
	2019			2018			2017
Interest expense	( 695	)		( 687	)		( 879	)
Interest income	88			72			56
Change in fair value adjustment on call option on mandatory convertible bonds and pellet purchase agreement (note 6.1.5)	( 320	)		( 572	)		578
Accretion of defined benefit obligations and other long term liabilities	( 405	)		( 349	)		( 353	)
Net foreign exchange result	4			( 235	)		546
Other 1	( 324	)		( 439	)		( 823	)
Total	( 1,652	)		( 2,210	)		( 875	)

1.

Other mainly includes expenses related to true sale of receivables (“TSR”) programs and bank fees. It also includes premiums and fees of 71 relating to the bonds early redeemed in 2019 ( 104 and 389 of premiums and fees relating to bonds early redeemed in 2018 and 2017 , respectively). In 2017, other also includes expenses relating to the extension of the mandatory convertible bonds (see note 11.2) of 92 .

---

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, energy and emissions. 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,
	2019			2018
Total equity	40,483			44,108
Net debt (including nil and 67 cash and debt classified as held for sale as of December 31, 2019 and December 31, 2018 respectively)	9,345			10,196
Gearing	23.1	%		23.1	%

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, 2019, the long-term debt was comprised of 88 % fixed rate debt and 12 % 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, Kazakhstani 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.

---

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 (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 the Indian Rupee and U.S. dollar in relation to the acquisition of AMNS India. The hedging programs generated 360 gain (gross) recognized in the AMNS India joint venture (note 2.4.1).

Foreign currency sensitivity analysis

As of December 31, 2019, 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, 2019
	Trade receivables			Trade payables
USD	810			5,179
EUR	1,391			4,901
BRL	491			566
CAD	34			357
KZT	60			186
ZAR	173			364
MXN	70			50
UAH	72			157
PLN	116			498
ARS	47			71
Other	305			285
Total	3,569			12,614

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	1,530			5,391			1,252			4,411
BRL	540			623			442			509
CAD	37			393			31			321
KZT	66			205			54			167
ZAR	190			400			156			328
MXN	77			55			63			45
UAH	79			173			65			141
PLN	128			548			104			448
ARS	52			78			42			64

---

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, 2019, and as such are sensitive to movements in mainly foreign 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, 2019
	Carrying amount			Contractual Cash Flow			2020			2021			from 2022 to 2024			After 2024
Non-derivative financial liabilities
Bonds	( 9,398	)		( 12,227	)		( 880	)		( 643	)		( 5,542	)		( 5,162	)
Loans over 100	( 1,968	)		( 2,405	)		( 534	)		( 453	)		( 1,014	)		( 404	)
Trade and other payables	( 12,614	)		( 12,619	)		( 12,619	)		—			—			—
Other loans and lease	( 2,974	)		( 3,257	)		( 1,886	)		( 297	)		( 528	)		( 546	)
Total	( 26,954	)		( 30,508	)		( 15,919	)		( 1,393	)		( 7,084	)		( 6,112	)
Derivative financial liabilities
Equity contracts (Put options)	( 125	)		( 125	)		( 125	)		—			—			—
Foreign exchange contracts	( 90	)		( 90	)		( 49	)		—			—			( 41	)
Other commodities contracts 1	( 331	)		( 331	)		( 134	)		( 76	)		( 103	)		( 18	)
Total	( 546	)		( 546	)		( 308	)		( 76	)		( 103	)		( 59	)

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

---

	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.

Cash flow hedges

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

	December 31, 2019
	Assets/ (liabilities)			(Outflows)/inflows
	Fair value			3 months and less			3-6 months			6-12 months			2021			After 2021
Foreign exchange contracts	46			67			( 17	)		( 4	)		—			—
Commodities	( 275	)		( 12	)		( 27	)		( 40	)		( 47	)		( 149	)
Emission rights	88			( 4	)		—			92			—			—
Total	( 141	)		51			( 44	)		48			( 47	)		( 149	)

	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 1	( 588	)		( 8	)		( 39	)		( 77	)		( 143	)		( 321	)
Emission rights	317			—			—			206			111			—
Total	58			321			( 35	)		129			( 33	)		( 324	)

1.

The commodities balance as of December 31, 2018 shown above has been revised to correct the prior period disclosure, increasing the liability balance of commodities by 568 for the special payment in the pellet purchase agreement described in note 6.1.5. The revision only impacted the amount disclosed above and the hedging instruments table below and otherwise had no impact on the Company’s consolidated financial statements. The Company has evaluated the impact of the revision and determined that it did not have a material impact on any of its prior period annual consolidated financial statements.

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, 2019
	Cash flow reserve			(Expense)/income
	Carrying amount			3 months and less			3-6 months			6-12 months			2021			After 2021
Foreign exchange contracts	13			9			1			3			—			—
Commodity contracts	( 106	)		( 16	)		( 19	)		( 27	)		( 44	)		—
Emission rights	310			72			73			145			16			4
Total	217			65			55			121			( 28	)		4

	December 31, 2018
	Cash flow reserve			(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

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.

	December 31, 2019
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
Cash flow hedges
Foreign exchange risk - Option/Forward contracts	5,207			80			( 34	)		Prepaid expenses and other current assets/Accrued expenses and other liabilities
Price risk - Commodities forwards 1	531			14			( 93	)		Prepaid expenses and other current assets/Accrued expenses and other liabilities
Price risk - Commodities forwards 1	721			—			( 196	)		Other assets/Other long-term obligations
Price risk - Emission rights forwards	559			104			( 16	)		Prepaid expenses and other current assets/Accrued expenses and other liabilities
Total	—			198			( 339	)

1.	Including energy forwards

---

	December 31, 2019
Hedging Instruments	Cash flow hedge reserve at December 31, 2018			Hedging gains or losses of the reporting period that were recognized in OCI			Gains or losses reclassification adjustment and hedge ineffectiveness			Basis adjustment			Line item in the statement of comprehensive income that includes the reclassification adjustment and hedge ineffectiveness		Cash flow hedge reserve at December 31, 2019
Cash flow hedges
Foreign exchange risk - Option/Forward contracts	282			76			( 4	)		( 323	)		Sales		31
Price risk - Commodities forwards	( 399	)		272			21			—			Sales, Cost of sales		( 106	)
Price risk - Emission rights forwards	778			( 32	)		( 436	)		—			Cost of sales		310
Total	661			316			( 419	)		( 323	)				235

	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
Cash flow hedges
Foreign exchange risk - Option/Forward contracts	7,465			332			—			Prepaid expenses and other current assets
Price risk - Commodities forwards	350			—			( 124	)		Accrued expenses and other liabilities
Price risk - Commodities forwards	491			—			( 454	)		Other long-term obligations
Price risk - Energy forwards	765			—			( 9	)		Other long-term obligations
Price risk - Emission rights forwards	1,091			205			—			Prepaid expenses and other current assets
Price risk - Emission rights forwards	79			112			—			Other assets
Total	10,241			649			( 587	)

---

	December 31, 2018
Hedging Instruments	Cash flow hedge reserve at December 31, 2017			Hedging gains or losses of the reporting period that were recognized in OCI			Gains or losses reclassification adjustment and hedge ineffectiveness			Basis adjustment			Line item in the statement of comprehensive income that includes the reclassification adjustment and hedge ineffectiveness		Cash flow hedge reserve at December 31, 2018
Cash flow hedges
Foreign exchange risk - Option/Forward contracts	( 141	)		284			—			139			n/a		282
Price risk - Commodities forwards 1	18			( 543	)		126			—			Sales, Cost of sales		( 399	)
Price risk - Emission rights forwards	84			694			—			—			n/a		778
Total	( 39	)		435			126			139					661

1.

The price risk - commodities forward balance as of December 31, 2018 shown above has been revised to correct the prior period disclosure decreasing the Hedging gains or losses of the reporting period and the cash flow hedge reserve by 381 for the special payment in the pellet purchase agreement described in note 6.1.5. The revision only impacted the disclosed amount in the maturities table above and this hedge accounting table and otherwise had no impact on the Company’s consolidated financial statements. The Company has evaluated the impact of the revision and determined that it did not have a material impact on any of its prior period annual consolidated financial statements.

---

Net investment hedge

In December 2014, the Company entered into euro/U.S. dollar cross currency swaps (“CCS”) to hedge a 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 a euro denominated net investment in foreign operations amounting to € 918 million , and designated them as a net investment hedge. As of December 31, 2019 and 2018 , the euro/U.S. dollar CCS have a fair value loss of 41 , net of a deferred tax of 12 , and a fair value loss of 101 , net of a deferred tax of 28 , respectively. Fair value movements have been recorded in the consolidated statements of other comprehensive income. The fair value of the remaining CCS is included in other long-term obligations in the consolidated statements of financial position. The remaining CCS is categorized as Level 2. The euro/U.S. dollar CCS with a notional of 500 were unwound on July 31, 2019. A deferred loss of 16 , will be recycled to the consolidated statements of operations when the hedged assets are disposed of.

In March 2018, the Company entered into additional euro/U.S. dollar CCS with a notional of 100 to hedge a euro denominated net investment in foreign operation amounting to € 81 million , and designated them as a net investment hedge. The CCS was categorized as Level 2 and the fair value movements were recorded in the consolidated statements of other comprehensive income. The euro/U.S. dollar CCS with a notional of 100 was unwound on June 18, 2018. A deferred gain of 8 will be recycled to the consolidated statements of operations when the hedged assets are disposed of.

In April 2019, the Company entered into additional euro/U.S. dollar CCS with a notional of 200 to hedge a euro denominated net investment in foreign operation amounting to € 178 million , and designated them as a net investment hedge. The CCS was categorized as Level 2 and the fair value movements were recorded in the consolidated statements of other comprehensive income. The euro/U.S. dollar CCS with a notional of 200 were unwound on November 26, 2019. A deferred gain of 11 will be recycled to the consolidated statements of operations when the hedged assets are disposed of.

As of April 1, 2018, the Company designated a portfolio of euro denominated debt ( € 6,922 million as of December 31, 2019 ) as a hedge of certain euro denominated investments ( € 8,070 million as of December 31, 2019 ) 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 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. As of December 31, 2019 , the Company recognized 109 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 hedging instrument is categorized as Level 2.

