| | | | | | | | | | | |
| | | | | |
| | | | | |
Related parties and their subsidiaries where applicable | | | | | | | | | | | |
| | | | | | | | | | | |
Gonvarri Steel Industries 1 | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
ArcelorMittal CLN Distribuzione Italia | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Coils Lamiere Nastri (C.L.N.) | | | | | | | | | | | |
| | | | | | | | | | | |
ArcelorMittal RZK \u00c7elik Servis Merkezi | | | | | | | | | | | |
Acciaierie d'Italia\u00a0 3 | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Industria Argentina de Aceros S.A. (\"Acindar\"), for which
hyperinflationary accounting is applied (see note 2.2.2). The
consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
(\u201cIFRS\u201d) as issued by the International Accounting Standards
Board (\u201cIASB\u201d) and as adopted by the European Union and are
presented in U.S. dollar with all amounts rounded to the nearest
million, except for share and per share data.
",
"dimensions": {
"concept": "ifrs-full:StatementOfIFRSCompliance",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMDcvZnJhZzo5MzQxMDA2MThiNTE0ZjAzOWQwYTBjNDJlNjY5N2ZkOC90ZXh0cmVnaW9uOjkzNDEwMDYxOGI1MTRmMDM5ZDBhMGM0MmU2Njk3ZmQ4XzI3NDg3NzkwNjk3MjMy_c246da42-eeb4-4a80-aa58-d99c35161d6b": {
"value": "1.1\u00a0 \u00a0 Basis of presentation
The consolidated financial statements have been prepared on a
historical cost basis, except for equity instruments and certain
trade receivables at fair value through other comprehensive
income (\"FVOCI\"), financial assets at fair value through profit or
loss (\"FVTPL\"), derivative financial instruments and biological
assets, which are measured at fair value less cost to sell,
inventories, which are measured at the lower of net realizable
value or cost, and the financial statements of the Company\u2019s
Venezuelan tubular production facilities Industrias Unicon CA
(\u201cUnicon\u201d) and the Company's Argentinian operation Acindar
Industria Argentina de Aceros S.A. (\"Acindar\"), for which
hyperinflationary accounting is applied (see note 2.2.2). The
consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
(\u201cIFRS\u201d) as issued by the International Accounting Standards
Board (\u201cIASB\u201d) and as adopted by the European Union and are
presented in U.S. dollar with all amounts rounded to the nearest
million, except for share and per share data.
As from April 1, 2021, ArcelorMittal implemented changes to its
organizational structure whereby primary responsibility for
captive mining operations whose output is mainly consumed by
their respective steel segments has been transferred to such
segments. The Mining segment retains primary responsibility for
the operation of the seaborne oriented operations at
ArcelorMittal Mining Canada G.P. and ArcelorMittal
Infrastructure Canada G.P. (\"AMMC\") and ArcelorMittal Liberia
Limited, and continues to provide technical support to all mining
operations within the Company. Accordingly, the Company
modified the structure of its segment information in order to
reflect changes in its approach to managing its operations and
segment disclosures have been recast to reflect this new
segmentation in conformity with IFRS. Only the seaborne-
oriented operations of AMMC and ArcelorMittal Liberia Limited
are reported within the Mining segment. The results of all other
mines are henceforth accounted for within the steel segment
that they primarily supply.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMTAvZnJhZzo2NmU0NTM2YjgxZGM0MTViYjJmMmVhM2MyNDZhMTFhMy90ZXh0cmVnaW9uOjY2ZTQ1MzZiODFkYzQxNWJiMmYyZWEzYzI0NmExMWEzXzgyMTQ_94a14ce1-4d4a-4aca-b91e-75b32f3bd106": {
"value": "1.2\u00a0 \u00a0 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\u2019s 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 order to assess the recoverable amount of tangible
and intangible assets at cash-generating unit (\"CGU\") level and
of goodwill at group of cash-generating unit (\"GCGU\") level, the
Company mainly determines their value in use on the basis of
the present value of cash flow projections. 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. When determining value in use,
management also applies judgement when assessing whether
cash flows expected to arise to achieve sustainability and
decarbonization targets are deemed to maintain the same level
of economic benefits or whether they improve or enhance the
asset's performance. 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. In connection with each
of its acquisitions, the Company undertakes a process to identify
all assets and liabilities acquired, including intangible assets.
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. Estimated fair values are
based on information available at acquisition date and on
expectations and assumptions that have been deemed
reasonable by management. There are several methods that
can be used to determine the fair value of assets acquired and
liabilities assumed. The \"income approach\" is based on the
forecast of the expected future cash flows adjusted to present
value by applying an appropriate discount rate that reflects the
risk factors associated with the cash flow streams. Some of the
more significant estimates and assumptions inherent in the
income method or other methods include the amount and timing
of projected future cash flows; the discount rate selected to
measure the risks inherent in the future cash flows (weighted
average cost of capital); the assessment of the asset's life cycle
and the competitive trends impacting the asset, including
consideration of any technical, legal, regulatory or economic
barriers to entry. The \"cost approach\" estimates the value of an
asset based on the current cost to reproduce of replace the
asset. Replacement cost is determined based on market data
subsequently adjusted for physical, functional and economic
obsolescence. The most common purchase accounting
adjustments relate to the following assets and liabilities:
\u2022The fair value of identifiable intangible assets
(generally patents, customer relationships, technology,
brand or favorable contracts) is estimated based on the
above-mentioned income approach;
\u2022Property, plant and equipment is recorded at market
value, or, if not available, depreciated replacement
cost;
\u2022The fair value of pension and other post-employment
benefits is determined separately for each plan using
actuarial assumptions valid as of the acquisition date
relating to the population of employees involved and
the fair value of plan assets.
\u2022Inventories are estimated based on expected selling
prices at the date of acquisition reduced by an estimate
of selling expenses and a normal profit margin.
\u2022Adjustments to deferred tax assets and liabilities of the
acquiree are recorded to reflect the deferred tax effects
of the fair value adjustments relating to identifiable
assets and liabilities other than goodwill.
Determining the estimated residual useful lives of tangible and
intangible assets acquired requires judgement and certain
intangible assets may be considered to have indefinite useful
lives.
Financial instruments (note 6.1.5) and financial amounts
receivable (note 4.5 and 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.
Mineral reserve and resource 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. Mineral resource estimates
constitute the part of a mineral deposit that have the potential to
be economically and legally extracted or produced at the time of
the resource determination. The potential for economic viability
is established through qualitative evaluation of relevant technical
and economic factors likely to influence the prospect of
economic extraction. A measured mineral resource is that part of
a mineral resource for which quantity, grade or quality, densities,
shape, and physical characteristics are so well established that
they can be estimated with confidence sufficient to allow the
appropriate application of technical and economic parameters,
to support production planning and evaluation of the economic
viability of the deposit. The estimate is based on detailed and
reliable exploration, sampling and testing information gathered
through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely
enough to confirm both geological and grade continuity. An
indicated mineral resource is that part of a mineral resource for
which quantity, grade or quality, densities, shape and physical
characteristics, can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation
of the economic viability of the deposit. The estimate is based
on detailed and reliable exploration sampling and testing
information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill
holes that are spaced closely enough for geological and grade
continuity to be reasonably assumed. An inferred mineral
resource is that part of a mineral resource for which quantity and
grade or quality can be estimated on the basis of geological
evidence and limited sampling, and reasonably assumed but not
verified geological and grade continuity. The estimate is based
on limited information and sampling gathered through
appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes. Estimates of mineral
reserves and resources 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 and resources are updated annually and
calculated using a reference price duly adjusted for quality, ore
content, logistics and other considerations. In order to estimate
reserves and resources, 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 and resources 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 and resources
change from period to period, and because additional geological
data is generated during the course of operations, estimates of
reserves and resources may change from period to period.
Judgements and estimates made in assessing the impact of
climate change and the transition to a low carbon economy
The Company continues to develop its assessment of the
potential impacts of climate change and the transition to a low
carbon economy and has considered such impacts when
preparing its consolidated financial statements. ArcelorMittal's
decarbonization strategy aims to achieve carbon neutrality by
2050 in line with the United Nations' Paris agreement. By 2030,
the Company is targeting a 25% reduction in its CO2 emissions
intensity across its global steel and mining operations, with an
increased European target of 35%. Both targets cover both
scope 1 and 2. The decarbonization strategy involves switching
where applicable from the BF-BOF (\"Blast Furnace-Basic
Oxygen Furnace\") to low-carbon steelmaking technologies
through the DRI-EAF (\"Direct Reduced Iron-Electric Arc
Furnace\"). It also includes Smart Carbon, which comprises bio-
energy and carbon capture utilization and storage (\"CCUS\") and
requires availability of stable renewable energy\u00a0 infrastructures
(electricity, hydrogen) at competitive prices and a fair
competitive landscape that accounts for the global nature of the
steel market, ensuring domestic production, import and exports
are subject to equivalent greenhouse gas (\"GHG\") reduction
regulations. ArcelorMittal's decarbonization strategy in each part
of the world where the Company operates is now based on the
same assumptions in terms of green hydrogen cost, CCUS or
introduction of climate-friendly policies. In some countries,
particularly in the EU and Canada, the Company sees sufficient
policy incentives to enable it to \u2018Accelerate\u2019 its decarbonization
plans. On February 17, 2023, the European Commission
approved, under EU state aid rules, a \u20ac460 million Spanish
measure to support ArcelorMittal Espa\u00f1a in construction of the
new DRI installation in Gij\u00f3n. Where these conditions do not yet
exist, ArcelorMittal will continue to make improvements to \u2018Move\u2019
but it is difficult to \u2018Accelerate\u2019 without becoming uncompetitive
in that market. Assumptions in respect of climate change and
the transition to a low carbon economy may impact the
Company\u2019s significant judgements and key estimates and result
in material changes to financial results and the carrying values
of certain assets and liabilities in future reporting periods.
\u2022Property, plant and equipment: Considering the expected
date of retirement of some assets in particular certain blast
furnaces, basic oxygen furnaces, sinter plants and coke
plants following investments in low-carbon steelmaking
technologies, the Company decreased estimates of residual
useful lives of such items of property, plant and equipment
for its flat carbon operations in the EU and in Canada.
\u2022Impairment of tangible and intangible assets, including
goodwill: Value in use calculations relating to flat carbon
operations in the EU and in Canada include the impact of
decarbonization; accordingly the Company developed
assumptions in determining related capital expenditures
which reflect announced commitments and initiatives in
place, operating costs including commodity prices and
carbon emission costs on the basis of historical experience
and expectations of future changes. This requires to assess
the future development in supply, technology change,
production changes and other important factors. These
assumptions may change, which could result in significant
changes to value in use calculations in future periods and
affects impairment assessments.
\u2022Decommissioning costs: Over the next ten years, the
retirement of certain above-mentioned assets in the context
of the transition to low-carbon steelmaking infrastructures
may lead to certain decommissioning costs. The Company
considered such costs in its value in use calculations but it
has not recognized decommissioning provisions related to
decarbonization as the obligating event has not occurred
yet. Decommissioning cost estimates are based on the
known regulatory and external environment. These cost
estimates may change in the future including as a result of
the transition to a lower carbon economy.
Situation in Ukraine and collateral consequences
The Company's operations in Ukraine consist of a steel plant,
which produced 1.2 million tonnes of steel in 2022 (4.9 million
tonnes in 2021), and (captive) mines that produced 4.9 million
tonnes of iron ore in 2022 (11.7 million tonnes in 2021); the
related property, plant and equipment had a carrying value of
0.6 billion (including impairment charge as discussed below) on
the Company\u2019s statement of financial position at December 31,
2022 (2.3 billion at December 31, 2021). In 2022, the
Company\u2019s Ukrainian operations (and in particular its Kryvyi Rih
steel plant) recorded 1.1 million of steel shipments (4.6 million
tonnes in 2021), generating 1.4 billion of sales (4.1 billion in
2021) including 0.4 billion of sales (0.9 billion in 2021) to
customers located in Ukraine.
Following the war outbreak on February 24, 2022, the Company
idled its Ukrainian operations on March 3, 2022 but restarted
blast furnace No.6 (one of the three blast furnaces representing
approximately 20% of Kryvyi Rih capacity) on April 11, 2022 to
resume low levels of pig iron production. Iron ore production
was approximately at 55% of capacity during the first half of
2022. During the third quarter, iron ore production was
temporarily suspended due to weaker demand and logistic
constraints but restarted in early October 2022 at approximately
25% level. ArcelorMittal continued to exercise control over its
Ukrainian operations and key production assets have not been
seriously damaged at the date of this report (as a result of the
missile strike at the plant premises on December 5, 2022 the
building of the rolling shop #2 finished goods warehouse was
partially destroyed). In addition, despite the lower level of
activity, none of the assets are held for sale or were
discontinued. In the context of the annual impairment test of
intangible assets, including goodwill, and tangible assets, the
Company revised its future cash flow projections and
considering that there is significant uncertainty about the
evolution of the geopolitical context in Ukraine and the timing
and ability for the Company to resume production to a normal
level, which resulted in a substantial increase in the discount
rate, ArcelorMittal recognized a 1,026 impairment loss of
property, plant and equipment and intangibles (see note 5.3).
The increased geopolitical risks induced by the war in Ukraine
have adversely impacted global macroeconomic conditions
leading to inflationary pressure, rising interest rates and energy
costs. As of October 1, 2022, when goodwill is tested for
impairment, discount rates applied for value in use calculations
include a higher risk-free rate as compared to October 1, 2021.
While rising energy costs have weighed on the Company's
profitability in the second half of 2022, the Company has taken
mitigating actions, as it has adapted production levels, optimized
energy consumption and has been able to announce and will
implement certain increases in steel selling prices",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMTAvZnJhZzo2NmU0NTM2YjgxZGM0MTViYjJmMmVhM2MyNDZhMTFhMy90ZXh0cmVnaW9uOjY2ZTQ1MzZiODFkYzQxNWJiMmYyZWEzYzI0NmExMWEzXzgyMTM_cda4007d-7509-4805-91c3-d3ac79660158": {
"value": "
The following summary provides further information about the
Company\u2019s 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 order to assess the recoverable amount of tangible
and intangible assets at cash-generating unit (\"CGU\") level and
of goodwill at group of cash-generating unit (\"GCGU\") level, the
Company mainly determines their value in use on the basis of
the present value of cash flow projections. 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. When determining value in use,
management also applies judgement when assessing whether
cash flows expected to arise to achieve sustainability and
decarbonization targets are deemed to maintain the same level
of economic benefits or whether they improve or enhance the
asset's performance. 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. In connection with each
of its acquisitions, the Company undertakes a process to identify
all assets and liabilities acquired, including intangible assets.
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. Estimated fair values are
based on information available at acquisition date and on
expectations and assumptions that have been deemed
reasonable by management. There are several methods that
can be used to determine the fair value of assets acquired and
liabilities assumed. The \"income approach\" is based on the
forecast of the expected future cash flows adjusted to present
value by applying an appropriate discount rate that reflects the
risk factors associated with the cash flow streams. Some of the
more significant estimates and assumptions inherent in the
income method or other methods include the amount and timing
of projected future cash flows; the discount rate selected to
measure the risks inherent in the future cash flows (weighted
average cost of capital); the assessment of the asset's life cycle
and the competitive trends impacting the asset, including
consideration of any technical, legal, regulatory or economic
barriers to entry. The \"cost approach\" estimates the value of an
asset based on the current cost to reproduce of replace the
asset. Replacement cost is determined based on market data
subsequently adjusted for physical, functional and economic
obsolescence. The most common purchase accounting
adjustments relate to the following assets and liabilities:
\u2022The fair value of identifiable intangible assets
(generally patents, customer relationships, technology,
brand or favorable contracts) is estimated based on the
above-mentioned income approach;
\u2022Property, plant and equipment is recorded at market
value, or, if not available, depreciated replacement
cost;
\u2022The fair value of pension and other post-employment
benefits is determined separately for each plan using
actuarial assumptions valid as of the acquisition date
relating to the population of employees involved and
the fair value of plan assets.
\u2022Inventories are estimated based on expected selling
prices at the date of acquisition reduced by an estimate
of selling expenses and a normal profit margin.
\u2022Adjustments to deferred tax assets and liabilities of the
acquiree are recorded to reflect the deferred tax effects
of the fair value adjustments relating to identifiable
assets and liabilities other than goodwill.
Determining the estimated residual useful lives of tangible and
intangible assets acquired requires judgement and certain
intangible assets may be considered to have indefinite useful
lives.
Financial instruments (note 6.1.5) and financial amounts
receivable (note 4.5 and 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.
Mineral reserve and resource 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. Mineral resource estimates
constitute the part of a mineral deposit that have the potential to
be economically and legally extracted or produced at the time of
the resource determination. The potential for economic viability
is established through qualitative evaluation of relevant technical
and economic factors likely to influence the prospect of
economic extraction. A measured mineral resource is that part of
a mineral resource for which quantity, grade or quality, densities,
shape, and physical characteristics are so well established that
they can be estimated with confidence sufficient to allow the
appropriate application of technical and economic parameters,
to support production planning and evaluation of the economic
viability of the deposit. The estimate is based on detailed and
reliable exploration, sampling and testing information gathered
through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely
enough to confirm both geological and grade continuity. An
indicated mineral resource is that part of a mineral resource for
which quantity, grade or quality, densities, shape and physical
characteristics, can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation
of the economic viability of the deposit. The estimate is based
on detailed and reliable exploration sampling and testing
information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill
holes that are spaced closely enough for geological and grade
continuity to be reasonably assumed. An inferred mineral
resource is that part of a mineral resource for which quantity and
grade or quality can be estimated on the basis of geological
evidence and limited sampling, and reasonably assumed but not
verified geological and grade continuity. The estimate is based
on limited information and sampling gathered through
appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes. Estimates of mineral
reserves and resources 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 and resources are updated annually and
calculated using a reference price duly adjusted for quality, ore
content, logistics and other considerations. In order to estimate
reserves and resources, 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 and resources 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 and resources
change from period to period, and because additional geological
data is generated during the course of operations, estimates of
reserves and resources may change from period to period.
Judgements and estimates made in assessing the impact of
climate change and the transition to a low carbon economy
The Company continues to develop its assessment of the
potential impacts of climate change and the transition to a low
carbon economy and has considered such impacts when
preparing its consolidated financial statements. ArcelorMittal's
decarbonization strategy aims to achieve carbon neutrality by
2050 in line with the United Nations' Paris agreement. By 2030,
the Company is targeting a 25% reduction in its CO2 emissions
intensity across its global steel and mining operations, with an
increased European target of 35%. Both targets cover both
scope 1 and 2. The decarbonization strategy involves switching
where applicable from the BF-BOF (\"Blast Furnace-Basic
Oxygen Furnace\") to low-carbon steelmaking technologies
through the DRI-EAF (\"Direct Reduced Iron-Electric Arc
Furnace\"). It also includes Smart Carbon, which comprises bio-
energy and carbon capture utilization and storage (\"CCUS\") and
requires availability of stable renewable energy\u00a0 infrastructures
(electricity, hydrogen) at competitive prices and a fair
competitive landscape that accounts for the global nature of the
steel market, ensuring domestic production, import and exports
are subject to equivalent greenhouse gas (\"GHG\") reduction
regulations. ArcelorMittal's decarbonization strategy in each part
of the world where the Company operates is now based on the
same assumptions in terms of green hydrogen cost, CCUS or
introduction of climate-friendly policies. In some countries,
particularly in the EU and Canada, the Company sees sufficient
policy incentives to enable it to \u2018Accelerate\u2019 its decarbonization
plans. On February 17, 2023, the European Commission
approved, under EU state aid rules, a \u20ac460 million Spanish
measure to support ArcelorMittal Espa\u00f1a in construction of the
new DRI installation in Gij\u00f3n. Where these conditions do not yet
exist, ArcelorMittal will continue to make improvements to \u2018Move\u2019
but it is difficult to \u2018Accelerate\u2019 without becoming uncompetitive
in that market. Assumptions in respect of climate change and
the transition to a low carbon economy may impact the
Company\u2019s significant judgements and key estimates and result
in material changes to financial results and the carrying values
of certain assets and liabilities in future reporting periods.
\u2022Property, plant and equipment: Considering the expected
date of retirement of some assets in particular certain blast
furnaces, basic oxygen furnaces, sinter plants and coke
plants following investments in low-carbon steelmaking
technologies, the Company decreased estimates of residual
useful lives of such items of property, plant and equipment
for its flat carbon operations in the EU and in Canada.
\u2022Impairment of tangible and intangible assets, including
goodwill: Value in use calculations relating to flat carbon
operations in the EU and in Canada include the impact of
decarbonization; accordingly the Company developed
assumptions in determining related capital expenditures
which reflect announced commitments and initiatives in
place, operating costs including commodity prices and
carbon emission costs on the basis of historical experience
and expectations of future changes. This requires to assess
the future development in supply, technology change,
production changes and other important factors. These
assumptions may change, which could result in significant
changes to value in use calculations in future periods and
affects impairment assessments.
\u2022Decommissioning costs: Over the next ten years, the
retirement of certain above-mentioned assets in the context
of the transition to low-carbon steelmaking infrastructures
may lead to certain decommissioning costs. The Company
considered such costs in its value in use calculations but it
has not recognized decommissioning provisions related to
decarbonization as the obligating event has not occurred
yet. Decommissioning cost estimates are based on the
known regulatory and external environment. These cost
estimates may change in the future including as a result of
the transition to a lower carbon economy.
Situation in Ukraine and collateral consequences
The Company's operations in Ukraine consist of a steel plant,
which produced 1.2 million tonnes of steel in 2022 (4.9 million
tonnes in 2021), and (captive) mines that produced 4.9 million
tonnes of iron ore in 2022 (11.7 million tonnes in 2021); the
related property, plant and equipment had a carrying value of
0.6 billion (including impairment charge as discussed below) on
the Company\u2019s statement of financial position at December 31,
2022 (2.3 billion at December 31, 2021). In 2022, the
Company\u2019s Ukrainian operations (and in particular its Kryvyi Rih
steel plant) recorded 1.1 million of steel shipments (4.6 million
tonnes in 2021), generating 1.4 billion of sales (4.1 billion in
2021) including 0.4 billion of sales (0.9 billion in 2021) to
customers located in Ukraine.
Following the war outbreak on February 24, 2022, the Company
idled its Ukrainian operations on March 3, 2022 but restarted
blast furnace No.6 (one of the three blast furnaces representing
approximately 20% of Kryvyi Rih capacity) on April 11, 2022 to
resume low levels of pig iron production. Iron ore production
was approximately at 55% of capacity during the first half of
2022. During the third quarter, iron ore production was
temporarily suspended due to weaker demand and logistic
constraints but restarted in early October 2022 at approximately
25% level. ArcelorMittal continued to exercise control over its
Ukrainian operations and key production assets have not been
seriously damaged at the date of this report (as a result of the
missile strike at the plant premises on December 5, 2022 the
building of the rolling shop #2 finished goods warehouse was
partially destroyed). In addition, despite the lower level of
activity, none of the assets are held for sale or were
discontinued. In the context of the annual impairment test of
intangible assets, including goodwill, and tangible assets, the
Company revised its future cash flow projections and
considering that there is significant uncertainty about the
evolution of the geopolitical context in Ukraine and the timing
and ability for the Company to resume production to a normal
level, which resulted in a substantial increase in the discount
rate, ArcelorMittal recognized a 1,026 impairment loss of
property, plant and equipment and intangibles (see note 5.3).
The increased geopolitical risks induced by the war in Ukraine
have adversely impacted global macroeconomic conditions
leading to inflationary pressure, rising interest rates and energy
costs. As of October 1, 2022, when goodwill is tested for
impairment, discount rates applied for value in use calculations
include a higher risk-free rate as compared to October 1, 2021.
While rising energy costs have weighed on the Company's
profitability in the second half of 2022, the Company has taken
mitigating actions, as it has adapted production levels, optimized
energy consumption and has been able to announce and will
implement certain increases in steel selling prices",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
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.
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\u2019s
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.\u00a0
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.
Uncertain (income) tax positions are periodically assessed by
the Company based on management\u2019s best judgment given any
changes in the facts, circumstances and information available
and applicable tax laws. When it is probable that the tax
authorities will not accept the position taken, the Group
establishes provisions based on the most likely amount of the
liability (recovery) or weighted average of various possible
outcomes to reflect the effect of the uncertainty in determining
the related taxable profit (tax loss), tax bases, unused tax
losses, unused tax credits or tax rates, to the extent that a
reliable estimate can be made.",
"dimensions": {
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"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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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.
8.2\u00a0 \u00a0 Deferred employee benefits
ArcelorMittal\u2019s 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.\u00a0
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.\u00a0
Termination plans are those plans that primarily correspond to
terminating an employee\u2019s contract usually 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 long-term termination plans
(like early retirement plans) are calculated annually on the basis
of the number of employees that have taken or contractually
agreed to take early retirement and are discounted using an
interest rate that corresponds to that of high quality bonds that
have maturity dates similar to the terms of the Company\u2019s 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.
\u2022Discount rates \u2013 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.
\u2022Rate of compensation increase \u2013 The rate of
compensation increase reflects actual experience and
the Company\u2019s long-term outlook, including
contractually agreed wage rate increases for
represented hourly employees.
\u2022Healthcare cost trend rate \u2013 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.
\u2022Mortality and retirement rates \u2013 Mortality and
retirement rates are based on actual and projected
plan experience.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMTAvZnJhZzo2NmU0NTM2YjgxZGM0MTViYjJmMmVhM2MyNDZhMTFhMy90ZXh0cmVnaW9uOjY2ZTQ1MzZiODFkYzQxNWJiMmYyZWEzYzI0NmExMWEzXzI3NDg3NzkwNzEzNDgx_d6b68654-9740-4709-928d-5433747bc07c": {
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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.
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 (\u201cARO\u201d)
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\u2019s 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\u2019s 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.
These assessments can involve a series of complex judgments
about future events and can rely heavily on estimates and
assumptions. The assessments are based on estimates and
assumptions that have been deemed reasonable by
management. The Company believes that the aggregate
provisions recorded for the above matters are adequate based
upon currently available information. However, given the
inherent uncertainties related to these cases and in estimating
contingent liabilities, the Company could, in the future, incur
judgments that have a material adverse effect on its results of
operations in any particular period. The Company considers it
highly unlikely, however, that any such judgments could have a
material adverse effect on its liquidity or financial condition.",
"dimensions": {
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"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Impairment of tangible and intangible assets, including goodwill
(note 5.3): In order to assess the recoverable amount of tangible
and intangible assets at cash-generating unit (\"CGU\") level and
of goodwill at group of cash-generating unit (\"GCGU\") level, the
Company mainly determines their value in use on the basis of
the present value of cash flow projections. 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. When determining value in use,
management also applies judgement when assessing whether
cash flows expected to arise to achieve sustainability and
decarbonization targets are deemed to maintain the same level
of economic benefits or whether they improve or enhance the
asset's performance. Discount rates are reviewed annually.
Impairment of tangible and intangible assets, including
goodwill: Value in use calculations relating to flat carbon
operations in the EU and in Canada include the impact of
decarbonization; accordingly the Company developed
assumptions in determining related capital expenditures
which reflect announced commitments and initiatives in
place, operating costs including commodity prices and
carbon emission costs on the basis of historical experience
and expectations of future changes. This requires to assess
the future development in supply, technology change,
production changes and other important factors. These
assumptions may change, which could result in significant
changes to value in use calculations in future periods and
affects impairment assessments.
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 (\u201cGCGU\u201d) 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.
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 2022
impairment test of goodwill did not include the GCGU
corresponding to the Mining segment (as from April 1, 2021,
ArcelorMittal implemented changes to its organizational
structure - see note 1.1) 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 $70 per tonne to $110 per tonne for iron ore ($71 per
tonne to $112 per tonne in 2021) and $170 per tonne to $268
per tonne ($144 per tonne to $240 per tonne in 2021) 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.
The Company considered its exposure to certain climate-related
risks which could affect its estimates of future cash flow
projections applied for the determination of the recoverable
amount of its GCGUs and CGUs. With the switch to electric
vehicles and the move to wind and solar power generation, the
Company sees additional opportunities as customers deepen
their understanding of embedded and lifecycle emissions of the
materials where steel compares favorably. ArcelorMittal's most
substantial climate-related policy risk is the EU Emissions
Trading scheme (\"'ETS\"), which applies to all its European
plants. The risk concerns the Company's primary steelmaking
plants which are exposed to this regulation and yet unprotected
against competition from imported steel. The Company is
committed to the objectives of the Paris agreement and
announced its ambition to reduce carbon emissions by 35% in
Europe and 25% group-wide by 2030 and achieve group-wide
carbon neutrality by 2050. These announced goals will require
significant long-term investments which require global level
playing field, access to abundant and affordable clean energy,
facilitating necessary energy infrastructure, access to
sustainable finance for low-emissions steelmaking and
accelerated transition to a circular economy. In addition, the
Company considered the legal obligation of carbon neutrality by
2050 effective within the EU and in Canada following adoption
of the Climate Law and the Net Zero Emission Accountability
Act, respectively. Accordingly, with respect to its flat steel
operations in the EU and in Canada, ArcelorMittal concluded
that future decarbonization capital expenditures, which
correspond essentially to the construction of DRI-EAF facilities,
are necessary to maintain the level of economic benefits
expected to arise from the assets in their current condition and
should therefore be included in the Company\u2019s assumptions for
future cash flows of the recoverable amount of the respective
GCGUs and CGUs. At the same time, the Company is engaged
in developing in the near to medium term a range of innovative\u00a0
low-emission technologies for the transition to decarbonized
steel including the Smart Carbon route and the Hydrogen-DRI
route and required investments are considered either in the
Company's future cash flow projections or in the context of joint
ventures, as an element of the Company's best estimate of
capital expenditures which are committed and/or being
implemented. The Company acknowledged that CGUs and
GCGUs applying the blast furnace basic oxygen furnace \"BF-
BOF\" route in other jurisdictions than the EU and Canada will
apply decarbonization at a different pace. They may also not yet
be subject to a legal obligation of carbon neutrality, as a result of
which future decarbonization capital expenditures may not be
included in their value in use calculations. Accordingly, the
Company increased risk premiums included in their discount
rates until they are able to accelerate their decarbonization
strategy to meet the 2050 carbon neutrality objective and a legal
obligation arises in the relevant jurisdiction. Additionally, the
Company\u2019s assumptions for future cash flows include an
estimate for costs that the Company expects to incur to acquire
emission allowances, which primarily impacts the flat steel
operations in the EU and in Canada. The assumption for carbon
emission cost is based on historical experience, implementation
of decarbonization strategies to mitigate or otherwise offset such
future costs and information available of future regulatory or
operational changes. Due to economic developments,
uncertainties over the pace of transition to low-emission
technologies, political and environmental actions that will be
taken to meet the carbon reduction goals, regulatory changes
and emissions activity arising from climate-related matters, the
Company\u2019s assumptions used in the recoverable amount
calculations, such as capital expenditure, carbon emission costs
and other assumptions are inherently uncertain and may
ultimately differ from actual amounts.
The assumptions used in the value in use calculations are
inherently uncertain and require management judgment. The
Company's process includes specific consideration given to the
most recent short, medium and long-term price forecasts and
discount rates consistent with external information, expected
production and shipment volumes and updated development
plans, operating costs and capital expenditure plans. While in
the first half of 2022, operating margins, supported by a
continuation of the buoyant market conditions in which the
Company was operating throughout 2021, benefited from a
continuing strong price environment and favorable supply
demand balance following a prolonged period of destocking, in
the second half of 2022, operating margins were significantly
lower as a result of negative price-cost effect, elevated energy
costs and lower steel shipments. Due to the non-recurrence of
the destocking effects that weighed on demand particularly in
the final months of 2022, apparent steel consumption is
expected to recover in 2023 and the Company expects growth
in steel shipments.
Management estimates discount rates using pre-tax rates that
reflect current market rates for investments of similar risk. The
rate for each CGU, including beta, cost of debt and capital
structure was estimated from the weighted average cost of
capital of producers, which operate a portfolio of assets similar
to those of the Company\u2019s assets and CGU specific country risk
premiums were applied. GCGU weighted average pre-tax
discount rates were as follows in 2022 and 2021:
| | | | | | | |
| | | | | | | |
GCGU weighted average pre-tax discount rate used in 2022 (in %) | | | | | | | |
GCGU weighted average pre-tax discount rate used in 2021 (in %) | | | | | | | |
Once recognized, impairment losses for goodwill are not
reversed.
Impairment test of property, plant and equipment and
intangibles (excluding goodwill)
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 fair value less
cost of disposal 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 cost of sales
(see note 4.2) 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\u2019s 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 inflows that are largely independent from the
cash inflows of the other. In this instance, the two facilities are
combined for purposes of testing for impairment. As of
December\u00a031, 2022, the Company determined it has 46 cash-
generating units as compared to 58 as of December 31, 2021
mainly as a result of the amalgamation of certain CGUs in
Europe).
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\u2019s 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMTAvZnJhZzo2NmU0NTM2YjgxZGM0MTViYjJmMmVhM2MyNDZhMTFhMy90ZXh0cmVnaW9uOjY2ZTQ1MzZiODFkYzQxNWJiMmYyZWEzYzI0NmExMWEzXzI3NDg3NzkwNzEzNDgy_60c8384f-0cc3-4aa8-8cb9-96b263af17ae": {
"value": "
Impairment of tangible and intangible assets, including goodwill
(note 5.3): In order to assess the recoverable amount of tangible
and intangible assets at cash-generating unit (\"CGU\") level and
of goodwill at group of cash-generating unit (\"GCGU\") level, the
Company mainly determines their value in use on the basis of
the present value of cash flow projections. 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. When determining value in use,
management also applies judgement when assessing whether
cash flows expected to arise to achieve sustainability and
decarbonization targets are deemed to maintain the same level
of economic benefits or whether they improve or enhance the
asset's performance. Discount rates are reviewed annually.
Impairment of tangible and intangible assets, including
goodwill: Value in use calculations relating to flat carbon
operations in the EU and in Canada include the impact of
decarbonization; accordingly the Company developed
assumptions in determining related capital expenditures
which reflect announced commitments and initiatives in
place, operating costs including commodity prices and
carbon emission costs on the basis of historical experience
and expectations of future changes. This requires to assess
the future development in supply, technology change,
production changes and other important factors. These
assumptions may change, which could result in significant
changes to value in use calculations in future periods and
affects impairment assessments.
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.
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 (\u201cGCGU\u201d) 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.
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 2022
impairment test of goodwill did not include the GCGU
corresponding to the Mining segment (as from April 1, 2021,
ArcelorMittal implemented changes to its organizational
structure - see note 1.1) 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 $70 per tonne to $110 per tonne for iron ore ($71 per
tonne to $112 per tonne in 2021) and $170 per tonne to $268
per tonne ($144 per tonne to $240 per tonne in 2021) 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.
