ArcelorMittal Annual Report 2008

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Notes to the Consolidated Financial Statements continued ArcelorMittal and Subsidiaries (millions of U.S. dollars, except share and per share data) The following table summarizes information about total stock options of the Company outstanding as of December 31, 2008: Options Outstanding Weighted average Options exercisable Exercise prices (per option) Number of options contractual life (in years) (number of options) 82.57 7,201,250 9.59 13,500 74.535 13,000 8.95 4,333 64.30 5,729,402 8.59 1,960,913 41.93 1,445,757 4.50 — 33.76 2,739,507 7.68 1,671,503 28.75 1,737,997 6.65 1,737,997 23.745 48,000 9.96 — 22.245 20,585 9.87 — 19.69 11,429 3.50 11,429 15.96 29,373 2.50 29,373 11.78 17,622 1.50 17,622 11.94 186,099 0.71 186,099 8.57 165,100 1.42 165,100 2.26 213,345 3.27 213,345 $2.26 – 82.57 19,558,466 8.15 6,011,214 For the purpose of calculating earnings per share, diluted weighted average common shares outstanding excludes 5 million and 9 million potential common shares from stock options outstanding for the years ended December 31, 2007 and 2008, respectively, because such stock options are anti-dilutive. Note 18: Financial Income and Expense Financial income and expense recognized in the years ended December 31, 2007 and 2008 is as follows: 2007 2008 Recognized in profit and loss Interest expense (2,174) (2,516) Interest income 577 497 Net gain (loss) on derivative instruments 431 (177) Net foreign exchange result and others 239 (156) Total (927) (2,352) Recognized in equity (Company share) Net change in fair value of available-for-sale financial assets 569 (78) Effective portion of changes in fair value of cash flow hedge (336) 1,844 Foreign currency translation differences for foreign operations 3,220 (6,122) Total 3,453 (4,356) Interest expense includes interest on borrowings, interest cost on defined benefit obligations and bank fees. Interest on borrowings amounted to 1,839 and 2,044 for the year ended December 31, 2007 and 2008, respectively. 122
Note 19: Income Tax Income tax expense The breakdown of the income tax expense (benefit) for each of the years ended December 31, 2007 and 2008, respectively, is summarized as follows: The following table reconciles the income tax expense (benefit) to the statutory tax expense as calculated: Year ended Year ended December 31, December 31, 2007 2008 Total current income tax expense 2,544 2,494 Total deferred tax expense (benefit) 494 (1,396) Total income tax expense 3,038 1,098 Year ended Year ended December 31, December 31, 2007 2008 Net income: 10,368 9,399 Minority interest 1,482 1,040 Income from investments in associates and joint ventures (985) (1,653) Income tax expense 3,038 1,098 Income before tax and income from investments in associates and joint ventures 13,903 9,884 Tax at the domestic rates applicable to profits in the countries 3,926 1,392 Permanent items (318) (540) Benefit arising from interest in partnership (51) (21) Rate changes (209) (151) Net change in measurement of deferred tax assets 103 (410) Re-characterization of capital loss to ordinary loss — — Benefit of tax holiday (27) (7) Effects of foreign currency translation (297) 728 Tax deduction (105) — Tax credits (14) (95) Other taxes 67 177 Others (37) 25 Income tax expense 3,038 1,098 The 2008 permanent items of (540) result from deemed deductions on taxable income of (979), tax expense relating to interest recaptures of 184, tax expense of 177 relating to non-deductible provisions and tax expense of 78 relating to other permanent items. The 2007 permanent items of (318) result from deemed deductions on taxable income of (347), income tax expense of 98 on inter-company dividends and share transfers, and other taxable income of (69) relating to other permanent items. The 2008 tax benefit from rate changes of (151) mainly results from the decrease of corporate income tax rates in Kazakhstan, Luxembourg, South Africa and Russia. The 2007 tax benefit from rate changes of (209) results from the decrease of corporate income tax rates in Canada, Czech Republic, Germany and Morocco. The 2008 net change in measurement of deferred tax assets of (410) primarily consists of a net tax benefit of 295 for recognition of acquired deferred tax assets and other net tax benefit of 115, mainly relating to recognized deferred tax assets for not acquired deferred tax assets, partly offset by non-recognition of deferred tax assets for losses of the year. The 2007 net change in measurement of deferred tax assets of 103 primarily consists of a tax benefit of 260 for acquired deferred tax assets, a tax expense of 192 for unrecognized net operating losses relating to the legal merger of Arcelor and Mittal Steel and other net tax expense of 171, mainly relating to deferred tax assets not recognized for losses of the year. 123 2008 Consolidated Financial Statements continued ArcelorMittal Annual Report 2008
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ArcelorMittal Annual Report 2008
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Contents Management Report 01 Our P
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Our Philosophy ArcelorMittal1 is th
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Whilst we must accept that real dem
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To this end, I must thank all our e
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Given the prime importance of Healt
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What is the outlook for the year ah
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July ArcelorMittal and AREVA sign a
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Health and Safety: The Number 1 Pri
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Health and Safety: The Number 1 Pri
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In 2008, ArcelorMittal and trade un
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Board of Directors Lakshmi N Mittal
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Board of Directors continued Vanish
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Senior Management - Group Managemen
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“ When people hear the word susta
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ArcelorMittal is the largest produc
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ArcelorMittal’s brand promise is
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International mobility Internationa
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ArcelorMittal’s longer-term respo
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ArcelorMittal Foundation The Arcelo
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The Casa Buna prototype was constru
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Las Truchas Vinton Guanajuato Láza
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Africa Jorf Lasfar Tiris Zemmour Ye
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Mergers and acquisitions have histo
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The following table provides a summ
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Operational Review - Operating inco
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Operating income for the year ended
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Customers and Innovation Much of th
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• In Russia, ArcelorMittal was in
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Analysts and Investors As the world
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Corporate Governance Board of Direc
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Corporate Governance continued Grou
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Corporate Governance continued Comp
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Corporate Governance continued The
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Share Capital and Voting Rights Arc
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By 2012, Spain is expected to have
Page 76 and 77: Underpinning all our operations is
Page 78 and 79: Consolidated Balance Sheets Arcelor
Page 80 and 81: Consolidated Statements of Changes
Page 82 and 83: Notes to the Consolidated Financial
Page 150 and 151: Auditors’ Report on the Consolida
Page 152 and 153: Profit and Loss Account ArcelorMitt
Page 154 and 155: Notes to the Annual Accounts contin
Page 162 and 163: Auditors’ Report on the Annual Ac
Page 164 and 165: Notes 160
Page 166 and 167: Notes 162
Page 168: Photography: ArcelorMittal Photo Li
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ArcelorMittal Annual Report 2008

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