Derivative hedging instruments in net investment hedges are as follows:

Derivatives		Notional amount		Date traded		Fair value at December 31, 2018		Change in fair value		Fair value as of December 31, 2019 1
CCS 10Y		300		May 27, 2015		( 39 )		14		( 25 )
CCS 10Y		160		May 27, 2015		( 21 )		8		( 13 )
CCS 10Y		40		May 27, 2015		( 6 )		3		( 3 )
Total		500				( 66 )		25		( 41 )

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

---

	December 31, 2019
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 2019			Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness		Foreign currency translation reserve
Net investment hedges
Foreign exchange risk - Cross Currency Swap	500			—			( 41	)		Other long-term obligations		—			n/a		33
Foreign exchange risk - EUR debt	7,788			—			( 7,777	)		Short-term debt and current portion of long-term debt; long-term debt, net of current portion		—			n/a		567
Total	8,288			—			( 7,818	)				—					600

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.

	December 31, 2018
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 2018			Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness		Foreign currency translation reserve
Net investment hedge
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

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.

---

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

	December 31,
	2019		2018
Base metals	( 6 )		( 9 )
Freight	7		—
Energy (oil, gas, electricity)	( 92 )		( 5 )
Emission rights	88		317
Total	( 3 )		303
Derivative assets associated with raw materials, energy, freight and emission rights	152		351
Derivative liabilities associated with raw materials, energy, freight and emission rights	( 155 )		( 48 )
Total	( 3 )		303

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, 2019 and 2018 , the Company had a net notional position of 557 with a net positive fair value of 88 and a net notional position of 1,170 with a net positive fair value of 317 , 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 2019 and 2018 .

	December 31, 2019
	Income		Other Equity
10% strengthening in U.S. dollar	( 104 )		325
10% weakening in U.S. dollar	113		( 252 )

---

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

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, 2019
	Floating porting of net debt 1		Interest Rate Swaps/Forward Rate Agreements
100 bp increase	30		—
100 bp decrease	( 30 )		—

	December 31, 2018
	Floating porting of net debt 1		Interest Rate Swaps/Forward Rate Agreements
100 bp increase	1		—
100 bp decrease	( 1 )		—

1.	Please refer to note 6.1.4 for a description of net debt (including fixed and floating portion)

Base metals, energy, freight, emissions rights

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

	December 31, 2019
	Income		Other Equity Cash Flow Hedging Reserves
+10% in prices
Base Metals	2		15
Iron Ore	—		—
Freight	—		—
Emission rights	—		65
Energy	—		71
-10% in prices
Base Metals	( 2 )		( 15 )
Iron Ore	—		—
Freight	—		—
Emission rights	—		( 65 )
Energy	—		( 71 )

---

	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 )

NOTE 7: LEASES

As a lessee, the Company assesses if a contract is or contains a lease at inception of the contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Company recognizes a right-of-use asset and a lease liability at the commencement date, except for short-term leases of twelve months or less and leases for which the underlying asset is of low value, which are expensed in the consolidated statement of operations on a straight-line basis over the lease term.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease, or, if not readily determinable, the incremental borrowing rate specific to the country, term and currency of the contract. Lease payments can include fixed payments, variable payments that depend on an index or rate known at the commencement date, as well as any extension or purchase options, if the Company is reasonably certain to exercise these options. The lease liability is subsequently measured at amortized cost using the effective interest method and remeasured with a corresponding adjustment to the related right-of-use asset when there is a change in future lease payments in case of renegotiation, changes of an index or rate or in case of reassessments of options.

The right-of-use asset comprises, at inception, the initial lease liability, any initial direct costs and, when applicable, the obligations to refurbish the asset, less any incentives granted by the lessors. The right-of-use asset is subsequently depreciated, on a straight-line basis, over the lease term or, if the lease transfers the ownership of the underlying asset to the Company at the end of the lease term or, if the cost of the right-of-use asset reflects that the lessee will exercise a purchase option, over the estimated useful life of the underlying asset. Right-of-use assets are also subject to testing for impairment if there is an indicator for impairment.

Variable lease payments not included in the measurement of the lease liabilities are expensed to the consolidated statement of operations in the period in which the events or conditions which trigger those payments occur.

In the statement of financial position, right-of-use assets and lease liabilities are classified, respectively, as part of property, plant and equipment and short-term/long-term debt.

Following the adoption of IFRS 16 "Leases" as described in note 1 on January 1, 2019, the Company recognized lease liabilities and right-of-use assets for operating lease contracts with fixed terms and future minimum lease payments as summarized in the following table:

---

Non-cancellable operating lease commitments as of December 31, 2018*	1,869
Recognition exemption for leases of low-value assets	( 58	)
Recognition exemption for short-term leases	( 20	)
Undiscounted operating lease commitments as of January 1, 2019	1,791
Effects of discounting using incremental borrowing rates (weighted average rate of 4.7%)	( 632	)
Lease liabilities related to assets held for sale	( 23	)
Additional lease liabilities as of January 1, 2019 from leases previously classified as operating leases in accordance with IAS 17	1,136
* As reported in the consolidated financial statements for the year ended December 31, 2018 - note 8.4

Following the application of the modified retrospective method at the date of implementation of IFRS 16 on January 1, 2019, whereby right-of-use assets of 1,405 were measured at an amount equal to the lease liabilities of 1,136 , increased by 77 related to favorable terms of operating leases acquired as part of previous business combinations and 192 related to amounts prepaid for the right of use of land, both reclassified from intangible assets. There was no impact on deferred tax assets and deferred tax liabilities as the corresponding deferred tax assets and deferred tax liabilities attributable to the lease liabilities and right-of-use assets relate to income taxes levied by the same taxation authority within the same legal entity and were therefore offset.

For leases that were classified as finance leases applying IAS 17, the carrying amount of the right-of-use asset and the lease liability at the date of initial application is the carrying amount of the lease asset and lease liability immediately before that date measured applying IAS 17 on December 31, 2018. The carrying amount of finance lease assets and lease liabilities was 363 and 423 , respectively as of December 31, 2018. Accordingly, the total right-of-use assets and lease liabilities as of January 1, 2019 were 1,768 and 1,559 , respectively.

There were no impacts on retained earnings upon implementation of IFRS 16.

The Company's lease contracts relate to a variety of assets used in its operational and administrative activities through several units, such as land, buildings, vehicles, industrial machinery, logistic and commercial facilities and power generation facilities. There are no sale and lease back transactions and no restrictions or covenants are imposed by the Company's current effective lease contracts.

The lease liabilities were 1,127 as of December 31, 2019. The corresponding interest expense for the twelve months ended December 31, 2019, amounted to 98 . The portion of the lease payments recognized as a reduction of the lease liabilities and as a cash outflow from financing activities amounted to 320 for the twelve months ended December 31, 2019.

The decrease in the total right-of-use assets and lease liabilities during the year ended December 31, 2019 included the decrease in right-of-use assets and lease liabilities by 390 and 400 , respectively, due to the sale of a 50 % controlling interest in Global Chartering to DryLog. See note 2.3.1.

The maturity analysis of the lease liabilities as of December 31, 2019, is as follows:

	1 year or less		2-3 years		4-5 years		Greater than 5 years		TOTAL
Lease liabilities (undiscounted)	279		369		209		513		1,370

---

The right-of-use assets as of December 31, 2019 and the depreciation and impairment charges for the twelve months ended December 31, 2019 amounted to 1,235 and 406 , respectively, and are shown below by underlying class of asset:

	Carrying amount		Depreciation and impairment charges
Land, buildings and improvements	854		( 118	)
Machinery, equipment and others	381		( 288	)
Total	1,235		( 406	)

The additions to right-of-use assets amounted to 259 for the twelve months ended December 31, 2019.

The Company recognizes the expenses of short-term leases and leases of low-value assets on a straight-line basis over the lease term. The expenses related to short-term leases and leases of low-value assets were 165 and 68 , respectively, for the twelve months ended December 31, 2019.

Expenses related to variable lease payments not included in the measurement of lease liabilities were 65 for the twelve months ended December 31, 2019. Such lease payments relate to rental fees that vary based on the actual level of activities or performance of the underlying leased assets such as a percentage of sales of the Company's goods through certain leased commercial warehouses and fixed rental fees per actual unit of output produced or transported by the leased assets.

An estimation of the future cash outflows to which the Company is potentially exposed in relation to those contracts involving variable lease payments, which are not reflected in the measurement of lease liabilities as of December 31, 2019, is as follows:

	1 year or less		2-3 years		4-5 years		Greater than 5 years		TOTAL
Potential variable lease payments	61		91		69		73		294

Also, some of the Company's lease contracts have extension and/or termination options as well as residual value guarantees whose amounts are not reflected in the measurement of the lease liabilities as of December 31, 2019. The potential addition/(reduction) in future cash outflows to which the Company is exposed in case such options are exercised or the guarantees required are as shown in the table below.

	1 year or less		2-3 years		4-5 years		Greater than 5 years		TOTAL
Potential extension options	1		8		13		16		38
Potential termination options	( 2	)	( 2	)	( 1	)	( 1	)	( 6	)
Potential residual value guarantees	1		1		1		—		3

Undiscounted amounts related to lease contracts not yet commenced and therefore not included in the recognized lease liabilities as of December 31, 2019, to which the Company is committed are described below:

	1 year or less		2-3 years		4-5 years		Greater than 5 years		TOTAL
Leases not yet commenced	2		8		8		13		31

---

8.1 Employees and key management personnel

As of December 31, 2019 , 2018 and 2017, ArcelorMittal had approximately 191,000 , 209,000 and 197,000 employees, respectively, and the total annual compensation of ArcelorMittal’s employees in 2019 , 2018 and 2017 was as follows:

	Year Ended December 31,
Employee Information	2019			2018			2017
Wages and salaries	8,380			8,176			7,912
Defined benefits cost (see note 8.2)	201			264			265
Loss following new labor agreement in the U.S. (see note 8.2)	—			15			—
Other staff expenses	1,668			2,004			1,791
Total	10,249			10,459			9,968

The total annual compensation of ArcelorMittal’s key management personnel , including its Board of Directors, expensed in 2019 , 2018 and 2017 was as follows:

	Year Ended December 31,
	2019		2018		2017
Base salary and directors fees	8		8		8
Short-term performance-related bonus	9		8		7
Post-employment benefits	1		1		1
Share-based payments	—		4		3

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

8.2 Deferred employee benefits

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. 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.

Termination 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 termination 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 termination 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. Provisions for social plans are recorded in connection with voluntary separation plans. Voluntary retirement plans primarily correspond to the practical implementation of social plans or are linked to collective agreements signed with certain categories of employees. 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.