The Company considered its exposure to certain climate-related
risks which could affect its estimates of future cash flow
projections applied for the determination of the recoverable
amount of its GCGUs and CGUs. With the switch to electric
vehicles and the move to wind and solar power generation, the
Company sees additional opportunities as customers deepen
their understanding of embedded and lifecycle emissions of the
materials where steel compares favorably. ArcelorMittal's most
substantial climate-related policy risk is the EU Emissions
Trading scheme (\"'ETS\"), which applies to all its European
plants. The risk concerns the Company's primary steelmaking
plants which are exposed to this regulation and yet unprotected
against competition from imported steel. The Company is
committed to the objectives of the Paris agreement and
announced its ambition to reduce carbon emissions by 35% in
Europe and 25% group-wide by 2030 and achieve group-wide
carbon neutrality by 2050. These announced goals will require
significant long-term investments which require global level
playing field, access to abundant and affordable clean energy,
facilitating necessary energy infrastructure, access to
sustainable finance for low-emissions steelmaking and
accelerated transition to a circular economy. In addition, the
Company considered the legal obligation of carbon neutrality by
2050 effective within the EU and in Canada following adoption
of the Climate Law and the Net Zero Emission Accountability
Act, respectively. Accordingly, with respect to its flat steel
operations in the EU and in Canada, ArcelorMittal concluded
that future decarbonization capital expenditures, which
correspond essentially to the construction of DRI-EAF facilities,
are necessary to maintain the level of economic benefits
expected to arise from the assets in their current condition and
should therefore be included in the Company\u2019s assumptions for
future cash flows of the recoverable amount of the respective
GCGUs and CGUs. At the same time, the Company is engaged
in developing in the near to medium term a range of innovative\u00a0
low-emission technologies for the transition to decarbonized
steel including the Smart Carbon route and the Hydrogen-DRI
route and required investments are considered either in the
Company's future cash flow projections or in the context of joint
ventures, as an element of the Company's best estimate of
capital expenditures which are committed and/or being
implemented. The Company acknowledged that CGUs and
GCGUs applying the blast furnace basic oxygen furnace \"BF-
BOF\" route in other jurisdictions than the EU and Canada will
apply decarbonization at a different pace. They may also not yet
be subject to a legal obligation of carbon neutrality, as a result of
which future decarbonization capital expenditures may not be
included in their value in use calculations. Accordingly, the
Company increased risk premiums included in their discount
rates until they are able to accelerate their decarbonization
strategy to meet the 2050 carbon neutrality objective and a legal
obligation arises in the relevant jurisdiction. Additionally, the
Company\u2019s assumptions for future cash flows include an
estimate for costs that the Company expects to incur to acquire
emission allowances, which primarily impacts the flat steel
operations in the EU and in Canada. The assumption for carbon
emission cost is based on historical experience, implementation
of decarbonization strategies to mitigate or otherwise offset such
future costs and information available of future regulatory or
operational changes. Due to economic developments,
uncertainties over the pace of transition to low-emission
technologies, political and environmental actions that will be
taken to meet the carbon reduction goals, regulatory changes
and emissions activity arising from climate-related matters, the
Company\u2019s assumptions used in the recoverable amount
calculations, such as capital expenditure, carbon emission costs
and other assumptions are inherently uncertain and may
ultimately differ from actual amounts.
The assumptions used in the value in use calculations are
inherently uncertain and require management judgment. The
Company's process includes specific consideration given to the
most recent short, medium and long-term price forecasts and
discount rates consistent with external information, expected
production and shipment volumes and updated development
plans, operating costs and capital expenditure plans. While in
the first half of 2022, operating margins, supported by a
continuation of the buoyant market conditions in which the
Company was operating throughout 2021, benefited from a
continuing strong price environment and favorable supply
demand balance following a prolonged period of destocking, in
the second half of 2022, operating margins were significantly
lower as a result of negative price-cost effect, elevated energy
costs and lower steel shipments. Due to the non-recurrence of
the destocking effects that weighed on demand particularly in
the final months of 2022, apparent steel consumption is
expected to recover in 2023 and the Company expects growth
in steel shipments.
Management estimates discount rates using pre-tax rates that
reflect current market rates for investments of similar risk. The
rate for each CGU, including beta, cost of debt and capital
structure was estimated from the weighted average cost of
capital of producers, which operate a portfolio of assets similar
to those of the Company\u2019s assets and CGU specific country risk
premiums were applied. GCGU weighted average pre-tax
discount rates were as follows in 2022 and 2021:
| | | | | | | |
| | | | | | | |
GCGU weighted average pre-tax discount rate used in 2022 (in %) | | | | | | | |
GCGU weighted average pre-tax discount rate used in 2021 (in %) | | | | | | | |
Once recognized, impairment losses for goodwill are not
reversed.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMTAvZnJhZzo2NmU0NTM2YjgxZGM0MTViYjJmMmVhM2MyNDZhMTFhMy90ZXh0cmVnaW9uOjY2ZTQ1MzZiODFkYzQxNWJiMmYyZWEzYzI0NmExMWEzXzI3NDg3NzkwNzEzNDgz_786516ab-3142-4287-a170-905a1eb40954": {
"value": "
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. In connection with each
of its acquisitions, the Company undertakes a process to identify
all assets and liabilities acquired, including intangible assets.
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. Estimated fair values are
based on information available at acquisition date and on
expectations and assumptions that have been deemed
reasonable by management. There are several methods that
can be used to determine the fair value of assets acquired and
liabilities assumed. The \"income approach\" is based on the
forecast of the expected future cash flows adjusted to present
value by applying an appropriate discount rate that reflects the
risk factors associated with the cash flow streams. Some of the
more significant estimates and assumptions inherent in the
income method or other methods include the amount and timing
of projected future cash flows; the discount rate selected to
measure the risks inherent in the future cash flows (weighted
average cost of capital); the assessment of the asset's life cycle
and the competitive trends impacting the asset, including
consideration of any technical, legal, regulatory or economic
barriers to entry. The \"cost approach\" estimates the value of an
asset based on the current cost to reproduce of replace the
asset. Replacement cost is determined based on market data
subsequently adjusted for physical, functional and economic
obsolescence. The most common purchase accounting
adjustments relate to the following assets and liabilities:
\u2022The fair value of identifiable intangible assets
(generally patents, customer relationships, technology,
brand or favorable contracts) is estimated based on the
above-mentioned income approach;
\u2022Property, plant and equipment is recorded at market
value, or, if not available, depreciated replacement
cost;
\u2022The fair value of pension and other post-employment
benefits is determined separately for each plan using
actuarial assumptions valid as of the acquisition date
relating to the population of employees involved and
the fair value of plan assets.
\u2022Inventories are estimated based on expected selling
prices at the date of acquisition reduced by an estimate
of selling expenses and a normal profit margin.
\u2022Adjustments to deferred tax assets and liabilities of the
acquiree are recorded to reflect the deferred tax effects
of the fair value adjustments relating to identifiable
assets and liabilities other than goodwill.
Determining the estimated residual useful lives of tangible and
intangible assets acquired requires judgement and certain
intangible assets may be considered to have indefinite useful
lives.
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\u2019s interest in the net fair value of the acquiree\u2019s
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.
Any contingent consideration payable is recognized at fair value
at the acquisition date and any costs directly attributable to the
business combination are expensed as incurred.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMTAvZnJhZzo2NmU0NTM2YjgxZGM0MTViYjJmMmVhM2MyNDZhMTFhMy90ZXh0cmVnaW9uOjY2ZTQ1MzZiODFkYzQxNWJiMmYyZWEzYzI0NmExMWEzXzI3NDg3NzkwNzEzNDg0_9919aed6-00fc-4ee3-aa74-b1cb6c9703f6": {
"value": "
Financial instruments (note 6.1.5) and financial amounts
receivable (note 4.5 and 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.
Instruments payable classified as Level 1 refer to the
Company\u2019s 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\u2019s credit spread
quotations for the relevant maturities. There were no
instruments payable classified as Level 3.
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\u2019s 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\u2019s 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 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\u2019s 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\u2019s
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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMTAvZnJhZzo2NmU0NTM2YjgxZGM0MTViYjJmMmVhM2MyNDZhMTFhMy90ZXh0cmVnaW9uOjY2ZTQ1MzZiODFkYzQxNWJiMmYyZWEzYzI0NmExMWEzXzI3NDg3NzkwNzEzNDg1_4ed6498d-8cba-4e3d-b36b-4235d1b01110": {
"value": "
Mineral reserve and resource 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. Mineral resource estimates
constitute the part of a mineral deposit that have the potential to
be economically and legally extracted or produced at the time of
the resource determination. The potential for economic viability
is established through qualitative evaluation of relevant technical
and economic factors likely to influence the prospect of
economic extraction. A measured mineral resource is that part of
a mineral resource for which quantity, grade or quality, densities,
shape, and physical characteristics are so well established that
they can be estimated with confidence sufficient to allow the
appropriate application of technical and economic parameters,
to support production planning and evaluation of the economic
viability of the deposit. The estimate is based on detailed and
reliable exploration, sampling and testing information gathered
through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely
enough to confirm both geological and grade continuity. An
indicated mineral resource is that part of a mineral resource for
which quantity, grade or quality, densities, shape and physical
characteristics, can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation
of the economic viability of the deposit. The estimate is based
on detailed and reliable exploration sampling and testing
information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill
holes that are spaced closely enough for geological and grade
continuity to be reasonably assumed. An inferred mineral
resource is that part of a mineral resource for which quantity and
grade or quality can be estimated on the basis of geological
evidence and limited sampling, and reasonably assumed but not
verified geological and grade continuity. The estimate is based
on limited information and sampling gathered through
appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes. Estimates of mineral
reserves and resources 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 and resources are updated annually and
calculated using a reference price duly adjusted for quality, ore
content, logistics and other considerations. In order to estimate
reserves and resources, 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 and resources 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 and resources
change from period to period, and because additional geological
data is generated during the course of operations, estimates of
reserves and resources may change from period to period.
Mineral Reserves and resources
Mineral Reserves are estimates of the amount of product that
can be economically and legally extracted from the Company\u2019s
properties. Furthermore, mineral resource estimates constitute
the part of a mineral deposit that have the potential to be
economically and legally extracted or produced at the time of
the resource determination. In order to estimate mineral
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. The potential for economic viability and
estimate of mineral resources is established through high level
and conceptual engineering studies.
Estimating the quantity and/or grade of mineral 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. The estimation of
mineral resource is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes that are spaced closely enough to
confirm both geological and grade continuity.
Because the economic assumptions used to estimate mineral
reserves and mineral resources change from period to period,
and because additional geological data is generated during the
course of operations, estimates of mineral reserves and mineral
resources may change from period to period. Changes in
reported mineral reserves and mineral resources may affect the
Company\u2019s financial results and financial position in a number of
ways, including the following:
\u2022Asset carrying amounts may be affected due to
changes in estimated future cash flows.
\u2022Depreciation, 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.
\u2022Overburden 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.
\u2022Decommissioning, 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
(\u201cdevelopmental stripping\u201d) or during the production stage
(\u201cproduction stripping\u201d).
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\u2019s
specific circumstances. The following factors would point
towards the stripping costs for the individual pits being
accounted for separately:
\u2022If mining of the second and subsequent pits is
conducted consecutively with that of the first pit, rather
than concurrently.
\u2022If separate investment decisions are made to develop
each pit, rather than a single investment decision being
made at the outset.
\u2022If 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.
\u2022If expenditures for additional infrastructure to support
the second and subsequent pits are relatively large.
\u2022If 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 (\u201cstripping activity assets\u201d) 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 \u201cmining assets\u201d class of property, plant and equipment
and then depreciated on a units-of-production basis.
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\u2019s 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBiologicalAssetsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMTAvZnJhZzo2NmU0NTM2YjgxZGM0MTViYjJmMmVhM2MyNDZhMTFhMy90ZXh0cmVnaW9uOjY2ZTQ1MzZiODFkYzQxNWJiMmYyZWEzYzI0NmExMWEzXzI3NDg3NzkwNzEzNDg2_c4a89610-cf3f-4765-bdef-162839900749": {
"value": "
Property, plant and equipment: Considering the expected date of retirement of some assets in particular certain blast
furnaces, basic oxygen furnaces, sinter plants and coke
plants following investments in low-carbon steelmaking
technologies, the Company decreased estimates of residual
useful lives of such items of property, plant and equipment
for its flat carbon operations in the EU and in Canada.
5.2\u00a0 \u00a0 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.
| | |
| | |
| | |
| | |
Property plant & equipment | | |
| | |
| | |
The Company\u2019s 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\u2019s 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\u2019s operations. The
most recent in-depth review took place in 2019, during which the
Company performed a review of the useful lives of its fixed
assets and determined there were no material changes to the
useful lives of property, 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\u2019s principal
production units.\u00a0
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. In the context
of the 2021 annual review of useful lives and considering the
expected date of retirement of certain assets in particular blast
furnaces, basic oxygen furnaces, sinter plants and coke plants
following the implementation of the Company's decarbonization
strategy involving the construction of DRI - EAF facilities, the
Company decreased estimates of residual useful lives of such
items of property, plant and equipment for its flat carbon
operations in the EU and in Canada.
Mining assets comprise:
\u2022Mineral rights acquired;
\u2022Capitalized developmental stripping (as described
below in \u201c\u2014Stripping and overburden removal costs\u201d).
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. \u00a0
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.
Mineral Reserves and resources
Mineral Reserves are estimates of the amount of product that
can be economically and legally extracted from the Company\u2019s
properties. Furthermore, mineral resource estimates constitute
the part of a mineral deposit that have the potential to be
economically and legally extracted or produced at the time of
the resource determination. In order to estimate mineral
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. The potential for economic viability and
estimate of mineral resources is established through high level
and conceptual engineering studies.
Estimating the quantity and/or grade of mineral 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. The estimation of
mineral resource is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes that are spaced closely enough to
confirm both geological and grade continuity.
Because the economic assumptions used to estimate mineral
reserves and mineral resources change from period to period,
and because additional geological data is generated during the
course of operations, estimates of mineral reserves and mineral
resources may change from period to period. Changes in
reported mineral reserves and mineral resources may affect the
Company\u2019s financial results and financial position in a number of
ways, including the following:
\u2022Asset carrying amounts may be affected due to
changes in estimated future cash flows.
\u2022Depreciation, 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.
\u2022Overburden 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.
\u2022Decommissioning, 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
(\u201cdevelopmental stripping\u201d) or during the production stage
(\u201cproduction stripping\u201d).
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\u2019s
specific circumstances. The following factors would point
towards the stripping costs for the individual pits being
accounted for separately:
\u2022If mining of the second and subsequent pits is
conducted consecutively with that of the first pit, rather
than concurrently.
\u2022If separate investment decisions are made to develop
each pit, rather than a single investment decision being
made at the outset.
\u2022If 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.
\u2022If expenditures for additional infrastructure to support
the second and subsequent pits are relatively large.
\u2022If 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 (\u201cstripping activity assets\u201d) 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 \u201cmining assets\u201d 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:
\u2022researching and analyzing historical exploration data;
\u2022conducting topographical, geological, geochemical and
geophysical studies;
\u2022carrying out exploratory drilling, trenching and sampling
activities;
\u2022drilling, trenching and sampling activities to determine
the quantity and grade of the deposit;
\u2022examining and testing extraction methods and
metallurgical or treatment processes; and
\u2022detailed 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\u2019s 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:
\u2022sinking shafts and underground drifts (often called
mine development);
\u2022making permanent excavations;
\u2022developing passageways and rooms or galleries;
\u2022building roads and tunnels; and
\u2022advance 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMTYvZnJhZzo0ZTg4ZWQyNTMxYzU0NmMzYTYxN2VkOGM0NDkwNDA2NS90ZXh0cmVnaW9uOjRlODhlZDI1MzFjNTQ2YzNhNjE3ZWQ4YzQ0OTA0MDY1XzI3NDg3NzkwNzAxMDAy_c96c5a45-0dc9-4841-bc8b-63cbc6d99966": {
"value": "
1.3.1 Adoption of new IFRS standards, amendments and
interpretations applicable from January 1, 2022\u00a0
On January 1, 2022, the Company adopted narrow-scope
amendments to IFRS 3, IAS 16 and IAS 37 issued by IASB on
May 14, 2020 and minor amendments as part of annual
improvements 2018-2020 to IFRS 1, IFRS 9, IFRS 16 and IAS
41. Amendments to\u00a0 IAS 16 \"Property, Plant and Equipment\" are
applied retrospectively while amendments to IFRS 3 \"Business
Combinations\", to IAS 37 \"Provisions, Contingent Liabilities and
Contingent Assets\" and the minor amendments as part of the
Annual Improvements 2018-2020 are applied prospectively.
These amendments did not have any material impact on the
consolidated financial statements of the Company.
\u2022Amendments to IFRS 3 \"Business Combinations\"
updated the reference to the Conceptual Framework for
financial reporting, without changing the accounting
requirements for business combinations.
\u2022Amendments to IAS 16 \"Property, Plant and Equipment\"
prohibit deducting from the cost of an item of property,
plant and equipment any proceeds from selling items
produced while bringing that asset to the location and
condition necessary for it to be capable of operating in
the manner intended by management. Instead, an entity
recognizes the proceeds from selling such items and
related cost in profit or loss.
\u2022Amendments to IAS 37 \"Provisions, Contingent Liabilities
and Contingent Assets\" clarify that the cost of fulfilling a
contract comprises the costs a company includes when
assessing whether a contract will be loss-making are
costs that relate directly to the contract. Costs that relate
directly to a contract can either be incremental costs of
fulfilling that contract or an allocation of other costs that
relate directly to fulfilling the contract. The amendments
are to be applied prospectively to contracts for which the
Company has not yet fulfilled all of its obligations as of
January 1, 2022.
\u2022Minor amendments as part of the Annual Improvements
2018-2020 to:\u00a0
\u2022IFRS 1 \"First-time Adoption of International Financial
Reporting Standards\" related to cumulative translation
differences for a subsidiary as a first time user.
\u2022IFRS 9 \"Financial Instruments\" related to which fees an
entity includes when it applies the \u201810 per cent\u2019 test in
assessing whether to derecognize a financial liability.
\u25aaIFRS 16 \"Leases\" removing the reimbursement of
leasehold improvements by the lessor from illustrative
example 13 in order to resolve any potential confusion
regarding the treatment of lease incentives and
\u25aaIAS 41 \"Agriculture\" removing the requirement for
entities to exclude taxation cash flows when measuring
the fair value of a biological asset using a present
value technique to ensure consistency with the
requirements in IFRS 13.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFirstTimeAdoptionExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMjIvZnJhZzowYjllZDRjNDhkM2E0YTM2YmU3NDcwMzFhMjhmMjRjYy90ZXh0cmVnaW9uOjBiOWVkNGM0OGQzYTRhMzZiZTc0NzAzMWEyOGYyNGNjXzEw_a13f028b-d005-4aaa-aaea-9bee06dcaa33": {
"value": "NOTE 2: SCOPE OF CONSOLIDATION
2.1\u00a0 \u00a0 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.
Associates 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\u2019s share
in undistributed earnings or losses since acquisition, less any
impairment incurred. Any excess of the cost of the acquisition
over the Company\u2019s 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\u2019s 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\u2019s proportionate interest
in the investee arising from changes in the investee\u2019s equity that
have not been recognized in the investee\u2019s profit or loss. The
Company\u2019s 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\u00a0 are
reclassified from other comprehensive income to retained
earnings within equity upon disposal.
While there are certain limitations on the Company\u2019s operating
and financial flexibility arising from the restrictive and financial
covenants of one of the Company\u2019s 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.
Non-controlling interests represent the portion of profit or loss
and net assets not held by the Company and are presented
separately in the consolidated statements of operations, in the
consolidated statements of other comprehensive income and
within equity in the consolidated statements of financial position.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMjUvZnJhZzpjMWJjNjdmM2MxNjA0MzE0ODlkMjgwNjBlZDI3OGIxZS90ZXh0cmVnaW9uOmMxYmM2N2YzYzE2MDQzMTQ4OWQyODA2MGVkMjc4YjFlXzI3NDg3NzkwNjk5MTky_2fe455c7-f1b8-4ec9-b0a2-5a3e61c95263": {
"value": "
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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMjUvZnJhZzpjMWJjNjdmM2MxNjA0MzE0ODlkMjgwNjBlZDI3OGIxZS90ZXh0cmVnaW9uOmMxYmM2N2YzYzE2MDQzMTQ4OWQyODA2MGVkMjc4YjFlXzI3NDg3NzkwNjk5MTkz_1bb4cc33-8d1f-427c-991b-70ff4230e7f3": {
"value": "
Associates 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\u2019s share
in undistributed earnings or losses since acquisition, less any
impairment incurred. Any excess of the cost of the acquisition
over the Company\u2019s 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\u2019s 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\u2019s proportionate interest
in the investee arising from changes in the investee\u2019s equity that
have not been recognized in the investee\u2019s profit or loss. The
Company\u2019s 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMjUvZnJhZzpjMWJjNjdmM2MxNjA0MzE0ODlkMjgwNjBlZDI3OGIxZS90ZXh0cmVnaW9uOmMxYmM2N2YzYzE2MDQzMTQ4OWQyODA2MGVkMjc4YjFlXzI3NDg3NzkwNjk5MTkz_487485a2-aace-4f64-8905-f4f0df07f28e": {
"value": "
Associates 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\u2019s share
in undistributed earnings or losses since acquisition, less any
impairment incurred. Any excess of the cost of the acquisition
over the Company\u2019s 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\u2019s 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\u2019s proportionate interest
in the investee arising from changes in the investee\u2019s equity that
have not been recognized in the investee\u2019s profit or loss. The
Company\u2019s 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMjUvZnJhZzpjMWJjNjdmM2MxNjA0MzE0ODlkMjgwNjBlZDI3OGIxZS90ZXh0cmVnaW9uOmMxYmM2N2YzYzE2MDQzMTQ4OWQyODA2MGVkMjc4YjFlXzI3NDg3NzkwNjk5MTkz_99c1a01a-b6fe-432e-9ca3-5401fd10510a": {
"value": "
Associates 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\u2019s share
in undistributed earnings or losses since acquisition, less any
impairment incurred. Any excess of the cost of the acquisition
over the Company\u2019s 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\u2019s 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\u2019s proportionate interest
in the investee arising from changes in the investee\u2019s equity that
have not been recognized in the investee\u2019s profit or loss. The
Company\u2019s 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMjUvZnJhZzpjMWJjNjdmM2MxNjA0MzE0ODlkMjgwNjBlZDI3OGIxZS90ZXh0cmVnaW9uOmMxYmM2N2YzYzE2MDQzMTQ4OWQyODA2MGVkMjc4YjFlXzI3NDg3NzkwNjk5MTk0_8eecf71d-5930-423f-9be4-a9651e82766b": {
"value": "
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).
2.4.4 Impairment of associates and joint ventures
For the year ended December 31, 2020, the Company
recognized a 211 impairment loss with respect to its investment
in DHS Group. For the years ended December 31, 2022 and
2021 the Company concluded there were no impairment
triggers.
The Company is not aware of any material contingent liabilities
related to associates and joint ventures for which it is severally
liable for all or part of the liabilities of the associates, nor are
there any contingent liabilities incurred jointly with other
investors. See note 9.4 for disclosure of commitments related to
associates and joint ventures.
5.3\u00a0 \u00a0 Impairment of intangible assets, including goodwill, and
tangible assets
Net impairment charges/(reversals) were as follows:
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 (\u201cGCGU\u201d) 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.
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 2022
impairment test of goodwill did not include the GCGU
corresponding to the Mining segment (as from April 1, 2021,
ArcelorMittal implemented changes to its organizational
structure - see note 1.1) 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 $70 per tonne to $110 per tonne for iron ore ($71 per
tonne to $112 per tonne in 2021) and $170 per tonne to $268
per tonne ($144 per tonne to $240 per tonne in 2021) 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.
The Company considered its exposure to certain climate-related
risks which could affect its estimates of future cash flow
projections applied for the determination of the recoverable
amount of its GCGUs and CGUs. With the switch to electric
vehicles and the move to wind and solar power generation, the
Company sees additional opportunities as customers deepen
their understanding of embedded and lifecycle emissions of the
materials where steel compares favorably. ArcelorMittal's most
substantial climate-related policy risk is the EU Emissions
Trading scheme (\"'ETS\"), which applies to all its European
plants. The risk concerns the Company's primary steelmaking
plants which are exposed to this regulation and yet unprotected
against competition from imported steel. The Company is
committed to the objectives of the Paris agreement and
announced its ambition to reduce carbon emissions by 35% in
Europe and 25% group-wide by 2030 and achieve group-wide
carbon neutrality by 2050. These announced goals will require
significant long-term investments which require global level
playing field, access to abundant and affordable clean energy,
facilitating necessary energy infrastructure, access to
sustainable finance for low-emissions steelmaking and
accelerated transition to a circular economy. In addition, the
Company considered the legal obligation of carbon neutrality by
2050 effective within the EU and in Canada following adoption
of the Climate Law and the Net Zero Emission Accountability
Act, respectively. Accordingly, with respect to its flat steel
operations in the EU and in Canada, ArcelorMittal concluded
that future decarbonization capital expenditures, which
correspond essentially to the construction of DRI-EAF facilities,
are necessary to maintain the level of economic benefits
expected to arise from the assets in their current condition and
should therefore be included in the Company\u2019s assumptions for
future cash flows of the recoverable amount of the respective
GCGUs and CGUs. At the same time, the Company is engaged
in developing in the near to medium term a range of innovative\u00a0
low-emission technologies for the transition to decarbonized
steel including the Smart Carbon route and the Hydrogen-DRI
route and required investments are considered either in the
Company's future cash flow projections or in the context of joint
ventures, as an element of the Company's best estimate of
capital expenditures which are committed and/or being
implemented. The Company acknowledged that CGUs and
GCGUs applying the blast furnace basic oxygen furnace \"BF-
BOF\" route in other jurisdictions than the EU and Canada will
apply decarbonization at a different pace. They may also not yet
be subject to a legal obligation of carbon neutrality, as a result of
which future decarbonization capital expenditures may not be
included in their value in use calculations. Accordingly, the
Company increased risk premiums included in their discount
rates until they are able to accelerate their decarbonization
strategy to meet the 2050 carbon neutrality objective and a legal
obligation arises in the relevant jurisdiction. Additionally, the
Company\u2019s assumptions for future cash flows include an
estimate for costs that the Company expects to incur to acquire
emission allowances, which primarily impacts the flat steel
operations in the EU and in Canada. The assumption for carbon
emission cost is based on historical experience, implementation
of decarbonization strategies to mitigate or otherwise offset such
future costs and information available of future regulatory or
operational changes. Due to economic developments,
uncertainties over the pace of transition to low-emission
technologies, political and environmental actions that will be
taken to meet the carbon reduction goals, regulatory changes
and emissions activity arising from climate-related matters, the
Company\u2019s assumptions used in the recoverable amount
calculations, such as capital expenditure, carbon emission costs
and other assumptions are inherently uncertain and may
ultimately differ from actual amounts.
The assumptions used in the value in use calculations are
inherently uncertain and require management judgment. The
Company's process includes specific consideration given to the
most recent short, medium and long-term price forecasts and
discount rates consistent with external information, expected
production and shipment volumes and updated development
plans, operating costs and capital expenditure plans. While in
the first half of 2022, operating margins, supported by a
continuation of the buoyant market conditions in which the
Company was operating throughout 2021, benefited from a
continuing strong price environment and favorable supply
demand balance following a prolonged period of destocking, in
the second half of 2022, operating margins were significantly
lower as a result of negative price-cost effect, elevated energy
costs and lower steel shipments. Due to the non-recurrence of
the destocking effects that weighed on demand particularly in
the final months of 2022, apparent steel consumption is
expected to recover in 2023 and the Company expects growth
in steel shipments.
Management estimates discount rates using pre-tax rates that
reflect current market rates for investments of similar risk. The
rate for each CGU, including beta, cost of debt and capital
structure was estimated from the weighted average cost of
capital of producers, which operate a portfolio of assets similar
to those of the Company\u2019s assets and CGU specific country risk
premiums were applied. GCGU weighted average pre-tax
discount rates were as follows in 2022 and 2021:
| | | | | | | |
| | | | | | | |
GCGU weighted average pre-tax discount rate used in 2022 (in %) | | | | | | | |
GCGU weighted average pre-tax discount rate used in 2021 (in %) | | | | | | | |
Once recognized, impairment losses for goodwill are not
reversed.
There were no impairment charges recognized with respect to
goodwill following the Company\u2019s impairment tests as of
October 1, 2022 and October 1, 2021. The total value in use
calculated for all GCGUs decreased overall in 2022 as
compared to 2021 primarily as a result of higher discount rates.
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 steel selling prices and shipments). As of December 31,
2022, the Company believes that reasonably possible changes
in key assumptions could cause an impairment loss to be
recognized in respect of the ACIS segment.
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 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\u2019 specific risks; such risk
premium increased significantly in 2022 in Ukraine in the context
of the war with Russia. The latter also led to substantially lower
levels of production, shipments and revenue at ArcelorMittal
Kryvyi Rih and such conditions are expected to continue
throughout 2023. The ACIS value in use model anticipates a
limited increase in sales volumes in 2023 (8.3\u00a0million tonnes) as
compared to 2022 (6.4\u00a0million tonnes) with stable shipments
after 2024. Average selling prices in the model are expected to
decrease steadily over time. The table below describes the
amount by which the value assigned to a key assumption must
change in order for the recoverable amount to equal the carrying
amount.
| |
| |
Excess of recoverable amount over carrying amount | |
Increase in pre-tax discount rate (change in basis points) | |
Decrease in average selling price (change in %) | |
Decrease in shipments (change in %) | |
2021
In the second half of 2021, in connection with the Company\u2019s
annual test for impairment of goodwill, property, plant and
equipment was also tested for impairment at that date. The
Company reversed 218 of impairment charges which had been
recognized in 2015 for the Sestao facility in Spain following
idling for an indefinite timing. The impairment reversal results
from improved future cash flow projections following restart of
operations and the Company's decarbonization strategy in
Spain.
| | | | | | | | | | | | |
| | | | | | | | 2021 Pre-Tax Discount Rate | | 2020 Pre-Tax Discount Rate | | Carrying amount of property, plant and equipment as of December 31, 2021 |
| | | | | | | | | | | | |
2020
In 2020, the Company recognized a 133 net reversal of
impairment including impairment charges of 92 and 104 related
to the permanent closure of the coke plant in Florange (France)
and the permanent closure of part of a blast furnace and steel
plant in Krakow (Poland), respectively. In addition, the Company
recognized an impairment loss of 331 relating to its plate
business in the Europe segment classified as held for sale at
December 31, 2020 and for which the held for sale classification
was discontinued in 2021 following the termination of the
divestment process.
In the third quarter of 2020, the Company reversed 660 of
impairment charges of property, plant and equipment previously
recognized for ArcelorMittal USA as a result of the increase in
the recoverable amount. The Company calculated the fair value
less cost of disposal using a market approach with market
multiples derived from comparable transactions, a Level 3
unobservable input. ArcelorMittal USA was sold to Cleveland-
Cliffs as described in note 2.3.1.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMjUvZnJhZzpjMWJjNjdmM2MxNjA0MzE0ODlkMjgwNjBlZDI3OGIxZS90ZXh0cmVnaW9uOmMxYmM2N2YzYzE2MDQzMTQ4OWQyODA2MGVkMjc4YjFlXzI3NDg3NzkwNjk5MTk4_f60e3c6f-d696-4968-8a51-863994f018fe": {
"value": "
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\u00a0 are
reclassified from other comprehensive income to retained
earnings within equity upon disposal.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMjUvZnJhZzpjMWJjNjdmM2MxNjA0MzE0ODlkMjgwNjBlZDI3OGIxZS90ZXh0cmVnaW9uOmMxYmM2N2YzYzE2MDQzMTQ4OWQyODA2MGVkMjc4YjFlXzQ3NzY_1c0417e3-9e4a-4e3b-85df-967fbb798e8d": {
"value": "
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\u00a0 are
reclassified from other comprehensive income to retained
earnings within equity upon disposal.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMjUvZnJhZzpjMWJjNjdmM2MxNjA0MzE0ODlkMjgwNjBlZDI3OGIxZS90ZXh0cmVnaW9uOmMxYmM2N2YzYzE2MDQzMTQ4OWQyODA2MGVkMjc4YjFlXzI3NDg3NzkwNjk5MTk5_45a9467f-f888-4f28-bfbd-914011cde8c4": {
"value": "
Non-controlling interests represent the portion of profit or loss
and net assets not held by the Company and are presented
separately in the consolidated statements of operations, in the
consolidated statements of other comprehensive income and
within equity in the consolidated statements of financial position.
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 also include the
mandatory convertible bonds (see note 11.2).",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithNoncontrollingInterestsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMjgvZnJhZzozZjExNjE2ZjZlYjg0OGQ0YmQxNzYwYTc2NWI3NGI5Ni90ZXh0cmVnaW9uOjNmMTE2MTZmNmViODQ4ZDRiZDE3NjBhNzY1Yjc0Yjk2XzI4MDM3NTQ2NTA4Mjk3_fdee3f59-a4d5-4070-bf6c-57ccbb79e12c": {
"value": "2.2\u00a0 \u00a0 Investments in subsidiaries\u00a0
2.2.1 List of subsidiaries
The table below provides a list of the Company\u2019s principal operating subsidiaries at December\u00a031, 2022. 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.
| | | | |
| | | | |
| | | | |
ArcelorMittal Dofasco G.P. | | | | |
ArcelorMittal M\u00e9xico S.A. de C.V. | | | | |
ArcelorMittal Long Products Canada G.P. | | | | |
ArcelorMittal Texas HBI LLC1 | | | | |
Brazil and neighboring countries (\"Brazil\") | | | | |
ArcelorMittal Brasil S.A. | | | | |
Acindar Industria Argentina de Aceros S.A. (\"Acindar\") | | | | |
| | | | |
ArcelorMittal France S.A.S. | | | | |
ArcelorMittal Belgium N.V. | | | | |
ArcelorMittal Espa\u00f1a S.A. | | | | |
ArcelorMittal Flat Carbon Europe S.A. | | | | |
ArcelorMittal Poland S.A. | | | | |
ArcelorMittal Eisenh\u00fcttenstadt GmbH | | | | |
ArcelorMittal Bremen GmbH | | | | |
ArcelorMittal M\u00e9diterran\u00e9e S.A.S. | | | | |
ArcelorMittal Belval & Differdange S.A. | | | | |
ArcelorMittal Hamburg GmbH | | | | |
ArcelorMittal Duisburg GmbH | | | | |
ArcelorMittal International Luxembourg S.A. | | | | |
Africa and Commonwealth of Independent States (\"ACIS\") | | | | |
ArcelorMittal South Africa Ltd. (\"AMSA\") | | | | |
JSC ArcelorMittal Temirtau | | | | |
PJSC ArcelorMittal Kryvyi Rih (\"AM Kryvyi Rih\") | | | | |
| | | | |
ArcelorMittal Mining Canada G.P. and ArcelorMittal Infrastructure Canada G.P. (\"AMMC\") | | | | |
ArcelorMittal Liberia Ltd2 | | | | |
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. dollar at the year-end exchange rate. The
Company used an estimated general price index (Consumer
Price Index \"IPC\") which changed by 94.8%, 50.3% and 36.1%
for the year ended December 31, 2022, 2021 and 2020,
respectively, for this purpose. As a result of the inflation-related
adjustments on non-monetary items, a loss of 4 and gain of\u00a0 33
and 30 was recognized in net financing costs for the year ended
December 31, 2022, 2021 and 2020, respectively.\u00a0 \u00a0
Since 2010 Venezuela has been considered a hyperinflationary
economy and therefore the financial statements of Unicon are
adjusted to reflect the changes in the general purchasing power
of the local currency before being translated into U.S. dollar. The
Company used estimated general price indices which changed
by 207%, 686% and 2,667% for the years ended December\u00a031,
2022, 2021 and 2020, respectively, for this purpose.