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. 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,
	2019			2018
Pension plan benefits	3,289			3,034
Other post-employment benefits and other long-term employee benefits ("OPEB")	3,792			3,600
Termination benefits	198			222
Defined benefit liabilities	7,279			6,856
Provisions for social plans (non-current)	64			126
Total	7,343			6,982

This note, including the table above, discloses the following benefit categories:

•	pension plan benefits are pension plans and lump sum benefits that are classified under post employment benefits as required by IAS 19 which are not mandatory by law;

•	other post employment and other long-term employee benefits, also referred to as, OPEB which includes all other post employment benefits as defined in IAS 19 (e.g. lump sum benefits which are mandatory by law, medical insurance and life insurance) together with all other long-term employee benefits as defined in IAS 19;

•	termination benefits, which relate to provisions for long term termination benefits as defined in IAS 19 (e.g. early retirement benefits); and

•	provisions for social plans (non-current) which relate to provisions for social plans in restructuring provisions as required by IAS 37.

The termination benefits mainly relate to European countries (Belgium, Spain, Germany and Luxembourg).

Pension plans

This section includes post employment benefits that are pension plan and lump sum benefits which are not mandatory by law. 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 12 % 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. Most wage 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 485 (as of December 31, 2018 ) 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 .

Canada

The primary pension plans are those of ArcelorMittal Dofasco, AMMC 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 AMMC 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, AMMC 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. The transaction was completed in 2019 and reduced the defined benefit obligation by 169 and fair value of the plan asset by 143 . The settlement gain of 26 was recognized in cost of sales and selling, general and administrative expenses.

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. From 2016 through 2019, the minimum guaranteed rate of return was 1.75 % and this is also the best estimate for 2020. 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.

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.

---

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

	Year ended December 31, 2019
	Total			United States			Canada			Brazil			Europe			Other
Change in benefit obligation
Benefit obligation at beginning of the period	9,872			3,266			3,001			724			2,716			165
Current service cost	114			26			21			—			58			9
Interest cost on DBO	367			130			110			58			47			22
Past service cost - Plan amendments	4			—			—			2			2			—
Plan participants’ contribution	2			—			—			—			2			—
Settlements	( 172	)		—			—			( 169	)		( 3	)		—
Actuarial (gain) loss	1,001			342			277			121			176			85
Demographic assumptions	16			2			43			—			( 29	)		—
Financial assumptions	949			334			213			138			209			55
Experience adjustment	36			6			21			( 17	)		( 4	)		30
Benefits paid	( 652	)		( 261	)		( 201	)		( 42	)		( 127	)		( 21	)
Foreign currency exchange rate differences and other movements	93			2			152			( 30	)		( 41	)		10
Benefit obligation at end of the period	10,629			3,505			3,360			664			2,830			270
Change in plan assets
Fair value of plan assets at beginning of the period	6,877			2,676			2,664			655			882			—
Interest income on plan assets	256			95			92			54			15			—
Return on plan assets greater than discount rate	808			360			305			79			64			—
Employer contribution	77			7			27			2			41			—
Plan participants’ contribution	2			—			—			—			2			—
Settlement	( 146	)		—			—			( 143	)		( 3	)		—
Benefits paid	( 541	)		( 257	)		( 200	)		( 42	)		( 42	)		—
Foreign currency exchange rate differences and other movements	62			—			133			( 29	)		( 42	)		—
Fair value of plan assets at end of the period	7,395			2,881			3,021			576			917			—
Present value of the wholly or partly funded obligation	( 9,012	)		( 3,476	)		( 3,345	)		( 663	)		( 1,528	)		—
Fair value of plan assets	7,395			2,881			3,021			576			917			—
Net present value of the wholly or partly funded obligation	( 1,617	)		( 595	)		( 324	)		( 87	)		( 611	)		—
Present value of the unfunded obligation	( 1,617	)		( 29	)		( 15	)		( 1	)		( 1,302	)		( 270	)
Prepaid due to unrecoverable surpluses	( 30	)		—			( 25	)		( 2	)		( 3	)		—
Net amount recognized	( 3,264	)		( 624	)		( 364	)		( 90	)		( 1,916	)		( 270	)
Net assets related to funded obligations	25			8			13			—			4			—
Recognized liabilities	( 3,289	)		( 632	)		( 377	)		( 90	)		( 1,920	)		( 270	)
Change in unrecoverable surplus
Unrecoverable surplus at beginning of the period	( 27	)		—			( 21	)		( 3	)		( 3	)		—
Interest cost on unrecoverable surplus	( 1	)		—			( 1	)		—			—			—
Change in unrecoverable surplus in excess of interest	( 1	)		—			( 2	)		1			—			—
Exchange rates changes	( 1	)		—			( 1	)		—			—			—
Unrecoverable surplus at end of the period	( 30	)		—			( 25	)		( 2	)		( 3	)		—

---

	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			—
Settlements	( 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	)		—

---

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

	Year ended December 31, 2019
Net periodic pension cost (benefit)	Total			United States			Canada			Brazil			Europe			Others
Current service cost	114			26			21			—			58			9
Past service cost - Plan amendments	4			—			—			2			2			—
Past service cost - Settlements	( 26	)		—			—			( 26	)		—			—
Net interest cost/(income) on net DB liability/(asset)	112			35			19			4			32			22
Total	204			61			40			( 20	)		92			31

	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

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

This section includes post employment employees benefits that are not disclosed above (i.e. includes lump sum benefits which are mandatory by law, medical insurance and life insurance). In addition, this section includes all other long-term employee benefits.

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 new labor agreement with the United Steelworkers ("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 .

ArcelorMittal USA’s labor contract requires payments into a Voluntary Employee Beneficiary Association (“VEBA”) trust based on 5 % of AMUSA’s operating income. Contributions can also be withdrawn from the trust to reimburse the company for benefits paid above certain levels. In 2018 and 2019 withdrawals exceeded contributions. The Company has significant assets mostly in the VEBA post-employment benefit plan. These assets consist of 69 % in fixed income and 31 % in equities. The total fair value of the assets in the VEBA trust was 451 as of December 31, 2019 .

---

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

	Year ended December 31, 2019
	Total			United States			Canada			Europe			Others
Change in benefit obligation
Benefit obligation at beginning of the period	4,098			2,907			591			531			69
Current service cost	80			40			9			28			3
Interest cost on DBO	163			124			22			11			6
Plan participants’ contribution	29			29			—			—			—
Actuarial (gain) loss	129			29			67			26			7
Demographic assumptions	4			( 11	)		15			—			—
Financial assumptions	256			169			53			25			9
Experience adjustment	( 131	)		( 129	)		( 1	)		1			( 2	)
Benefits paid	( 242	)		( 170	)		( 31	)		( 37	)		( 4	)
Foreign currency exchange rate differences and other movements	37			17			30			( 13	)		3
Benefit obligation at end of the period	4,294			2,976			688			546			84
Change in plan assets
Fair value of plan assets at beginning of the period	498			491			—			7			—
Interest income on plan assets	20			20			—			—			—
Return on plan assets greater/(less) than discount rate	37			37			—			—			—
Employer contribution	( 25	)		( 25	)		—			—			—
Plan participants’ contribution	29			29			—			—			—
Benefits paid	( 57	)		( 56	)		—			( 1	)		—
Fair value of plan assets at end of the period	502			496			—			6			—
Present value of the wholly or partly funded obligation	( 575	)		( 531	)		—			( 44	)		—
Fair value of plan assets	502			496			—			6			—
Net present value of the wholly or partly funded obligation	( 73	)		( 35	)		—			( 38	)		—
Present value of the unfunded obligation	( 3,719	)		( 2,445	)		( 688	)		( 502	)		( 84	)
Net amount recognized	( 3,792	)		( 2,480	)		( 688	)		( 540	)		( 84	)

---

	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	)

---

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

	Year ended December 31, 2019
Components of net periodic OPEB cost (benefit)	Total			United States			Canada			Europe			Others
Current service cost	80			40			9			28			3
Net interest cost/(income) on net DB liability/(asset)	143			104			22			11			6
Actuarial (gains)/losses recognized during the year	8			—			—			8			—
Total	231			144			31			47			9

	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

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

	Year ended December 31,
	2019			2018			2017
Net periodic pension cost	204			263			245
Net periodic OPEB cost	231			215			310
Total	435			478			555
Cost of sales	142			212			220
Selling, general and administrative expenses	30			34			23
Financing costs - net	263			232			312
Total	435			478			555

---

Plan Assets

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

	December 31, 2019
	United States			Canada			Brazil			Europe
Equity Securities	40	%		44	%		6	%		2	%
- Asset classes that have a quoted market price in an active market	13	%		34	%		6	%		2	%
- Asset classes that do not have a quoted market price in an active market	27	%		10	%		—			—
Fixed Income Securities (including cash)	43	%		48	%		88	%		73	%
- Asset classes that have a quoted market price in an active market	—			42	%		88	%		73	%
- Asset classes that do not have a quoted market price in an active market	43	%		6	%		—			—
Real Estate	3	%		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	3	%		6	%		—			—
Other	14	%		2	%		5	%		25	%
- Asset classes that have a quoted market price in an active market	5	%		—			5	%		5	%
- Asset classes that do not have a quoted market price in an active market	9	%		2	%		—			20	%	1
Total	100	%		100	%		100	%		100	%

	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.

These assets do not include direct investments in ArcelorMittal stock or ArcelorMittal bonds. These assets may include ArcelorMittal shares or bonds held by mutual fund investments. The invested assets produced an actual return of 1,121 in 2019 and a loss of 82 in 2018.

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

---

	December 31, 2019
	United States			Canada			Brazil			Europe
Equity Securities	38	%		45	%		6	%		3	%
Fixed Income Securities (including cash)	44	%		48	%		88	%		72	%
Real Estate	3	%		6	%		1	%		—
Other	15	%		1	%		5	%		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
	2019		2018		2017		2019		2018		2017
Discount rate
Range	1.00% - 10.50%		1.75% - 16.00%		1.50% - 15.00%		1.00% - 7.25%		1.75% - 9.50%		1.30% - 7.65%
Weighted average	2.90 %		3.80 %		3.45 %		3.06 %		3.98 %		3.60 %
Rate of compensation increase
Range	1.90% - 10.00%		2.00% - 10.00%		1.80% - 9.00%		1.60% - 4.80%		2.00% - 4.80%		2.00% - 4.50%
Weighted average	2.80 %		2.85 %		2.81 %		2.95 %		3.24 %		3.32 %

	Other Post-employment Benefits
	2019		2018		2017
Healthcare cost trend rate assumed
Range	1.80% - 5.00%		1.80% - 8.00%		1.80% - 5.00%
Weighted average	4.42 %		4.46 %		4.48 %

Cash contributions and maturity profile of the plans

In 2020, the Company expects its cash contributions to amount to 269 for pension plans, 153 for other post-employment benefits plans, 110 for defined contribution plans and 85 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 120 and 85 in 2019.

At December 31, 2019, the weighted average duration of the liabilities related to the pension and other post-employment benefits plans were 12 years (2018: 12 years ) and 15 years (2018: 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 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.

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.