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\u2019s interest in the net fair value of the acquiree\u2019s
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.
Any contingent consideration payable is recognized at fair value
at the acquisition date and any costs directly attributable to the
business combination are expensed as incurred.
2.2.4 Acquisitions
During 2022, among others, the Company announced or
completed the acquisition of four specialist scrap metal recyclers
as the Company continually seeks to enhance its ability to
source scrap steel, a key raw material which supports the
ArcelorMittal\u2019s ability to reduce its carbon emissions from
steelmaking in both the electric arc furnace (\"EAF\") and blast
furnace routes.
On February 28, 2022, ArcelorMittal acquired John Lawrie
Metals Limited (\"JLM\"), a UK based leading consolidator of
ferrous scrap metal, for total consideration of \u00a335\u00a0million (43 net
of cash acquired of 5). The Company completed its
measurement of the acquisition-date fair value of the identifiable
asset and liabilities of JLM. Revenue and net income since
acquisition date were 49 and 3, respectively. JLM is part of the
Europe reportable segment.
On May 2, 2022, ArcelorMittal completed the acquisition of
Architectural Steel Limited (\"ASL\"), a UK based manufacturer of
bespoke metal fabrications and flashings for building envelopes
to strengthen ArcelorMittal Downstream Solutions' construction
business within the Europe segment. Total consideration was
\u00a336\u00a0million (39 net of cash acquired of 6). The Company
completed its measurement of the acquisition-date fair value of
the identifiable asset and liabilities of ASL. Revenue and net
income since acquisition date were 14 and 3, respectively.
On May 9, 2022, in order to strengthen the Company's plate
operations in the Europe reportable segment in selected
downstream and distribution activities, ArcelorMittal increased
its interest in the former associate Centro Servizi Metalli S.p.A.
(\"CSM\"), a stainless plate processing business with operations
mainly in Italy and Poland, from 49.29% to 91.68% through the
acquisition of a 42.39% controlling stake for \u20ac13.5\u00a0million (7 net
of cash acquired of 7). The Company completed its
measurement of the acquisition-date fair value of the identifiable
asset and liabilities of CSM and recognized a 3 bargain
purchase gain in cost of sales. Revenue and net income since
acquisition date were 76 and 8, respectively.
On June 30, 2022, ArcelorMittal completed the acquisition of an
80% interest in voestalpine\u2019s world-class Hot Briquetted Iron
(\"HBI\") plant located in Corpus Christi, Texas and subsequently
renamed ArcelorMittal Texas HBI LLC (\"ArcelorMittal Texas
HBI\") for total consideration of 817 (805 net of cash acquired of
12) including certain post-closing adjustments. The Company
recognized acquisition-related costs of 7 in selling, general and
administrative expenses. The facility has an annual capacity of
two\u00a0million tonnes of HBI, a high-quality feedstock made through
the direct reduction of iron ore which is used to produce high-
quality steel grades in an EAF, but which can also be used in
blast furnaces, resulting in lower coke consumption. HBI is a
premium, compacted form of Direct Reduced Iron (\"DRI\")
developed to overcome issues associated with shipping and
handling DRI. voestalpine has retained a 20% interest in the
plant with a corresponding offtake agreement with an initial ten-
year term renewable as long as voestalpine retains any interest
in ArcelorMittal Texas HBI. ArcelorMittal would own 100% of any
future development of operations. The remaining balance of
production will be delivered to third parties under existing supply
contracts, and to ArcelorMittal facilities, including to AM/NS
Calvert in Alabama, upon the commissioning of its 1.5\u00a0million
tonne EAF. Pursuant to the purchase agreement, voestalpine's
20% interest is subject to a call option exercisable by
ArcelorMittal upon termination of the offtake agreement or
failure by voestalpine to purchase the offtake volume and a put
option exercisable by voestalpine at the end of the fifth, tenth
and fifteenth year subsequently to the acquisition date. The
Company did not ascribe any value to the call option but
recognized a 177 financial liability at amortized cost measured
at the present value of the redemption amount of the written put
option based on the lower of equity value increased by an
annual contractual return and fair value. The Company
completed its measurement of the acquisition-date fair value of
the identifiable assets and liabilities of ArcelorMittal Texas HBI.\u00a0
It recognized 283 (including trade receivables of 124), 949 and
11 of current assets, property, plant and equipment and
intangible assets, respectively. ArcelorMittal recognized a 97
bargain purchase gain in cost of sales as a result of i)
ArcelorMittal's agreement for voestalpine to retain a 20% non-
controlling interest ii) the above-mentioned offtake agreement
and iii) the fair value of property, plant and equipment\u00a0
exceeding its carrying amount. Revenue and net loss since
acquisition date were 445 and 35, respectively. ArcelorMittal HBI
is part of the NAFTA reportable segment.
On July 1, 2022, the Company completed the combined
acquisition of three subsidiaries from environmental services
and recycling company ALBA International Recycling (ALBA
Metall S\u00fcd Rhein-Main GmbH, ALBA Electronics Recycling
GmbH and ALBA Metall S\u00fcd Franken GmbH in aggregate
\"ALBA\") active in ferrous and non-ferrous metal recycling in
Germany for total consideration of 65 of which \u20ac51 million (45
net of cash acquired of 9) in cash and deferred consideration of
11. Following the completion of the acquisition-date fair value of
the identifiable assets and liabilities of the three companies, the
Company recognized goodwill of 22. Revenue and net income
since acquisition date were 87 and 1, respectively. ALBA is part
of the Europe reportable segment.
On July 28, 2022, ArcelorMittal announced it has signed an
agreement with the shareholders of Companhia Sider\u00fargica do
Pec\u00e9m (\"CSP\") to acquire CSP for an enterprise value of
approximately 2.2 billion. Transaction closing is expected to
occur during the first quarter of 2023 as the Company obtained
corporate and regulatory approvals, including CADE (Brazilian
anti-trust) approval. CSP is a world-class operation, producing
high-quality slab at a globally competitive cost. CSP\u2019s state-of-
the-art steel facility in the state of Cear\u00e1 in northeast Brazil was
commissioned in 2016 and produced its first slabs in June of
that year. It operates a three million tonne capacity blast furnace
and has access via conveyors to the Port of Pec\u00e9m, a large
scale, deep water port located 10 kilometers from the plant.
CSP operates within Brazil\u2019s first Export Processing Zone, and
benefits from various tax incentives including a low corporate
income tax rate. CSP is part of the Brazil reportable segment.
On December 29, 2022, ArcelorMittal announced it signed an
agreement to acquire Polish scrap metal recycling business,
Zak\u0142ad Przerobu Z\u0142omu (\u201cZ\u0142omex\u201d). Zlomex operates scrap
yards in Krakow and Warsaw. Transaction closing, which is
subject to customary regulatory approvals is expected during
the first half of 2023.
On January 3, 2023, ArcelorMittal completed the acquisition of
Riwald Recycling (\"Riwald\"), a state-of-the-art ferrous scrap
metal recycling business based in the Netherlands for total
consideration of \u20ac85 million subject to certain post-closing
adjustments. Following the recent closing of the transaction, the
Company is still in the process of measuring the acquisition-date
fair value of the identifiable assets and liabilities of Riwald and
expects to complete such measurement during the first half of
2023. Riwald is part of the Europe reportable segment.
Revenue and net income attributable to the equity holders of the
parent of the Company for twelve months ended December 31,
2022 were 80,572 and 9,360, respectively, as though the
acquisition date of JLM, ASL, CSM, ALBA and ArcelorMittal
Texas HBI had been as of January 1, 2022.
On November 19, 2021, the Company completed the acquisition
of Condesa Tubos, S.L. (\"Condesa\"), a joint venture in which it
already held a 33% interest, through the acquisition of the
remaining 67% stake from a pool of banks for total consideration
of \u20ac31 million (25 net of cash acquired of 10). The acquisition of
Condesa strengthened ArcelorMittal's tubular operations within
the Europe segment. Following the completion of the
measurement of the acquisition-date fair value of the identifiable
assets and liabilities of Condesa, the Company recognized 92,
39 and 10 of current assets, property, plant and equipment and
other non-current assets, respectively, and a 24 bargain
purchase gain in cost of sales as ArcelorMittal's industrial
expertise was considered by the other previous shareholders.
The table below summarizes the final acquisition-date fair value of the assets acquired and liabilities assumed in 2022 and 2021:
| | | | | | |
| | |
| | | | | | |
| | | | | | |
Property, plant and equipment | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Consideration paid net of cash acquired | | | | | | |
| | | | | | |
Non-controlling interests | | | | | | |
Fair value of previously held interests at acquisition date | | | | | | |
Remeasurement gain relating to the equity interest previously held | | | | | | |
Goodwill/(bargain purchase gain) | | | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMzQvZnJhZzowYTlhZWVlODI0ZWU0NDU3OGRiOGJiZTQyNzZhYjk3YS90ZXh0cmVnaW9uOjBhOWFlZWU4MjRlZTQ0NTc4ZGI4YmJlNDI3NmFiOTdhXzMwODQ_20346ae0-5cbd-4048-8c98-371eab6675a9": {
"value": "
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
M\u00e9xico, AMMC, ArcelorMittal Liberia Ltd, 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\u2019s
subsidiaries, associates and joint arrangements whose
functional currency is other than the U.S.\u00a0dollar are translated
into U.S. dollar 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMzQvZnJhZzowYTlhZWVlODI0ZWU0NDU3OGRiOGJiZTQyNzZhYjk3YS90ZXh0cmVnaW9uOjBhOWFlZWU4MjRlZTQ0NTc4ZGI4YmJlNDI3NmFiOTdhXzI3NDg3NzkwNjk3NTUx_a41235fc-d05d-4659-a011-432cb61b3c85": {
"value": "
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. dollar at the year-end exchange rate. The
Company used an estimated general price index (Consumer
Price Index \"IPC\") which changed by 94.8%, 50.3% and 36.1%
for the year ended December 31, 2022, 2021 and 2020,
respectively, for this purpose. As a result of the inflation-related
adjustments on non-monetary items, a loss of 4 and gain of\u00a0 33
and 30 was recognized in net financing costs for the year ended
December 31, 2022, 2021 and 2020, respectively.\u00a0 \u00a0
Since 2010 Venezuela has been considered a hyperinflationary
economy and therefore the financial statements of Unicon are
adjusted to reflect the changes in the general purchasing power
of the local currency before being translated into U.S. dollar. The
Company used estimated general price indices which changed
by 207%, 686% and 2,667% for the years ended December\u00a031,
2022, 2021 and 2020, respectively, for this purpose.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfHyperinflationaryReportingExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zMzcvZnJhZzozNmFiYWJiNTA5MDU0ZDczYjZhMjdjYWFmYWYyMzYwYi90ZXh0cmVnaW9uOjM2YWJhYmI1MDkwNTRkNzNiNmEyN2NhYWZhZjIzNjBiXzI4MDM3NTQ2NTA5ODA3_7b7a0d16-3746-40db-af96-d0751e9d62c0": {
"value": "
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\u2019s interest in the net fair value of the acquiree\u2019s
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.
Any contingent consideration payable is recognized at fair value
at the acquisition date and any costs directly attributable to the
business combination are expensed as incurred.
2.2.4 Acquisitions
During 2022, among others, the Company announced or
completed the acquisition of four specialist scrap metal recyclers
as the Company continually seeks to enhance its ability to
source scrap steel, a key raw material which supports the
ArcelorMittal\u2019s ability to reduce its carbon emissions from
steelmaking in both the electric arc furnace (\"EAF\") and blast
furnace routes.
On February 28, 2022, ArcelorMittal acquired John Lawrie
Metals Limited (\"JLM\"), a UK based leading consolidator of
ferrous scrap metal, for total consideration of \u00a335\u00a0million (43 net
of cash acquired of 5). The Company completed its
measurement of the acquisition-date fair value of the identifiable
asset and liabilities of JLM. Revenue and net income since
acquisition date were 49 and 3, respectively. JLM is part of the
Europe reportable segment.
On May 2, 2022, ArcelorMittal completed the acquisition of
Architectural Steel Limited (\"ASL\"), a UK based manufacturer of
bespoke metal fabrications and flashings for building envelopes
to strengthen ArcelorMittal Downstream Solutions' construction
business within the Europe segment. Total consideration was
\u00a336\u00a0million (39 net of cash acquired of 6). The Company
completed its measurement of the acquisition-date fair value of
the identifiable asset and liabilities of ASL. Revenue and net
income since acquisition date were 14 and 3, respectively.
On May 9, 2022, in order to strengthen the Company's plate
operations in the Europe reportable segment in selected
downstream and distribution activities, ArcelorMittal increased
its interest in the former associate Centro Servizi Metalli S.p.A.
(\"CSM\"), a stainless plate processing business with operations
mainly in Italy and Poland, from 49.29% to 91.68% through the
acquisition of a 42.39% controlling stake for \u20ac13.5\u00a0million (7 net
of cash acquired of 7). The Company completed its
measurement of the acquisition-date fair value of the identifiable
asset and liabilities of CSM and recognized a 3 bargain
purchase gain in cost of sales. Revenue and net income since
acquisition date were 76 and 8, respectively.
On June 30, 2022, ArcelorMittal completed the acquisition of an
80% interest in voestalpine\u2019s world-class Hot Briquetted Iron
(\"HBI\") plant located in Corpus Christi, Texas and subsequently
renamed ArcelorMittal Texas HBI LLC (\"ArcelorMittal Texas
HBI\") for total consideration of 817 (805 net of cash acquired of
12) including certain post-closing adjustments. The Company
recognized acquisition-related costs of 7 in selling, general and
administrative expenses. The facility has an annual capacity of
two\u00a0million tonnes of HBI, a high-quality feedstock made through
the direct reduction of iron ore which is used to produce high-
quality steel grades in an EAF, but which can also be used in
blast furnaces, resulting in lower coke consumption. HBI is a
premium, compacted form of Direct Reduced Iron (\"DRI\")
developed to overcome issues associated with shipping and
handling DRI. voestalpine has retained a 20% interest in the
plant with a corresponding offtake agreement with an initial ten-
year term renewable as long as voestalpine retains any interest
in ArcelorMittal Texas HBI. ArcelorMittal would own 100% of any
future development of operations. The remaining balance of
production will be delivered to third parties under existing supply
contracts, and to ArcelorMittal facilities, including to AM/NS
Calvert in Alabama, upon the commissioning of its 1.5\u00a0million
tonne EAF. Pursuant to the purchase agreement, voestalpine's
20% interest is subject to a call option exercisable by
ArcelorMittal upon termination of the offtake agreement or
failure by voestalpine to purchase the offtake volume and a put
option exercisable by voestalpine at the end of the fifth, tenth
and fifteenth year subsequently to the acquisition date. The
Company did not ascribe any value to the call option but
recognized a 177 financial liability at amortized cost measured
at the present value of the redemption amount of the written put
option based on the lower of equity value increased by an
annual contractual return and fair value. The Company
completed its measurement of the acquisition-date fair value of
the identifiable assets and liabilities of ArcelorMittal Texas HBI.\u00a0
It recognized 283 (including trade receivables of 124), 949 and
11 of current assets, property, plant and equipment and
intangible assets, respectively. ArcelorMittal recognized a 97
bargain purchase gain in cost of sales as a result of i)
ArcelorMittal's agreement for voestalpine to retain a 20% non-
controlling interest ii) the above-mentioned offtake agreement
and iii) the fair value of property, plant and equipment\u00a0
exceeding its carrying amount. Revenue and net loss since
acquisition date were 445 and 35, respectively. ArcelorMittal HBI
is part of the NAFTA reportable segment.
On July 1, 2022, the Company completed the combined
acquisition of three subsidiaries from environmental services
and recycling company ALBA International Recycling (ALBA
Metall S\u00fcd Rhein-Main GmbH, ALBA Electronics Recycling
GmbH and ALBA Metall S\u00fcd Franken GmbH in aggregate
\"ALBA\") active in ferrous and non-ferrous metal recycling in
Germany for total consideration of 65 of which \u20ac51 million (45
net of cash acquired of 9) in cash and deferred consideration of
11. Following the completion of the acquisition-date fair value of
the identifiable assets and liabilities of the three companies, the
Company recognized goodwill of 22. Revenue and net income
since acquisition date were 87 and 1, respectively. ALBA is part
of the Europe reportable segment.
On July 28, 2022, ArcelorMittal announced it has signed an
agreement with the shareholders of Companhia Sider\u00fargica do
Pec\u00e9m (\"CSP\") to acquire CSP for an enterprise value of
approximately 2.2 billion. Transaction closing is expected to
occur during the first quarter of 2023 as the Company obtained
corporate and regulatory approvals, including CADE (Brazilian
anti-trust) approval. CSP is a world-class operation, producing
high-quality slab at a globally competitive cost. CSP\u2019s state-of-
the-art steel facility in the state of Cear\u00e1 in northeast Brazil was
commissioned in 2016 and produced its first slabs in June of
that year. It operates a three million tonne capacity blast furnace
and has access via conveyors to the Port of Pec\u00e9m, a large
scale, deep water port located 10 kilometers from the plant.
CSP operates within Brazil\u2019s first Export Processing Zone, and
benefits from various tax incentives including a low corporate
income tax rate. CSP is part of the Brazil reportable segment.
On December 29, 2022, ArcelorMittal announced it signed an
agreement to acquire Polish scrap metal recycling business,
Zak\u0142ad Przerobu Z\u0142omu (\u201cZ\u0142omex\u201d). Zlomex operates scrap
yards in Krakow and Warsaw. Transaction closing, which is
subject to customary regulatory approvals is expected during
the first half of 2023.
On January 3, 2023, ArcelorMittal completed the acquisition of
Riwald Recycling (\"Riwald\"), a state-of-the-art ferrous scrap
metal recycling business based in the Netherlands for total
consideration of \u20ac85 million subject to certain post-closing
adjustments. Following the recent closing of the transaction, the
Company is still in the process of measuring the acquisition-date
fair value of the identifiable assets and liabilities of Riwald and
expects to complete such measurement during the first half of
2023. Riwald is part of the Europe reportable segment.
Revenue and net income attributable to the equity holders of the
parent of the Company for twelve months ended December 31,
2022 were 80,572 and 9,360, respectively, as though the
acquisition date of JLM, ASL, CSM, ALBA and ArcelorMittal
Texas HBI had been as of January 1, 2022.
On November 19, 2021, the Company completed the acquisition
of Condesa Tubos, S.L. (\"Condesa\"), a joint venture in which it
already held a 33% interest, through the acquisition of the
remaining 67% stake from a pool of banks for total consideration
of \u20ac31 million (25 net of cash acquired of 10). The acquisition of
Condesa strengthened ArcelorMittal's tubular operations within
the Europe segment. Following the completion of the
measurement of the acquisition-date fair value of the identifiable
assets and liabilities of Condesa, the Company recognized 92,
39 and 10 of current assets, property, plant and equipment and
other non-current assets, respectively, and a 24 bargain
purchase gain in cost of sales as ArcelorMittal's industrial
expertise was considered by the other previous shareholders.
The table below summarizes the final acquisition-date fair value of the assets acquired and liabilities assumed in 2022 and 2021:
| | | | | | |
| | |
| | | | | | |
| | | | | | |
Property, plant and equipment | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Consideration paid net of cash acquired | | | | | | |
| | | | | | |
Non-controlling interests | | | | | | |
Fair value of previously held interests at acquisition date | | | | | | |
Remeasurement gain relating to the equity interest previously held | | | | | | |
Goodwill/(bargain purchase gain) | | | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zNDMvZnJhZzpkNjk5NWRhMTc3MDQ0NzM2YmFkNzlmY2YxMDdiMDYwMS90ZXh0cmVnaW9uOmQ2OTk1ZGExNzcwNDQ3MzZiYWQ3OWZjZjEwN2IwNjAxXzI4MDM3NTQ2NTA5MzYz_0355c8db-b640-440a-a6a8-0b068fc7f70a": {
"value": "2.3\u00a0 \u00a0 Divestments and assets held for sale
Non-current assets and disposal groups that are classified as
held for sale are measured at the lower of carrying amount and
fair value less costs to sell. Assets and disposal groups are
classified as held for sale if their carrying amount will be
recovered through a sale transaction rather than through
continuing use. The non-current asset, or disposal group, is
classified as held for sale only when the sale is highly probable
and is available for immediate sale in its present condition and is
marketed for sale at a price that is reasonable in relation to its
current fair value. Assets held for sale are presented separately
in the consolidated statements of financial position and are not
depreciated. Gains (losses) on disposal of subsidiaries are
recognized in cost of sales, whereas gains (losses) on disposal
of investments accounted for under the equity method are
recognized in income (loss) from investments in associates, joint
ventures and other investments.
2.3.1. Divestments
There were no divestments in 2022.
Divestments in 2021
On March 4, 2020, ArcelorMittal executed an amendment (the
\u201cAmendment Agreement\u201d) to the original lease agreement with
the Ilva Commissioners with a conditional obligation to purchase
the former Ilva business units (\"ArcelorMittal Italia\") in an
extraordinary administration insolvency procedure. The
Amendment Agreement outlined the terms for a significant
equity investment by an Italian state-sponsored entity, thereby
forming the basis for an important new partnership between
ArcelorMittal and the Italian government, with the investment
agreement to be executed by November 30, 2020. The
Amendment Agreement also provided for a 50% reduction in the
quarterly rental payments payable by ArcelorMittal, with the
balance being due upon closing of the purchase obligation. On
December 10, 2020, the Company entered into an investment
agreement with Invitalia - Agenzia nazionale per l'attrazione
degli investimenti e lo sviluppo d'impresa S.P.A (\u201cInvitalia\u201d), the
party designated by the Italian government to be the
government-sponsored investor as contemplated in the
Amendment Agreement, in order to create a partnership
between Invitalia and the Company to support the completion of
the purchase obligation.
On December 14, 2020, ISP exercised its put option for
\u20ac111\u00a0million (135) to sell its share in ArcelorMittal Italia to the
Company and the liability it had recognized upon acquisition of
ArcelorMittal Italia was derecognized.
The investment agreement includes two capital increases:
\u2022The first investment of \u20ac400\u00a0million (476) which was
completed on April 14, 2021 provided Invitalia with 50%
voting and governance rights and therefore joint control
over AM InvestCo with a 38% shareholding;
\u2022The second investment of up to \u20ac680\u00a0million was payable
on closing of the purchase obligation, which was subject to
the satisfaction of various conditions precedent by May
2022. On May 31, 2022, following an amendment to the
investment agreement signed between ArcelorMittal and
Invitalia, the latest date for the second equity injection was
extended to May 31, 2024. At the end of December 2022,
ArcelorMittal, the Italian Government and Invitalia agreed,
among other things, to accelerate the funding originally
envisaged to occur in connection with the acquisition of
Ilva\u2019s assets (see note 2.4.1).
Subsequently to April 14, 2021, Acciaierie d'Italia Holding
(formerly AM InvestCo) operates independently and as such has
its own funding plans. Its main operating subsidiary ArcelorMittal
Italia was renamed Acciaierie d'Italia. As a result of loss of
control, the Company derecognized assets (including 199 of
cash pooling receivable from the Company and subsequently
settled) and liabilities of 4,639 and 3,873, respectively, and
accounted for its 62% interest in the joint venture under the
equity method at its fair value of 1,205. The Company
recognized in cost of sales a gain of 104 including the
reclassification from other comprehensive income to the
consolidated statements of operations of foreign exchange
translation losses and other for 283. The fair value
measurement was determined using a discounted cash flow
model and Level 3 unobservable inputs.
Divestment in 2020
On December 9, 2020, the Company completed the sale of
100% of the shares of ArcelorMittal USA, ArcelorMittal Princeton
and ArcelorMittal Monessen, their subsidiaries and certain other
subsidiaries as well as the joint operations of Hibbing Taconite
Mines, Double G Coatings and I/N Tek and the joint venture I/N
Kote, together the \u201cArcelorMittal USA Divestment Business\u201d to
Cleveland-Cliffs Inc. (\u201cCleveland-Cliffs\u201d) for a combination of
cash and shares. ArcelorMittal retained certain intellectual
property assets and office space.
In addition, Nippon Steel Corporation (\"NSC\"), the co-
shareholder of I/N Tek and I/N Kote simultaneously exited from
such entities, which were transferred in full to Cleveland-Cliffs.
The consideration (net of transaction fees of 21 and estimated
working capital adjustment of 50) was 2,219 and included:
\u2022Cash of 509 (497 net of 7 cash disposed of and 5
transaction fees paid);
\u202278,186,671 common shares of Cleveland-Cliffs with
value of 1,020 and representing a 16% stake in
Cleveland-Cliffs; and
\u2022583,273 non-voting preferred shares redeemable, at
Cleveland-Cliff's option, for 58,327,300 of its common
shares with a value of 761 or an equivalent amount in
cash.
Following the settlement of the final working capital adjustment
during the second quarter of 2021, the total consideration
decreased by 4 to 2,215.
In addition, Cleveland-Cliffs assumed certain liabilities of the
ArcelorMittal USA Divestment Business, including pensions and
other post-employment benefit liabilities net of pension fund
assets with a carrying amount of 3.2 billion in ArcelorMittal's
consolidated statement of financial position upon disposal. The
resulting net gain on disposal was 1,460. The ArcelorMittal USA
Divestment Business was part of the NAFTA reportable
segment. Immediately prior to classification as held for sale as
of September 30, 2020, the Company assessed whether there
was an indication that the impairment loss recognized in 2019
may have decreased. The Company calculated the fair value
less cost of disposal using a market approach with market
multiples derived from comparable transactions, a Level 3
unobservable input. As a result, the Company reversed 660, in
cost of sales, of impairment charges of property, plant and
equipment previously recognized. The Company allocated 672
of the NAFTA segment goodwill to the disposal group based on
the relative values of the operations disposed of and the portion
of the group of cash-generating units retained.
The table below summarizes the significant divestments
completed in 2021 and 2020:
| | | |
| | | |
| | | ArcelorMittal USA Divestment Business |
Cash and cash equivalents | | | |
| | | |
| | | |
Property, plant\u00a0and equipment | | | |
| | | |
| | | |
| | | |
Other long-term liabilities | | | |
| | | |
| | | |
| | | |
Total net assets disposed of | | | |
ArcelorMittal retained interest 62% | | | |
| | | |
| | | |
Reclassification of foreign exchange and other | | | |
Gain on disposal/derecognition | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zNTIvZnJhZzo3MzFkMDdkYzM4MTM0MmZmOTJkNzZhZTBiYzA1NTI3Zi90ZXh0cmVnaW9uOjczMWQwN2RjMzgxMzQyZmY5MmQ3NmFlMGJjMDU1MjdmXzI3NDg3NzkwNjk0Nzg4_04a1aac1-c233-4dc1-9451-938cf56657bd": {
"value": "2.4\u00a0 \u00a0 Investments in associates and joint arrangements\u00a0
The carrying amounts of the Company\u2019s investments accounted for under the equity method were as follows:
| | | |
| |
| | | |
| | | |
| | | |
Individually immaterial joint ventures and associates1 | | | |
| | | |
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\u00a031, 2022 and 2021, and none of them have a carrying value exceeding 150 at December\u00a031, 2022 and 2021.
2.4.2 Associates
The following table summarizes the financial information and reconciles it to the carrying amount of each of the Company\u2019s material
associates, as well as the income statement of the Company\u2019s material associates:
| | | | | | | | | | |
| | |
| | | | | | Gonvarri Steel Industries | | | | |
Financial statements reporting date | | | | | | | | | | |
Place of incorporation and operation1 | | | | | | | | | | |
| | Iron and steel manufacturing | | | | | | | | |
Ownership and voting rights at December 31, 2022 | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Non-controlling interests | | | | | | | | | | |
Net assets attributable to equity holders of the parent | | | | | | | | | | |
Company's share of net assets | | | | | | | | | | |
Adjustments for differences in accounting policies and other | | | | | | | | | | |
| | | | | | | | | | |
Carrying amount in the statements of financial position | | | | | | | | | | |
| | | | | | | | | | |
Income / (loss) from continuing operations | | | | | | | | | | |
Other comprehensive income | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | |
Cash dividends received by the Company | | | | | | | | | | |
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\u00a031, 2022 and the net assets situation corresponding to the latest financial
statements ArcelorMittal is permitted to disclose translated with closing rates as of the reporting dates described in the table above. For the year ended December 31,
2020, the Company recognized a 211 impairment loss with respect to its investment in DHS Group.
3.The amount for DHS Group includes an adjustment to align the German GAAP financial information with the Company\u2019s 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 recognized goodwill. In September 2020, following a legal reorganization that was
not a business combination for the Company, its share of fair value remeasurement of 1.5 billion was not recognized in the carrying amount of Baffinland.
6.Following a legal reorganization in September 2020, the Company holds an indirect interest in Baffinland through Nunavut Iron Ore Inc.
| | | | | | | | | | |
| | |
| | | | | | Gonvarri Steel Industries | | | | |
Financial statements reporting date | | | | | | | | | | |
Place of incorporation and operation1 | | | | | | | | | | |
| | Iron and steel manufacturing | | | | | | | | |
Ownership and voting rights at December 31, 2021 | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Non-controlling interests | | | | | | | | | | |
Net assets attributable to equity holders of the parent | | | | | | | | | | |
Company's share of net assets | | | | | | | | | | |
Adjustments for differences in accounting policies and other | | | | | | | | | | |
| | | | | | | | | | |
Carrying amount in the statements of financial position | | | | | | | | | | |
| | | | | | | | | | |
Income / (loss) from continuing operations | | | | | | | | | | |
Other comprehensive income (loss) | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | |
Cash dividends received by the Company | | | | | | | | | | |
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\u00a031, 2021 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. For the year ended December 31, 2020, the Company recognized
a 211 impairment loss with respect to its investment in DHS.
3.The amount for DHS Group includes an adjustment to align the German GAAP financial information with the Company\u2019s 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. In September 2020,
following a legal reorganization that was not a business combination for the Company, its share of provisional fair value remeasurement of 1.5 billion was not recognized
in the carrying amount of Baffinland.
6.Following a legal reorganization in September 2020, the Company holds an indirect interest in Baffinland through Nunavut Iron Ore Inc.
| | | | | | | | | | |
| | |
| | | | | | Gonvarri Steel Industries | | | | |
Financial statements reporting date | | | | | | | | | | |
Place of incorporation and operation1 | | | | | | | | | | |
| | Iron and steel manufacturing | | | | | | | | |
Ownership and voting rights at December 31, 2020 | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Non-controlling interests | | | | | | | | | | |
Net assets attributable to equity holders of the parent | | | | | | | | | | |
Company's share of net assets | | | | | | | | | | |
Adjustments for differences in accounting policies and other | | | | | | | | | | |
| | | | | | | | | | |
Carrying amount in the statements of financial position | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Other comprehensive income (loss) | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | |
Cash dividends received by the Company | | | | | | | | | | |
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, 2020 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.\u00a0 For the year ended December 31, 2020, the Company recognized
a 211 impairment loss with respect to its investment in DHS.
3.The amount for DHS Group includes an adjustment to align the German GAAP financial information with the Company\u2019s 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.\u00a0 In September 2020,
following a legal reorganization that was not a business combination for the Company, its share of provisional fair value remeasurement of 1.5 billion was not recognized
in the carrying amount of Baffinland.
6.Following a legal reorganization in September 2020, the Company holds an indirect interest in Baffinland through Nunavut Iron Ore Inc. The summarized statement of
comprehensive income presents full year result for Baffinland (direct owner and operator of Mary River project).
China Oriental
China Oriental Group Company Limited (\u201cChina Oriental\u201d) is a
Chinese integrated iron and steel company listed on the Hong
Kong Stock Exchange (\u201cHKEx\u201d). The China Oriental Group has
manufacturing plants in Hebei Province and Guangdong
Province of the People\u2019s Republic of China (the \u201cPRC\u201d) and
sells mainly to customers located in the PRC. The China
Oriental Group also carries out property development business
which is mainly in the PRC.
DHS Group
DHS - Dillinger H\u00fctte Saarstahl AG (\u201cDHS Group\u201d), 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).
As of December 31, 2020, as a result of lower cash flow
projections resulting from weaker market conditions partially
linked to the COVID-19 pandemic, the Company identified an
impairment trigger with respect to its investment in DHS and
recognized accordingly a 211 impairment charge. The Company
calculated the fair value of its investment in DHS using a
discounted cash flow model (using a\u00a0 discount rate of 7.24%), a
level 3 unobservable input.\u00a0
Gonvarri Steel Industries
Holding Gonvarri SL (\u201cGonvarri Steel Industries\u201d) is dedicated to
the processing of steel. The entity is a European leader in steel
service centers and renewable energy components, with strong
presence in Europe and Latin America.
Baffinland\u00a0
Baffinland Iron Mines Corporation (\"Baffinland\") owns the Mary
River project, which has direct shipping, high grade iron ore on
Baffin Island in Nunavut (Canada).
During 2020, ArcelorMittal's shareholding in Baffinland slightly
decreased from 25.70% to 25.23% following capital calls
exclusively fulfilled by Nunavut Iron Ore Inc. (\u201cNIO\u201d). In
September 2020, the corporate structure was reorganized
whereby NIO became the parent company of Baffinland, and
ArcelorMittal together with The Energy and Minerals Group
(\"EMG\") became shareholders of NIO with ArcelorMittal's share
in NIO and thus Baffinland unchanged at 25.23%.
NIO accounted for the acquisition of Baffinland as a business
combination and the acquisition-date fair value of assets and
liabilities was provisional at December 31, 2020. This legal
reorganization was not a business combination for the Company
which accordingly did not recognize its share of the fair value
measurement in the carrying amount of Baffinland.
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:
| | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | |
Carrying amount of interests in associates and joint ventures | | | | | | | | | | | | |
| | | | | | | | | | | | |
Income from continuing operations | | | | | | | | | | | | |
Other comprehensive income (loss) | | | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | | | |
1.Mainly 117, 89 and 12 dividend income from Erdemir in 2022, 2021 and
2020, respectively.
For the year ended December 31, 2021, the gain on disposal
corresponded to the gain on dilution of\u00a0 the Company's interest
in Al Jubail (see note 2.4.1).
For the year ended December 31, 2020, impairment charges of
211 related to DHS where the carrying value of the investment
exceeded its fair value (see note 2.4.2).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zNTIvZnJhZzo3MzFkMDdkYzM4MTM0MmZmOTJkNzZhZTBiYzA1NTI3Zi90ZXh0cmVnaW9uOjczMWQwN2RjMzgxMzQyZmY5MmQ3NmFlMGJjMDU1MjdmXzI3NDg3NzkwNjk0Nzg4_54944c15-c21e-4f79-a1e1-e31150bcfe61": {
"value": "2.4\u00a0 \u00a0 Investments in associates and joint arrangements\u00a0
The carrying amounts of the Company\u2019s investments accounted for under the equity method were as follows:
| | | |
| |
| | | |
| | | |
| | | |
Individually immaterial joint ventures and associates1 | | | |
| | | |
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\u00a031, 2022 and 2021, and none of them have a carrying value exceeding 150 at December\u00a031, 2022 and 2021.
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\u2019s
material joint ventures, as well as the income statement of the Company\u2019s material joint ventures:
| | | | | | | | | | | | | | | | |
| | |
| | | | | | | | | | | | | | | | |
Place of incorporation and operation 1 | | | | | | | | | | | | | | | | |
| | Integrated flat steel producer 4,5 | | Integrated flat steel producer6 | | Automotive steel finishing7 | | Automotive steel finishing | | Energy production and supply | | Manufacturing and sale of steel 2,3 | | Production and sale seamless line pipes and tubes | | |
Ownership and voting rights at December 31, 2022 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
of which cash, cash equivalents and restricted cash | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
of which trade and other payables and provisions | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
of which trade and other payables and provisions | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Net assets attributable to equity holders of the parent | | | | | | | | | | | | | | | | |
Company's share of net assets | | | | | | | | | | | | | | | | |
Adjustments for differences in accounting policies and other | | | | | | | | | | | | | | | | |
Carrying amount in the statements of financial position | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Income tax benefit (expense) | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | | | | | | | | | | | | | | |
Other comprehensive income (loss) | | | | | | | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | | | | | | | |
Cash dividends received by the Company | | | | | | | | | | | | | | | | |
1.The country of incorporation corresponds to the country of operation except for Tameh whose country of operation is also the Czech Republic.\u00a0
2.Ownership interest in Bor\u00e7elik was 45.33% and 50.00% based on issued shares and outstanding shares, respectively, at December 31, 2022;\u00a0 voting interest was 48.01%
at December\u00a031, 2022.\u00a0
3.Adjustment in Bor\u00e7elik relates primarily to differences in accounting policies regarding revaluation of fixed assets.
4.Adjustments in AMNS India correspond primarily to transaction costs incurred to set up the joint venture and the fair value of the guarantee of the joint venture's debt (see
note 9.4).
5.Includes AMNS Luxembourg, AMNS India and intermediate holding entities.
6.Includes Acciaierie d'Italia summarized statement of financial position as of December 31, 2022 adjusted for the fair value adjustments at divestment date (see note 2.3.1).
7.Adjustments in Calvert primarily relate to differences in accounting policies regarding inventory valuation.
| | | | | | | | | | | | | | | | |
| | |
| | | | | | | | | | | | | | | | |
Place of incorporation and operation 1 | | | | | | | | | | | | | | | | |
| | Integrated flat steel producer 5,6 | | Integrated flat steel producer7 | | Automotive steel finishing8 | | Automotive steel finishing | | Energy production and supply | | Manufacturing and sale of steel 2,3,4 | | Production and sale seamless line pipes and tubes 9 | | |
Ownership and voting rights at December 31, 2021 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
of which cash and cash equivalents | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
of which trade and other payables and provisions | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
of which trade and other payables and provisions | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Company's share of net assets | | | | | | | | | | | | | | | | |
Adjustments for differences in accounting policies and other | | | | | | | | | | | | | | | | |
Carrying amount in the statements of financial position | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Income tax benefit (expense) | | | | | | | | | | | | | | | | |
Income / (loss) from continuing operations | | | | | | | | | | | | | | | | |
Other comprehensive income (loss) | | | | | | | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | | | | | | | |
Cash dividends received by the Company | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
1.The country of incorporation corresponds to the country of operation except for Tameh whose country of operation is also the Czech Republic.\u00a0
2.Ownership interest in Bor\u00e7elik was 45.33% and 50.00% based on issued shares and outstanding shares, respectively, at December 31, 2021; voting interest was 48.01%
at December\u00a031, 2021.\u00a0
3.The non-current liabilities include 39 deferred tax liability.
4.Adjustment in Bor\u00e7elik relates primarily to differences in accounting policies regarding revaluation of fixed assets.
5.Adjustments in AMNS India correspond primarily to transaction costs incurred to set up the joint venture and the fair value of the guarantee of the joint venture's debt (see
note 9.4).
6.Includes AMNS Luxembourg, AMNS India and intermediate holding entities.
7.Includes Acciaierie d'Italia summarized statement of financial position as of December 31, 2021 adjusted for the fair value adjustments at divestment date (see note 2.3.1).
The summarized statement of comprehensive income presents results of Acciaierie d'Italia for the period from April 14, 2021 to December 31, 2021.
8.Adjustments in Calvert primarily relate to differences in accounting policies regarding inventory valuation.
9.The summarized statement of comprehensive income presents results for full year 2021 including Jubail Energy Services Company (\"JESCO\") results after July 31, 2021.
| | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | |
Place of incorporation and operation1 | | | | | | | | | | | | |
| | 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, 2020 | | | | | | | | | | | | |
| | | | | | | | | | | | |
of which cash and cash equivalents | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
of which trade and other payables and provisions | | | | | | | | | | | | |
| | | | | | | | | | | | |
of which trade and other payables and provisions | | | | | | | | | | | | |
| | | | | | | | | | | | |
Company's share of net assets | | | | | | | | | | | | |
Adjustments for differences in accounting policies and other | | | | | | | | | | | | |
Carrying amount in the statements of financial position | | | | | | | | | | | | |
| | | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Income tax benefit (expense) | | | | | | | | | | | | |
Income / (loss) from continuing operations | | | | | | | | | | | | |
Other comprehensive income (loss) | | | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | | | |
Cash dividends received by the Company | | | | | | | | | | | | |
1.The country of incorporation corresponds to the country of operation except for Tameh whose country of operation is also the Czech Republic.\u00a0
2.Ownership interest in Bor\u00e7elik was 45.33% and 50.00% based on issued shares and outstanding shares, respectively, at December 31, 2020;\u00a0 voting interest was 48.01%
at December\u00a031, 2020.\u00a0
3.The non-current liabilities include 39 deferred tax liability.\u00a0
4.Adjustment in Bor\u00e7elik relates primarily to differences in accounting policies regarding revaluation of fixed assets.
5.Adjustments in AMNS India correspond primarily to transaction costs incurred to set up the joint venture and the fair value of the guarantee of the joint venture's debt (see
note 9.4).
6.Includes AMNS Luxembourg, AMNS India and intermediate holding entities.
AMNS India
AMNS India is an integrated flat carbon steel manufacturer -
from iron ore to ready-to-market products with an achievable
crude steel capacity of 8.8\u00a0million tonnes per annum. Its
manufacturing facilities comprise iron making, steelmaking and
downstream facilities spread across India.
In 2019, ArcelorMittal and Nippon Steel Corporation (\"NSC\"),
Japan\u2019s 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%. Through the agreement, both
ArcelorMittal and NSC are guaranteed equal board
representation and participation in all significant financial and
operating decisions. The Company has therefore determined
that it does not control the entity, even though it holds 60% of
the voting rights. AMNS Luxembourg Holding S.A. (\"AMNS
Luxembourg\") is the parent company of the joint venture.
ArcelorMittal's 60% interest is accounted for under the equity
method.
AMNS India\u2019s main steel manufacturing facility is located at
Hazira, Gujarat in western India. It also has:\u00a0
\u2013two 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;\u00a0
\u2013a 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\u00a0
\u2013six service centers in the industrial clusters of Hazira,
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.\u00a0 Its facilities are located close
to ports with deep draft for movement of raw materials
and finished goods.\u00a0
The Resolution Plan which was approved for the acquisition of
AMNS India includes a capital expenditure plan of 2.6 billion to
be implemented in two stages over six years.
On February 13, 2020 and pursuant to the follow-on funding
requirement in accordance with the joint venture formation
agreement, AMNS Luxembourg completed an equity injection
into AMNS India of 840 mainly through a 475 drawn under the 7
billion bridge term facility agreement guaranteed by ArcelorMittal
and a 325 shareholder loan from NSC.\u00a0
On March 16, 2020, AMNS Luxembourg entered into a 5.1
billion ten-year term loan agreement with various Japanese
banks which is guaranteed by ArcelorMittal and NSC in
proportion to their interests in the joint venture. The proceeds of
the loan were used on March 27, 2020 to refinance in full the
amounts borrowed by the Company in connection with the
acquisition of AMNS India, including the amounts borrowed
under the 7 billion bridge term facility agreement.
On November 10, 2022, following the approval of the resolution
plan by the National Company Law Tribunal (\"NCLT\") on
October 14, 2022, AMNS India completed the acquisition of
Uttam Galva Steels Limited subsequently renamed AMNS
Khopoli Limited (\"AMNSK\"), a downstream steel manufacturer in
Maharashtra, for which it had made payments to the financial
creditors of AMNSK in 2018 and 2019.
On August 26, 2022, AMNS India announced a definitive
agreement with Essar Group to acquire, port, power plants and
other logistics and infrastructure assets in India for a net value
of approximately 2.4 billion. Accordingly, it completed the
acquisition of a multi-fuel power plant at Hazira on October 19,
2022 as well as a 25\u00a0million-tonne jetty at the all-weather deep
draft bulk port terminal at Hazira and a 12\u00a0million-tonne deep-
water jetty at Paradeep on November 15, 2022.
In terms of iron ore mining assets, AMNS India operates the
Thakurani mine in the Keonjhar district of Odisha, which
operates at full capacity since the first quarter of 2021 and the
Ghoraburhani-Sagasahi mine in the Sudargarh district of
Odisha, where\u00a0 AMNS India commenced operations in
September 2021. AMNS India has also made acquisitions of
certain ancillary assets including Odisha Slurry Pipeline
infrastructure Limited (\"OSPIL\") which secured an important
infrastructure asset for raw material supply to the Paradeep
pellet plant and Hazira steel plant and a captive power plant at
Paradeep in Odisha in January 2021. In September 2021,
AMNS India commissioned a 6 million tonnes per annum pellet
plant at the port city of Paradeep in Odisha. The plant doubled
production capacity at AMNS India\u2019s Paradeep complex to 12
million tonnes, and AMNS India\u2019s total pelletization capacity
increased to 20 million tonnes per annum.
In October 2022, AMNS India started an expansion plan
representing capital expenditures of approximately 7.4 billion to
increase production at the Hazira facility to 15 million tonnes of
rolled products by the first half of 2026. The plan includes the
construction of two blast furnaces (to start in 2025 and 2026),
the capacity increase of the existing blast furnace from 2 to 3
million tonnes per annum and it includes also a CRM2 complex
and galvanizing and annealing line, steel shop, hot strip mill and
ancillary equipment (including coke, sinter, networks, power,
gas, oxygen plant) and raw material handling.
Acciaierie d'Italia
Acciaierie d'Italia is the leading steel producer in Italy and
produces high-quality and sustainable steel to be used in a
range of vital industry sectors across the domestic steel market
such as construction, energy, automotive, home appliances,
packaging and transport and for international export. Acciaierie
d'Italia has operations across various structurally linked
operating sites including Europe\u2019s biggest single-site integrated
steel facility in Taranto and rolling mills in Genova and Novi
Ligure. Genova is also an important hub in terms of intermodal
logistics.
On April 14, 2021, pursuant to the investment agreement signed
on December 10, 2020 forming a public-private partnership
between Invitalia and ArcelorMittal and providing Invitalia joint
control rights, ArcelorMittal recorded its 62% interest at its fair
value of 1,205 (see 2.3.1.) at the initial recognition of Acciaierie
d'Italia as equity method investment.
On May 31, 2022, Acciaierie d\u2019Italia Holding and Ilva signed an
amendment to the Ilva lease agreement (with a conditional
purchase obligation) to, among other changes, extend the
longstop date for the fulfillment of the conditions precedent (and,
therefore, the term of the lease of the Ilva business) by two
years until May 31, 2024. In parallel, ArcelorMittal and Invitalia
signed an amendment to their investment agreement to extend
the latest date for the second equity injection to May 31, 2024 to
coincide with the latest date for the fulfillment of the conditions
precedent for the purchase of the Ilva business assets and to
reflect certain other circumstances. This amendment to the
investment agreement confirms Acciaierie d\u2019Italia Holding\u2019s
ownership and governance structure until May 2024. At the end
of December 2022, in order to address the financial
consequences on the Acciaierie d\u2019Italia group of the
unprecedented spike in energy costs caused by the Ukraine
crisis, ArcelorMittal, the Italian Government and Invitalia agreed,
among other things, to accelerate the funding originally
envisaged to occur in connection with the acquisition of Ilva\u2019s
assets, consisting in particular of \u20ac680 million from Invitalia and
\u20ac70 million from ArcelorMittal (corresponding to an equivalent
amount of receivables towards the Acciaierie d\u2019Italia Group), in
the form of a convertible shareholder loan made available on
February 14, 2023, as a result of which, upon conversion,
Invitalia\u2019s stake in Acciaierie d\u2019Italia Holding will be increased to
60% and ArcelorMittal\u2019s will reduce to 40%. The settlement of
Invitalia\u2019s shareholder loan was completed on February 17,
2023.
The investment agreement also includes an updated industrial
plan envisaging through 2026 investment in lower-carbon
steelmaking technologies, including the construction of a
2.5\u00a0million tonne electric arc furnace (\"EAF\"), which is expected
to open in mid-2024, and the relining of blast furnace #5, which
is expected to start production in 2024.
VAMA
Valin ArcelorMittal Automotive Steel (\u201cVAMA\u201d) 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.\u00a0
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 subsequently acquired by Ternium S.A., using
a market-based price formula. The slab purchase agreement
with Ternium S.A. was terminated with last purchases concluded
in May 2021. The remaining slabs for Calvert's operations are
sourced from ArcelorMittal plants in Brazil and Mexico and from
Cleveland-Cliffs , which following its acquisition of ArcelorMittal
USA entered on December 9, 2020 into a new five-year
agreement with Calvert (with an automatic three-year extension
unless either party provides notice of intent to terminate) for 1.5
million tonnes annually for the initial term and 0.55 million
tonnes annually under the extension and which can be reduced
with a six-month notice. 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.
Calvert plans to invest in an on-site steelmaking facility through
a 1.5 million tonnes capacity EAF (producing slabs for the
existing operations and replacing part of the purchased slabs).
Construction commenced in March 2021 after obtaining all
environmental permits, and the facility is expected to start in the
second half of 2023.
Tameh
Tameh is a joint venture between ArcelorMittal and Tauron
Group including four energy production facilities located in
Poland and the Czech Republic. Tameh\u2019s objective is to ensure
energy supply to the Company\u2019s steel plants in Poland and\u00a0
external customers in the Czech Republic as well as the
utilization of steel plant gases for energy production processes.
Bor\u00e7elik
Bor\u00e7elik \u00c7elik Sanayii Ticaret Anonim \u015eirketi (\"Bor\u00e7elik\"),
incorporated and located in Turkey, is a joint venture between
ArcelorMittal and Borusan Holding involved in the manufacturing
and sale of cold-rolled and galvanized flat steel products.
Al Jubail
ArcelorMittal Tubular Products Al Jubail (\"Al Jubail\") is a state of
the art seamless tube mill in Saudi Arabia designed and built to
serve the fast growing energy producing markets of Saudi
Arabia, the Middle East, North Africa and beyond.
Al Jubail is a joint venture in which the Company owns a
33.34% interest. On July 31, 2021, Al Jubail completed the
acquisition of Jubail Energy Services Company (\"JESCO\"), a
leading producer of carbon steel seamless pipes in Saudi
Arabia.\u00a0
The Company had outstanding shareholder loans given to Al
Jubail for 109 as of December 31, 2020. In connection with the
shareholding reorganization and completion of the acquisition of
JESCO, the Company converted its remaining 109 of
shareholders loans and 21 of other receivables into equity and
made an additional 50 cash injection to partially finance the
acquisition. Following the share conversion and capital
injections by ArcelorMittal, the Company's shareholding in Al
Jubail was diluted from 40.80% to 29.23% as of December 31,
2021. During 2022, the Company made 29 cash injection and
converted 14 other receivable into equity. Accordingly,
ArcelorMittal's shareholding increased from 29.23% to 33.34%.
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:
| | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | |
Carrying amount of interests in associates and joint ventures | | | | | | | | | | | | |
| | | | | | | | | | | | |
Income from continuing operations | | | | | | | | | | | | |
Other comprehensive income (loss) | | | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | | | |
1.Mainly 117, 89 and 12 dividend income from Erdemir in 2022, 2021 and
2020, respectively.
For the year ended December 31, 2021, the gain on disposal
corresponded to the gain on dilution of\u00a0 the Company's interest
in Al Jubail (see note 2.4.1).
For the year ended December 31, 2020, impairment charges of
211 related to DHS where the carrying value of the investment
exceeded its fair value (see note 2.4.2).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfJointVenturesExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zNzAvZnJhZzozYWVhODdkY2E4MjI0MThiYmI3Y2Q0MTE2NmZhMTQ0NC90ZXh0cmVnaW9uOjNhZWE4N2RjYTgyMjQxOGJiYjdjZDQxMTY2ZmExNDQ0XzI3NDg3NzkwNzAyMTE3_07344cf1-404e-488f-a361-084e3f516465": {
"value": "2.5\u00a0 \u00a0 Other investments\u00a0
Other investments include those investments in equity
instruments for which the Company does not have significant
influence. The Company irrevocably elected\u00a0 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:
| | | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
Investments in equity instruments at FVOCI | | | |
| | | |
The Company\u2019s significant investments in equity instruments at
FVOCI at December\u00a031, 2022 and 2021 were the following:\u00a0
Ere\u011dli Demir ve \u00c7elik Fabrikalari T.A.S. (\u201cErdemir\u201d)\u00a0
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 66 and
437 for the year ended December\u00a031, 2022 and 2021,
respectively.
Cleveland-Cliffs
Cleveland-Cliffs was historically the largest and oldest
independent iron ore mining company in the United States and it
became the largest flat-rolled steel company and largest iron ore
pellet producer in North America in 2020 after the acquisition of
AK Steel and ArcelorMittal USA Divestment Business. It is
vertically integrated from mining through iron making,
steelmaking, rolling, finishing and downstream with hot and cold
stamping of steel parts and components. As part of the
consideration for the sale of ArcelorMittal USA Divestment
Business to Cleveland-Cliffs as described in note 2.3.1, on
December 9, 2020, ArcelorMittal received 78,186,671 common
shares with a value of 1,020 and representing a 16% stake in
Cleveland-Cliffs and 583,273 non-voting preferred shares with a
value of 761. The non-voting preferred shares are redeemable
at Cleveland-Cliff\u2019s option for 58,327,300 of its common shares
or an equivalent amount in cash. Unrealized gains recognized in
other comprehensive income were 119 for the common shares
and 88 preferred shares for the year ended December 31, 2020.
On February 9, 2021 and June 18, 2021, ArcelorMittal
completed the sale of 40 million and 38.2 million common
shares in Cleveland-Cliffs, respectively, as part of a combined
primary and secondary public offering of Cleveland-Cliffs shares
for total net proceeds of 1,377. The accumulated gain of 357
(267 net of tax) recognized in other comprehensive income was
transferred to retained earnings. On July 28, 2021, Cleveland-
Cliffs redeemed the preferred shares and following the
completion of the review of the redemption notice, ArcelorMittal
received 1,303. The accumulated gain of 543 (411 net of tax)
recognized in other comprehensive income was transferred to
retained earnings.
ArcelorMittal\u2019s XCarb\u2122 innovation fund
ArcelorMittal has launched an innovation fund which will invest
up to 100 annually in groundbreaking companies developing
pioneering or breakthrough technologies which will accelerate
the steel industry's transition to carbon neutral steelmaking.
During 2022 and 2021 the Company has invested 43 and 80,
respectively, through its XCarb innovation fund of which 43 and
50, respectively, in equity instruments at FVOCI. Unrealized
gains recognized in other comprehensive income were 50 and
33 for the year ended December\u00a031, 2022 and 2021,
respectively.
Stalprodukt S.A.\u00a0
Stalprodukt S.A. is a leading manufacturer and exporter of
highly processed steel products based in Poland. Unrealized
(losses) recognized in other comprehensive income were (7)
and (12) for the year ended December\u00a031, 2022 and 2021,
respectively. In 2022 the Company sold 117,187 shares for total
consideration of 6. The accumulated loss recognized in other
comprehensive income of 2 was transferred to retained
earnings.
In 2020 the Company sold its remaining 1.8\u00a0million shares in
Powercell Sweden AB, a leading developer and producer of fuel
cell and fuel cell systems with high-power density for the
automotive, marine and stationary segments, for total
consideration of 59. The accumulated gain recognized in other
comprehensive income of 28 was transferred to retained
earnings.
2.6\u00a0 \u00a0 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:
| | | | | |
| |
| | | | | |
Share in net earnings of equity-accounted companies | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
1.Mainly 117, 89 and 12 dividend income from Erdemir in 2022, 2021 and
2020, respectively.
For the year ended December 31, 2021, the gain on disposal
corresponded to the gain on dilution of\u00a0 the Company's interest
in Al Jubail (see note 2.4.1).
For the year ended December 31, 2020, impairment charges of
211 related to DHS where the carrying value of the investment
exceeded its fair value (see note 2.4.2).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zNzYvZnJhZzo5NmUzODdlMWQ1ODE0MGRiOGZmYWYwYTUwYWNkYzM3MS90ZXh0cmVnaW9uOjk2ZTM4N2UxZDU4MTQwZGI4ZmZhZjBhNTBhY2RjMzcxXzk_b741648b-1904-4724-8622-b2e95046b74a": {
"value": "NOTE 3: SEGMENT REPORTING
3.1\u00a0 \u00a0 Reportable segments
As from April 1, 2021, ArcelorMittal implemented changes to its
organizational structure whereby primary responsibility for
captive mining operations whose output is mainly consumed by
their respective steel segments has been transferred to such
segments. The Mining segment retains primary responsibility for
the operation of the seaborne oriented operations at AMMC and
ArcelorMittal Liberia Ltd, and continues to provide technical
support to all mining operations within the Company.
Accordingly, the Company modified the structure of its segment
information in order to reflect changes in its approach to
managing its operations and segment disclosures have been
recast to reflect this new segmentation in conformity with IFRS.
Only the seaborne-oriented operations of AMMC and
ArcelorMittal Liberia Ltd are reported within the Mining segment.
The results of all other mines are henceforth accounted for
within the steel segment that they primarily supply.
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
(\u201cCODM\u201d) to make decisions about resources to be allocated to
the segment and assess its performance. The Company's
CODM as of December 31, 2022 was the Executive Office -
comprising the Executive Chairman, Mr. Lakshmi N. Mittal and
the CEO, 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\u2019s segments are structured as follows:
\u2022NAFTA represents the flat, long and tubular facilities of
the Company located in Canada, Mexico and the
United States (on December 9, 2020, the Company
divested ArcelorMittal USA\u00a0 see note 2.3.1). NAFTA
produces hot briquetted iron and 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. The
raw material supply of the NAFTA operations includes
sourcing from iron ore captive mines in Mexico and iron
ore and coal captive mines in the United States (until
disposal of ArcelorMittal USA on December 9, 2020 as
mentioned above) to supply the steel facilities.
\u2022Brazil includes the flat operations of Brazil, 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. The raw material supply of the Brazil
operations includes sourcing from iron ore captive
mines in Brazil.
\u2022Europe 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.
The raw material supply of Europe operations includes
sourcing from iron ore captive mines in Bosnia &
Herzegovina.\u00a0
\u2022ACIS produces a combination of flat, long and tubular
products. Its steel facilities are located in South Africa,
Ukraine and Kazakhstan. The raw material supply of
the ACIS operations includes sourcing from iron ore
captive mines in Kazakhstan and Ukraine and coal
captive mines in Kazakhstan.\u00a0
\u2022The Mining segment comprises the mines owned by
ArcelorMittal in Canada and Liberia. It provides the
Company's steel operations with high quality and low-
cost iron ore reserves and also sells mineral products
to third parties.
The following table summarizes certain financial data for ArcelorMittal\u2019s operations by reportable segments.
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Year ended December 31, 2022 | | | | | | | | | | | | | | | |
Sales to external customers | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Year ended December 31, 2021 | | | | | | | | | | | | | | | |
Sales to external customers | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Year ended December 31, 2020 | | | | | | | | | | | | | | | |
Sales to external customers | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
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.
The reconciliation from operating income to net income
(including non-controlling interests) is as follows:
| | | | | |
| |
| | | | | |
| | | | | |
Income from investments in associates and joint ventures | | | | | |
| | | | | |
| | | | | |
| | | | | |
Net income (including non- controlling interests) | | | | | |
The Company does not regularly provide a measure of total
assets and liabilities for each reportable segment to the CODM.
3.2\u00a0 \u00a0 Geographical information
Geographical information, by country or region, is separately
disclosed and represents ArcelorMittal\u2019s 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)
1.On December 9, 2020, the Company completed the sale of\u00a0 ArcelorMittal
USA. Sales of divested operations were consolidated by ArcelorMittal until
December 9, 2020, see note 2.3.1.
2.Sales in Italy includes sales from Acciaierie d'Italia until April 14, 2021 (see
note 2.3.1).
Revenues from external customers attributed to the country of
domicile (Luxembourg) were 206, 185 and 114 for the years
ended December\u00a031, 2022, 2021 and 2020, respectively.
Non-current assets1 per significant country:
include non-steel and by-products sales, manufactured and
specialty steel products sales, shipping and other services.
| | | | | | | | | | | | | |
Year ended December 31, 2021 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Year ended December 31, 2020 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
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.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zODUvZnJhZzpkZmE1OTVkZjkxNjE0ZTc2ODQ4NjFjZjFjOGUxZjJlOS90ZXh0cmVnaW9uOmRmYTU5NWRmOTE2MTRlNzY4NDg2MWNmMWM4ZTFmMmU5XzI3NDg3NzkwNjk0ODI2_09e1aa84-0121-4595-a5da-96a4e33e1bab": {
"value": "3.3\u00a0 \u00a0 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. Mining
products relate to the Company's own production. Others mainly
include non-steel and by-products sales, manufactured and
specialty steel products sales, shipping and other services.
| | | | | | | | | | | | | |
Year ended December 31, 2021 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Year ended December 31, 2020 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
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\u00a0 \u00a0 Revenue
The Company\u2019s 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\u2019s 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\u2019s 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\u2019s products must meet customer specifications. A
certain portion of the Company\u2019s 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:
\u2013Product 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.
\u2013Consequential 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
specifications. Accordingly,\u00a0the Company accounts for
warranties in accordance with IAS\u00a037 \"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\u2019s payment terms range from 30 to 90 days from
date of delivery, depending on the market and product sold. The
Company received 384 as advances from its customers which
are classified as unsatisfied performance obligations and
recognized as liabilities in line with IFRS 15.\u00a0The Company
expects 100% of these unsatisfied performance obligations as
of December\u00a031, 2022 to be recognized as revenue during 2023
as the Company\u2019s 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, 2022, 2021 and 2020.
| | | | | |
| |
| | | | | |
Trade accounts receivable and other - opening balance | | | | | |
Performance obligations satisfied | | | | | |
| | | | | |
Impairment of receivables (net of write backs and utilization) | | | | | |
Reclassification of the period- end receivables from /(to) held for sale and recognition (derecognition) of receivables related to business combination and divestments 1 | | | | | |
TSR receivables retained in ArcelorMittal USA divestment 2 | | | | | |
Foreign exchange and others | | | | | |
Trade accounts receivable and other - closing balance | | | | | |
2.See note 6.1.3",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zODUvZnJhZzpkZmE1OTVkZjkxNjE0ZTc2ODQ4NjFjZjFjOGUxZjJlOS90ZXh0cmVnaW9uOmRmYTU5NWRmOTE2MTRlNzY4NDg2MWNmMWM4ZTFmMmU5XzQyMA_8717ab1a-4f77-4ec8-9c9b-5717ff9bbfd3": {
"value": "3.3\u00a0 \u00a0 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. Mining
products relate to the Company's own production. Others mainly
include non-steel and by-products sales, manufactured and
specialty steel products sales, shipping and other services.
| | | | | | | | | | | | | |
Year ended December 31, 2021 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Year ended December 31, 2020 | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
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\u00a0 \u00a0 Revenue
The Company\u2019s 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\u2019s 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\u2019s 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\u2019s products must meet customer specifications. A
certain portion of the Company\u2019s 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:
\u2013Product 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.
\u2013Consequential 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
specifications. Accordingly,\u00a0the Company accounts for
warranties in accordance with IAS\u00a037 \"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\u2019s payment terms range from 30 to 90 days from
date of delivery, depending on the market and product sold. The
Company received 384 as advances from its customers which
are classified as unsatisfied performance obligations and
recognized as liabilities in line with IFRS 15.\u00a0The Company
expects 100% of these unsatisfied performance obligations as
of December\u00a031, 2022 to be recognized as revenue during 2023
as the Company\u2019s 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, 2022, 2021 and 2020.
| | | | | |
| |
| | | | | |
Trade accounts receivable and other - opening balance | | | | | |
Performance obligations satisfied | | | | | |
| | | | | |
Impairment of receivables (net of write backs and utilization) | | | | | |
Reclassification of the period- end receivables from /(to) held for sale and recognition (derecognition) of receivables related to business combination and divestments 1 | | | | | |
TSR receivables retained in ArcelorMittal USA divestment 2 | | | | | |
Foreign exchange and others | | | | | |
Trade accounts receivable and other - closing balance | | | | | |
2.See note 6.1.3",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zOTQvZnJhZzo3NTk1NDg3NjVlNGM0OGM4ODk5ZGU4YTJlOTUzYjcwZC90ZXh0cmVnaW9uOjc1OTU0ODc2NWU0YzQ4Yzg4OTlkZThhMmU5NTNiNzBkXzI3NDg3NzkwNjk4ODA0_f7c13f2c-2c7c-4a79-9bbd-60408bea691b": {
"value": "4.1\u00a0 \u00a0 Revenue
The Company\u2019s 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\u2019s 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\u2019s 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\u2019s products must meet customer specifications. A
certain portion of the Company\u2019s 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:
\u2013Product 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.
\u2013Consequential 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
specifications. Accordingly,\u00a0the Company accounts for
warranties in accordance with IAS\u00a037 \"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\u2019s payment terms range from 30 to 90 days from
date of delivery, depending on the market and product sold. The
Company received 384 as advances from its customers which
are classified as unsatisfied performance obligations and
recognized as liabilities in line with IFRS 15.\u00a0The Company
expects 100% of these unsatisfied performance obligations as
of December\u00a031, 2022 to be recognized as revenue during 2023
as the Company\u2019s contracts have an original expected duration
of one year or less.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV8zOTcvZnJhZzpkZmUwMmM2NjFiMDk0ZWJmYmNkOWJiOWEzMGIxMmMyNC90ZXh0cmVnaW9uOmRmZTAyYzY2MWIwOTRlYmZiY2Q5YmI5YTMwYjEyYzI0XzI3NDg3NzkwNjk0NDk4_fdff4781-5b87-4d18-ae2f-500b7e4ae8eb": {
"value": "4.2\u00a0 \u00a0 Cost of sales
Cost of sales includes the following components:
| | | | | |
| |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Depreciation and amortization | | | | | |
Net impairment charges/ (reversal) (see note 5.3) | | | | | |
Gain on ArcelorMittal USA disposal 1 | | | | | |
| | | | | |
| | | | | |
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\u2019s 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.\u00a0
Exposure to credit risk by reportable segment
The maximum exposure to credit risk for trade accounts
receivable by reportable segment is as follows:
The movements in the allowance are calculated based on
lifetime expected credit loss model for 2022, 2021 and 2020.
The allowances in respect of trade accounts receivable during
the periods presented are as follows:
| | | | | |
| |
| | | | | |
Allowance - opening balance | | | | | |
| | | | | |
Write backs / utilization | | | | | |
Foreign exchange and others | | | | | |
Allowance - closing balance | | | | | |
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\u2019s 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.\u00a0
Exposure to credit risk by reportable segment
The maximum exposure to credit risk for trade accounts
receivable by reportable segment is as follows:
The movements in the allowance are calculated based on
lifetime expected credit loss model for 2022, 2021 and 2020.
The allowances in respect of trade accounts receivable during
the periods presented are as follows:
| | | | | |
| |
| | | | | |
Allowance - opening balance | | | | | |
| | | | | |
Write backs / utilization | | | | | |
Foreign exchange and others | | | | | |
Allowance - closing balance | | | | | |
pricing system regulations since January 1, 2019 but effective
January 1, 2022, they are regulated on carbon pricing under the
Ontario Emissions Performance System (\u201cOEPS\u201d). In South
Africa, a CO2 tax system was introduced in 2019.
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 | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Foreign exchange differences | | | | | | | |
Transfers from assets held for sale | | | | | | | |
Transfers and other movements | | | | | | | |
| | | | | | | |
| | | | | | | |
Acquisitions through business combination (note 2.2.4) | | | | | | | |
| | | | | | | |
Foreign exchange differences | | | | | | | |
Transfers and other movements | | | | | | | |
| | | | | | | |
| | | | | | | |
Accumulated amortization and impairment losses | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Foreign exchange differences | | | | | | | |
Transfers from assets held for sale | | | | | | | |
Transfers and other movements | | | | | | | |
| | | | | | | |
| | | | | | | |
Impairment charge (note 5.3) | | | | | | | |
Foreign exchange differences | | | | | | | |
Transfers and other movements | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
2 emission rights.