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, 2019, the defined benefit obligation for pension plans was 10,629 ):

	Effect on 2020 Pre-Tax Pension Expense (sum of service cost and interest cost)		Effect on December 31, 2019 DBO
Change in assumption
100 basis points decrease in discount rate	( 54 )		1,321
100 basis points increase in discount rate	42		( 1,081 )
100 basis points decrease in rate of compensation	( 13 )		( 178 )
100 basis points increase in rate of compensation	14		180
1 year increase of the expected life of the beneficiaries	10		302

The following table illustrates the sensitivity to a change of the significant actuarial assumptions related to ArcelorMittal’s OPEB plans (as of December 31, 2019 the defined benefit obligation for post-employment benefit plans was 4,294 ):

	Effect on 2020 Pre-Tax OPEB Expense (sum of service cost and interest cost)		Effect on December 31, 2019 DBO
Change in assumption
100 basis points decrease in discount rate	( 3 )		682
100 basis points increase in discount rate	2		( 536 )
100 basis points decrease in healthcare cost trend rate	( 29 )		( 450 )
100 basis points increase in healthcare cost trend rate	39		566
1 year increase of the expected life of the beneficiaries	7		162

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.

Multi-employer plans

---

8.3 Share-based payments

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 grant date. 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 grant date 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 meeting of shareholders ("AGM") 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, Corporate Governance and Sustainability ("ARCGS") 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.

Grant date	Exercise prices (per option)
August 2010	$ 91.98

No options were granted during the years ended December 31, 2019 , 2018 , and 2017 . The compensation expense recognized for stock option plans was nil for each of the years ended December 31, 2019 , 2018 and 2017 .

---

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, 2019 , 2018 and 2017 :

	Number of Options			Range of Exercise Prices (per option)		Weighted Average Exercise Price (per option)
Outstanding, December 31, 2016	4,682,534			63.42 – 235.32		153.19
Expired	( 1,397,659	)		63.42 – 235.32		170.40
Outstanding, December 31, 2017	3,284,875			63.42 – 235.32		145.86
Expired	( 1,295,500	)		63.42 – 235.32		215.77
Outstanding, December 31, 2018	1,989,375			91.98 – 109.14		100.33
Expired	( 1,084,985	)		91.98 – 109.14		107.29
Outstanding, December 31, 2019	904,390			91.98		91.98
Exercisable, December 31, 2017	3,284,875			63.42 – 235.32		145.86
Exercisable, December 31, 2018	1,989,375			91.98 – 109.14		100.33
Exercisable, December 31, 2019	904,390			91.98		91.98

The following table summarizes information about total stock options of the Company outstanding as of December 31, 2019 :

Options Outstanding
Exercise Price (per option)		Number of options			Remaining contractual life (in years)		Options exercisable (number of options)			Maturity
91.98		904,390			0.59		904,390			August 3, 2020

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

On May 10, 2011, the AGM 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.

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 AGM. 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 AGM 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 AGM on May 9, 2018 at a maximum of 1,500,000 shares. The 2019 Cap for the number of PSUs that may be allocated to the CEO Office and other performance based grants below the CEO Office level, was approved at the annual shareholders' meeting held on May 7, 2019 at a maximum of 2,500,000 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.

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.

---

Conditions of the 2019 grant were as follows:

		CEO Office					Other Executive Officers
2019 Grant	l	PSUs with a three year performance period				l	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:				l	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 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.

---

The plans in 2018, 2017 and 2016 are summarized below:

CEO Office

Other Executive Officers

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%

2018 Grant

l

PSUs with a three year performance period

l

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:

l

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%

---

The following table summarizes the Company’s share unit plans outstanding as of December 31, 2019 :

At Grant date														Number of shares issued as of December 31, 2019
Grant date		Type of plan		Number of shares			Number of beneficiaries			Maturity		Fair value per share		Shares outstanding			Shares forfeited
December 16, 2019		PSU		1,760,350			517			January 1, 2023		18.57		1,760,350			—
December 16, 2019		CEO Office		172,517			2			January 1, 2023		14.89		172,517			—
December 20, 2018		PSU		1,358,750			524			January 1, 2022		21.31		1,298,550			60,200
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		958,082			123,365
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		2,751,076			721,279
June 30, 2016		CEO PSU II		153,268			2			January 1, 2022		16.62		153,268			—
June 30, 2016		CEO PSU I		153,268			2			January 1, 2020		10.68		153,268			—
Total				8,376,900								$10.68 – $22.85		7,472,056			904,844

The compensation expense recognized for RSUs and PSUs was nil , 31 and 31 for the years ended December 31, 2019 , 2018 and 2017 .

Share unit plan activity is summarized below as of and for each year ended December 31, 2019 , 2018 and 2017 :

	RSUs					PSUs
	Number of shares			Fair value per share		Number of shares			Fair value per share
Outstanding, December 31, 2016	650,254			21.00		8,039,494			15.08
Granted 1	—			—		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 2	—			—		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
Granted 3	—			—		2,018,176			17.96
Exited	—			—		( 2,677,011	)		13.49
Forfeited	—			—		( 1,239,569	)		14.25
Outstanding, December 31, 2019	—			—		7,472,056			16.76

1.	Including 27,807 over-performance shares granted for the targets achievement of the PSU grant September 27, 2013 .

2.	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.

3.	Including 85,309 over-performance shares granted for the targets achievement of the PSU grant December 18, 2015.

NOTE 9: PROVISIONS, CONTINGENCIES AND COMMITMENTS

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.

---

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.

---

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.

9.1 Provisions overview

	Balance at December 31, 2018			Additions 1			Deductions/ Payments				Effects of foreign exchange and other movements				Balance at December 31, 2019
Environmental (see note 9.3)	1,228			97			( 95	)			( 156	)	2		1,074
Emission rights (see text below)	—			481			—				3				484
Asset retirement obligations (see note 9.3)	422			28			( 10	)			38				478
Site restoration	141			3			( 5	)			( 3	)			136
Staff related obligations	201			65			( 64	)			( 17	)			185
Voluntary separation plans	38			30			( 13	)			( 8	)			47
Litigation and other (see note 9.3)	369			65			( 91	)			( 31	)			312
Tax claims	120			5			( 14	)			( 30	)			81
Other legal claims	249			60			( 77	)			( 1	)			231
Commercial agreements and onerous contracts	34			29			( 16	)			( 1	)			46
Other	101			148			( 30	)			10				229
	2,534			946			( 324	)			( 165	)			2,991
Short-term provisions	539														516
Long-term provisions	1,995														2,475
	2,534														2,991

	Balance at December 31, 2017			Additions 1			Deductions/ Payments				Effects of foreign exchange and other movements				Balance at December 31, 2018
Environmental (see note 9.3)	815			24			( 90	)			479		2		1,228
Asset retirement obligations (see note 9.3)	427			26			( 11	)			( 20	)			422
Site restoration	40			117			( 13	)			( 3	)			141
Staff related obligations	183			75			( 46	)			( 11	)			201
Voluntary separation plans	79			3			( 56	)			12				38
Litigation and other (see note 9.3)	328			79			( 76	)			38				369
Tax claims	126			13			( 14	)			( 5	)			120
Other legal claims	202			66			( 62	)			43				249
Commercial agreements and onerous contracts	24			14			( 20	)			16				34
Other	126			19			( 32	)			( 12	)			101
	2,022			357			( 344	)			499				2,534
Short-term provisions	410														539
Long-term provisions	1,612														1,995
	2,022														2,534

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 9.3).

---

As described in note 6.1.5, the Company uses derivative financial instruments to manage its exposure to fluctuations in prices of emission rights allowances. The expense associated with the provision above was offset by recycling of hedging reserves in 2019 and will be largely offset again in 2020. See note 6.3 for the details of the cash flow hedging in place for emission rights. The Company also receives indirect compensation through rebates on its energy tariffs.

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, 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 in connection with the 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 provisions of 113 as of December 31, 2019 and December 31, 2018 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, Belgium and the United States which are expected to be settled within one year.

Provisions for litigation include losses relating to present legal obligations that are considered to be probable. Further detail regarding legal matters is provided in note 9.3.

Provisions for commercial agreements and onerous contracts concern primarily onerous contracts recognized in the United States and Brazil.

9.2 Other long-term obligations

	Balance at December 31,
	2019			2018
Derivative financial instruments (see note 6.1.5)	238			708
Payable from acquisition of financial assets	1,340			1,506
Unfavorable contracts	203			217
Income tax payable	251			184
Other	486			404
Total	2,518			3,019

Derivative financial instruments included 138 and 454 as of December 31, 2019 and 2018, respectively, relating to the pellet purchase agreement that contains a special payment in the U.S. (see note 6.1.5). As of December 31, 2018, derivative financial instruments also included 124 relating to the fair value of the put option granted to ISP in the framework of the acquisition of ArcelorMittal Italia (see note 2.2.4) which was reclassified to current liabilities as of December 31, 2019 (see note 4.8).

---

As of December 31, 2019 and 2018, payable from acquisition of financial assets included 1,032 and 1,245 , respectively, relating to the non-current portion of the consideration payable with respect to the acquisition of ArcelorMittal Italia and 265 and 253 , respectively, relating to the financial liability with respect to the acquisition of AMSF (see note 2.2.4).

Unfavorable contracts of 203 and 217 as of December 31, 2019 and 2018, respectively, mainly related to AMSF (see note 2.2.4).

9.3 Environmental liabilities, asset retirement obligations and legal proceedings

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, 2019 , excluding asset retirement obligations, ArcelorMittal had established provisions of 1,074 for environmental remedial activities and liabilities. The provisions for all operations by geographic area were 772 in Europe, 136 in the United States, 127 in South Africa and 39 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.

United States

ArcelorMittal’s operations in the United States have environmental provisions of 136 (exclusive of asset retirement obligations) to address existing environmental liabilities, of which 12 is expected to be spent in 2020. 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 36 , with anticipated spending of 2 during 2020, 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 8 for such sediment assessment and remediation, and 4 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.

An approximately 489-acre portion of ArcelorMittal USA’s properties in Lackawanna, New York is subject to Resource Conservation and Recovery Act RCRA Corrective Action. RCRA Corrective Action requires the Company to complete a Facilities Assessment ("RFA"), a Facility Investigation ("RFI"), and a Corrective Measures Study ("CMS"). The New York State Department of Environmental Conservation ("NYDEC" ) and the US EPA Region 2 approved the RFA and RFI. ArcelorMittal USA has completed implementation of Interim Measures at eleven of the most significant former solid waste management locations including installation and operation of a ground water treatment system, dredging of a local waterway known as Smokes Creek, and containment of certain onsite wastes at a historic onsite landfill. The CMS was performed by ArcelorMittal USA under a Consent Order with the NYDEC. The CMS assessed the need for additional remedial actions and recommended post- closure activities at 20 additional solid waste management locations on the site. The CMS was completed

---

and accepted as final in 2019 by NYDEC. The NYDEC is currently preparing a draft Remedial Action Plan that selects final comprehensive measures subject to comments from the public and ArcelorMittal USA. ArcelorMittal USA’s provisions for environmental liabilities include 31 for anticipated remediation and post-remediation activities at this site. The provisioned amount is based upon remedial measures recommended in the CMS, including excavation and consolidation of contaminated soil and fill into an on-site containment facilities, as well as expansion and continued operation 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. ArcelorMittal can be reimbursed from the fund for the continuing cost of treatment of acid mine drainage, which was done during 2019 for the prior year (2018 operating costs). The trust had a market value of 49 as of December 31, 2019 . ArcelorMittal USA’s provisions for environmental liabilities include 33 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. A comprehensive Settlement was reached with the United States EPA and affected state agencies involving all NOVs which is anticipated to encompass self-reported non-compliance through September 30, 2018. This settlement was finalized by the parties and awaits issuance from the federal court in the Northern District of Indiana. The settlement will include payment of penalties and injunctive relief. Liabilities associated with this comprehensive settlement are estimated at 7 .

Europe

Environmental provisions for ArcelorMittal’s operations in Europe total 772 and are mainly related to the investigation and remediation of environmental contamination at current and former operating sites in France ( 72 ), Belgium ( 230 ), Luxembourg ( 43 ), Poland ( 27 ), Germany ( 26 ), Italy ( 366 ) and Spain ( 8 ). 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 72 , 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 material.

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 Thionville coke plant, the remediation process is ongoing. At Moyeuvre-Petite, the operation of covering the sludge basins is underway. ArcelorMittal is responsible for closure and final rehabilitation of the rest of the site, that is to say the former Conroy and Pérotin slag-heaps, from which the administrative procedure for cessation of activity is underway. The year 2020 will be devoted in particular to the development of the detailed remediation project. At other sites, ArcelorMittal France is responsible for monitoring the concentration of organic compound and heavy metals in soil and groundwater. Following the official closure at the end of 2018 of the liquid phase in Florange, ArcelorMittal France has started the studies to dismantle the site and recorded a site restoration provision of 113 related to such activity (see note 9.1).

ArcelorMittal France 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, 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 France 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 230 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 43 , 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 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 1,400,000 cubic meters until mid 2023. A provision of 35 covers these obligations.

ArcelorMittal Belval and Differdange has an environmental provision of 8 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 27 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 26 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 366 .

A provision of 155 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 211 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 8 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 127 to be used over 16 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 42 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.

The Newcastle Works site is the main long carbon steel operation of AMSA . A provision of 21 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 38 relates to the environmental rehabilitation of the Thabazimbi Mine. AMSA holds an environmental trust which holds investments for a value of 25 that will be used for rehabilitation purposes .

The remainder of the obligation of 7 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 39 for the expected cost of remediating toxic sediment located in the Company’s East Boatslip site, of which 11 is expected to be spent in 2020. ArcelorMittal Long Products Canada has an environmental provision of 2 for future disposal of sludge left in ponds after the 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, 2019 , ArcelorMittal had established provisions for asset retirement obligations of 478 , including mainly 59 for Ukraine, 148 for Canada, 87 for the United States, 63 for Mexico, 14 for Belgium, 38 for Germany, 18 for South Africa, 12 for Brazil, 13 for Kazakhstan and 22 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 mines 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 site.

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.

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, 2019 , ArcelorMittal had recorded long term obligations related to income tax contingencies of 72 (see note 9.2) and provisions for other tax claims in the aggregate of 81 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, 2019 , (ii) that constitute a contingent liability, (iii) that were resolved in 2019 or (iv) that were resolved and had a financial impact in 2018 or 2017, 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 the first instance upheld the amount of the assessment. ArcelorMittal Brasil appealed to the administrative tribunal of the second instance, and, on August 8, 2012, the administrative tribunal of the second instance found in favor of ArcelorMittal Brasil 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 the 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 the second instance. In February 2018, the administrative tribunal of the 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. No further appeal was filed by the Federal Revenue Service within the time limit so the case is closed definitively in favor of ArcelorMittal Brasil.

In 2011, ArcelorMittal Brasil (at the time SOL Coqueria Tubarão S.A.) received 21 separate tax assessments from the Revenue Service of the State of Espirito Santo for ICMS (a value-added tax) in an amount which totaled 31 relating to a tax incentive (INVEST) it used. The dispute concerns the definition of fixed assets. In August 2015, the administrative tribunal of the first instance upheld the 21 separate 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 were 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 the third instance found in favor of ArcelorMittal Brasil sending the six other cases back to the administrative tribunal of the second instance. After the administrative tribunal of the second instance issued a partially favorable ruling on these six cases in December 2019, related only to the recognition of the limitation period of May 2005, a further appeal to the administrative tribunal of the third instance will be filed.

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 518 . On January 31, 2014, the administrative tribunal of the 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 the 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 the third instance.

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 MTO 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 456 . In October 2014, the administrative tribunal of the 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 the 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 the third instance.

In April 2016, ArcelorMittal Brasil received a tax assessment in relation to (i) the amortization of goodwill resulting from Mittal Steel’s MTO 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 239 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, which was rejected in May 2019. ArcelorMittal Brasil filed a motion for clarification which was denied in November 2019 and thereafter filed an appeal to the administrative tribunal of the third instance.

In December 2018, ArcelorMittal Brasil received a tax assessment of 151 with respect to the 2013-2014 tax years, principally in relation to the amortization of goodwill resulting from Mittal Steel’s MTO to the minority shareholders of Arcelor Brasil following Mittal Steel’s merger with Arcelor in 2007. In January 2019, ArcelorMittal Brasil filed a defense in the first administrative instance, which issued an unfavorable decision in June 2019. An appeal to the second administrative instance was filed in July 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 65 . 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 which was upheld by the Federal Court of Appeals in February 2019. In July 2019, the Federal Revenue Service filed appeals with the Superior Court of Justice and the Supreme Court. 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, which in June 2019 decided in ArcelorMittal Brasil’s favor. This decision is subject to appeal. A further related tax assessment was received in September 2018 from the Federal Revenue Service claiming 0.3 as a penalty for alleged failure to comply with formal requirements in the import declarations delivered by the Company in the period between September and November 2013. In October 2018 ArcelorMittal Brasil presented its defense in the first administrative instance, and a decision is pending.

For over 20 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 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, is of binding precedential value with respect to all similar cases, including those of ArcelorMittal Brasil. 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 June 2019, the Federal Revenue Service’s appeal was dismissed in a final and unappealable decision in favor of ArcelorMittal Brasil.

In the period from 2014 to 2018, ArcelorMittal Brasil received six tax assessments from the Federal Revenue Service in the amount of 52 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 the first case, the administrative tribunal of the first instance found partially in favor of ArcelorMittal Brasil. The decision was upheld in the administrative tribunal of the second instance and ArcelorMittal Brasil filed an appeal to the administrative tribunal of the third instance which ruled partially in favor of ArcelorMittal Brasil in May 2019. In January 2020, the case was sent back to the Federal Revenue which is verifying the extent of the administrative tribunal of the third instance’s decision in order to proceed with the write-off of amounts due. The remaining amount (yet to be defined) will be discussed in the judicial level. In the second case, the administrative tribunal of the first instance found partially in favor of ArcelorMittal Brasil and an appeal has been filed to the administrative tribunal of the second instance. In the third case, the administrative tribunal of the first instance upheld the tax assessment, and ArcelorMittal Brasil appealed to the administrative tribunal of the second instance. In the fourth and fifth cases, ArcelorMittal Brasil has filed its defenses to the administrative tribunal of the first instance. In the sixth case, the administrative tribunal of the first instance upheld the tax assessment, and ArcelorMittal Brasil appealed to the administrative tribunal of the second instance. 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. 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 41 . 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, of 58 , after taking account of a reduction of fines mentioned below 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 February 2019, due to the retrospective application of a new law, a reduction of the fine element of 9 was finalized in the first case.

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 the 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 the 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 the second instance found against ArcelorMittal Brasil and, in April 2018, ArcelorMittal Brasil filed an appeal to the administrative tribunal of the third instance. In December 2019, the tax assessment was upheld by the administrative tribunal of the third instance. In January 2020, ArcelorMittal Brasil filed a motion for clarification.

Mexico

In 2015, the Mexican Tax Administration Service issued a tax assessment to ArcelorMittal Mexico, alleging that ArcelorMittal Mexico owes 182 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 dividends. 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 23 and 28 , 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 a constitutional claim before the Collegiate Tribunal For Administrative Matters, which was rejected in June 2019. A review appeal was filed in July 2019 and rejected in August 2019. An extraordinary appeal of constitutional review was filed against this decision in September 2019 before the Supreme Court of Justice for consideration. In November 2019, the Court dismissed the extraordinary appeal of constitutional review confirming the earlier decision in favor of the tax authorities, although this decision has not yet been officially notified. No further appeal is possible. 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 decided.

In 2013, the Mexican Tax Administration Service issued a tax assessment to ArcelorMittal Las Truchas, alleging that ArcelorMittal Las Truchas owes 87 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 the taxable basis of assets 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 partially in favor of ArcelorMittal Las Truchas in October 2018. The tax authority filed an application for judicial review in January 2019. ArcelorMittal Las Truchas also filed a nullity lawsuit to challenge the ruling in respect of items (ii) and (iii).

In October 2018, the Mexican Tax Administration Service issued a tax assessment to ArcelorMittal Las Truchas, alleging that ArcelorMittal Las Truchas owes 92 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, which was partially rejected in June 2019 and is being appealed.

Ukraine

In October 2019, ArcelorMittal Kryvyi Rih received a tax order from Ukrainian tax authorities covering the findings of a tax audit for the period from 2015 through the first quarter of 2019 which claimed the Company owes additional taxes of 313 for that period. ArcelorMittal Kryvyi Rih appealed this order to the tax authorities resulting in a significant reduction of the amounts claimed. In January 2020, ArcelorMittal Kryvyi Rih filed 3 legal actions with the Kyiv District Administrative Court seeking to cancel the remaining additional charges amounting to 145 .

Competition/Antitrust Claims

ArcelorMittal is a party to various competition/antitrust claims. As of December 31, 2019 , 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 2019 or (iii) that were resolved and had a financial impact in 2018 or

---

2017, 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 61 . 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 65 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.