Research and development costs not meeting the criteria for
capitalization are expensed as incurred. These costs amounted
to 286, 270 and 245 for the years ended December\u00a031, 2022,
2021 and 2020, respectively and were recognized in selling,
general and administrative expenses.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80MjEvZnJhZzo3YjY0NWQ2N2UyOWU0OWZjYjFlZjg2MWE3NWFiOGNjNC90ZXh0cmVnaW9uOjdiNjQ1ZDY3ZTI5ZTQ5ZmNiMWVmODYxYTc1YWI4Y2M0XzI3NDg3NzkwNjk3MjE1_c6112938-2e4f-4041-8009-7608052c05bf": {
"value": "
The carrying amounts of goodwill and intangible assets are
summarized as follows:
| | | |
| |
| | | |
| | | |
Concessions, patents and licenses | | | |
Customer relationships and trade marks | | | |
| | | |
| | | |
| | | |
pricing system regulations since January 1, 2019 but effective
January 1, 2022, they are regulated on carbon pricing under the
Ontario Emissions Performance System (\u201cOEPS\u201d). In South
Africa, a CO2 tax system was introduced in 2019.
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 | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Foreign exchange differences | | | | | | | |
Transfers from assets held for sale | | | | | | | |
Transfers and other movements | | | | | | | |
| | | | | | | |
| | | | | | | |
Acquisitions through business combination (note 2.2.4) | | | | | | | |
| | | | | | | |
Foreign exchange differences | | | | | | | |
Transfers and other movements | | | | | | | |
| | | | | | | |
| | | | | | | |
Accumulated amortization and impairment losses | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Foreign exchange differences | | | | | | | |
Transfers from assets held for sale | | | | | | | |
Transfers and other movements | | | | | | | |
| | | | | | | |
| | | | | | | |
Impairment charge (note 5.3) | | | | | | | |
Foreign exchange differences | | | | | | | |
Transfers and other movements | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
2 emission rights.
Research and development costs not meeting the criteria for
capitalization are expensed as incurred. These costs amounted
to 286, 270 and 245 for the years ended December\u00a031, 2022,
2021 and 2020, respectively and were recognized in selling,
general and administrative expenses.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80MjEvZnJhZzo3YjY0NWQ2N2UyOWU0OWZjYjFlZjg2MWE3NWFiOGNjNC90ZXh0cmVnaW9uOjdiNjQ1ZDY3ZTI5ZTQ5ZmNiMWVmODYxYTc1YWI4Y2M0XzI3NDg3NzkwNjk3MjE0_02ecf9e1-1ed6-478d-b603-caba14572bfe": {
"value": "
The carrying amounts of goodwill and intangible assets are
summarized as follows:
| | | |
| |
| | | |
| | | |
Concessions, patents and licenses | | | |
Customer relationships and trade marks | | | |
| | | |
| | | |
| | | |
The Company\u2019s 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\u2019s 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\u2019s operations. The
most recent in-depth review took place in 2019, during which the
Company performed a review of the useful lives of its fixed
assets and determined there were no material changes to the
useful lives of property, 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\u2019s principal
production units.\u00a0
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. In the context
of the 2021 annual review of useful lives and considering the
expected date of retirement of certain assets in particular blast
furnaces, basic oxygen furnaces, sinter plants and coke plants
following the implementation of the Company's decarbonization
strategy involving the construction of DRI - EAF facilities, the
Company decreased estimates of residual useful lives of such
items of property, plant and equipment for its flat carbon
operations in the EU and in Canada.
Mining assets comprise:
\u2022Mineral rights acquired;
\u2022Capitalized developmental stripping (as described
below in \u201c\u2014Stripping and overburden removal costs\u201d).
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. \u00a0
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.
Mineral Reserves and resources
Mineral Reserves are estimates of the amount of product that
can be economically and legally extracted from the Company\u2019s
properties. Furthermore, mineral resource estimates constitute
the part of a mineral deposit that have the potential to be
economically and legally extracted or produced at the time of
the resource determination. In order to estimate mineral
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. The potential for economic viability and
estimate of mineral resources is established through high level
and conceptual engineering studies.
Estimating the quantity and/or grade of mineral 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. The estimation of
mineral resource is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes that are spaced closely enough to
confirm both geological and grade continuity.
Because the economic assumptions used to estimate mineral
reserves and mineral resources change from period to period,
and because additional geological data is generated during the
course of operations, estimates of mineral reserves and mineral
resources may change from period to period. Changes in
reported mineral reserves and mineral resources may affect the
Company\u2019s financial results and financial position in a number of
ways, including the following:
\u2022Asset carrying amounts may be affected due to
changes in estimated future cash flows.
\u2022Depreciation, 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.
\u2022Overburden 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.
\u2022Decommissioning, 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
(\u201cdevelopmental stripping\u201d) or during the production stage
(\u201cproduction stripping\u201d).
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\u2019s
specific circumstances. The following factors would point
towards the stripping costs for the individual pits being
accounted for separately:
\u2022If mining of the second and subsequent pits is
conducted consecutively with that of the first pit, rather
than concurrently.
\u2022If separate investment decisions are made to develop
each pit, rather than a single investment decision being
made at the outset.
\u2022If 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.
\u2022If expenditures for additional infrastructure to support
the second and subsequent pits are relatively large.
\u2022If 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 (\u201cstripping activity assets\u201d) 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 \u201cmining assets\u201d 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:
\u2022researching and analyzing historical exploration data;
\u2022conducting topographical, geological, geochemical and
geophysical studies;
\u2022carrying out exploratory drilling, trenching and sampling
activities;
\u2022drilling, trenching and sampling activities to determine
the quantity and grade of the deposit;
\u2022examining and testing extraction methods and
metallurgical or treatment processes; and
\u2022detailed 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\u2019s 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:
\u2022sinking shafts and underground drifts (often called
mine development);
\u2022making permanent excavations;
\u2022developing passageways and rooms or galleries;
\u2022building roads and tunnels; and
\u2022advance 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\u2019s 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:\u00a0
| | | | | | | | | | | |
| Land, buildings\u00a0and Improvements | | Machinery,\u00a0 equipment and other2 | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Acquisitions through business combinations (note 2.2.4) | | | | | | | | | | | |
Foreign exchange differences | | | | | | | | | | | |
| | | | | | | | | | | |
Transfers from assets held for sale | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Acquisitions through business combinations (note 2.2.4) | | | | | | | | | | | |
Foreign exchange differences | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Accumulated depreciation and impairment | | | | | | | | | | |
| | | | | | | | | | | |
Depreciation charge for the year | | | | | | | | | | | |
Impairment reversal (note 5.3) | | | | | | | | | | | |
| | | | | | | | | | | |
Foreign exchange differences | | | | | | | | | | | |
Transfers from assets held for sale | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Depreciation charge for the year | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Foreign exchange differences | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
The Company\u2019s 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\u2019s 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\u2019s operations. The
most recent in-depth review took place in 2019, during which the
Company performed a review of the useful lives of its fixed
assets and determined there were no material changes to the
useful lives of property, 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\u2019s principal
production units.\u00a0
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. In the context
of the 2021 annual review of useful lives and considering the
expected date of retirement of certain assets in particular blast
furnaces, basic oxygen furnaces, sinter plants and coke plants
following the implementation of the Company's decarbonization
strategy involving the construction of DRI - EAF facilities, the
Company decreased estimates of residual useful lives of such
items of property, plant and equipment for its flat carbon
operations in the EU and in Canada.
Mining assets comprise:
\u2022Mineral rights acquired;
\u2022Capitalized developmental stripping (as described
below in \u201c\u2014Stripping and overburden removal costs\u201d).
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. \u00a0
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.
Mineral Reserves and resources
Mineral Reserves are estimates of the amount of product that
can be economically and legally extracted from the Company\u2019s
properties. Furthermore, mineral resource estimates constitute
the part of a mineral deposit that have the potential to be
economically and legally extracted or produced at the time of
the resource determination. In order to estimate mineral
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. The potential for economic viability and
estimate of mineral resources is established through high level
and conceptual engineering studies.
Estimating the quantity and/or grade of mineral 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. The estimation of
mineral resource is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes that are spaced closely enough to
confirm both geological and grade continuity.
Because the economic assumptions used to estimate mineral
reserves and mineral resources change from period to period,
and because additional geological data is generated during the
course of operations, estimates of mineral reserves and mineral
resources may change from period to period. Changes in
reported mineral reserves and mineral resources may affect the
Company\u2019s financial results and financial position in a number of
ways, including the following:
\u2022Asset carrying amounts may be affected due to
changes in estimated future cash flows.
\u2022Depreciation, 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.
\u2022Overburden 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.
\u2022Decommissioning, 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
(\u201cdevelopmental stripping\u201d) or during the production stage
(\u201cproduction stripping\u201d).
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\u2019s
specific circumstances. The following factors would point
towards the stripping costs for the individual pits being
accounted for separately:
\u2022If mining of the second and subsequent pits is
conducted consecutively with that of the first pit, rather
than concurrently.
\u2022If separate investment decisions are made to develop
each pit, rather than a single investment decision being
made at the outset.
\u2022If 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.
\u2022If expenditures for additional infrastructure to support
the second and subsequent pits are relatively large.
\u2022If 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 (\u201cstripping activity assets\u201d) 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 \u201cmining assets\u201d 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:
\u2022researching and analyzing historical exploration data;
\u2022conducting topographical, geological, geochemical and
geophysical studies;
\u2022carrying out exploratory drilling, trenching and sampling
activities;
\u2022drilling, trenching and sampling activities to determine
the quantity and grade of the deposit;
\u2022examining and testing extraction methods and
metallurgical or treatment processes; and
\u2022detailed 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\u2019s 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:
\u2022sinking shafts and underground drifts (often called
mine development);
\u2022making permanent excavations;
\u2022developing passageways and rooms or galleries;
\u2022building roads and tunnels; and
\u2022advance 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\u2019s 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:\u00a0
| | | | | | | | | | | |
| Land, buildings\u00a0and Improvements | | Machinery,\u00a0 equipment and other2 | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Acquisitions through business combinations (note 2.2.4) | | | | | | | | | | | |
Foreign exchange differences | | | | | | | | | | | |
| | | | | | | | | | | |
Transfers from assets held for sale | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Acquisitions through business combinations (note 2.2.4) | | | | | | | | | | | |
Foreign exchange differences | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Accumulated depreciation and impairment | | | | | | | | | | |
| | | | | | | | | | | |
Depreciation charge for the year | | | | | | | | | | | |
Impairment reversal (note 5.3) | | | | | | | | | | | |
| | | | | | | | | | | |
Foreign exchange differences | | | | | | | | | | | |
Transfers from assets held for sale | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Depreciation charge for the year | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Foreign exchange differences | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
60% guarantee of the 5,146
ten-year term loan agreement entered into by the AMNS India
joint venture with various Japanese banks on March 16, 2020.
As of December\u00a031, 2022, pledges and other collateral mainly
related to (i) mortgages entered into by the Company\u2019s
operating subsidiaries and (ii) inventories and receivables
pledged to secure the South African Rand revolving borrowing
base finance facility for the amount drawn of 147 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 98 and 111 as of December\u00a031, 2022 and 2021,
respectively. Other sureties, first demand guarantees, letters of
credit, pledges and other collateral included 375 and 406 of
commitments given on behalf of associates as of December\u00a031,
2022 and 2021, respectively, and 598 and 452 of commitments
given on behalf of joint ventures as of December\u00a031, 2022 and
2021, respectively.
Capital expenditure commitments
Capital expenditure commitments relate to commitments with
respect to purchases of property, plant and equipment including
in the context of expansion and improvement projects.
Capital expenditure commitments include 340 at December 31,
2022 relating to ArcelorMittal Liberia Ltd in connection with
Phase 2 expansion project that envisages the construction of
15\u00a0million tonnes of concentrate sinter fines capacity and
associated infrastructure.
Capital expenditure commitments include 394 at December 31,
2022 relating to ArcelorMittal Dofasco (Canada) mainly with
respect to the construction of DRI \u2013 EAF facilities in the
framework of the plant's decarbonization project.
Capital expenditure commitments also include 182 at the iron
ore Serra Azul mine (Brazil) at December 31, 2022 in
connection with the construction of facilities to produce 4.5
million tonnes per annum of DRI quality pellet feed.
AMSA was committed to an investment program in connection
with the competition commission settlement. The remaining
capital expenditure commitment was 100 as of December 31,
2021. The commitment related to this investment program
expired during 2022.
Capital expenditure commitments included 158 as of December
31, 2021 for the 1 billion investment program at the Company's
Mexican operations, which is focused on building ArcelorMittal
Mexico\u2019s downstream capabilities. The main investment was
related to the new hot strip mill with capacity of approximately
2.5 million tonnes. The investment program was completed
during 2022.
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 Tubar\u00e3o 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. As of December 31, 2022 and 2021,
ArcelorMittal Brasil estimated the underlying costs to implement
those investments at 115 and 87, respectively. The non-
compliance with ECA would lead to fines amounting to a
maximum of 19 and 18 as of December 31, 2022 and 2021,
respectively. On November 19, 2021, following a protocol of
intent agreed between the Minas Gerais State Government,
ArcelorMittal Brasil and BMB Belgo Mineira Bekaert Artefatos
De Arame Ltd (\"BMB\"), ArcelorMittal Brasil committed to carry
out capital expenditures at the Monlevade site to complete the
expansion project by the second half of 2024. As of December
31, 2022 and 2021, commitments related to this project were
420 and 442, respectively.
Commitments to sell
In addition to the commitments presented above, the Company
has firm commitments to sell for which it also has firm
commitments to purchase included in purchase commitments
for 368 and 292 as of December\u00a031, 2022 and 2021,
respectively, and mainly related to natural gas and electricity.
Other
On December 20, 2022, ArcelorMittal, the Fonds d'Urbanisation
et d'Am\u00e9nagement du Plateau de Kirchberg and the State of the
Grand-Duchy of Luxembourg entered into an agreement
whereby the Company granted to the State the right to acquire
50% of ArcelorMittal's future new headquarters and related
right-of-use of land in the Kirchberg district of the city of
Luxembourg. The right is exercisable within a twelve-month
period ending on December 20, 2023 and after ratification of the
acquisition by the Luxembourg Parliament. The acquisition price
is based on construction cost.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCommitmentsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80MjcvZnJhZzo1NDQwOTlkNTFhN2E0NDc1OTZiYjJiZTFhOTA2ZGRjMy90ZXh0cmVnaW9uOjU0NDA5OWQ1MWE3YTQ0NzU5NmJiMmJlMWE5MDZkZGMzXzEzODQ3_2a647315-de5d-4908-99e9-31789c533683": {
"value": "5.3\u00a0 \u00a0 Impairment of intangible assets, including goodwill, and
tangible assets
Net impairment charges/(reversals) were as follows:
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 (\u201cGCGU\u201d) 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.
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 2022
impairment test of goodwill did not include the GCGU
corresponding to the Mining segment (as from April 1, 2021,
ArcelorMittal implemented changes to its organizational
structure - see note 1.1) 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 $70 per tonne to $110 per tonne for iron ore ($71 per
tonne to $112 per tonne in 2021) and $170 per tonne to $268
per tonne ($144 per tonne to $240 per tonne in 2021) 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.
The Company considered its exposure to certain climate-related
risks which could affect its estimates of future cash flow
projections applied for the determination of the recoverable
amount of its GCGUs and CGUs. With the switch to electric
vehicles and the move to wind and solar power generation, the
Company sees additional opportunities as customers deepen
their understanding of embedded and lifecycle emissions of the
materials where steel compares favorably. ArcelorMittal's most
substantial climate-related policy risk is the EU Emissions
Trading scheme (\"'ETS\"), which applies to all its European
plants. The risk concerns the Company's primary steelmaking
plants which are exposed to this regulation and yet unprotected
against competition from imported steel. The Company is
committed to the objectives of the Paris agreement and
announced its ambition to reduce carbon emissions by 35% in
Europe and 25% group-wide by 2030 and achieve group-wide
carbon neutrality by 2050. These announced goals will require
significant long-term investments which require global level
playing field, access to abundant and affordable clean energy,
facilitating necessary energy infrastructure, access to
sustainable finance for low-emissions steelmaking and
accelerated transition to a circular economy. In addition, the
Company considered the legal obligation of carbon neutrality by
2050 effective within the EU and in Canada following adoption
of the Climate Law and the Net Zero Emission Accountability
Act, respectively. Accordingly, with respect to its flat steel
operations in the EU and in Canada, ArcelorMittal concluded
that future decarbonization capital expenditures, which
correspond essentially to the construction of DRI-EAF facilities,
are necessary to maintain the level of economic benefits
expected to arise from the assets in their current condition and
should therefore be included in the Company\u2019s assumptions for
future cash flows of the recoverable amount of the respective
GCGUs and CGUs. At the same time, the Company is engaged
in developing in the near to medium term a range of innovative\u00a0
low-emission technologies for the transition to decarbonized
steel including the Smart Carbon route and the Hydrogen-DRI
route and required investments are considered either in the
Company's future cash flow projections or in the context of joint
ventures, as an element of the Company's best estimate of
capital expenditures which are committed and/or being
implemented. The Company acknowledged that CGUs and
GCGUs applying the blast furnace basic oxygen furnace \"BF-
BOF\" route in other jurisdictions than the EU and Canada will
apply decarbonization at a different pace. They may also not yet
be subject to a legal obligation of carbon neutrality, as a result of
which future decarbonization capital expenditures may not be
included in their value in use calculations. Accordingly, the
Company increased risk premiums included in their discount
rates until they are able to accelerate their decarbonization
strategy to meet the 2050 carbon neutrality objective and a legal
obligation arises in the relevant jurisdiction. Additionally, the
Company\u2019s assumptions for future cash flows include an
estimate for costs that the Company expects to incur to acquire
emission allowances, which primarily impacts the flat steel
operations in the EU and in Canada. The assumption for carbon
emission cost is based on historical experience, implementation
of decarbonization strategies to mitigate or otherwise offset such
future costs and information available of future regulatory or
operational changes. Due to economic developments,
uncertainties over the pace of transition to low-emission
technologies, political and environmental actions that will be
taken to meet the carbon reduction goals, regulatory changes
and emissions activity arising from climate-related matters, the
Company\u2019s assumptions used in the recoverable amount
calculations, such as capital expenditure, carbon emission costs
and other assumptions are inherently uncertain and may
ultimately differ from actual amounts.
The assumptions used in the value in use calculations are
inherently uncertain and require management judgment. The
Company's process includes specific consideration given to the
most recent short, medium and long-term price forecasts and
discount rates consistent with external information, expected
production and shipment volumes and updated development
plans, operating costs and capital expenditure plans. While in
the first half of 2022, operating margins, supported by a
continuation of the buoyant market conditions in which the
Company was operating throughout 2021, benefited from a
continuing strong price environment and favorable supply
demand balance following a prolonged period of destocking, in
the second half of 2022, operating margins were significantly
lower as a result of negative price-cost effect, elevated energy
costs and lower steel shipments. Due to the non-recurrence of
the destocking effects that weighed on demand particularly in
the final months of 2022, apparent steel consumption is
expected to recover in 2023 and the Company expects growth
in steel shipments.
Management estimates discount rates using pre-tax rates that
reflect current market rates for investments of similar risk. The
rate for each CGU, including beta, cost of debt and capital
structure was estimated from the weighted average cost of
capital of producers, which operate a portfolio of assets similar
to those of the Company\u2019s assets and CGU specific country risk
premiums were applied. GCGU weighted average pre-tax
discount rates were as follows in 2022 and 2021:
| | | | | | | |
| | | | | | | |
GCGU weighted average pre-tax discount rate used in 2022 (in %) | | | | | | | |
GCGU weighted average pre-tax discount rate used in 2021 (in %) | | | | | | | |
Once recognized, impairment losses for goodwill are not
reversed.
There were no impairment charges recognized with respect to
goodwill following the Company\u2019s impairment tests as of
October 1, 2022 and October 1, 2021. The total value in use
calculated for all GCGUs decreased overall in 2022 as
compared to 2021 primarily as a result of higher discount rates.
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 steel selling prices and shipments). As of December 31,
2022, the Company believes that reasonably possible changes
in key assumptions could cause an impairment loss to be
recognized in respect of the ACIS segment.
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 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\u2019 specific risks; such risk
premium increased significantly in 2022 in Ukraine in the context
of the war with Russia. The latter also led to substantially lower
levels of production, shipments and revenue at ArcelorMittal
Kryvyi Rih and such conditions are expected to continue
throughout 2023. The ACIS value in use model anticipates a
limited increase in sales volumes in 2023 (8.3\u00a0million tonnes) as
compared to 2022 (6.4\u00a0million tonnes) with stable shipments
after 2024. Average selling prices in the model are expected to
decrease steadily over time. The table below describes the
amount by which the value assigned to a key assumption must
change in order for the recoverable amount to equal the carrying
amount.
| |
| |
Excess of recoverable amount over carrying amount | |
Increase in pre-tax discount rate (change in basis points) | |
Decrease in average selling price (change in %) | |
Decrease in shipments (change in %) | |
2021
In the second half of 2021, in connection with the Company\u2019s
annual test for impairment of goodwill, property, plant and
equipment was also tested for impairment at that date. The
Company reversed 218 of impairment charges which had been
recognized in 2015 for the Sestao facility in Spain following
idling for an indefinite timing. The impairment reversal results
from improved future cash flow projections following restart of
operations and the Company's decarbonization strategy in
Spain.
| | | | | | | | | | | | |
| | | | | | | | 2021 Pre-Tax Discount Rate | | 2020 Pre-Tax Discount Rate | | Carrying amount of property, plant and equipment as of December 31, 2021 |
| | | | | | | | | | | | |
2020
In 2020, the Company recognized a 133 net reversal of
impairment including impairment charges of 92 and 104 related
to the permanent closure of the coke plant in Florange (France)
and the permanent closure of part of a blast furnace and steel
plant in Krakow (Poland), respectively. In addition, the Company
recognized an impairment loss of 331 relating to its plate
business in the Europe segment classified as held for sale at
December 31, 2020 and for which the held for sale classification
was discontinued in 2021 following the termination of the
divestment process.
In the third quarter of 2020, the Company reversed 660 of
impairment charges of property, plant and equipment previously
recognized for ArcelorMittal USA as a result of the increase in
the recoverable amount. The Company calculated the fair value
less cost of disposal using a market approach with market
multiples derived from comparable transactions, a Level 3
unobservable input. ArcelorMittal USA was sold to Cleveland-
Cliffs as described in note 2.3.1.
",
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"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80MzAvZnJhZzo0NTRjMDQxMDlmZmQ0MTFkYTVhMDNjNTk5YzcyODU0NS90ZXh0cmVnaW9uOjQ1NGMwNDEwOWZmZDQxMWRhNWEwM2M1OTljNzI4NTQ1XzI3NDg3NzkwNjk0NDEw_953f5de8-a99c-412f-829c-a71dad80a43a": {
"value": "
NOTE 6: FINANCING AND FINANCIAL INSTRUMENTS 6.1\u00a0 \u00a0 Financial assets and liabilities
Financial assets and liabilities mainly comprise:
\u2022gross debt (see note 6.1.2)
\u2022cash and cash equivalents, restricted cash and reconciliations of cash flows (see note 6.1.3)
\u2022net debt (see note 6.1.4)
\u2022derivative financial instruments (see note 6.1.5)
\u2022other 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\u00a031, 2022:
| | | | | | | | | | | |
| |
| 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 | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Cash and cash equivalents | | | | | | | | | | | |
| | | | | | | | | | | |
Trade accounts receivable and other | | | | | | | | | | | |
| | | | | | | | | | | |
Prepaid expenses and other current assets | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Goodwill and intangible assets | | | | | | | | | | | |
Property, plant and equipment and biological assets | | | | | | | | | | | |
Investments in associates and joint ventures | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Short-term debt and current portion of long-term debt | | | | | | | | | | | |
Trade accounts payable and other | | | | | | | | | | | |
| | | | | | | | | | | |
Accrued expenses and other liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
Total current liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Long-term debt, net of current portion | | | | | | | | | | | |
| | | | | | | | | | | |
Deferred employee benefits | | | | | | | | | | | |
| | | | | | | | | | | |
Other long-term obligations | | | | | | | | | | | |
Total non-current liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity attributable to the equity holders of the parent | | | | | | | | | | | |
Non-controlling interests | | | | | | | | | | | |
| | | | | | | | | | | |
Total liabilities and equity | | | | | | | | | | | |
| | | | | | | | | | | |
| |
| 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 | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Cash and cash equivalents | | | | | | | | | | | |
| | | | | | | | | | | |
Trade accounts receivable and other | | | | | | | | | | | |
| | | | | | | | | | | |
Prepaid expenses and other current assets | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Goodwill and intangible assets | | | | | | | | | | | |
Property, plant and equipment and biological assets | | | | | | | | | | | |
Investments in associates and joint ventures | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Short-term debt and current portion of long-term debt | | | | | | | | | | | |
Trade accounts payable and other | | | | | | | | | | | |
| | | | | | | | | | | |
Accrued expenses and other liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
Total current liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Long-term debt, net of current portion | | | | | | | | | | | |
| | | | | | | | | | | |
Deferred employee benefits | | | | | | | | | | | |
| | | | | | | | | | | |
Other long-term obligations | | | | | | | | | | | |
Total non-current liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity attributable to the equity holders of the parent | | | | | | | | | | | |
Non-controlling interests | | | | | | | | | | | |
| | | | | | | | | | | |
Total liabilities and equity | | | | | | | | | | | |
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.
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Investments in equity instruments at FVOCI | | | | | | | | |
Trade accounts receivable and other subject to TSR programs* | | | | | | | | |
Derivative financial current assets | | | | | | | | |
Derivative financial non-current assets | | | | | | | | |
Total assets at fair value | | | | | | | | |
Liabilities at fair value: | | | | | | | | |
Derivative financial current liabilities | | | | | | | | |
Derivative financial non-current liabilities | | | | | | | | |
Total liabilities at fair value | | | | | | | | |
discretion. On December 8, 2022, an amount of 1.76 billion was
cancelled, following the bonds issuances of September 20, 2022
and November 29, 2022. After the cancellation, the remaining
available amount under the bridge facility as of December 31,
2022 was 444. On January 31, 2023 the remaining amount
available under the bridge facility of 444\u00a0 was cancelled.
Commercial paper
The Company has a commercial paper program enabling
borrowings of up to \u20ac1.5 billion. As of December\u00a031, 2022 and
2021, the outstanding amount was 796 and 541, respectively.
6.1.2.2 Long-term debt
Long-term debt is comprised of the following:
| | | | | | | | | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | Carrying amount at amortized cost |
| | | | | | | | | |
5.5 billion Revolving Credit Facility | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
\u20ac500 million Unsecured Notes | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
\u20ac1.0 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
\u20ac600 million Unsecured Notes | | | | | | | | | |
1.2 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | |
1.5 billion Unsecured Bonds | | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Total Europe, Asia & Africa | | | | | | | | | |
| | | | | | | | | |
Less current portion of long-term debt | | | | | | | | | |
Total long-term debt (excluding lease obligations) | | | | | | | | | |
Long-term lease obligations2 | | | | | | | | | |
Total long-term debt, net of current portion | | | | | | | | | |
1.Rates applicable to balances outstanding at December\u00a031, 2022. For debt that has been redeemed in its entirety during 2022, the interest rates refer to the rates at
repayment date.
2.Net of current portion of 228 and 189 as of December 31, 2022 and 2021, respectively. See note 7.
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
replaced the 5.5 billion revolving credit facility dated April 30,
2015, which was amended and extended on December 21,
2016. The agreement incorporated a single tranche of 5.5 billion
maturing on December 19, 2023, with two one-year extension
options. On November 27, 2019 and on November 26, 2020,
ArcelorMittal exercised the options to extend the facility's
maturity by one year to December 19, 2024 and to December
19, 2025, respectively. The extension was completed for 5.4
billion of the available amount, with the 0.1 billion remaining with
a maturity of December 19, 2023. On April 13, 2021,
ArcelorMittal's revolving credit facility was amended so that the
Leverage Ratio financial covenant would permanently cease to
apply in the event that the Company obtained an investment
grade long-term credit rating (with stable outlook) from two
rating agencies (which was obtained from Moody's and Fitch in
2021). On April 27, 2021, the Facility was amended so that the
margin payable will be increased or decreased depending on
the Company\u2019s performance against two metrics measured
annually against pre-defined targets with respect to its
environmental and sustainability performance (CO2 intensity of
the Company\u2019s European operations and the number of facilities
which have been certified by ResponsibleSteel\u2122). The Facility
may be used for general corporate purposes. As of December
31, 2022, 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 initially matured on July
31, 2022. On August 5, 2020, the Letter of Credit Facility
maturity was extended to July 31, 2023. On November 25,
2020, the amount of the Letter of Credit Facility was increased
to 395. On June 25, 2021, the maturity of the Letter of Credit
Facility was extended to July 31, 2024.
Bonds
On January 14, 2022, at maturity, ArcelorMittal repaid all of the
outstanding \u20ac486 million (551) of its \u20ac750 million Fixed Rate
Notes due 2022.
On September 26, 2022, ArcelorMittal issued \u20ac600 million (640)
of 4.875% Notes due September 28, 2026.
On November 29, 2022, ArcelorMittal issued 1.2 billion of 6.55%
Notes due November 29, 2027 and 1.0 billion of 6.80% Notes
due November 29, 2032.
The margin applicable to ArcelorMittal\u2019s 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 amount of outstanding value | | | | | | | | | |
\u20ac500 million Unsecured Notes | | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
\u20ac250 million Unsecured Notes | | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
| | | | | | | | | | | |
\u20ac600 million Unsecured Notes | | | | | | | | | | | |
1.2 billion Unsecured Bonds | | | | | | | | | | | |
| | | | | | | | | | | |
1.0 billion Unsecured Bonds | | | | | | | | | | | |
1.0 billion Unsecured Bonds | | | | | | | | | | | |
| | | | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | | | |
1.Rates applicable at December 31, 2022.
European Investment Bank (\u201cEIB\u201d) Loan
On June 2, 2021, ArcelorMittal signed a \u20ac280\u00a0million loan
agreement with the European Investment Bank (\"EIB\") for
funding of research, development and innovation projects in
Europe over the period of 2021-2023. This operation benefits
from a guarantee from the European Union under the European
Fund for Strategic Investments. On March 16, 2022 ArcelorMittal
draw down the facility in full. As of December 31, 2022, \u20ac280
million (299) was outstanding.
On December 16, 2016, ArcelorMittal signed a \u20ac350 million
finance contract with the EIB 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\u00a031, 2022, \u20ac131\u00a0million (140) was outstanding.
Other loans
On May 4, 2022, ArcelorMittal completed the offering of a
\u20ac346.5\u00a0million variable rate loan, a \u20ac24.5\u00a0million fixed rate loan,
a \u20ac263\u00a0million variable rate loan and a \u20ac66\u00a0million fixed rate loan
in the German Schuldschein market. On May 6, 2022, the
Company further completed the offering of a \u20ac25\u00a0million fixed
rate loan. The proceeds of these issuances were used for
general corporate purposes. As of December 31, 2022,
\u20ac725\u00a0million (773) was outstanding.
On December 21, 2018, the Company entered into a facility
agreement with a group of lenders for \u20ac235 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 8.5 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, 2022 was \u20ac142 million (151).
On November 29, 2021, ArcelorMittal entered into an agreement
for financing with a financial institution for net proceeds of
CAD130\u00a0million (105) with repayment over several dates in
2021, 2022 and 2023.
Other loans relate to various debt with banks and public
institutions.
Americas
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 (\"EBRD\") 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\u00a031, 2022, 36 was
outstanding under the agreement.\u00a0
On December 15, 2022, ArcelorMittal Kryvyi Rih entered into a
100 loan agreement with EBRD for working capital purposes. As
of December 31, 2022, 50 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 with a maturity of on July 26, 2022.
On August 23, 2021, the facility was further amended and
restated for an amount of 3.5\u00a0billion South African rand and with
a maturity of September 3, 2024. 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, 2022, 2.5 billion South African
rand (147) was drawn.\u00a0
Other loans\u00a0
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\u2019s 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.
The other loans relate to various debt with banks and public
institutions.
Hedge of net investments
As of April\u00a01, 2018, the Company designated a portfolio of euro
denominated debt (\u20ac4,862 million and \u20ac3,709 million as of
December\u00a031, 2022 and December 31, 2021, respectively) as a
hedge of certain euro denominated investments (\u20ac8,837 million
and \u20ac8,261 million as of December\u00a031, 2022 and December 31,
2021, respectively) 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.\u00a0
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.\u00a0
As of December\u00a031, 2022 and December 31, 2021, the
Company recognized 197 and 423 foreign exchange gain
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\u00a031, 2022 the scheduled maturities of short-term
debt, long-term debt and long-term lease obligations, including
their current portion are as follows:
| | | | | | | | | |
| | | |
| | | | | | | | | |
Instruments payable bearing interest at fixed rates | | | | | | | | | |
Instruments payable bearing interest at variable rates | | | | | | | | | |
Total long-term debt, including current portion | | | | | | | | | |
Short term bank loans and other credit facilities including commercial paper | | | | | | | | | |
Instruments payable classified as Level 1 refer to the
Company\u2019s 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\u2019s credit spread
quotations for the relevant maturities. There were no
instruments payable classified as Level 3.
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.
Cash and cash equivalents are primarily centralized at the
parent level and are managed by ArcelorMittal Treasury SNC,
although from time to time cash or cash equivalent balances
may be held at the Company\u2019s international subsidiaries or its
holding companies. Some of these operating subsidiaries have
debt outstanding or are subject to acquisition agreements that
impose restrictions on such operating subsidiaries\u2019 ability to pay
dividends, but such restrictions are not significant in the context
of ArcelorMittal\u2019s 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\u2019s
overall liquidity.
Cash and cash equivalents consisted of the following:
1Money 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.
Restricted cash of 114 as of December\u00a031, 2022 and 156 as of
December 31, 2021 included 52 and 89 relating to various
environmental obligations, true sales of receivables programs
and letters of credit issued in ArcelorMittal South Africa. It also
included 20 and 20 in connection with the mandatory convertible
bonds as of December\u00a031, 2022 and December\u00a031, 2021,
respectively (see note 11.2).