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) an 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) an agreement to continue market and price structures introduced by the European Coal and Steel Community from 2002-2016. In February 2020,the German Federal Cartel Office notified  the said companies of the formal closure of the investigation with no action being taken.

Other Legal Claims

ArcelorMittal is a party to various other legal claims. As of December 31, 2019 , ArcelorMittal had recorded provisions of 231 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, 2019 , (ii) that constitute a contingent liability, (iii) that were resolved in 2019, or (iv) that were resolved and had a financial impact in 2018 or 2017, 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, which has led to a reduction in the number of claims and amounts claimed against Acindar. As of January 2020, the aggregate amount claimed by the Customs Office Authority in respect of all iron ore shipments is 93 in 19 different cases. Of these 19 cases, 4 are still in the

---

administrative branch of the Customs Office Authority and the other 15 cases, in which the administrative branch of the Customs Office Authority ruled against Acindar, have been appealed to the Argentinian National Fiscal Court.

Brazil

In 2015, the SINDIMETAL (employees’ union) filed a lawsuit against ArcelorMittal Brasil to annul all the collective labor agreements related to 12-hour work shifts. In 2018, at the Labor Court of Vitória/ES, the case was dismissed. SINDIMETAL subsequently appealed to the Regional Labor Court of Appeals, which in 2019 reversed the ruling of the first judicial instance and ordered the payment of overtime wages, based on the argument that the 12-hour working day was unconstitutional. In September 2019, ArcelorMittal Brasil filed an appeal with the Superior Labor Court on the grounds of (i) the constitutionality of collective labor agreements; (ii) ArcelorMittal Brasil was obliged to maintain the 12-hour work shift in the period between November 2011 and November 2012 by another judicial decision; and (iii) the Supreme Court has ordered the suspension of legal proceedings in which there is a discussion about the validity of collective labor agreements due to a pending decision in a case not involving ArcelorMittal Brasil with binding precedential value on similar cases. This decision impacts a group of approximately 2,500 employees.

In April 2017, a shareholder in Siderúrgica Três Lagoas (“SITREL”), commenced an arbitration against Votorantim Siderurgia S.A. (which subsequently merged into ArcelorMittal Brasil) and SITREL with the Center for Arbitration and Mediation of the Chamber of Commerce Brazil-Canada (CAM-CCBC). The dispute concerns a provision in SITREL’s joint venture agreement relating to the formula used to determine the selling price for steel billets supplied by ArcelorMittal Brasil to SITREL from January 2013 onwards. The shareholder has alleged that the steel billets were overpriced and is seeking compensation for overpaid amounts on both a retrospective and prospective basis, with the initial amount claimed totalling 42 . The case is currently at a pre-hearing stage, where evidence is being collected. In November 2019, an expert report on accounting questions was presented and an expert report concerning economic questions is pending conclusion.

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 764 (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. In June 2019, the parties entered into a settlement agreement in which the defendants agreed to pay 5 (CAD 6.5 million) to the class subject to the approval of the court. The settlement contained a threshold for opt outs which, if exceeded, gave any of the defendants the right to terminate the settlement. The settlement was approved by the Ontario Court in September 2019 and, following the expiry of the period for any appeal, is now final.

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 104 , 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 42 to 67 . 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 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.

On November 4, 2019, after the law adopted by the Italian Parliament which removed the legal protection necessary for AM InvestCo to implement its environmental plan without the risk of criminal liability became effective, AM InvestCo sent to the former Ilva business’ legal representatives (i.e. the commissioners in Ilva’s extraordinary administration insolvency procedure, the “Commissioners”) a notice to withdraw from, or terminate, the agreement for the lease and subsequent conditional purchase of the former Ilva business and certain of its subsidiaries. On November 5, 2019, AM InvestCo served the Commissioners with a writ of summons to, inter alia , ascertain and declare the lawfulness and validity of its withdrawal and termination of the agreement. The Civil Court of Milan scheduled the first hearing for May 6, 2020. On November 15, 2019, the Commissioners filed suit in the same court seeking an injunction to prevent AM InvestCo’s withdrawal from, and termination of, the agreement and require AM InvestCo to stop the implementation of its plan to suspend the operations and to continue the maintenance and operation of the leased business units. The Commissioners also requested that the court require AM InvestCo to pay 1,123 ( € 1 billion ) in the event that it fails to comply with an adverse decision on the Commissioners’ application for interim injunctions. Moreover, following a complaint filed by the Commissioners, in mid-November 2019 prosecutors in Milan and Taranto opened investigations into potential violations of numerous criminal laws. The hearing to discuss the Commissioners’ application for interim measures was originally set for November 27, 2019, pending which AM InvestCo suspended the implementation of its plan to suspend the operations at ArcelorMittal Italia. At the hearing, the court granted the request by the Commissioners and AM InvestCo for postponement (to December 20, 2019) in order to allow the development of ongoing negotiations, on the basis that AM InvestCo assure the maintenance of the normal functioning of the plants and guarantee production continuity pending such negotiations. On December 20, 2019, ArcelorMittal announced that AM InvestCo had signed a non-binding agreement with the Commissioners that forms a basis to continue negotiations on a new industrial plan for ArcelorMittal Italia, and in light thereof, the Civil Court of Milan granted the parties’ request to further postpone the hearing until February 7, 2020 and on that date until March 6, 2020. Under the agreement, AM InvestCo has posted a performance bond of 101 ( € 90 million ). ArcelorMittal expects to continue to consolidate ArcelorMittal Italia, as it has retained power over the relevant activities and continues to be exposed to the losses incurred by the subsidiary, unless and until the control of the assets is transferred to the Commissioners or other changes in power or exposure to variable returns occur. ArcelorMittal continues to monitor its risk of criminal liability pending the implementation of its environmental plan for ArcelorMittal Italia and, at this time, is unable to assess the likelihood of any proceedings or the amount of any potential ensuing liability.

On February 27, 2020, the Mayor of Taranto adopted an order addressed to ArcelorMittal Italia and Ilva related to certain emissions events that appear to have occurred in August 2019 and February 22 and 23, 2020 and that allegedly concern the Taranto plant. The order requires  ArcelorMittal Italia to identify the responsible installations within 30 days, to eliminate any anomalies at such installations causing such emission events within 60 days or, if necessary, to shut down certain installations related to such emissions events. The Mayor of Taranto also alleges that it did not receive adequate responses from the Italian Ministry of the Environment with respect to such emissions events. ArcelorMittal Italia considers the order to be unfounded and will appeal it. Following the order, the Ministry of the Environment requested additional information from the Mayor of Taranto about the events (including the type of emissions and how the events can be connected to the Taranto plant) and has also requested information from certain other industrial companies in Taranto, as to any anomalies, accidents or events that may have occurred on February 22 and 23, 2020. ArcelorMittal Italia is preparing its responses to the request for information from the Ministry of the Environment, which will also be provided to the Mayor of Taranto.

---

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 66 . 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 162 or alternatively 153 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 137 . 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 was heard before the Commercial Court of Nanterre. In November 2019, the Appeals Court of Versailles determined (having been asked to decide whether a decision by the Commercial Court of Nanterre was in fact an official, formal judgment) that the earlier decision of the Commercial Court of Nanterre was the official first instance decision of the court. As a result, ArcelorMittal is ordered to pay damages of 3 plus interest. The decision is subject to appeal.

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.

The number of claims outstanding for asbestos exposure at December 31, 2019 was 337 as compared to 367 at December 31, 2018 . The range of amounts claimed for the year ended December 31, 2019 was $ 35,000 to $ 745,000 . The aggregate costs and settlements for the year ended December 31, 2019 were 7.77 , of which 0.15 represented legal fees and 7.6 represented damages paid to the claimant. 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 .

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 on the Significant Shareholder. 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 .

9.4 Commitments

	December 31,
	2019			2018
Purchase commitments	19,697			24,594
Guarantees, pledges and other collateral	7,815			5,527
Non-cancellable operating leases*	—			1,869
Capital expenditure commitments	448			697
Other commitments	3,201			3,516
Total	31,161			36,203

*As a result of the adoption of IFRS 16 "Leases" as of January 1, 2019, the Company has recognized right–of–use assets and lease liabilities related to non–cancellable operating leases. See notes 1 and 7.

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 592 and 405 as of December 31, 2019 and 2018 , respectively. Purchase commitments include commitments given to joint ventures for 1,521 and 2,246 as of December 31, 2019 and 2018 , respectively. Commitments given to joint ventures related to purchase of output from Tameh decreased from 1,489 as of December 31, 2018 to 852 as of December 31, 2019 mainly as a result of the sale of ArcelorMittal Ostrava a.s. (see note 2.3.1). Commitments given to joint ventures also include purchase commitments of 649 and 711 related to Enerfos as of December 31, 2019 and 2018, respectively.

---

Guarantees, pledges and other collateral

Guarantees related to financial debt and credit lines given on behalf of third parties were 158 and 235 as of December 31, 2019 and 2018 , respectively. Additionally, nil and 7 were related to guarantees given on behalf of associates as of December 31, 2019 and 2018 , respectively and guarantees of 3,836 and 1,079 were given on behalf of joint ventures as of December 31, 2019 and 2018 , respectively. Guarantees given on behalf of joint ventures include 288 and 348 for the guarantees issued on behalf of Calvert and 346 and 397 for the guarantees issued on behalf of ArcelorMittal Tubular Products Al Jubail ("Al Jubail") as of December 31, 2019 and 2018 , respectively. The increase in guarantees given on behalf of joint ventures includes 2,571 with respect to the AMNS India joint venture (see note 2.4.1) and 232 (net of 50 % counter guarantee from Prime Shipping Investments Limited, an affiliate of DryLog) in relation to outstanding lease liabilities for vessels operated by Global Chartering (see note 2.3.1.).

Due to the failure of other shareholders to provide requisite equity funding by December 31, 2018, the Company's joint venture Al Jubail’s indebtedness became technically in default as of such date. As of December 31, 2019, the technical default remains pending completion of formalities as the joint venture completed the conditions necessary to clear the default, including the capital increase, prior to year end. ArcelorMittal’s guarantee of such indebtedness has not been called by the lenders, and ArcelorMittal does not currently expect it to be called. 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.

As of December 31, 2019, pledges and other collateral mainly relate to (i) mortgages entered into by the Company’s operating subsidiaries and (ii) inventories and receivables pledged to secure the South African Rand revolving borrowing base finance facility for the amount drawn of 81 and ceded bank accounts to secure environmental obligations, true sale of receivables programs and the revolving borrowing base finance facility in South Africa of 64 . Pledges of property, plant and equipment were 155 and 225 as of December 31, 2019 and 2018 , respectively. Other sureties, first demand guarantees, letters of credit, pledges and other collateral included 356 and 380 of commitments given on behalf of associates as of December 31, 2019 and 2018 , respectively and 293 and 154 of commitments given on behalf of joint ventures as of December 31, 2019 and 2018 , respectively.

In addition, other sureties, first demand guarantees, letters of credit, pledges and other collateral include 504 as of December 31, 2019 in relation to the Company's share of the obligation to deliver the follow-on funding for AMNS India in accordance with the second amended joint venture formation agreement.

Other sureties, first demand guarantees, letters of credit, pledges and other collateral included 567 as of December 31, 2018 in relation to a performance guarantee provided by the Company for the execution of the AMNS India resolution plan. The performance guarantee terminated on December 31, 2019 .

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 139 and 171 as of December 31, 2019 and 2018 , respectively .

Capital expenditure commitments also include 250 and 413 as of December 31, 2019 and 2018, respectively, 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 as of December 31, 2019 and 2018.

---

As of December 31, 2019, capital expenditure commitments relating to the Ilva acquisition include 1,311 industrial capital expenditure commitments over a remaining six-year period focused on blast furnaces, steel shops and finishing lines ( 1,439 as of December 31, 2018) and 688 environmental capital expenditure commitments ( 917 as of December 31, 2018).

Commitments to sell

NOTE 10: INCOME TAXES

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 calculated 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. In case a history of recent losses is present, the Company considers whether convincing other evidence exists, such as the character of (historical) losses and planning opportunities, to support the deferred tax assets recognition.

---

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities, when they relate to income taxes levied by the same taxation authority and when the Company intends to settle its current tax assets and liabilities on a net basis.

10.1 Income tax expense (benefit)

The components of income tax expense (benefit) are summarized as follows:

	Year Ended December 31,
	2019		2018		2017
Total current tax expense	786		928		583
Total deferred tax benefit	( 327 )		( 1,277 )		( 151 )
Total income tax expense (benefit)	459		( 349 )		432

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,
	2019			2018			2017
Net income (loss) (including non-controlling interests)	( 2,391	)		5,330			4,575
Income tax expense (benefit)	459			( 349	)		432
Income (loss) before tax	( 1,932	)		4,981			5,007
Tax expense (benefit) at the statutory rates applicable to profits (losses) in the countries 1	( 468	)		1,043			1,407
Permanent items	( 993	)		( 421	)		( 522	)
Rate changes	340			—			( 94	)
Net change in measurement of deferred tax assets	1,201			( 1,301	)		( 281	)
Tax effects of foreign currency translation	14			( 47	)		( 157	)
Tax credits	( 9	)		( 17	)		( 66	)
Other taxes	160			151			90
Others	214			243			55
Income tax expense (benefit)	459			( 349	)		432

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 ( 24.94 %), 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,
	2019			2018			2017
Tax deductible write-downs on shares and receivables	( 922	)		( 498	)		( 652	)
Juros sobre o Capital Próprio (“JSCP”)	( 32	)		( 73	)		( 4	)
Non taxable gain on bargain purchase	—			( 60	)		—
Taxable income (tax loss) of AMTFS	( 8	)		47			( 34	)
Taxable dividends	11			—			65
Other permanent items	( 42	)		163			103
Total permanent items	( 993	)		( 421	)		( 522	)

Tax deductible (taxable reversals of) 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, or taxable reversals of previously recorded 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 accounting 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 ArcelorMittal Italia (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 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 2019 tax expense from rate changes of 340 is mainly due to the impact of the decrease in the future income tax rate on deferred tax assets in Luxembourg.

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 .

Net change in measurement of deferred tax assets

The 2019 net change in measurement of deferred tax assets of 1,201 mainly consists of non-recognition of deferred tax assets on write-downs of the value of shares of consolidated subsidiaries in Luxembourg and other non-recognition and derecognition of deferred tax assets in certain tax jurisdictions, partially offset by an additional recognition of deferred tax assets of previous years of 0.6 billion due to increase in projections of future taxable income in Luxembourg driven primarily by the lower external borrowing costs.

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 ArcelorMittal S.A. tax integration in Luxembourg. 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 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 ArcelorMittal S.A. tax integration in Luxembourg. 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.

Tax effects of foreign currency translation

The tax effects of foreign currency translation of 14 , ( 47 ) and ( 157 ) at December 31, 2019 , 2018 and 2017 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, state tax and Base Erosion and Anti-Abuse Tax ("BEAT") in the United States, and Cotisation sur la Valeur Ajoutée des Entreprises ("CVAE'') in France.

Others

	Year Ended December 31,
	2019			2018			2017
Tax contingencies/settlements	225			183			7
Prior period taxes	( 20	)		21			( 7	)
Others	9			39			55
Total	214			243			55

---

10.2 Income tax recorded directly in equity and/or other comprehensive income

10.3 Uncertain tax positions

10.4 Deferred tax assets and liabilities

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

	Assets						Liabilities						Net
	2019			2018			2019			2018			2019			2018
Intangible assets	22			29			( 720	)		( 744	)		( 698	)		( 715	)
Property, plant and equipment	177			271			( 4,445	)		( 5,098	)		( 4,268	)		( 4,827	)
Inventories	261			286			( 209	)		( 251	)		52			35
Financial instruments	47			124			( 98	)		( 424	)		( 51	)		( 300	)
Other assets	157			460			( 408	)		( 572	)		( 251	)		( 112	)
Provisions	1,350			1,728			( 243	)		( 512	)		1,107			1,216
Other liabilities	469			461			( 70	)		( 331	)		399			130
Tax losses and other tax benefits carried forward	9,984			10,384			—			—			9,984			10,384
Tax credits carried forward	76			104			—			—			76			104
Untaxed reserves	—			—			( 1	)		( 2	)		( 1	)		( 2	)
Deferred tax assets / (liabilities)	12,543			13,847			( 6,194	)		( 7,934	)		6,349			5,913
Deferred tax assets													8,680			8,287
Deferred tax liabilities													( 2,331	)		( 2,374	)

The deferred tax assets recognized by the Company as of December 31, 2019 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	105,937		26,504		9,984		16,520
Tax credits carried forward	693		693		76		617
Other temporary differences	15,793		3,799		2,483		1,316
Total			30,996		12,543		18,453

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

As of December 31, 2019 , 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.

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 may also 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, 2019 , the total amount of accumulated tax losses in Luxembourg with respect to the ArcelorMittal S.A. tax integration amounted to approximately 83.3 billion , of which 34.8 billion is considered realizable, resulting in the recognition of 8.7 billion of deferred tax assets at the applicable income tax rate in Luxembourg. 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 this amount 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. 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, 21.6 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 expected lower interest expenses in Luxembourg driven by the targeted reduction of the Group net debt level in the short-term , (v) the industrial franchise agreement ("IFA") whereby ArcelorMittal S.A. licenses its business model for manufacturing, processing and distributing steel to group subsidiaries, and (vi) 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, 2019 , 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 8.7 billion recognized. The amount of future taxable income required to be generated by ArcelorMittal’s subsidiaries to utilize the deferred tax assets of 8.7 billion is at least 34.8 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.

For the period ended December 31, 2019 , ArcelorMittal recorded approximately 79 ( December 31, 2018 : 80 ) of deferred income tax liabilities in respect of deferred taxation that would arise if temporary differences on investments in subsidiaries, associates and interests in joint ventures were to be realized in the foreseeable future. No deferred tax liability has been recognized in respect of other temporary differences on investments in subsidiaries, associates and interests in joint ventures because the Company is able to control the timing of the reversal of the temporary difference and it is probable that such differences will not reverse in the foreseeable future. The amount of these unrecognized deferred tax liabilities is approximately 899 .

10.5 Tax losses, tax credits and other tax benefits carried forward

At December 31, 2019 , the Company had total estimated tax losses carried forward and other tax benefits of 105.9 billion .

This includes net operating losses and other tax benefits of 8.5 billion primarily related to subsidiaries in Basque Country in Spain, Liberia, Luxembourg, Mexico and the United States, which expire as follows:

Year expiring		Recognized		Unrecognized		Total
2020		25		144		169
2021		3		656		659
2022		2		659		661
2023		6		469		475
2024		3		212		215
2025 - 2039		354		5,934		6,288
Total		393		8,074		8,467

The remaining tax losses carried forward and other tax benefits for an amount of 97.4 billion (of which 39 billion are recognized and 58.4 billion are unrecognized) are carried forward for unlimited period of time and primarily relate to the Company’s operations in France, Germany, Luxembourg, Spain and South Africa.

At December 31, 2019 , the Company also had total estimated tax credits carried forward of 693 .

Such amount includes tax credits of 610 (of which 26 recognized and 584 unrecognized) and primarily attributable to subsidiaries in Basque Country in Spain which expire as follows:

Year expiring		Recognized		Unrecognized		Total
2020		—		3		3
2021		—		2		2
2022		—		2		2
2023		—		1		1
2024		—		1		1
2025 - 2039		26		575		601
Total		26		584		610

---

The remaining tax credits for an amount of 83 (of which 50 are recognized and 33 are unrecognized) are indefinite and primarily attributable to the Company’s operations in Brazil and Spain.

11.1 Share details

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 .

The Company’s shares consist of the following:

	December 31, 2017			Movement in year			December 31, 2018			Movement in year			December 31, 2019
Issued shares	1,021,903,623			—			1,021,903,623			—			1,021,903,623
Treasury shares	( 1,986,836	)		( 6,348,529	)		( 8,335,365	)		( 1,488,837	)		( 9,824,202	)
Total outstanding shares	1,019,916,787			( 6,348,529	)		1,013,568,258			( 1,488,837	)		1,012,079,421

The number of issued shares were 1,021,903,623 at December 31, 2017, 2018 and 2019 .

Authorized shares

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.

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 amounted to 364 as of December 31, 2018, based on the exchange rate published by the European Central Bank on May 15, 2018. The difference was transferred to additional paid-in capital. There was no change in the aggregate number of shares issued and fully paid up which continued to amount to 1,021,903,623 .

The number of authorized shares were 1,151,576,921 at December 31, 2017 , 2018 and 2019 .

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 ).

On February 15, 2019, ArcelorMittal completed a share buyback program and repurchased 4 million shares for a total value of € 80 million ( 90 ) at an average price per share of € 19.89 (equivalent to $ 22.42 ) .

The shares acquired through the buyback program are recognized as treasury shares.

---

Treasury shares

ArcelorMittal held, indirectly and directly, 9.8 million and 8.3 million treasury shares as of December 31, 2019 and December 31, 2018 , respectively.

11.2 Equity instruments and hybrid instruments

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 convertible bonds from 750 to 1,000 . The Company further extended the conversion date for the mandatory convertible bonds in 2012, 2014, 2015 (resulting in the extinguishment and recognition of a new compound instrument), 2016 and the latest on December 14, 2017.