Changes in restricted cash are included within investing
activities 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, 2020 (note 6.1.2) | | | |
Proceeds from long-term debt | | | |
Payments of long-term debt | | | |
| | | |
Proceeds from short-term debt | | | |
Payments of short-term debt | | | |
Current portion of long-term debt | | | |
Payments of principal portion of lease liabilities (note 7) 1 | | | |
Additions to lease liabilities (notes 5.2 and 7) | | | |
Unrealized foreign exchange effects and other movements | | | |
Balance as of December 31, 2021 (note 6.1.2) | | | |
Proceeds from long-term debt | | | |
Payments of long-term debt | | | |
| | | |
Proceeds from short-term debt | | | |
Payments of short-term debt | | | |
Current portion of long-term debt | | | |
Payments of principal portion of lease liabilities (note 7) 1 | | | |
Additions to lease liabilities (notes 5.2 and 7) | | | |
Unrealized foreign exchange effects and other movements | | | |
Balance as of December 31, 2022 (note 6.1.2) | | | |
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\u2019s net debt
by original currency translated into USD at December\u00a031, 2022 and December\u00a031, 2021:
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Short-term debt and current portion of long-term debt | | | | | | | | | | | | | |
Long-term debt, net of current portion | | | | | | | | | | | | | |
Cash and cash equivalents and restricted cash | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Short-term debt and current portion of long-term debt | | | | | | | | | | | | | |
Long-term debt, net of current portion | | | | | | | | | | | | | |
Cash and cash equivalents, restricted cash and other restricted funds | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
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\u2019s 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\u2019s 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:
| | | | | | | |
| |
| | | |
| | | | | | | |
Foreign exchange rate instruments | | | | | | | |
Forward purchase contracts | | | | | | | |
| | | | | | | |
Exchange option purchases | | | | | | | |
| | | | | | | |
Total foreign exchange rate instruments | | | | | | | |
| | | | | | | |
Raw materials (base metals), freight, energy, emission rights | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Total raw materials (base metals), freight, energy, emission rights | | | | | | | |
| | | | | | | |
In 2022, the Company unwound natural gas and emission rights
forward purchase contracts with notional of \u20ac0.3 billion and \u20ac0.7
billion, respectively, and carrying amount of 1,025 and 1,086,
respectively, designated as a cash flow hedge of future natural
gas and emission rights purchases. The deferred gain
recognized in other comprehensive income will be recycled to
the consolidated statements of operations when the hedged
item impacts profit or loss (see note 6.3). In addition, at maturity
of forward purchases of emission rights with notional amount of
\u20ac0.7 billion and carrying amount of 1,408 designated as a cash
flow hedge of future emission rights purchases, the Company (i)
removed 1,268 (953 net of tax) deferred gain recognized in
other comprehensive income from the cash flow hedge reserve
(see note 6.3) and included it in the 671 carrying amount of the
delivered emission rights as basis adjustment (see note 5.1) and
(ii) recycled 140 (104 net of tax) to the consolidated statements
of operations in cost of sales (see note 6.3).
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\u2019s 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\u2019s
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 $127 ($137 at December 31,
2021) and volatility of 13% (18% at December 31, 2021).
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\u2019s 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 price, European Central Bank
foreign exchange fixing 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 2022 based mainly
on the movement of China Oriental stock market prices
observable in the active market over 90 working days, which is
particularly sensitive for the valuation resulting from the model.
A 10% increase or decrease in Hera Ermac share prices would
result in a 84,000% and 100% increase and decrease of the fair
value of the call option at December\u00a031, 2022, respectively.
The following table summarizes the reconciliation of the fair value of the financial instrument classified as Level 3:
| | | |
| | Call option on 1,000 mandatory convertible bonds | |
Balance as of December 31, 2020 | | | |
| | | |
Balance as of December 31, 2021 | | | |
| | | |
Balance as of December 31, 2022 | | | |
The fair value movement relating to the Level 3 derivative
instrument is recognized in the consolidated statements of
operations. The decrease in fair value of the call option on 1,000
mandatory convertible bonds is due to a decrease in the share
price of China Oriental, which impacts the value of the notes in
which Hera Ermac, a wholly-owned subsidiary, invested the
bonds proceeds (see note 11.2).
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),
certain 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\u2019s 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, an expected
credit loss (\"ECL\") model is required. The\u00a0ECL 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, the
Company measures the loss allowance for a\u00a0financial
instrument at an amount equal to the lifetime ECL if the credit
risk on that financial instrument has increased significantly since
initial recognition. Receivables aged 31 days or older and
uninsured trade receivables remain consistent with historical
levels and the Company did not identify any expected increased
risk of default (note 4.3).
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 because the fair value of the investment is
recorded in OCI and not recycled to profit and loss.\u00a0
Financial assets are tested for ECLs annually or whenever
changes in circumstances indicate that there is a change in
credit risk. Any ECL is recognized in the consolidated
statements of operations. An ECL related to financial assets is
reversed if and to the extent there has been a change in the
factors used to determine the recoverable amount. The loss is
reversed only to the extent that the asset\u2019s carrying amount
does not exceed the carrying amount that would have been
determined if no ECL had been recognized. Reversals of ECLs
are recognized in net income, except for investments in equity
instruments at FVOCI, in which all fair value movements are
recognized in OCI.
6.2\u00a0 \u00a0 Financing costs - net\u00a0
Financing costs - net recognized in the years ended
December\u00a031, 2022, 2021 and 2020 are as follows:
| | | | | |
| |
| | | | | |
| | | | | |
| | | | | |
Change in fair value adjustment on call option on mandatory convertible bonds and pellet purchase agreement2 | | | | | |
Accretion of defined benefit obligations and other long term liabilities | | | | | |
Net foreign exchange gain/ (loss) | | | | | |
| | | | | |
| | | | | |
risks: interest rate risk, foreign exchange risk, liquidity risk and
risks in fluctuations in prices of raw materials, freight, energy
and CO2 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.\u00a0
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.
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\u00a031, 2022, the long-term debt was comprised of
87% fixed rate debt and 13% variable rate debt (note 6.1.2). The
Company may utilize 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\u2019s
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,\u00a0Kazakhstani tenge, South African rand,
Mexican peso and Ukrainian hryvnia, as well as fluctuations in
the other countries\u2019 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\u2019s
subsidiaries may purchase raw materials, including iron ore and
coking coal, in U.S. dollar, 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\u2019s 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 \u201cNet investment hedge\u201d).
The Company also uses derivative instruments 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.\u00a0
Foreign currency sensitivity analysis
As of\u00a0 December\u00a031, 2022, 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 Ukrainian
hryvnia against the U.S. dollar resulting from its trade payables
and receivables. The structure of trade receivables and trade
payables by original currency translated in USD is as follows as
of December 31, 2022:
The use of a 10% sensitivity rate is used when reporting foreign
currency exposure internally to key management personnel and
represents management\u2019s 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. For trade receivables, a positive number
indicates an income and a negative number an expense. For
trade payables, a positive number indicates an expense and a
negative number an income.
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\u2019s 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\u2019s 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, 2022, 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.
| | | | | | | | | | | |
| |
| | | | | | | | | | | |
Non-derivative financial liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Derivative financial liabilities | | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
1.Commodity contracts include base metals, freight, energy and emission rights.
| | | | | | | | | | | |
| |
| | | | | | | | | | | |
Non-derivative financial liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Derivative financial liabilities | | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
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:
| | | | | | | | | | | |
| |
| | | |
| | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
which are not included in the table above (603 as of December 31, 2021).
| | | | | | | | | | | |
| |
| Cash flow hedge\u00a0 reserve1 | | |
| | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
investments, which are not included in the table above (30 as of December 31, 2020).
The following tables summarize the effect of hedge accounting on ArcelorMittal\u2019s consolidated statement of financial position, statement
of comprehensive income and statement of changes in equity.
| | | | | | | |
| |
| Nominal amount of the hedging instrument | | | | Liabilities carrying amount | | Line item in the statement of financial position where the hedging instrument is located |
| | | | | | | |
Foreign exchange risk - Option/forward/swap contracts | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
Foreign exchange risk - Option/forward/swap contracts | | | | | | | Other assets/Other long-term obligations |
Price risk - Commodities forwards | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
Price risk - Commodities forwards | | | | | | | Other assets/Other long-term obligations |
Price risk - Emission rights forwards | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
| | | | | | | |
Current derivative assets classified as cash flow hedge | | | | | | | |
Other current derivative assets | | | | | | | |
Total current derivative assets (note 4.5) | | | | | | | |
Non-current derivative assets classified as cash flow hedge | | | | | | | |
Other non-current derivative assets | | | | | | | |
Total non-current derivative assets (note 4.6) | | | | | | | |
Current derivative liabilities classified as cash flow hedge | | | | | | | |
Other current derivative liabilities | | | | | | | |
Total current derivative liabilities (note 4.8) | | | | | | | |
Non-current derivative liabilities classified as cash flow hedge | | | | | | | |
Other non-current derivative liabilities | | | | | | | |
Total non-current derivative liabilities (note 9.2) | | | | | | | |
\u00a0 \u00a0 \u00a0 \u00a0 | | | | | | | | | |
| |
| Cash flow hedge reserve at December 31, 2021 | | Hedging gains or losses of the reporting period that were recognized in OCI | Gains or losses reclassification adjustment and hedge ineffectiveness | | | | Line item in the statement of comprehensive income that includes the reclassification adjustment and hedge ineffectiveness | Cash flow hedge reserve1 at December 31, 2022 |
| | | | | | | | | |
Foreign exchange risk - Option/Forward contracts | | | | | | | | | |
Price risk - Commodities Option/Forward contracts | | | | | | | | | |
Price risk - Emission rights forwards | | | | | | | | | |
| | | | | | | | | |
1.The cash flow hedge reserve balance as of December 31, 2022 also includes 1023 deferred gains for the Company's share of such reserves at its equity method
investments, which are not disclosed above.
. | | | | | | | |
| |
| Nominal amount of the hedging instrument | | | | Liabilities carrying amount | | Line item in the statement of financial position where the hedging instrument is located |
| | | | | | | |
Foreign exchange risk - Option/ Forward contracts | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
Foreign exchange risk - Option/ Forward/Swap contracts | | | | | | | Other assets/Other long-term obligations |
Price risk - Commodities forwards | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
Price risk - Commodities forwards | | | | | | | Other assets/Other long-term obligations |
Price risk - Emission rights forwards | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
| | | | | | | |
Current derivative assets classified as cash flow hedge | | | | | | | |
Other current derivative assets | | | | | | | |
Total current derivative assets (note 4.5) | | | | | | | |
Non-current derivative assets classified as cash flow hedge | | | | | | | |
Other non-current derivative assets | | | | | | | |
Total non-current derivative assets (note 4.6) | | | | | | | |
Current derivative liabilities classified as cash flow hedge | | | | | | | |
Other current derivative liabilities | | | | | | | |
Total current derivative liabilities (note 4.8) | | | | | | | |
Non-current derivative liabilities classified as cash flow hedge | | | | | | | |
Other non-current derivative liabilities | | | | | | | |
Total non-current derivative liabilities (note 9.2) | | | | | | | |
| | | | | | | | | | | |
| |
| Cash flow hedge reserve at December 31, 2020 | | Hedging gains or losses of the reporting period that were recognized in OCI | | Gains or losses reclassification adjustment and hedge ineffectiveness | | | | Line item in the statement of comprehensive income that includes the reclassification adjustment and hedge ineffectiveness | | Cash flow hedge reserve1 at December 31, 2021 |
| | | | | | | | | | | |
Foreign exchange risk - Option/ Forward contracts | | | | | | | | | | | |
Price risk - Commodities forwards1 | | | | | | | | | | | |
Price risk - Emission rights forwards | | | | | | | | | | | |
| | | | | | | | | | | |
investments, which are not disclosed above
Net investment hedge
The Company designated a portfolio of euro denominated debt
(\u20ac4,862 million and \u20ac3,709 million as of December 31, 2022 and
2021, respectively) as a hedge of certain euro denominated
investments (\u20ac8,837 million and \u20ac8,261 million as of December
31, 2022 and 2021, respectively) 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, 2022, the Company recognized 197 foreign
exchange gain (423 foreign exchange gain as of December\u00a031,
2021)\u00a0 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. The hedging instrument is
categorized as Level 2.
The Company has periodically hedged a part of its euro
denominated net investments via euro/U.S. dollar cross
currency swaps (\"CCS\"). These CCS, all of which have been
unwound, were designated as net investment hedges.
The following tables summarizes the historical gain/loss that will
be recycled to the consolidation statements of operations when
the hedged assets are disposed of.
1.In 2022 and in 2021, the Company did not designate any new CCS as net investment hedge.
2.\u00a0 On March 25, 2020 and March 26, 2020, the Company unwound euro/U.S. dollar CCS with a notional of 300 and 200, respectively, which were entered into on May 27,
2015 and designated as a net investment hedge of a euro denominated net investment in foreign operations amounting to \u20ac459. A deferred gain of 8, net of tax, was
recorded in other comprehensive income and it will be recycled to the consolidation statements of operations when the hedged assets are disposed of.
| | | | | | | | | | | | | |
| |
| Nominal amount of the hedging instrument | | | | 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 2021 | | Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness | | Foreign currency translation reserve |
| | | | | | | | | | |
Foreign exchange risk - Cross Currency Swap | | | | | | | | | | | | | |
Foreign exchange risk - EUR debt | | | | | | | Short-term debt and current portion of long- term debt; long- term debt, net of current portion | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| |
| Nominal amount of the hedging instrument | | | | 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 2020 | | Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness | | Foreign currency translation reserve |
| | | | | | | | | | | | | |
Foreign exchange risk - Cross Currency Swap | | | | | | | | | | | | | |
Foreign exchange risk - EUR debt | | | | | | | Short-term debt and current portion of long-term debt; long-term debt, net of current portion | | | | | | |
| | | | | | | | | | | | | |
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.\u00a0
Fair values of raw material, freight, energy and emission rights instruments categorized as Level 2 are as follows:
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| |
| | | |
| | | |
| | | |
Energy (oil, gas, electricity) | | | |
| | | |
| | | |
| | | |
Derivative assets associated with raw materials, energy, freight and emission rights | | | |
Derivative liabilities associated with raw materials, energy, freight and emission rights | | | |
| | | |
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) and the European Energy
Exchange (EEX) power 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\u00a013, 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\u00a031, 2022 and 2021, the Company had a net
notional position of 488 with a net positive fair value of 53\u00a0and a
net notional position of 1,555 with a net positive fair value of
2,443, respectively.
Credit risk
The Company\u2019s treasury department monitors various market
data regarding the credit standings and overall reliability of the
financial institutions for all countries where the Company\u2019s
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\u2019s 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\u2019s complete
portfolio of foreign currency derivatives outstanding. The impact
on the non-euro 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 2022 and 2021.
| | | |
| |
| | | |
10% strengthening in U.S. dollar | | | |
10% weakening in U.S. dollar | | | |
| | | |
| |
| | | |
10% strengthening in U.S. dollar | | | |
10% weakening in U.S. dollar | | | |
Cash flow sensitivity analysis for variable rate instruments
The following tables detail the Company\u2019s variable interest rate
instruments\u2019 sensitivity. A change of 100 basis points (\u201cbp\u201d) 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.
| | | |
| |
| Floating porting of net debt1 | | Interest\u00a0Rate Swaps/ Forward Rate\u00a0Agreements |
| | | |
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| |
| Floating porting of net debt1 | | Interest\u00a0Rate Swaps/ Forward Rate\u00a0Agreements |
| | | |
| | | |
1.See 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\u2019s 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.
| | | |
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| | | Other\u00a0Equity Cash\u00a0Flow Hedging Reserves |
| | | |
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| | | Other\u00a0Equity Cash\u00a0Flow Hedging Reserves |
| | | |
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| | | |
| | | |
| | | |
| | | |
| | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory",
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"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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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\u00a031, 2022:
| | | | | | | | | | | |
| |
| 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 | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Cash and cash equivalents | | | | | | | | | | | |
| | | | | | | | | | | |
Trade accounts receivable and other | | | | | | | | | | | |
| | | | | | | | | | | |
Prepaid expenses and other current assets | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Goodwill and intangible assets | | | | | | | | | | | |
Property, plant and equipment and biological assets | | | | | | | | | | | |
Investments in associates and joint ventures | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Short-term debt and current portion of long-term debt | | | | | | | | | | | |
Trade accounts payable and other | | | | | | | | | | | |
| | | | | | | | | | | |
Accrued expenses and other liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
Total current liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Long-term debt, net of current portion | | | | | | | | | | | |
| | | | | | | | | | | |
Deferred employee benefits | | | | | | | | | | | |
| | | | | | | | | | | |
Other long-term obligations | | | | | | | | | | | |
Total non-current liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity attributable to the equity holders of the parent | | | | | | | | | | | |
Non-controlling interests | | | | | | | | | | | |
| | | | | | | | | | | |
Total liabilities and equity | | | | | | | | | | | |
| | | | | | | | | | | |
| |
| 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 | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Cash and cash equivalents | | | | | | | | | | | |
| | | | | | | | | | | |
Trade accounts receivable and other | | | | | | | | | | | |
| | | | | | | | | | | |
Prepaid expenses and other current assets | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Goodwill and intangible assets | | | | | | | | | | | |
Property, plant and equipment and biological assets | | | | | | | | | | | |
Investments in associates and joint ventures | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Short-term debt and current portion of long-term debt | | | | | | | | | | | |
Trade accounts payable and other | | | | | | | | | | | |
| | | | | | | | | | | |
Accrued expenses and other liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
Total current liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Long-term debt, net of current portion | | | | | | | | | | | |
| | | | | | | | | | | |
Deferred employee benefits | | | | | | | | | | | |
| | | | | | | | | | | |
Other long-term obligations | | | | | | | | | | | |
Total non-current liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity attributable to the equity holders of the parent | | | | | | | | | | | |
Non-controlling interests | | | | | | | | | | | |
| | | | | | | | | | | |
Total liabilities and equity | | | | | | | | | | | |
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.
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Investments in equity instruments at FVOCI | | | | | | | | |
Trade accounts receivable and other subject to TSR programs* | | | | | | | | |
Derivative financial current assets | | | | | | | | |
Derivative financial non-current assets | | | | | | | | |
Total assets at fair value | | | | | | | | |
Liabilities at fair value: | | | | | | | | |
Derivative financial current liabilities | | | | | | | | |
Derivative financial non-current liabilities | | | | | | | | |
Total liabilities at fair value | | | | | | | | |
discretion. On December 8, 2022, an amount of 1.76 billion was
cancelled, following the bonds issuances of September 20, 2022
and November 29, 2022. After the cancellation, the remaining
available amount under the bridge facility as of December 31,
2022 was 444. On January 31, 2023 the remaining amount
available under the bridge facility of 444\u00a0 was cancelled.
Commercial paper
The Company has a commercial paper program enabling
borrowings of up to \u20ac1.5 billion. As of December\u00a031, 2022 and
2021, the outstanding amount was 796 and 541, respectively.
6.1.2.2 Long-term debt
Long-term debt is comprised of the following:
| | | | | | | | | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | Carrying amount at amortized cost |
| | | | | | | | | |
5.5 billion Revolving Credit Facility | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
\u20ac500 million Unsecured Notes | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
\u20ac1.0 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
\u20ac600 million Unsecured Notes | | | | | | | | | |
1.2 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | |
1.5 billion Unsecured Bonds | | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Total Europe, Asia & Africa | | | | | | | | | |
| | | | | | | | | |
Less current portion of long-term debt | | | | | | | | | |
Total long-term debt (excluding lease obligations) | | | | | | | | | |
Long-term lease obligations2 | | | | | | | | | |
Total long-term debt, net of current portion | | | | | | | | | |
1.Rates applicable to balances outstanding at December\u00a031, 2022. For debt that has been redeemed in its entirety during 2022, the interest rates refer to the rates at
repayment date.
2.Net of current portion of 228 and 189 as of December 31, 2022 and 2021, respectively. See note 7.
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
replaced the 5.5 billion revolving credit facility dated April 30,
2015, which was amended and extended on December 21,
2016. The agreement incorporated a single tranche of 5.5 billion
maturing on December 19, 2023, with two one-year extension
options. On November 27, 2019 and on November 26, 2020,
ArcelorMittal exercised the options to extend the facility's
maturity by one year to December 19, 2024 and to December
19, 2025, respectively. The extension was completed for 5.4
billion of the available amount, with the 0.1 billion remaining with
a maturity of December 19, 2023. On April 13, 2021,
ArcelorMittal's revolving credit facility was amended so that the
Leverage Ratio financial covenant would permanently cease to
apply in the event that the Company obtained an investment
grade long-term credit rating (with stable outlook) from two
rating agencies (which was obtained from Moody's and Fitch in
2021). On April 27, 2021, the Facility was amended so that the
margin payable will be increased or decreased depending on
the Company\u2019s performance against two metrics measured
annually against pre-defined targets with respect to its
environmental and sustainability performance (CO2 intensity of
the Company\u2019s European operations and the number of facilities
which have been certified by ResponsibleSteel\u2122). The Facility
may be used for general corporate purposes. As of December
31, 2022, 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 initially matured on July
31, 2022. On August 5, 2020, the Letter of Credit Facility
maturity was extended to July 31, 2023. On November 25,
2020, the amount of the Letter of Credit Facility was increased
to 395. On June 25, 2021, the maturity of the Letter of Credit
Facility was extended to July 31, 2024.
Bonds
On January 14, 2022, at maturity, ArcelorMittal repaid all of the
outstanding \u20ac486 million (551) of its \u20ac750 million Fixed Rate
Notes due 2022.
On September 26, 2022, ArcelorMittal issued \u20ac600 million (640)
of 4.875% Notes due September 28, 2026.
On November 29, 2022, ArcelorMittal issued 1.2 billion of 6.55%
Notes due November 29, 2027 and 1.0 billion of 6.80% Notes
due November 29, 2032.
The margin applicable to ArcelorMittal\u2019s 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 amount of outstanding value | | | | | | | | | |
\u20ac500 million Unsecured Notes | | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
\u20ac250 million Unsecured Notes | | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
| | | | | | | | | | | |
\u20ac600 million Unsecured Notes | | | | | | | | | | | |
1.2 billion Unsecured Bonds | | | | | | | | | | | |
| | | | | | | | | | | |
1.0 billion Unsecured Bonds | | | | | | | | | | | |
1.0 billion Unsecured Bonds | | | | | | | | | | | |
| | | | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | | | |
1.Rates applicable at December 31, 2022.
European Investment Bank (\u201cEIB\u201d) Loan
On June 2, 2021, ArcelorMittal signed a \u20ac280\u00a0million loan
agreement with the European Investment Bank (\"EIB\") for
funding of research, development and innovation projects in
Europe over the period of 2021-2023. This operation benefits
from a guarantee from the European Union under the European
Fund for Strategic Investments. On March 16, 2022 ArcelorMittal
draw down the facility in full. As of December 31, 2022, \u20ac280
million (299) was outstanding.
On December 16, 2016, ArcelorMittal signed a \u20ac350 million
finance contract with the EIB 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\u00a031, 2022, \u20ac131\u00a0million (140) was outstanding.
Other loans
On May 4, 2022, ArcelorMittal completed the offering of a
\u20ac346.5\u00a0million variable rate loan, a \u20ac24.5\u00a0million fixed rate loan,
a \u20ac263\u00a0million variable rate loan and a \u20ac66\u00a0million fixed rate loan
in the German Schuldschein market. On May 6, 2022, the
Company further completed the offering of a \u20ac25\u00a0million fixed
rate loan. The proceeds of these issuances were used for
general corporate purposes. As of December 31, 2022,
\u20ac725\u00a0million (773) was outstanding.
On December 21, 2018, the Company entered into a facility
agreement with a group of lenders for \u20ac235 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 8.5 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, 2022 was \u20ac142 million (151).
On November 29, 2021, ArcelorMittal entered into an agreement
for financing with a financial institution for net proceeds of
CAD130\u00a0million (105) with repayment over several dates in
2021, 2022 and 2023.
Other loans relate to various debt with banks and public
institutions.
Americas
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 (\"EBRD\") 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\u00a031, 2022, 36 was
outstanding under the agreement.\u00a0
On December 15, 2022, ArcelorMittal Kryvyi Rih entered into a
100 loan agreement with EBRD for working capital purposes. As
of December 31, 2022, 50 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 with a maturity of on July 26, 2022.
On August 23, 2021, the facility was further amended and
restated for an amount of 3.5\u00a0billion South African rand and with
a maturity of September 3, 2024. 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, 2022, 2.5 billion South African
rand (147) was drawn.\u00a0
Other loans\u00a0
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\u2019s 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.
The other loans relate to various debt with banks and public
institutions.
Hedge of net investments
As of April\u00a01, 2018, the Company designated a portfolio of euro
denominated debt (\u20ac4,862 million and \u20ac3,709 million as of
December\u00a031, 2022 and December 31, 2021, respectively) as a
hedge of certain euro denominated investments (\u20ac8,837 million
and \u20ac8,261 million as of December\u00a031, 2022 and December 31,
2021, respectively) 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.\u00a0
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.\u00a0
As of December\u00a031, 2022 and December 31, 2021, the
Company recognized 197 and 423 foreign exchange gain
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\u00a031, 2022 the scheduled maturities of short-term
debt, long-term debt and long-term lease obligations, including
their current portion are as follows:
| | | | | | | | | |
| | | |
| | | | | | | | | |
Instruments payable bearing interest at fixed rates | | | | | | | | | |
Instruments payable bearing interest at variable rates | | | | | | | | | |
Total long-term debt, including current portion | | | | | | | | | |
Short term bank loans and other credit facilities including commercial paper | | | | | | | | | |
Instruments payable classified as Level 1 refer to the
Company\u2019s 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\u2019s credit spread
quotations for the relevant maturities. There were no
instruments payable classified as Level 3.
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.
Cash and cash equivalents are primarily centralized at the
parent level and are managed by ArcelorMittal Treasury SNC,
although from time to time cash or cash equivalent balances
may be held at the Company\u2019s international subsidiaries or its
holding companies. Some of these operating subsidiaries have
debt outstanding or are subject to acquisition agreements that
impose restrictions on such operating subsidiaries\u2019 ability to pay
dividends, but such restrictions are not significant in the context
of ArcelorMittal\u2019s 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\u2019s
overall liquidity.
Cash and cash equivalents consisted of the following:
1Money 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.
Restricted cash of 114 as of December\u00a031, 2022 and 156 as of
December 31, 2021 included 52 and 89 relating to various
environmental obligations, true sales of receivables programs
and letters of credit issued in ArcelorMittal South Africa. It also
included 20 and 20 in connection with the mandatory convertible
bonds as of December\u00a031, 2022 and December\u00a031, 2021,
respectively (see note 11.2).
Changes in restricted cash are included within investing
activities 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, 2020 (note 6.1.2) | | | |
Proceeds from long-term debt | | | |
Payments of long-term debt | | | |
| | | |
Proceeds from short-term debt | | | |
Payments of short-term debt | | | |
Current portion of long-term debt | | | |
Payments of principal portion of lease liabilities (note 7) 1 | | | |
Additions to lease liabilities (notes 5.2 and 7) | | | |
Unrealized foreign exchange effects and other movements | | | |
Balance as of December 31, 2021 (note 6.1.2) | | | |
Proceeds from long-term debt | | | |
Payments of long-term debt | | | |
| | | |
Proceeds from short-term debt | | | |
Payments of short-term debt | | | |
Current portion of long-term debt | | | |
Payments of principal portion of lease liabilities (note 7) 1 | | | |
Additions to lease liabilities (notes 5.2 and 7) | | | |
Unrealized foreign exchange effects and other movements | | | |
Balance as of December 31, 2022 (note 6.1.2) | | | |
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\u2019s net debt
by original currency translated into USD at December\u00a031, 2022 and December\u00a031, 2021:
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Short-term debt and current portion of long-term debt | | | | | | | | | | | | | |
Long-term debt, net of current portion | | | | | | | | | | | | | |
Cash and cash equivalents and restricted cash | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Short-term debt and current portion of long-term debt | | | | | | | | | | | | | |
Long-term debt, net of current portion | | | | | | | | | | | | | |
Cash and cash equivalents, restricted cash and other restricted funds | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
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\u2019s 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\u2019s 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:
| | | | | | | |
| |
| | | |
| | | | | | | |
Foreign exchange rate instruments | | | | | | | |
Forward purchase contracts | | | | | | | |
| | | | | | | |
Exchange option purchases | | | | | | | |
| | | | | | | |
Total foreign exchange rate instruments | | | | | | | |
| | | | | | | |
Raw materials (base metals), freight, energy, emission rights | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Total raw materials (base metals), freight, energy, emission rights | | | | | | | |
| | | | | | | |
In 2022, the Company unwound natural gas and emission rights
forward purchase contracts with notional of \u20ac0.3 billion and \u20ac0.7
billion, respectively, and carrying amount of 1,025 and 1,086,
respectively, designated as a cash flow hedge of future natural
gas and emission rights purchases. The deferred gain
recognized in other comprehensive income will be recycled to
the consolidated statements of operations when the hedged
item impacts profit or loss (see note 6.3). In addition, at maturity
of forward purchases of emission rights with notional amount of
\u20ac0.7 billion and carrying amount of 1,408 designated as a cash
flow hedge of future emission rights purchases, the Company (i)
removed 1,268 (953 net of tax) deferred gain recognized in
other comprehensive income from the cash flow hedge reserve
(see note 6.3) and included it in the 671 carrying amount of the
delivered emission rights as basis adjustment (see note 5.1) and
(ii) recycled 140 (104 net of tax) to the consolidated statements
of operations in cost of sales (see note 6.3).
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\u2019s 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\u2019s
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 $127 ($137 at December 31,
2021) and volatility of 13% (18% at December 31, 2021).
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\u2019s 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 price, European Central Bank
foreign exchange fixing 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 2022 based mainly
on the movement of China Oriental stock market prices
observable in the active market over 90 working days, which is
particularly sensitive for the valuation resulting from the model.
A 10% increase or decrease in Hera Ermac share prices would
result in a 84,000% and 100% increase and decrease of the fair
value of the call option at December\u00a031, 2022, respectively.
The following table summarizes the reconciliation of the fair value of the financial instrument classified as Level 3:
| | | |
| | Call option on 1,000 mandatory convertible bonds | |
Balance as of December 31, 2020 | | | |
| | | |
Balance as of December 31, 2021 | | | |
| | | |
Balance as of December 31, 2022 | | | |
The fair value movement relating to the Level 3 derivative
instrument is recognized in the consolidated statements of
operations. The decrease in fair value of the call option on 1,000
mandatory convertible bonds is due to a decrease in the share
price of China Oriental, which impacts the value of the notes in
which Hera Ermac, a wholly-owned subsidiary, invested the
bonds proceeds (see note 11.2).
6.2\u00a0 \u00a0 Financing costs - net\u00a0
Financing costs - net recognized in the years ended
December\u00a031, 2022, 2021 and 2020 are as follows:
| | | | | |
| |
| | | | | |
| | | | | |
| | | | | |
Change in fair value adjustment on call option on mandatory convertible bonds and pellet purchase agreement2 | | | | | |
Accretion of defined benefit obligations and other long term liabilities | | | | | |
Net foreign exchange gain/ (loss) | | | | | |
| | | | | |
| | | | | |
risks: interest rate risk, foreign exchange risk, liquidity risk and
risks in fluctuations in prices of raw materials, freight, energy
and CO2 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.\u00a0
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.
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\u00a031, 2022, the long-term debt was comprised of
87% fixed rate debt and 13% variable rate debt (note 6.1.2). The
Company may utilize 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\u2019s
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,\u00a0Kazakhstani tenge, South African rand,
Mexican peso and Ukrainian hryvnia, as well as fluctuations in
the other countries\u2019 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\u2019s
subsidiaries may purchase raw materials, including iron ore and
coking coal, in U.S. dollar, 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\u2019s 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 \u201cNet investment hedge\u201d).
The Company also uses derivative instruments 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.\u00a0
Foreign currency sensitivity analysis
As of\u00a0 December\u00a031, 2022, 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 Ukrainian
hryvnia against the U.S. dollar resulting from its trade payables
and receivables. The structure of trade receivables and trade
payables by original currency translated in USD is as follows as
of December 31, 2022:
The use of a 10% sensitivity rate is used when reporting foreign
currency exposure internally to key management personnel and
represents management\u2019s 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. For trade receivables, a positive number
indicates an income and a negative number an expense. For
trade payables, a positive number indicates an expense and a
negative number an income.
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\u2019s 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\u2019s 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, 2022, 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.
| | | | | | | | | | | |
| |
| | | | | | | | | | | |
Non-derivative financial liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Derivative financial liabilities | | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
1.Commodity contracts include base metals, freight, energy and emission rights.
| | | | | | | | | | | |
| |
| | | | | | | | | | | |
Non-derivative financial liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Derivative financial liabilities | | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
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:
| | | | | | | | | | | |
| |
| | | |
| | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
which are not included in the table above (603 as of December 31, 2021).
| | | | | | | | | | | |
| |
| Cash flow hedge\u00a0 reserve1 | | |
| | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
investments, which are not included in the table above (30 as of December 31, 2020).
The following tables summarize the effect of hedge accounting on ArcelorMittal\u2019s consolidated statement of financial position, statement
of comprehensive income and statement of changes in equity.
| | | | | | | |
| |
| Nominal amount of the hedging instrument | | | | Liabilities carrying amount | | Line item in the statement of financial position where the hedging instrument is located |
| | | | | | | |
Foreign exchange risk - Option/forward/swap contracts | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
Foreign exchange risk - Option/forward/swap contracts | | | | | | | Other assets/Other long-term obligations |
Price risk - Commodities forwards | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
Price risk - Commodities forwards | | | | | | | Other assets/Other long-term obligations |
Price risk - Emission rights forwards | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
| | | | | | | |
Current derivative assets classified as cash flow hedge | | | | | | | |
Other current derivative assets | | | | | | | |
Total current derivative assets (note 4.5) | | | | | | | |
Non-current derivative assets classified as cash flow hedge | | | | | | | |
Other non-current derivative assets | | | | | | | |
Total non-current derivative assets (note 4.6) | | | | | | | |
Current derivative liabilities classified as cash flow hedge | | | | | | | |
Other current derivative liabilities | | | | | | | |
Total current derivative liabilities (note 4.8) | | | | | | | |
Non-current derivative liabilities classified as cash flow hedge | | | | | | | |
Other non-current derivative liabilities | | | | | | | |
Total non-current derivative liabilities (note 9.2) | | | | | | | |
\u00a0 \u00a0 \u00a0 \u00a0 | | | | | | | | | |
| |
| Cash flow hedge reserve at December 31, 2021 | | Hedging gains or losses of the reporting period that were recognized in OCI | Gains or losses reclassification adjustment and hedge ineffectiveness | | | | Line item in the statement of comprehensive income that includes the reclassification adjustment and hedge ineffectiveness | Cash flow hedge reserve1 at December 31, 2022 |
| | | | | | | | | |
Foreign exchange risk - Option/Forward contracts | | | | | | | | | |
Price risk - Commodities Option/Forward contracts | | | | | | | | | |
Price risk - Emission rights forwards | | | | | | | | | |
| | | | | | | | | |
1.The cash flow hedge reserve balance as of December 31, 2022 also includes 1023 deferred gains for the Company's share of such reserves at its equity method
investments, which are not disclosed above.
. | | | | | | | |
| |
| Nominal amount of the hedging instrument | | | | Liabilities carrying amount | | Line item in the statement of financial position where the hedging instrument is located |
| | | | | | | |
Foreign exchange risk - Option/ Forward contracts | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
Foreign exchange risk - Option/ Forward/Swap contracts | | | | | | | Other assets/Other long-term obligations |
Price risk - Commodities forwards | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
Price risk - Commodities forwards | | | | | | | Other assets/Other long-term obligations |
Price risk - Emission rights forwards | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
| | | | | | | |
Current derivative assets classified as cash flow hedge | | | | | | | |
Other current derivative assets | | | | | | | |
Total current derivative assets (note 4.5) | | | | | | | |
Non-current derivative assets classified as cash flow hedge | | | | | | | |
Other non-current derivative assets | | | | | | | |
Total non-current derivative assets (note 4.6) | | | | | | | |
Current derivative liabilities classified as cash flow hedge | | | | | | | |
Other current derivative liabilities | | | | | | | |
Total current derivative liabilities (note 4.8) | | | | | | | |
Non-current derivative liabilities classified as cash flow hedge | | | | | | | |
Other non-current derivative liabilities | | | | | | | |
Total non-current derivative liabilities (note 9.2) | | | | | | | |
| | | | | | | | | | | |
| |
| Cash flow hedge reserve at December 31, 2020 | | Hedging gains or losses of the reporting period that were recognized in OCI | | Gains or losses reclassification adjustment and hedge ineffectiveness | | | | Line item in the statement of comprehensive income that includes the reclassification adjustment and hedge ineffectiveness | | Cash flow hedge reserve1 at December 31, 2021 |
| | | | | | | | | | | |
Foreign exchange risk - Option/ Forward contracts | | | | | | | | | | | |
Price risk - Commodities forwards1 | | | | | | | | | | | |
Price risk - Emission rights forwards | | | | | | | | | | | |
| | | | | | | | | | | |
investments, which are not disclosed above
Net investment hedge
The Company designated a portfolio of euro denominated debt
(\u20ac4,862 million and \u20ac3,709 million as of December 31, 2022 and
2021, respectively) as a hedge of certain euro denominated
investments (\u20ac8,837 million and \u20ac8,261 million as of December
31, 2022 and 2021, respectively) 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, 2022, the Company recognized 197 foreign
exchange gain (423 foreign exchange gain as of December\u00a031,
2021)\u00a0 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. The hedging instrument is
categorized as Level 2.
The Company has periodically hedged a part of its euro
denominated net investments via euro/U.S. dollar cross
currency swaps (\"CCS\"). These CCS, all of which have been
unwound, were designated as net investment hedges.
The following tables summarizes the historical gain/loss that will
be recycled to the consolidation statements of operations when
the hedged assets are disposed of.
1.In 2022 and in 2021, the Company did not designate any new CCS as net investment hedge.
2.\u00a0 On March 25, 2020 and March 26, 2020, the Company unwound euro/U.S. dollar CCS with a notional of 300 and 200, respectively, which were entered into on May 27,
2015 and designated as a net investment hedge of a euro denominated net investment in foreign operations amounting to \u20ac459. A deferred gain of 8, net of tax, was
recorded in other comprehensive income and it will be recycled to the consolidation statements of operations when the hedged assets are disposed of.
| | | | | | | | | | | | | |
| |
| Nominal amount of the hedging instrument | | | | 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 2021 | | Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness | | Foreign currency translation reserve |
| | | | | | | | | | |
Foreign exchange risk - Cross Currency Swap | | | | | | | | | | | | | |
Foreign exchange risk - EUR debt | | | | | | | Short-term debt and current portion of long- term debt; long- term debt, net of current portion | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| |
| Nominal amount of the hedging instrument | | | | 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 2020 | | Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness | | Foreign currency translation reserve |
| | | | | | | | | | | | | |
Foreign exchange risk - Cross Currency Swap | | | | | | | | | | | | | |
Foreign exchange risk - EUR debt | | | | | | | Short-term debt and current portion of long-term debt; long-term debt, net of current portion | | | | | | |
| | | | | | | | | | | | | |
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.\u00a0
Fair values of raw material, freight, energy and emission rights instruments categorized as Level 2 are as follows:
| | | |
| |
| | | |
| | | |
| | | |
Energy (oil, gas, electricity) | | | |
| | | |
| | | |
| | | |
Derivative assets associated with raw materials, energy, freight and emission rights | | | |
Derivative liabilities associated with raw materials, energy, freight and emission rights | | | |
| | | |
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) and the European Energy
Exchange (EEX) power 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\u00a013, 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\u00a031, 2022 and 2021, the Company had a net
notional position of 488 with a net positive fair value of 53\u00a0and a
net notional position of 1,555 with a net positive fair value of
2,443, respectively.
Credit risk
The Company\u2019s treasury department monitors various market
data regarding the credit standings and overall reliability of the
financial institutions for all countries where the Company\u2019s
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\u2019s 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\u2019s complete
portfolio of foreign currency derivatives outstanding. The impact
on the non-euro 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 2022 and 2021.
| | | |
| |
| | | |
10% strengthening in U.S. dollar | | | |
10% weakening in U.S. dollar | | | |
| | | |
| |
| | | |
10% strengthening in U.S. dollar | | | |
10% weakening in U.S. dollar | | | |
Cash flow sensitivity analysis for variable rate instruments
The following tables detail the Company\u2019s variable interest rate
instruments\u2019 sensitivity. A change of 100 basis points (\u201cbp\u201d) 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.
| | | |
| |
| Floating porting of net debt1 | | Interest\u00a0Rate Swaps/ Forward Rate\u00a0Agreements |
| | | |
| | | |
| | | |
| |
| Floating porting of net debt1 | | Interest\u00a0Rate Swaps/ Forward Rate\u00a0Agreements |
| | | |
| | | |
1.See 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\u2019s 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.
| | | |
| |
| | | Other\u00a0Equity Cash\u00a0Flow Hedging Reserves |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Other\u00a0Equity Cash\u00a0Flow Hedging Reserves |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80MzYvZnJhZzpkMjkzMjlhOGRjYTM0M2VjOTM4NTFkNWMyNWVhYzBiMS90ZXh0cmVnaW9uOmQyOTMyOWE4ZGNhMzQzZWM5Mzg1MWQ1YzI1ZWFjMGIxXzI3NDg3NzkwNjk3MTky_16cbf0f8-1f30-433f-9caf-05d48532a595": {
"value": "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 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80MzkvZnJhZzozNDQ1OWM2NjQ2YTA0MDY1OGE0NzdjYTIyYjA0YzkwZS90ZXh0cmVnaW9uOjM0NDU5YzY2NDZhMDQwNjU4YTQ3N2NhMjJiMDRjOTBlXzI3NDg3NzkwNzE0MDM1_2a7ce9a2-3ed7-43a7-9621-d82f8e7ed976": {
"value": "
6.1.2 Gross debt
Gross debt includes bank debt, debenture loans and lease
obligations and is stated at amortized cost.
6.1.2.1 Short-term debt
Short-term debt, including the current portion of long-term debt,
consisted of the following:
| | | |
| |
| | | |
Short-term bank loans and other credit facilities including commercial paper 1 | | | |
Current portion of long-term debt | | | |
| | | |
| | | |
discretion. On December 8, 2022, an amount of 1.76 billion was
cancelled, following the bonds issuances of September 20, 2022
and November 29, 2022. After the cancellation, the remaining
available amount under the bridge facility as of December 31,
2022 was 444. On January 31, 2023 the remaining amount
available under the bridge facility of 444\u00a0 was cancelled.
Commercial paper
The Company has a commercial paper program enabling
borrowings of up to \u20ac1.5 billion. As of December\u00a031, 2022 and
2021, the outstanding amount was 796 and 541, respectively.
6.1.2.2 Long-term debt
Long-term debt is comprised of the following:
| | | | | | | | | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | Carrying amount at amortized cost |
| | | | | | | | | |
5.5 billion Revolving Credit Facility | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
\u20ac500 million Unsecured Notes | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
\u20ac1.0 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
\u20ac600 million Unsecured Notes | | | | | | | | | |
1.2 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | |
1.5 billion Unsecured Bonds | | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Total Europe, Asia & Africa | | | | | | | | | |
| | | | | | | | | |
Less current portion of long-term debt | | | | | | | | | |
Total long-term debt (excluding lease obligations) | | | | | | | | | |
Long-term lease obligations2 | | | | | | | | | |
Total long-term debt, net of current portion | | | | | | | | | |
1.Rates applicable to balances outstanding at December\u00a031, 2022. For debt that has been redeemed in its entirety during 2022, the interest rates refer to the rates at
repayment date.
2.Net of current portion of 228 and 189 as of December 31, 2022 and 2021, respectively. See note 7.
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
replaced the 5.5 billion revolving credit facility dated April 30,
2015, which was amended and extended on December 21,
2016. The agreement incorporated a single tranche of 5.5 billion
maturing on December 19, 2023, with two one-year extension
options. On November 27, 2019 and on November 26, 2020,
ArcelorMittal exercised the options to extend the facility's
maturity by one year to December 19, 2024 and to December
19, 2025, respectively. The extension was completed for 5.4
billion of the available amount, with the 0.1 billion remaining with
a maturity of December 19, 2023. On April 13, 2021,
ArcelorMittal's revolving credit facility was amended so that the
Leverage Ratio financial covenant would permanently cease to
apply in the event that the Company obtained an investment
grade long-term credit rating (with stable outlook) from two
rating agencies (which was obtained from Moody's and Fitch in
2021). On April 27, 2021, the Facility was amended so that the
margin payable will be increased or decreased depending on
the Company\u2019s performance against two metrics measured
annually against pre-defined targets with respect to its
environmental and sustainability performance (CO2 intensity of
the Company\u2019s European operations and the number of facilities
which have been certified by ResponsibleSteel\u2122). The Facility
may be used for general corporate purposes. As of December
31, 2022, 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 initially matured on July
31, 2022. On August 5, 2020, the Letter of Credit Facility
maturity was extended to July 31, 2023. On November 25,
2020, the amount of the Letter of Credit Facility was increased
to 395. On June 25, 2021, the maturity of the Letter of Credit
Facility was extended to July 31, 2024.
Bonds
On January 14, 2022, at maturity, ArcelorMittal repaid all of the
outstanding \u20ac486 million (551) of its \u20ac750 million Fixed Rate
Notes due 2022.
On September 26, 2022, ArcelorMittal issued \u20ac600 million (640)
of 4.875% Notes due September 28, 2026.
On November 29, 2022, ArcelorMittal issued 1.2 billion of 6.55%
Notes due November 29, 2027 and 1.0 billion of 6.80% Notes
due November 29, 2032.
The margin applicable to ArcelorMittal\u2019s 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 amount of outstanding value | | | | | | | | | |
\u20ac500 million Unsecured Notes | | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
\u20ac250 million Unsecured Notes | | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
| | | | | | | | | | | |
\u20ac600 million Unsecured Notes | | | | | | | | | | | |
1.2 billion Unsecured Bonds | | | | | | | | | | | |
| | | | | | | | | | | |
1.0 billion Unsecured Bonds | | | | | | | | | | | |
1.0 billion Unsecured Bonds | | | | | | | | | | | |
| | | | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | | | |
1.Rates applicable at December 31, 2022.
European Investment Bank (\u201cEIB\u201d) Loan
On June 2, 2021, ArcelorMittal signed a \u20ac280\u00a0million loan
agreement with the European Investment Bank (\"EIB\") for
funding of research, development and innovation projects in
Europe over the period of 2021-2023. This operation benefits
from a guarantee from the European Union under the European
Fund for Strategic Investments. On March 16, 2022 ArcelorMittal
draw down the facility in full. As of December 31, 2022, \u20ac280
million (299) was outstanding.
On December 16, 2016, ArcelorMittal signed a \u20ac350 million
finance contract with the EIB 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\u00a031, 2022, \u20ac131\u00a0million (140) was outstanding.
Other loans
On May 4, 2022, ArcelorMittal completed the offering of a
\u20ac346.5\u00a0million variable rate loan, a \u20ac24.5\u00a0million fixed rate loan,
a \u20ac263\u00a0million variable rate loan and a \u20ac66\u00a0million fixed rate loan
in the German Schuldschein market. On May 6, 2022, the
Company further completed the offering of a \u20ac25\u00a0million fixed
rate loan. The proceeds of these issuances were used for
general corporate purposes. As of December 31, 2022,
\u20ac725\u00a0million (773) was outstanding.
On December 21, 2018, the Company entered into a facility
agreement with a group of lenders for \u20ac235 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 8.5 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, 2022 was \u20ac142 million (151).
On November 29, 2021, ArcelorMittal entered into an agreement
for financing with a financial institution for net proceeds of
CAD130\u00a0million (105) with repayment over several dates in
2021, 2022 and 2023.
Other loans relate to various debt with banks and public
institutions.
Americas
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 (\"EBRD\") 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\u00a031, 2022, 36 was
outstanding under the agreement.\u00a0
On December 15, 2022, ArcelorMittal Kryvyi Rih entered into a
100 loan agreement with EBRD for working capital purposes. As
of December 31, 2022, 50 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 with a maturity of on July 26, 2022.
On August 23, 2021, the facility was further amended and
restated for an amount of 3.5\u00a0billion South African rand and with
a maturity of September 3, 2024. 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, 2022, 2.5 billion South African
rand (147) was drawn.\u00a0
Other loans\u00a0
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\u2019s 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.
The other loans relate to various debt with banks and public
institutions.
Hedge of net investments
As of April\u00a01, 2018, the Company designated a portfolio of euro
denominated debt (\u20ac4,862 million and \u20ac3,709 million as of
December\u00a031, 2022 and December 31, 2021, respectively) as a
hedge of certain euro denominated investments (\u20ac8,837 million
and \u20ac8,261 million as of December\u00a031, 2022 and December 31,
2021, respectively) 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.\u00a0
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.\u00a0
As of December\u00a031, 2022 and December 31, 2021, the
Company recognized 197 and 423 foreign exchange gain
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\u00a031, 2022 the scheduled maturities of short-term
debt, long-term debt and long-term lease obligations, including
their current portion are as follows:
| | | | | | | | | |
| | | |
| | | | | | | | | |
Instruments payable bearing interest at fixed rates | | | | | | | | | |
Instruments payable bearing interest at variable rates | | | | | | | | | |
Total long-term debt, including current portion | | | | | | | | | |
Short term bank loans and other credit facilities including commercial paper | | | | | | | | | |
Instruments payable classified as Level 1 refer to the
Company\u2019s 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\u2019s credit spread
quotations for the relevant maturities. There were no
instruments payable classified as Level 3.
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\u2019s net debt
by original currency translated into USD at December\u00a031, 2022 and December\u00a031, 2021:
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Short-term debt and current portion of long-term debt | | | | | | | | | | | | | |
Long-term debt, net of current portion | | | | | | | | | | | | | |
Cash and cash equivalents and restricted cash | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Short-term debt and current portion of long-term debt | | | | | | | | | | | | | |
Long-term debt, net of current portion | | | | | | | | | | | | | |
Cash and cash equivalents, restricted cash and other restricted funds | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80MzkvZnJhZzozNDQ1OWM2NjQ2YTA0MDY1OGE0NzdjYTIyYjA0YzkwZS90ZXh0cmVnaW9uOjM0NDU5YzY2NDZhMDQwNjU4YTQ3N2NhMjJiMDRjOTBlXzI3NDg3NzkwNzE0MDM1_a3f6f7d7-db27-4096-a1c7-7c13200bfae8": {
"value": "
6.1.2 Gross debt
Gross debt includes bank debt, debenture loans and lease
obligations and is stated at amortized cost.
6.1.2.1 Short-term debt
Short-term debt, including the current portion of long-term debt,
consisted of the following:
| | | |
| |
| | | |
Short-term bank loans and other credit facilities including commercial paper 1 | | | |
Current portion of long-term debt | | | |
| | | |
| | | |
discretion. On December 8, 2022, an amount of 1.76 billion was
cancelled, following the bonds issuances of September 20, 2022
and November 29, 2022. After the cancellation, the remaining
available amount under the bridge facility as of December 31,
2022 was 444. On January 31, 2023 the remaining amount
available under the bridge facility of 444\u00a0 was cancelled.
Commercial paper
The Company has a commercial paper program enabling
borrowings of up to \u20ac1.5 billion. As of December\u00a031, 2022 and
2021, the outstanding amount was 796 and 541, respectively.
6.1.2.2 Long-term debt
Long-term debt is comprised of the following:
| | | | | | | | | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | Carrying amount at amortized cost |
| | | | | | | | | |
5.5 billion Revolving Credit Facility | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
\u20ac500 million Unsecured Notes | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
\u20ac1.0 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
\u20ac600 million Unsecured Notes | | | | | | | | | |
1.2 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | |
1.5 billion Unsecured Bonds | | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Total Europe, Asia & Africa | | | | | | | | | |
| | | | | | | | | |
Less current portion of long-term debt | | | | | | | | | |
Total long-term debt (excluding lease obligations) | | | | | | | | | |
Long-term lease obligations2 | | | | | | | | | |
Total long-term debt, net of current portion | | | | | | | | | |
1.Rates applicable to balances outstanding at December\u00a031, 2022. For debt that has been redeemed in its entirety during 2022, the interest rates refer to the rates at
repayment date.
2.Net of current portion of 228 and 189 as of December 31, 2022 and 2021, respectively. See note 7.
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
replaced the 5.5 billion revolving credit facility dated April 30,
2015, which was amended and extended on December 21,
2016. The agreement incorporated a single tranche of 5.5 billion
maturing on December 19, 2023, with two one-year extension
options. On November 27, 2019 and on November 26, 2020,
ArcelorMittal exercised the options to extend the facility's
maturity by one year to December 19, 2024 and to December
19, 2025, respectively. The extension was completed for 5.4
billion of the available amount, with the 0.1 billion remaining with
a maturity of December 19, 2023. On April 13, 2021,
ArcelorMittal's revolving credit facility was amended so that the
Leverage Ratio financial covenant would permanently cease to
apply in the event that the Company obtained an investment
grade long-term credit rating (with stable outlook) from two
rating agencies (which was obtained from Moody's and Fitch in
2021). On April 27, 2021, the Facility was amended so that the
margin payable will be increased or decreased depending on
the Company\u2019s performance against two metrics measured
annually against pre-defined targets with respect to its
environmental and sustainability performance (CO2 intensity of
the Company\u2019s European operations and the number of facilities
which have been certified by ResponsibleSteel\u2122). The Facility
may be used for general corporate purposes. As of December
31, 2022, 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 initially matured on July
31, 2022. On August 5, 2020, the Letter of Credit Facility
maturity was extended to July 31, 2023. On November 25,
2020, the amount of the Letter of Credit Facility was increased
to 395. On June 25, 2021, the maturity of the Letter of Credit
Facility was extended to July 31, 2024.
Bonds
On January 14, 2022, at maturity, ArcelorMittal repaid all of the
outstanding \u20ac486 million (551) of its \u20ac750 million Fixed Rate
Notes due 2022.
On September 26, 2022, ArcelorMittal issued \u20ac600 million (640)
of 4.875% Notes due September 28, 2026.
On November 29, 2022, ArcelorMittal issued 1.2 billion of 6.55%
Notes due November 29, 2027 and 1.0 billion of 6.80% Notes
due November 29, 2032.
The margin applicable to ArcelorMittal\u2019s 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 amount of outstanding value | | | | | | | | | |
\u20ac500 million Unsecured Notes | | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
\u20ac250 million Unsecured Notes | | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
| | | | | | | | | | | |
\u20ac600 million Unsecured Notes | | | | | | | | | | | |
1.2 billion Unsecured Bonds | | | | | | | | | | | |
| | | | | | | | | | | |
1.0 billion Unsecured Bonds | | | | | | | | | | | |
1.0 billion Unsecured Bonds | | | | | | | | | | | |
| | | | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | | | |
1.Rates applicable at December 31, 2022.
European Investment Bank (\u201cEIB\u201d) Loan
On June 2, 2021, ArcelorMittal signed a \u20ac280\u00a0million loan
agreement with the European Investment Bank (\"EIB\") for
funding of research, development and innovation projects in
Europe over the period of 2021-2023. This operation benefits
from a guarantee from the European Union under the European
Fund for Strategic Investments. On March 16, 2022 ArcelorMittal
draw down the facility in full. As of December 31, 2022, \u20ac280
million (299) was outstanding.
On December 16, 2016, ArcelorMittal signed a \u20ac350 million
finance contract with the EIB 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\u00a031, 2022, \u20ac131\u00a0million (140) was outstanding.
Other loans
On May 4, 2022, ArcelorMittal completed the offering of a
\u20ac346.5\u00a0million variable rate loan, a \u20ac24.5\u00a0million fixed rate loan,
a \u20ac263\u00a0million variable rate loan and a \u20ac66\u00a0million fixed rate loan
in the German Schuldschein market. On May 6, 2022, the
Company further completed the offering of a \u20ac25\u00a0million fixed
rate loan. The proceeds of these issuances were used for
general corporate purposes. As of December 31, 2022,
\u20ac725\u00a0million (773) was outstanding.
On December 21, 2018, the Company entered into a facility
agreement with a group of lenders for \u20ac235 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 8.5 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, 2022 was \u20ac142 million (151).
On November 29, 2021, ArcelorMittal entered into an agreement
for financing with a financial institution for net proceeds of
CAD130\u00a0million (105) with repayment over several dates in
2021, 2022 and 2023.
Other loans relate to various debt with banks and public
institutions.
Americas
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 (\"EBRD\") 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\u00a031, 2022, 36 was
outstanding under the agreement.\u00a0
On December 15, 2022, ArcelorMittal Kryvyi Rih entered into a
100 loan agreement with EBRD for working capital purposes. As
of December 31, 2022, 50 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 with a maturity of on July 26, 2022.
On August 23, 2021, the facility was further amended and
restated for an amount of 3.5\u00a0billion South African rand and with
a maturity of September 3, 2024. 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, 2022, 2.5 billion South African
rand (147) was drawn.\u00a0
Other loans\u00a0
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\u2019s 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.
The other loans relate to various debt with banks and public
institutions.
Hedge of net investments
As of April\u00a01, 2018, the Company designated a portfolio of euro
denominated debt (\u20ac4,862 million and \u20ac3,709 million as of
December\u00a031, 2022 and December 31, 2021, respectively) as a
hedge of certain euro denominated investments (\u20ac8,837 million
and \u20ac8,261 million as of December\u00a031, 2022 and December 31,
2021, respectively) 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.\u00a0
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.\u00a0
As of December\u00a031, 2022 and December 31, 2021, the
Company recognized 197 and 423 foreign exchange gain
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\u00a031, 2022 the scheduled maturities of short-term
debt, long-term debt and long-term lease obligations, including
their current portion are as follows:
| | | | | | | | | |
| | | |
| | | | | | | | | |
Instruments payable bearing interest at fixed rates | | | | | | | | | |
Instruments payable bearing interest at variable rates | | | | | | | | | |
Total long-term debt, including current portion | | | | | | | | | |
Short term bank loans and other credit facilities including commercial paper | | | | | | | | | |
Instruments payable classified as Level 1 refer to the
Company\u2019s 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\u2019s credit spread
quotations for the relevant maturities. There were no
instruments payable classified as Level 3.
11.2\u00a0 \u00a0 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 Cr\u00e9dit 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
has extended the conversion date for the mandatory convertible
bonds from time to time.
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, 2020, the
remaining notes were linked to the value of the shares of China
Oriental (see note 6.1.5).
On December 22, 2020, the maturity of the mandatory
convertible bonds was extended from January 29, 2021 to
January 31, 2024. 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 869
(net of cumulative tax and fees) and other liabilities for 131. The
derecognition of the previous instrument and the recognition at
fair value of the new instrument resulted in a 178 expense
included in financing costs-net in the consolidated statement of
operations and a 53 increase in non-controlling interests.
Mandatorily convertible subordinated notes
On May 18, 2020, following the offering of common shares
described in note 11.1, the Company completed an offering of\u00a0
mandatorily convertible subordinated notes (\u201cMCNs\u201d) for 1,250.
The MCNs have a three-year maturity, were issued at 100% of
the principal amount and will be mandatorily converted into
common shares of the Company upon maturity unless
converted earlier at the option of the holders or ArcelorMittal
during the conversion period or upon occurrence of certain
defined events.
In all cases, ArcelorMittal may exercise its right to convert early,
taking precedent over the other options. In case of an early
conversion, ArcelorMittal must deliver shares at the \u201cMaximum
Conversion Ratio.\u201d The mandatorily convertible notes pay a
coupon of 5.50% per annum, payable quarterly in arrears. The
minimum conversion price of the mandatorily convertible notes
is equal to $9.06, corresponding to the offering price of the
shares as described above, and the maximum conversion price
is 117.5% of the minimum conversion price or $10.64 as
adjusted from time to time. ArcelorMittal intends to use the net
proceeds from the offerings for general corporate purposes, to
deleverage and to enhance liquidity, thereby building additional
resilience going forward in what remains an uncertain
environment.
The Significant Shareholder participated in the offerings by
contributing an amount of 100 for the MCNs.
The Company determined that the MCNs are a hybrid
instrument including an equity component and a debt
component. The Company assessed whether there is actual
economic or other business reasons that it would exercise its
option to convert prior to maturity, whether the MCNs would
have been priced differently if the early settlement option had
not been included in the contractual terms and other factors
such as the term of the instrument, the width of the range
between the cap and the floor, ArcelorMittal\u2019s share price and
the volatility of the share price as important criterion in this
conclusion. The early conversion right has economic substance
with respect to maintaining the current credit rating if early
conversion can help in preventing a rating downgrade. In this
event, future savings of credit interest is expected to be more
than the cost of early conversion. The debt component of 190
(net of transaction costs of 2) at issuance corresponded to the
net present value of the future interest payments and is included
in accrued expenses and other liabilities and other long-term
obligations. The remaining amount of 1,047 (net of transaction
costs of 11) was the equity instrument.
On December 15, 2020, ArcelorMittal signed separate, privately
negotiated exchange agreements with a limited number of
holders of MCNs exchanging 247 in aggregate principal amount
of MCNs for an aggregate of 22,653,933 treasury shares at the
minimum conversion ratio plus 25 paid in cash (including
accrued interest on the exchanged MCNs up to, but excluding,
the settlement date). The Company allocated the share
consideration to the debt (30) and equity (207) components
consistent with the original allocation using net present value of
the future interest payments at the date of exchange. As of
December 31, 2020 and following the exchange, the debt and
equity components were 123 and 840 (presented separately in
the statements of changes in equity), net of transaction fees
respectively.
On December 23, 2021, ArcelorMittal completed separate,
privately negotiated agreements with a limited number of
holders of MCNs to repurchase 395 in aggregate principal
amount of MCNs at the minimum conversion ratio for an
aggregate cash consideration of 1,196. The Company allocated
the cash consideration to the debt (30) and equity (331)
components of the instrument and recognized in financing costs
- net a 61 loss relating to the liability component and a 774 (589
net of tax) decrease in retained earnings relating to the equity
component consistent with the original allocation using net
present value of the future interest payments at the date of
exchange. As of December 31, 2022, the debt and equity
components were 13 and 509 (presented separately in the
statements of changes in equity), net of transaction fees,
respectively.
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"value": "
6.1.2 Gross debt
Gross debt includes bank debt, debenture loans and lease
obligations and is stated at amortized cost.
",
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"value": "
6.1.2.1 Short-term debt
Short-term debt, including the current portion of long-term debt,
consisted of the following:
| | | |
| |
| | | |
Short-term bank loans and other credit facilities including commercial paper 1 | | | |
Current portion of long-term debt | | | |
| | | |
| | | |
discretion. On December 8, 2022, an amount of 1.76 billion was
cancelled, following the bonds issuances of September 20, 2022
and November 29, 2022. After the cancellation, the remaining
available amount under the bridge facility as of December 31,
2022 was 444. On January 31, 2023 the remaining amount
available under the bridge facility of 444\u00a0 was cancelled.
Commercial paper
The Company has a commercial paper program enabling
borrowings of up to \u20ac1.5 billion. As of December\u00a031, 2022 and
2021, the outstanding amount was 796 and 541, respectively.
6.1.2.2 Long-term debt
Long-term debt is comprised of the following:
| | | | | | | | | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | Carrying amount at amortized cost |
| | | | | | | | | |
5.5 billion Revolving Credit Facility | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
\u20ac500 million Unsecured Notes | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
\u20ac1.0 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
\u20ac600 million Unsecured Notes | | | | | | | | | |
1.2 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | |
1.5 billion Unsecured Bonds | | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Total Europe, Asia & Africa | | | | | | | | | |
| | | | | | | | | |
Less current portion of long-term debt | | | | | | | | | |
Total long-term debt (excluding lease obligations) | | | | | | | | | |
Long-term lease obligations2 | | | | | | | | | |
Total long-term debt, net of current portion | | | | | | | | | |
1.Rates applicable to balances outstanding at December\u00a031, 2022. For debt that has been redeemed in its entirety during 2022, the interest rates refer to the rates at
repayment date.
2.Net of current portion of 228 and 189 as of December 31, 2022 and 2021, respectively. See note 7.
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
replaced the 5.5 billion revolving credit facility dated April 30,
2015, which was amended and extended on December 21,
2016. The agreement incorporated a single tranche of 5.5 billion
maturing on December 19, 2023, with two one-year extension
options. On November 27, 2019 and on November 26, 2020,
ArcelorMittal exercised the options to extend the facility's
maturity by one year to December 19, 2024 and to December
19, 2025, respectively. The extension was completed for 5.4
billion of the available amount, with the 0.1 billion remaining with
a maturity of December 19, 2023. On April 13, 2021,
ArcelorMittal's revolving credit facility was amended so that the
Leverage Ratio financial covenant would permanently cease to
apply in the event that the Company obtained an investment
grade long-term credit rating (with stable outlook) from two
rating agencies (which was obtained from Moody's and Fitch in
2021). On April 27, 2021, the Facility was amended so that the
margin payable will be increased or decreased depending on
the Company\u2019s performance against two metrics measured
annually against pre-defined targets with respect to its
environmental and sustainability performance (CO2 intensity of
the Company\u2019s European operations and the number of facilities
which have been certified by ResponsibleSteel\u2122). The Facility
may be used for general corporate purposes. As of December
31, 2022, 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 initially matured on July
31, 2022. On August 5, 2020, the Letter of Credit Facility
maturity was extended to July 31, 2023. On November 25,
2020, the amount of the Letter of Credit Facility was increased
to 395. On June 25, 2021, the maturity of the Letter of Credit
Facility was extended to July 31, 2024.
Bonds
On January 14, 2022, at maturity, ArcelorMittal repaid all of the
outstanding \u20ac486 million (551) of its \u20ac750 million Fixed Rate
Notes due 2022.
On September 26, 2022, ArcelorMittal issued \u20ac600 million (640)
of 4.875% Notes due September 28, 2026.
On November 29, 2022, ArcelorMittal issued 1.2 billion of 6.55%
Notes due November 29, 2027 and 1.0 billion of 6.80% Notes
due November 29, 2032.
The margin applicable to ArcelorMittal\u2019s 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 amount of outstanding value | | | | | | | | | |
\u20ac500 million Unsecured Notes | | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
\u20ac250 million Unsecured Notes | | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
\u20ac750 million Unsecured Notes | | | | | | | | | | | |
| | | | | | | | | | | |
\u20ac600 million Unsecured Notes | | | | | | | | | | | |
1.2 billion Unsecured Bonds | | | | | | | | | | | |
| | | | | | | | | | | |
1.0 billion Unsecured Bonds | | | | | | | | | | | |
1.0 billion Unsecured Bonds | | | | | | | | | | | |
| | | | | | | | | | | |
1.0 billion Unsecured Notes | | | | | | | | | | | |
1.Rates applicable at December 31, 2022.
European Investment Bank (\u201cEIB\u201d) Loan
On June 2, 2021, ArcelorMittal signed a \u20ac280\u00a0million loan
agreement with the European Investment Bank (\"EIB\") for
funding of research, development and innovation projects in
Europe over the period of 2021-2023. This operation benefits
from a guarantee from the European Union under the European
Fund for Strategic Investments. On March 16, 2022 ArcelorMittal
draw down the facility in full. As of December 31, 2022, \u20ac280
million (299) was outstanding.
On December 16, 2016, ArcelorMittal signed a \u20ac350 million
finance contract with the EIB 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\u00a031, 2022, \u20ac131\u00a0million (140) was outstanding.
Other loans
On May 4, 2022, ArcelorMittal completed the offering of a
\u20ac346.5\u00a0million variable rate loan, a \u20ac24.5\u00a0million fixed rate loan,
a \u20ac263\u00a0million variable rate loan and a \u20ac66\u00a0million fixed rate loan
in the German Schuldschein market. On May 6, 2022, the
Company further completed the offering of a \u20ac25\u00a0million fixed
rate loan. The proceeds of these issuances were used for
general corporate purposes. As of December 31, 2022,
\u20ac725\u00a0million (773) was outstanding.
On December 21, 2018, the Company entered into a facility
agreement with a group of lenders for \u20ac235 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 8.5 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, 2022 was \u20ac142 million (151).
On November 29, 2021, ArcelorMittal entered into an agreement
for financing with a financial institution for net proceeds of
CAD130\u00a0million (105) with repayment over several dates in
2021, 2022 and 2023.
Other loans relate to various debt with banks and public
institutions.
Americas
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 (\"EBRD\") 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\u00a031, 2022, 36 was
outstanding under the agreement.\u00a0
On December 15, 2022, ArcelorMittal Kryvyi Rih entered into a
100 loan agreement with EBRD for working capital purposes. As
of December 31, 2022, 50 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 with a maturity of on July 26, 2022.
On August 23, 2021, the facility was further amended and
restated for an amount of 3.5\u00a0billion South African rand and with
a maturity of September 3, 2024. 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, 2022, 2.5 billion South African
rand (147) was drawn.\u00a0
Other loans\u00a0
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\u2019s 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.
The other loans relate to various debt with banks and public
institutions.
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, 2020 (note 6.1.2) | | | |
Proceeds from long-term debt | | | |
Payments of long-term debt | | | |
| | | |
Proceeds from short-term debt | | | |
Payments of short-term debt | | | |
Current portion of long-term debt | | | |
Payments of principal portion of lease liabilities (note 7) 1 | | | |
Additions to lease liabilities (notes 5.2 and 7) | | | |
Unrealized foreign exchange effects and other movements | | | |
Balance as of December 31, 2021 (note 6.1.2) | | | |
Proceeds from long-term debt | | | |
Payments of long-term debt | | | |
| | | |
Proceeds from short-term debt | | | |
Payments of short-term debt | | | |
Current portion of long-term debt | | | |
Payments of principal portion of lease liabilities (note 7) 1 | | | |
Additions to lease liabilities (notes 5.2 and 7) | | | |
Unrealized foreign exchange effects and other movements | | | |
Balance as of December 31, 2022 (note 6.1.2) | | | |
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\u2019s net debt
by original currency translated into USD at December\u00a031, 2022 and December\u00a031, 2021:
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Short-term debt and current portion of long-term debt | | | | | | | | | | | | | |
Long-term debt, net of current portion | | | | | | | | | | | | | |
Cash and cash equivalents and restricted cash | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Short-term debt and current portion of long-term debt | | | | | | | | | | | | | |
Long-term debt, net of current portion | | | | | | | | | | | | | |
Cash and cash equivalents, restricted cash and other restricted funds | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBorrowingsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NDUvZnJhZzpkNTUwNjA5ZDA5ODE0M2ViOTYxNDJmMzM4NjFjZGJhNy90ZXh0cmVnaW9uOmQ1NTA2MDlkMDk4MTQzZWI5NjE0MmYzMzg2MWNkYmE3XzI3NDg3NzkwNjk3Mjk1_a96d784f-6f43-4802-bab7-72fd09fe7dc9": {
"value": "
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.