On December 14, 2017, the conversion date of the 1,000 mandatory convertible bonds was extended from January 31, 2018 to January 29, 2021. 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 797 (net of cumulative tax and fees) and other liabilities for 184 . The derecognition of the previous instrument and the recognition at fair value of the new instrument resulted in a 92 expense included in financing costs-net in the consolidated statement of operations and a 83 decrease in non-controlling interests.

On March 29, 2019 and December 18, 2019, the Company repaid notes issued by subsidiaries which were linked to the value of the shares of Erdemir. As of December 31, 2019, the remaining notes were linked to the value of the shares of China Oriental (see note 6.1.5).

11.3 Earnings per common share

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 plus potential common shares from share unit plans and outstanding stock options whenever the conversion results in a dilutive effect.

On May 22, 2017, ArcelorMittal completed the consolidation of each three existing shares in ArcelorMittal without nominal value into one share without nominal value.

The following table provides the numerators and a reconciliation of the denominators used in calculating basic and diluted earnings per common share for the years ended December 31, 2019, 2018 and 2017.

	Year Ended December 31,
	2019			2018			2017
Net income (loss) attributable to equity holders of the parent	( 2,454	)		5,149			4,568
Weighted average common shares outstanding (in millions) for the purposes of basic earnings per share	1,013			1,015			1,020
Incremental shares from assumed conversion of restricted share units and performance share units (in millions)	—			6			4
Weighted average common shares outstanding (in millions) for the purposes of diluted earnings per share	1,013			1,021			1,024

---

11.4 Dividends

Calculations to determine the amounts available for dividends are based on ArcelorMittal’s financial statements (“ArcelorMittal S.A.”) which are prepared in accordance with IFRS, as endorsed by the European Union. ArcelorMittal S.A. has no significant manufacturing operations of its own and generates its profit mostly from financing activities and the management fees/industrial franchise agreements with 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 share premiums from the issuance of common shares. 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 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
Dividend for financial year 2018	Annual general shareholders’ meeting on May 7, 2019		0.20		June 13, 2019		203

On May 7, 2019 at the annual general meeting of shareholders, the shareholders approved the Company’s dividend of $ 0.20 per share. The dividend amounted to 204 ( 203 net of dividends paid to subsidiaries holding treasury shares), and was paid on June 13, 2019.

---

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

The tables below provide a list of the subsidiaries which include significant non-controlling interests at December 31, 2019 and 2018 and for the years ended December 31, 2019 , 2018 and 2017 .

Name of Subsidiary		Country of incorporation and operation		% of non-controlling interests and non- controlling voting rights at December 31, 2019		% of non-controlling interests and non- controlling voting rights at December 31, 2018		Net income (loss) attributable to non- controlling interests for the year ended December 31, 2019			Non-controlling interests at December 31, 2019			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
AMSA		South Africa		30.78 %		30.78 %		( 98	)		74			29			170			( 124	)
Sonasid 1		Morocco		67.57 %		67.57 %		—			103			2			107			3
ArcelorMittal Kryvyi Rih		Ukraine		4.87 %		4.87 %		( 5	)		185			15			182			10
Belgo Bekaert Arames ("BBA")		Brazil		45.00 %		45.00 %		28			141			28			136			25
Hera Ermac 2		Luxembourg		—		—		—			801			—			797			—
AMMC		Canada		15.00 %		15.00 %		114			486			91			484			91
Arceo		Belgium		62.86 %		62.86 %		3			154			4			158			4
ArcelorMittal Liberia Ltd		Liberia		15.00 %		15.00 %		18			( 250	)		( 2	)		( 268	)		( 11	)
Other								3			268			14			256			9
Total								63			1,962			181			2,022			7

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 11.2) .

The tables below provide summarized statements of financial position for the above-mentioned subsidiaries as of December 31, 2019 and 2018 and summarized statements of operations and summarized statements of cash flows for the years ended December 31, 2019 , 2018 and 2017 .

Summarized statements of financial position

	December 31, 2019
	AMSA			Sonasid			AM Kryvyi Rih			BBA			Hera Ermac			AMMC			Arceo			AM Liberia
Current assets	997			188			1,557			225			905			1,434			129			155
Non-current assets	618			102			3,530			148			1,193			3,083			122			123
Total assets	1,615			290			5,087			373			2,098			4,517			251			278
Current liabilities	907			101			1,130			98			298			457			1			1,739
Non-current liabilities	468			39			446			14			76			591			1			46
Net assets	240			150			3,511			261			1,724			3,469			249			( 1,507	)

Summarized statements of operations

	December 31, 2019
	AMSA			Sonasid			AM Kryvyi Rih			BBA			Hera Ermac			AMMC			Arceo			AM Liberia
Revenue	2,864			366			2,420			761			—			2,655			—			257
Net income (loss)	( 319	)		( 1	)		( 100	)		63			144			766			5			115
Total comprehensive income (loss)	( 312	)		—			( 141	)		64			144			761			5			115

---

Summarized statements of cash flows

	December 31, 2019
	AMSA			Sonasid			AM Kryvyi Rih			BBA			Hera Ermac			AMMC			Arceo			AM Liberia
Net cash provided by / (used in) operating activities	( 35	)		9			163			76			857			1,045			9			84
Net cash provided by / (used in) investing activities	( 79	)		( 5	)		( 270	)		( 12	)		( 114	)		( 332	)		17			( 18	)
Net cash provided by / (used in) financing activities	97			( 6	)		68			( 62	)		( 743	)		( 683	)		( 7	)		( 65	)
Impact of currency movements on cash	5			—			8			—			—			—			—			—
Cash and cash equivalents:
At the beginning of the year	72			55			73			11			—			180			27			—
At the end of the year	60			53			42			13			—			210			46			1
Dividend to non-controlling interests	—			( 4	)		—			( 18	)		—			( 102	)		( 5	)		—

Summarized statements of financial position

	December 31, 2018
	AMSA			Sonasid			AM Kryvyi Rih			BBA			Hera Ermac			AMMC			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			AMMC			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	)

---

Summarized statements of cash flows

	December 31, 2018
	AMSA			Sonasid			AM Kryvyi Rih			BBA			Hera Ermac			AMMC			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 operations

	December 31, 2017
	AMSA			Sonasid			AM Kryvyi Rih			BBA			Hera Ermac			AMMC			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	)

Summarized statements of cash flows

	December 31, 2017
	AMSA			Sonasid			AM Kryvyi Rih			BBA			Hera Ermac			AMMC			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	)		—

11.5.2 Transactions with non-controlling interests

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 their 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.

NOTE 12: RELATED PARTIES

The related parties of the Group are predominately subsidiaries, joint operations, joint ventures, associates and key management personnel (see note 8.1) 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.

12.1 Sales and trade receivables

			Year Ended December 31,									December 31,
			Sales									Trade receivables
Related parties and their subsidiaries where applicable	Category		2019			2018			2017			2019			2018
Calvert	Joint Venture		2,518			2,207			2,030			5			33
Gonvarri Steel Industries 1	Associate		1,728			2,022			1,666			42			78
ArcelorMittal CLN Distribuzione Italia S.r.l.	Joint Venture		483			511			472			57			38
Borçelik	Joint Venture		474			536			426			20			20
Bamesa	Associate		365			383			397			32			27
I/N Kote L.P.	Joint Venture		321			329			321			2			10
C.L.N. Coils Lamiere Nastri S.p.A.	Associate		247			265			233			10			6
AM RZK	Joint Venture		225			136			235			13			5
Aperam Société Anonyme ("Aperam")	Other		172			278			262			16			29
Tuper S.A.	Joint Venture		147			155			154			43			45
Tameh	Joint Venture		109			110			67			8			4
WDI 2	Associate		105			148			127			1			1
Al Jubail	Joint Venture		25			115			66			—			1
Macsteel 3	Other		—			470			521			—			2
Other			523			594			526			49			67
Total			7,442			8,259			7,503			298			366

1.	Gonvarri Steel Industries includes ArcelorMittal Gonvarri Brasil Productos Siderúrgicos which is a joint venture.

2.	WDI includes Westfälische Drahtindustrie Verwaltungsgesellschaft mbH & Co. KG and Westfälische Drahtindustrie GmbH.

3.	Macsteel was sold on October 31, 2018 .

---

12.2 Purchases and trade payables

			Year Ended December 31,									December 31,
			Purchases									Trade payables
Related parties and their subsidiaries where applicable	Category		2019			2018			2017			2019			2018
Tameh	Joint Venture		273			344			286			22			2
Calvert	Joint Venture		127			107			65			41			23
CFL Cargo S.A.	Associate		63			59			60			17			9
Al Jubail	Joint Venture		53			42			2			4			22
Exeltium S.A.S.	Associate		52			54			53			—			—
Sitrel	Joint Venture		49			41			—			1			3
Aperam	Other		47			85			94			7			6
Baycoat Limited Partnership	Joint Venture		47			43			42			8			5
Gonvarri Steel Industries 1	Associate		22			35			19			15			31
Baffinland 2	Associate		16			28			142			1			16
Other			343			278			270			135			84
Total			1,092			1,116			1,033			251			201

1.	Gonvarri Steel Industries includes ArcelorMittal Gonvarri Brasil Productos Siderúrgicos which is a joint venture.

2.	Baffinland was classified as an associate as of October 31, 2017 (see note 2).

12.3 Other transactions with related parties

At December 31, 2019, subsequent to the ArcelorMittal's sale of a 50 % controlling interest in Global Chartering to DryLog (see note 2.3.1), the Company signed a 10 year freight contract with Global Chartering, whereby ArcelorMittal agreed to provide cargo up to 16.8 million tonnes annually for shipping, representing 80 % of the current capacity of Global Chartering. As of December 31, 2019, the Company also had an outstanding short-term loan of 127 granted to Global Chartering, which is expected to be repaid following the sale-and-lease back of three vessels owned by Global Chartering.

At December 31, 2019, the shareholder loans granted by the Company to Al Jubail, with various maturity dates , had a carrying value of 109 (see note 2.4.3).

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, 2019 , the loans amounted to 162 including accrued interest. The loans bear interest from 3 % to 4.77 % and have various maturity dates ranging from less than 1 to 25 years .

On November 8, 2019, Baffinland entered into an agreement with a bank to finance up to 6 million tonnes at 78 % of the value of the iron ore produced and hauled to the port of Milne Inlet by Baffinland up to a limit of 450 . ArcelorMittal's shared operator rights terminated on June 30, 2018 and the Company retained marketing rights until December 31, 2019. ArcelorMittal is working with Nunavut Iron Ore and Baffinland on this transition of the marketing activities.