Cash and cash equivalents are primarily centralized at the
parent level and are managed by ArcelorMittal Treasury SNC,
although from time to time cash or cash equivalent balances
may be held at the Company\u2019s international subsidiaries or its
holding companies. Some of these operating subsidiaries have
debt outstanding or are subject to acquisition agreements that
impose restrictions on such operating subsidiaries\u2019 ability to pay
dividends, but such restrictions are not significant in the context
of ArcelorMittal\u2019s 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\u2019s
overall liquidity.
Cash and cash equivalents consisted of the following:
1Money 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.
Restricted cash of 114 as of December\u00a031, 2022 and 156 as of
December 31, 2021 included 52 and 89 relating to various
environmental obligations, true sales of receivables programs
and letters of credit issued in ArcelorMittal South Africa. It also
included 20 and 20 in connection with the mandatory convertible
bonds as of December\u00a031, 2022 and December\u00a031, 2021,
respectively (see note 11.2).
Changes in restricted cash are included within investing
activities in the consolidated statements of cash flows.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NDUvZnJhZzpkNTUwNjA5ZDA5ODE0M2ViOTYxNDJmMzM4NjFjZGJhNy90ZXh0cmVnaW9uOmQ1NTA2MDlkMDk4MTQzZWI5NjE0MmYzMzg2MWNkYmE3XzI3NDg3NzkwNjk3Mjk1_cc9321e4-bad6-4fdf-b33a-a1873489b22d": {
"value": "
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.
Cash and cash equivalents are primarily centralized at the
parent level and are managed by ArcelorMittal Treasury SNC,
although from time to time cash or cash equivalent balances
may be held at the Company\u2019s international subsidiaries or its
holding companies. Some of these operating subsidiaries have
debt outstanding or are subject to acquisition agreements that
impose restrictions on such operating subsidiaries\u2019 ability to pay
dividends, but such restrictions are not significant in the context
of ArcelorMittal\u2019s 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\u2019s
overall liquidity.
Cash and cash equivalents consisted of the following:
1Money 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.
Restricted cash of 114 as of December\u00a031, 2022 and 156 as of
December 31, 2021 included 52 and 89 relating to various
environmental obligations, true sales of receivables programs
and letters of credit issued in ArcelorMittal South Africa. It also
included 20 and 20 in connection with the mandatory convertible
bonds as of December\u00a031, 2022 and December\u00a031, 2021,
respectively (see note 11.2).
Changes in restricted cash are included within investing
activities in the consolidated statements of cash flows.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NDUvZnJhZzpkNTUwNjA5ZDA5ODE0M2ViOTYxNDJmMzM4NjFjZGJhNy90ZXh0cmVnaW9uOmQ1NTA2MDlkMDk4MTQzZWI5NjE0MmYzMzg2MWNkYmE3XzI3NDg3NzkwNjk3Mjk2_aeceb1b8-91f3-438f-b6d4-408111d7e667": {
"value": "
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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NDUvZnJhZzpkNTUwNjA5ZDA5ODE0M2ViOTYxNDJmMzM4NjFjZGJhNy90ZXh0cmVnaW9uOmQ1NTA2MDlkMDk4MTQzZWI5NjE0MmYzMzg2MWNkYmE3XzI3NDg3NzkwNjk3Mjk3_0077d79b-e618-4ada-9bd4-33e57bbfc448": {
"value": "
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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRestrictedCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NDgvZnJhZzo1OGU2YmJiZjkyYzg0NzZiYjEwMGQ0MGVjNzBkYWFhNC90ZXh0cmVnaW9uOjU4ZTZiYmJmOTJjODQ3NmJiMTAwZDQwZWM3MGRhYWE0XzI3NDg3NzkwNjk1MDU1_31fcf8b9-e3e6-4fcc-9db3-269b170c6f91": {
"value": "
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, 2020 (note 6.1.2) | | | |
Proceeds from long-term debt | | | |
Payments of long-term debt | | | |
| | | |
Proceeds from short-term debt | | | |
Payments of short-term debt | | | |
Current portion of long-term debt | | | |
Payments of principal portion of lease liabilities (note 7) 1 | | | |
Additions to lease liabilities (notes 5.2 and 7) | | | |
Unrealized foreign exchange effects and other movements | | | |
Balance as of December 31, 2021 (note 6.1.2) | | | |
Proceeds from long-term debt | | | |
Payments of long-term debt | | | |
| | | |
Proceeds from short-term debt | | | |
Payments of short-term debt | | | |
Current portion of long-term debt | | | |
Payments of principal portion of lease liabilities (note 7) 1 | | | |
Additions to lease liabilities (notes 5.2 and 7) | | | |
Unrealized foreign exchange effects and other movements | | | |
Balance as of December 31, 2022 (note 6.1.2) | | | |
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\u2019s 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\u2019s 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:
| | | | | | | |
| |
| | | |
| | | | | | | |
Foreign exchange rate instruments | | | | | | | |
Forward purchase contracts | | | | | | | |
| | | | | | | |
Exchange option purchases | | | | | | | |
| | | | | | | |
Total foreign exchange rate instruments | | | | | | | |
| | | | | | | |
Raw materials (base metals), freight, energy, emission rights | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Total raw materials (base metals), freight, energy, emission rights | | | | | | | |
| | | | | | | |
In 2022, the Company unwound natural gas and emission rights
forward purchase contracts with notional of \u20ac0.3 billion and \u20ac0.7
billion, respectively, and carrying amount of 1,025 and 1,086,
respectively, designated as a cash flow hedge of future natural
gas and emission rights purchases. The deferred gain
recognized in other comprehensive income will be recycled to
the consolidated statements of operations when the hedged
item impacts profit or loss (see note 6.3). In addition, at maturity
of forward purchases of emission rights with notional amount of
\u20ac0.7 billion and carrying amount of 1,408 designated as a cash
flow hedge of future emission rights purchases, the Company (i)
removed 1,268 (953 net of tax) deferred gain recognized in
other comprehensive income from the cash flow hedge reserve
(see note 6.3) and included it in the 671 carrying amount of the
delivered emission rights as basis adjustment (see note 5.1) and
(ii) recycled 140 (104 net of tax) to the consolidated statements
of operations in cost of sales (see note 6.3).
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\u2019s 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\u2019s
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 $127 ($137 at December 31,
2021) and volatility of 13% (18% at December 31, 2021).
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\u2019s 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 price, European Central Bank
foreign exchange fixing 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 2022 based mainly
on the movement of China Oriental stock market prices
observable in the active market over 90 working days, which is
particularly sensitive for the valuation resulting from the model.
A 10% increase or decrease in Hera Ermac share prices would
result in a 84,000% and 100% increase and decrease of the fair
value of the call option at December\u00a031, 2022, respectively.
The following table summarizes the reconciliation of the fair value of the financial instrument classified as Level 3:
| | | |
| | Call option on 1,000 mandatory convertible bonds | |
Balance as of December 31, 2020 | | | |
| | | |
Balance as of December 31, 2021 | | | |
| | | |
Balance as of December 31, 2022 | | | |
The fair value movement relating to the Level 3 derivative
instrument is recognized in the consolidated statements of
operations. The decrease in fair value of the call option on 1,000
mandatory convertible bonds is due to a decrease in the share
price of China Oriental, which impacts the value of the notes in
which Hera Ermac, a wholly-owned subsidiary, invested the
bonds proceeds (see note 11.2).
11.2\u00a0 \u00a0 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 Cr\u00e9dit 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
has extended the conversion date for the mandatory convertible
bonds from time to time.
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, 2020, the
remaining notes were linked to the value of the shares of China
Oriental (see note 6.1.5).
On December 22, 2020, the maturity of the mandatory
convertible bonds was extended from January 29, 2021 to
January 31, 2024. 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 869
(net of cumulative tax and fees) and other liabilities for 131. The
derecognition of the previous instrument and the recognition at
fair value of the new instrument resulted in a 178 expense
included in financing costs-net in the consolidated statement of
operations and a 53 increase in non-controlling interests.
Mandatorily convertible subordinated notes
On May 18, 2020, following the offering of common shares
described in note 11.1, the Company completed an offering of\u00a0
mandatorily convertible subordinated notes (\u201cMCNs\u201d) for 1,250.
The MCNs have a three-year maturity, were issued at 100% of
the principal amount and will be mandatorily converted into
common shares of the Company upon maturity unless
converted earlier at the option of the holders or ArcelorMittal
during the conversion period or upon occurrence of certain
defined events.
In all cases, ArcelorMittal may exercise its right to convert early,
taking precedent over the other options. In case of an early
conversion, ArcelorMittal must deliver shares at the \u201cMaximum
Conversion Ratio.\u201d The mandatorily convertible notes pay a
coupon of 5.50% per annum, payable quarterly in arrears. The
minimum conversion price of the mandatorily convertible notes
is equal to $9.06, corresponding to the offering price of the
shares as described above, and the maximum conversion price
is 117.5% of the minimum conversion price or $10.64 as
adjusted from time to time. ArcelorMittal intends to use the net
proceeds from the offerings for general corporate purposes, to
deleverage and to enhance liquidity, thereby building additional
resilience going forward in what remains an uncertain
environment.
The Significant Shareholder participated in the offerings by
contributing an amount of 100 for the MCNs.
The Company determined that the MCNs are a hybrid
instrument including an equity component and a debt
component. The Company assessed whether there is actual
economic or other business reasons that it would exercise its
option to convert prior to maturity, whether the MCNs would
have been priced differently if the early settlement option had
not been included in the contractual terms and other factors
such as the term of the instrument, the width of the range
between the cap and the floor, ArcelorMittal\u2019s share price and
the volatility of the share price as important criterion in this
conclusion. The early conversion right has economic substance
with respect to maintaining the current credit rating if early
conversion can help in preventing a rating downgrade. In this
event, future savings of credit interest is expected to be more
than the cost of early conversion. The debt component of 190
(net of transaction costs of 2) at issuance corresponded to the
net present value of the future interest payments and is included
in accrued expenses and other liabilities and other long-term
obligations. The remaining amount of 1,047 (net of transaction
costs of 11) was the equity instrument.
On December 15, 2020, ArcelorMittal signed separate, privately
negotiated exchange agreements with a limited number of
holders of MCNs exchanging 247 in aggregate principal amount
of MCNs for an aggregate of 22,653,933 treasury shares at the
minimum conversion ratio plus 25 paid in cash (including
accrued interest on the exchanged MCNs up to, but excluding,
the settlement date). The Company allocated the share
consideration to the debt (30) and equity (207) components
consistent with the original allocation using net present value of
the future interest payments at the date of exchange. As of
December 31, 2020 and following the exchange, the debt and
equity components were 123 and 840 (presented separately in
the statements of changes in equity), net of transaction fees
respectively.
On December 23, 2021, ArcelorMittal completed separate,
privately negotiated agreements with a limited number of
holders of MCNs to repurchase 395 in aggregate principal
amount of MCNs at the minimum conversion ratio for an
aggregate cash consideration of 1,196. The Company allocated
the cash consideration to the debt (30) and equity (331)
components of the instrument and recognized in financing costs
- net a 61 loss relating to the liability component and a 774 (589
net of tax) decrease in retained earnings relating to the equity
component consistent with the original allocation using net
present value of the future interest payments at the date of
exchange. As of December 31, 2022, the debt and equity
components were 13 and 509 (presented separately in the
statements of changes in equity), net of transaction fees,
respectively.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NTQvZnJhZzo2NWRjYmI2NTk5NDg0M2Q1OTQ4MDkwZGY0ZTFhMTI1Mi90ZXh0cmVnaW9uOjY1ZGNiYjY1OTk0ODQzZDU5NDgwOTBkZjRlMWExMjUyXzI3NDg3NzkwNzAzNDc4_6d2341b1-622c-4dac-a02b-5c8cdbff74c2": {
"value": "
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\u2019s 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\u2019s 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 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\u2019s 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\u2019s
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.",
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"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
Impairment of financial assets
In relation to the impairment of financial assets, an expected
credit loss (\"ECL\") model is required. The\u00a0ECL 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, the
Company measures the loss allowance for a\u00a0financial
instrument at an amount equal to the lifetime ECL if the credit
risk on that financial instrument has increased significantly since
initial recognition. Receivables aged 31 days or older and
uninsured trade receivables remain consistent with historical
levels and the Company did not identify any expected increased
risk of default (note 4.3).
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 because the fair value of the investment is
recorded in OCI and not recycled to profit and loss.\u00a0
Financial assets are tested for ECLs annually or whenever
changes in circumstances indicate that there is a change in
credit risk. Any ECL is recognized in the consolidated
statements of operations. An ECL related to financial assets is
reversed if and to the extent there has been a change in the
factors used to determine the recoverable amount. The loss is
reversed only to the extent that the asset\u2019s carrying amount
does not exceed the carrying amount that would have been
determined if no ECL had been recognized. Reversals of ECLs
are recognized in net income, except for investments in equity
instruments at FVOCI, in which all fair value movements are
recognized in OCI.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "
6.2\u00a0 \u00a0 Financing costs - net\u00a0
Financing costs - net recognized in the years ended
December\u00a031, 2022, 2021 and 2020 are as follows:
| | | | | |
| |
| | | | | |
| | | | | |
| | | | | |
Change in fair value adjustment on call option on mandatory convertible bonds and pellet purchase agreement2 | | | | | |
Accretion of defined benefit obligations and other long term liabilities | | | | | |
Net foreign exchange gain/ (loss) | | | | | |
| | | | | |
| | | | | |
risks: interest rate risk, foreign exchange risk, liquidity risk and
risks in fluctuations in prices of raw materials, freight, energy
and CO2 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.\u00a0
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.
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\u00a031, 2022, the long-term debt was comprised of
87% fixed rate debt and 13% variable rate debt (note 6.1.2). The
Company may utilize 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\u2019s
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,\u00a0Kazakhstani tenge, South African rand,
Mexican peso and Ukrainian hryvnia, as well as fluctuations in
the other countries\u2019 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\u2019s
subsidiaries may purchase raw materials, including iron ore and
coking coal, in U.S. dollar, 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\u2019s 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 \u201cNet investment hedge\u201d).
The Company also uses derivative instruments 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.\u00a0
Foreign currency sensitivity analysis
As of\u00a0 December\u00a031, 2022, 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 Ukrainian
hryvnia against the U.S. dollar resulting from its trade payables
and receivables. The structure of trade receivables and trade
payables by original currency translated in USD is as follows as
of December 31, 2022:
The use of a 10% sensitivity rate is used when reporting foreign
currency exposure internally to key management personnel and
represents management\u2019s 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. For trade receivables, a positive number
indicates an income and a negative number an expense. For
trade payables, a positive number indicates an expense and a
negative number an income.
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\u2019s 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\u2019s 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, 2022, 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.
| | | | | | | | | | | |
| |
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Non-derivative financial liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Derivative financial liabilities | | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
1.Commodity contracts include base metals, freight, energy and emission rights.
| | | | | | | | | | | |
| |
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Non-derivative financial liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Derivative financial liabilities | | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
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:
| | | | | | | | | | | |
| |
| | | |
| | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
which are not included in the table above (603 as of December 31, 2021).
| | | | | | | | | | | |
| |
| Cash flow hedge\u00a0 reserve1 | | |
| | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
investments, which are not included in the table above (30 as of December 31, 2020).
The following tables summarize the effect of hedge accounting on ArcelorMittal\u2019s consolidated statement of financial position, statement
of comprehensive income and statement of changes in equity.
| | | | | | | |
| |
| Nominal amount of the hedging instrument | | | | Liabilities carrying amount | | Line item in the statement of financial position where the hedging instrument is located |
| | | | | | | |
Foreign exchange risk - Option/forward/swap contracts | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
Foreign exchange risk - Option/forward/swap contracts | | | | | | | Other assets/Other long-term obligations |
Price risk - Commodities forwards | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
Price risk - Commodities forwards | | | | | | | Other assets/Other long-term obligations |
Price risk - Emission rights forwards | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
| | | | | | | |
Current derivative assets classified as cash flow hedge | | | | | | | |
Other current derivative assets | | | | | | | |
Total current derivative assets (note 4.5) | | | | | | | |
Non-current derivative assets classified as cash flow hedge | | | | | | | |
Other non-current derivative assets | | | | | | | |
Total non-current derivative assets (note 4.6) | | | | | | | |
Current derivative liabilities classified as cash flow hedge | | | | | | | |
Other current derivative liabilities | | | | | | | |
Total current derivative liabilities (note 4.8) | | | | | | | |
Non-current derivative liabilities classified as cash flow hedge | | | | | | | |
Other non-current derivative liabilities | | | | | | | |
Total non-current derivative liabilities (note 9.2) | | | | | | | |
\u00a0 \u00a0 \u00a0 \u00a0 | | | | | | | | | |
| |
| Cash flow hedge reserve at December 31, 2021 | | Hedging gains or losses of the reporting period that were recognized in OCI | Gains or losses reclassification adjustment and hedge ineffectiveness | | | | Line item in the statement of comprehensive income that includes the reclassification adjustment and hedge ineffectiveness | Cash flow hedge reserve1 at December 31, 2022 |
| | | | | | | | | |
Foreign exchange risk - Option/Forward contracts | | | | | | | | | |
Price risk - Commodities Option/Forward contracts | | | | | | | | | |
Price risk - Emission rights forwards | | | | | | | | | |
| | | | | | | | | |
1.The cash flow hedge reserve balance as of December 31, 2022 also includes 1023 deferred gains for the Company's share of such reserves at its equity method
investments, which are not disclosed above.
. | | | | | | | |
| |
| Nominal amount of the hedging instrument | | | | Liabilities carrying amount | | Line item in the statement of financial position where the hedging instrument is located |
| | | | | | | |
Foreign exchange risk - Option/ Forward contracts | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
Foreign exchange risk - Option/ Forward/Swap contracts | | | | | | | Other assets/Other long-term obligations |
Price risk - Commodities forwards | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
Price risk - Commodities forwards | | | | | | | Other assets/Other long-term obligations |
Price risk - Emission rights forwards | | | | | | | Prepaid expenses and other current assets/Accrued expenses and other liabilities |
| | | | | | | |
Current derivative assets classified as cash flow hedge | | | | | | | |
Other current derivative assets | | | | | | | |
Total current derivative assets (note 4.5) | | | | | | | |
Non-current derivative assets classified as cash flow hedge | | | | | | | |
Other non-current derivative assets | | | | | | | |
Total non-current derivative assets (note 4.6) | | | | | | | |
Current derivative liabilities classified as cash flow hedge | | | | | | | |
Other current derivative liabilities | | | | | | | |
Total current derivative liabilities (note 4.8) | | | | | | | |
Non-current derivative liabilities classified as cash flow hedge | | | | | | | |
Other non-current derivative liabilities | | | | | | | |
Total non-current derivative liabilities (note 9.2) | | | | | | | |
| | | | | | | | | | | |
| |
| Cash flow hedge reserve at December 31, 2020 | | Hedging gains or losses of the reporting period that were recognized in OCI | | Gains or losses reclassification adjustment and hedge ineffectiveness | | | | Line item in the statement of comprehensive income that includes the reclassification adjustment and hedge ineffectiveness | | Cash flow hedge reserve1 at December 31, 2021 |
| | | | | | | | | | | |
Foreign exchange risk - Option/ Forward contracts | | | | | | | | | | | |
Price risk - Commodities forwards1 | | | | | | | | | | | |
Price risk - Emission rights forwards | | | | | | | | | | | |
| | | | | | | | | | | |
investments, which are not disclosed above
Net investment hedge
The Company designated a portfolio of euro denominated debt
(\u20ac4,862 million and \u20ac3,709 million as of December 31, 2022 and
2021, respectively) as a hedge of certain euro denominated
investments (\u20ac8,837 million and \u20ac8,261 million as of December
31, 2022 and 2021, respectively) 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, 2022, the Company recognized 197 foreign
exchange gain (423 foreign exchange gain as of December\u00a031,
2021)\u00a0 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. The hedging instrument is
categorized as Level 2.
The Company has periodically hedged a part of its euro
denominated net investments via euro/U.S. dollar cross
currency swaps (\"CCS\"). These CCS, all of which have been
unwound, were designated as net investment hedges.
The following tables summarizes the historical gain/loss that will
be recycled to the consolidation statements of operations when
the hedged assets are disposed of.
1.In 2022 and in 2021, the Company did not designate any new CCS as net investment hedge.
2.\u00a0 On March 25, 2020 and March 26, 2020, the Company unwound euro/U.S. dollar CCS with a notional of 300 and 200, respectively, which were entered into on May 27,
2015 and designated as a net investment hedge of a euro denominated net investment in foreign operations amounting to \u20ac459. A deferred gain of 8, net of tax, was
recorded in other comprehensive income and it will be recycled to the consolidation statements of operations when the hedged assets are disposed of.
| | | | | | | | | | | | | |
| |
| Nominal amount of the hedging instrument | | | | 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 2021 | | Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness | | Foreign currency translation reserve |
| | | | | | | | | | |
Foreign exchange risk - Cross Currency Swap | | | | | | | | | | | | | |
Foreign exchange risk - EUR debt | | | | | | | Short-term debt and current portion of long- term debt; long- term debt, net of current portion | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| |
| Nominal amount of the hedging instrument | | | | 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 2020 | | Line item in the statement of comprehensive income that includes the recognized hedge ineffectiveness | | Foreign currency translation reserve |
| | | | | | | | | | | | | |
Foreign exchange risk - Cross Currency Swap | | | | | | | | | | | | | |
Foreign exchange risk - EUR debt | | | | | | | Short-term debt and current portion of long-term debt; long-term debt, net of current portion | | | | | | |
| | | | | | | | | | | | | |
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.\u00a0
Fair values of raw material, freight, energy and emission rights instruments categorized as Level 2 are as follows:
| | | |
| |
| | | |
| | | |
| | | |
Energy (oil, gas, electricity) | | | |
| | | |
| | | |
| | | |
Derivative assets associated with raw materials, energy, freight and emission rights | | | |
Derivative liabilities associated with raw materials, energy, freight and emission rights | | | |
| | | |
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) and the European Energy
Exchange (EEX) power 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\u00a013, 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\u00a031, 2022 and 2021, the Company had a net
notional position of 488 with a net positive fair value of 53\u00a0and a
net notional position of 1,555 with a net positive fair value of
2,443, respectively.
Credit risk
The Company\u2019s treasury department monitors various market
data regarding the credit standings and overall reliability of the
financial institutions for all countries where the Company\u2019s
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\u2019s 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\u2019s complete
portfolio of foreign currency derivatives outstanding. The impact
on the non-euro 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 2022 and 2021.
| | | |
| |
| | | |
10% strengthening in U.S. dollar | | | |
10% weakening in U.S. dollar | | | |
| | | |
| |
| | | |
10% strengthening in U.S. dollar | | | |
10% weakening in U.S. dollar | | | |
Cash flow sensitivity analysis for variable rate instruments
The following tables detail the Company\u2019s variable interest rate
instruments\u2019 sensitivity. A change of 100 basis points (\u201cbp\u201d) 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.
| | | |
| |
| Floating porting of net debt1 | | Interest\u00a0Rate Swaps/ Forward Rate\u00a0Agreements |
| | | |
| | | |
| | | |
| |
| Floating porting of net debt1 | | Interest\u00a0Rate Swaps/ Forward Rate\u00a0Agreements |
| | | |
| | | |
1.See 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\u2019s 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.
| | | |
| |
| | | Other\u00a0Equity Cash\u00a0Flow Hedging Reserves |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Other\u00a0Equity Cash\u00a0Flow Hedging Reserves |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NjMvZnJhZzpkOTNkYjI3NTliMjM0NGQyOTAxOWU4NGY0ZDEzOTcwYS90ZXh0cmVnaW9uOmQ5M2RiMjc1OWIyMzQ0ZDI5MDE5ZTg0ZjRkMTM5NzBhXzI3NDg3NzkwNzEwODI2_3e72f040-1cf6-40dc-8c82-c5d553a077d4": {
"value": "
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.\u00a0
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.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NjMvZnJhZzpkOTNkYjI3NTliMjM0NGQyOTAxOWU4NGY0ZDEzOTcwYS90ZXh0cmVnaW9uOmQ5M2RiMjc1OWIyMzQ0ZDI5MDE5ZTg0ZjRkMTM5NzBhXzI3NDg3NzkwNzEwODMx_dea24bda-f3cf-40cd-a096-b31797d5b79d": {
"value": "
Foreign currency sensitivity analysis
As of\u00a0 December\u00a031, 2022, 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 Ukrainian
hryvnia against the U.S. dollar resulting from its trade payables
and receivables. The structure of trade receivables and trade
payables by original currency translated in USD is as follows as
of December 31, 2022:
The use of a 10% sensitivity rate is used when reporting foreign
currency exposure internally to key management personnel and
represents management\u2019s 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. For trade receivables, a positive number
indicates an income and a negative number an expense. For
trade payables, a positive number indicates an expense and a
negative number an income.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NjMvZnJhZzpkOTNkYjI3NTliMjM0NGQyOTAxOWU4NGY0ZDEzOTcwYS90ZXh0cmVnaW9uOmQ5M2RiMjc1OWIyMzQ0ZDI5MDE5ZTg0ZjRkMTM5NzBhXzI3NDg3NzkwNzEwODI3_534ce647-da0e-4e0c-8e1c-055118858ecc": {
"value": "
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\u2019s 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NjMvZnJhZzpkOTNkYjI3NTliMjM0NGQyOTAxOWU4NGY0ZDEzOTcwYS90ZXh0cmVnaW9uOmQ5M2RiMjc1OWIyMzQ0ZDI5MDE5ZTg0ZjRkMTM5NzBhXzI3NDg3NzkwNzEwODI4_7d794140-90be-4601-91fb-f9858aff66ef": {
"value": "
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\u2019s 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, 2022, 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.
| | | | | | | | | | | |
| |
| | | | | | | | | | | |
Non-derivative financial liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Derivative financial liabilities | | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
1.Commodity contracts include base metals, freight, energy and emission rights.
| | | | | | | | | | | |
| |
| | | | | | | | | | | |
Non-derivative financial liabilities | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Derivative financial liabilities | | | | | | | | | | | |
Foreign exchange contracts | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NjMvZnJhZzpkOTNkYjI3NTliMjM0NGQyOTAxOWU4NGY0ZDEzOTcwYS90ZXh0cmVnaW9uOmQ5M2RiMjc1OWIyMzQ0ZDI5MDE5ZTg0ZjRkMTM5NzBhXzI3NDg3NzkwNzEwODMw_3d56a271-57db-473f-93ae-93f6a7b7649b": {
"value": "
Credit risk
The Company\u2019s treasury department monitors various market
data regarding the credit standings and overall reliability of the
financial institutions for all countries where the Company\u2019s
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.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCreditRiskExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NjYvZnJhZzoxNTYyMGY5MmE5YjA0YTMxYTZjYjc5NDRkOTAyOTE1ZC90ZXh0cmVnaW9uOjE1NjIwZjkyYTliMDRhMzFhNmNiNzk0NGQ5MDI5MTVkXzI3NDg3NzkwNjk5MDM4_bd7bb105-750f-46d9-af37-147f8c02e8ec": {
"value": "
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 to the earlier end of its estimated useful
life or the end of the lease term or to the end of the estimated
useful life of the underlying asset, 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. Right-of-use assets
are also subject to testing for impairment if there is an indicator
that they may be impaired.
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.\u00a0
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.
Balances for the Company\u2019s lease activities are summarized as follows:\u00a0
| | | | |
| | | | |
| | | | |
| | | | |
\u00a0 \u00a0 Land, buildings and improvements | | | | |
\u00a0 \u00a0 Machinery, equipment and others | | | | |
Total right-of-use assets | | | | |
| | | | |
| Year ended December 31, 2022 | | Year ended December 31, 2021 | |
Depreciation and impairment charges: | | | | |
Land, buildings and improvements | | | | |
Machinery, equipment and others | | | | |
Total depreciation and impairment charges | | | | |
| | | | |
Other lease related expenses: | | | | |
Interest expense on lease liabilities | | | | |
Expenses of short-term leases | | | | |
Expenses of leases of low-value assets | | | | |
Expenses related to variable lease payments not included in the measurement of lease liabilities | | | | |
| | | | |
Additions to right-of-use assets | | | | |
Lease payments recorded as reduction of lease liabilities and cash outflow from financing activities | | | | |
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 maturity analysis of the lease liabilities as of December 31, 2022 and December 31, 2021, is as follows:\u00a0
| | | | | |
| | | | |
| | | | | |
Lease liabilities (undiscounted) | | | | | |
| | | | | |
| | | | |
| | | | | |
Lease liabilities (undiscounted) | | | | | |
Expenses for variable 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, 2022 and December 31, 2021, is as
follows:
| | | | | |
| | | | | |
| | | | | |
Potential variable lease payments | | | | | |
| | | | | |
| | | | | |
| | | | | |
Potential variable lease payments | | | | | |
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, 2022 and December 31, 2021. 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:
| | | | | |
| | | | |
| | | | | |
Potential extension options | | | | | |
Potential termination options | | | | | |
Potential residual value guarantees | | | | | |
There were neither income from subleasing right-of-use assets
nor gains or losses from sales and leaseback for the years
ended December 31, 2022 and December 31, 2021.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLeasesExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NjYvZnJhZzoxNTYyMGY5MmE5YjA0YTMxYTZjYjc5NDRkOTAyOTE1ZC90ZXh0cmVnaW9uOjE1NjIwZjkyYTliMDRhMzFhNmNiNzk0NGQ5MDI5MTVkXzI3NDg3NzkwNjk5MDM5_da0a5ec4-4419-4317-b81a-a22a64786de3": {
"value": "
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 to the earlier end of its estimated useful
life or the end of the lease term or to the end of the estimated
useful life of the underlying asset, 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. Right-of-use assets
are also subject to testing for impairment if there is an indicator
that they may be impaired.
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.\u00a0
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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NzIvZnJhZzphNzNjODdiODg4MmI0MTY1ODU3NGU1MDhlNDAxYWIzZC90ZXh0cmVnaW9uOmE3M2M4N2I4ODgyYjQxNjU4NTc0ZTUwOGU0MDFhYjNkXzg_3d3846f4-b6e2-4cc9-9f80-18f0b8b69f88": {
"value": "NOTE 8: PERSONNEL EXPENSES AND DEFERRED EMPLOYEE BENEFITS
8.1\u00a0 \u00a0 Employees and key management personnel
As of December\u00a031, 2022, 2021 and 2020, ArcelorMittal had
approximately 154,000, 158,000 and 168,000 employees,
respectively, and the total annual compensation of
ArcelorMittal\u2019s employees in 2022, 2021 and 2020 was as
follows:
| | | | | |
| |
| | | | | |
| | | | | |
Defined benefits cost (see note 8.2) | | | | | |
| | | | | |
| | | | | |
The fair value of the shares allocated based on Restricted Share
Unit (\u201cRSU\u201d) and Performance Share Unit (\u201cPSU\u201d) plans to
ArcelorMittal\u2019s key management personnel was recorded as an
expense in the consolidated statements of operations over the
relevant vesting periods.
As of December\u00a031, 2022, 2021 and 2020, ArcelorMittal did not
have any outstanding loans or advances to members of its
Board of Directors or key management personnel, and, as of
December\u00a031, 2022, 2021 and 2020, ArcelorMittal had not given
any guarantees for the benefit of any member of its Board of
Directors or key management personnel.
8.2\u00a0 \u00a0 Deferred employee benefits
ArcelorMittal\u2019s 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.\u00a0
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.\u00a0
Termination plans are those plans that primarily correspond to
terminating an employee\u2019s contract usually 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 long-term termination plans
(like early retirement plans) are calculated annually on the basis
of the number of employees that have taken or contractually
agreed to take early retirement and are discounted using an
interest rate that corresponds to that of high quality bonds that
have maturity dates similar to the terms of the Company\u2019s 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.
\u2022Discount rates \u2013 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.
\u2022Rate of compensation increase \u2013 The rate of
compensation increase reflects actual experience and
the Company\u2019s long-term outlook, including
contractually agreed wage rate increases for
represented hourly employees.
\u2022Healthcare cost trend rate \u2013 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.
\u2022Mortality and retirement rates \u2013 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:
| | | |
| |
| | | |
| | | |
Other post-employment benefits and other long-term employee benefits (\"OPEB\") | | | |
| | | |
Defined benefit liabilities | | | |
Provisions for social plans (non-current) | | | |
| | | |
This note, including the table above, discloses the following
benefit categories:\u00a0
\u2022pension 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;
\u2022other 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;
\u2022termination benefits, which relate to provisions for long
term termination benefits as defined in IAS 19 (e.g.
early retirement benefits); and
\u2022provisions for social plans (non-current) which relate to
provisions for social plans in restructuring provisions as
required by IAS 37, including a provision of 55 related
to early retirement scheme in Spain recognized in cost
of sales.
The provisions for termination benefits 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:
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\u2019s 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\u2019s 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.\u00a0
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\u2019s length of service.
ArcelorMittal Long Products Canada continued to operate under
a six-year collective labor agreement (\"CLA\") renewed in July
2020 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. The six-year
labor agreement ratified in February 2016, covering Contrecoeur
East and Longueuil facilities remains valid until January 31,
2022. The positive vote of the workers assembly on February
27, 2022 concluded the CLA negotiations for a new six-year
CLA ending the labor dispute which began on February 2, 2022.
In 2020, ArcelorMittal Long Products Canada entered into a buy-
in transaction for some of its fully funded pension plans
representing 112 obligations. In 2022, ArcelorMittal Long
Products Canada entered in a similar buy-in transaction
representing 166 obligations.
Brazil
The primary defined benefit plans, financed through\u00a0trust
funds,\u00a0have been closed to new entrants.\u00a0Brazilian entities have
all established defined contribution plans that are financed by
employer and employee contributions.
Europe
Certain European operating subsidiaries maintain primarily
unfunded defined benefit pension plans for a certain number of
employees. Benefits are based on such employees\u2019 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
2022, the minimum guaranteed rate of return was 1.75% and
this percentage will be also applicable for the year 2023. 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 Kazakhstan, Mexico, Morocco, Ukraine
and the United States of America).
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 generally 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\u2019s
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 (\u201cDBO\u201d), plan assets, irrecoverable surplus and statements of
financial position.
| | | | | | | | | |
| Year ended December 31, 2022 |
| | | | | | | | | |
Change in benefit obligation | | | | | | | | | |
Benefit obligation at beginning of the period | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Past service cost - Plan amendments | | | | | | | | | |
Past service cost - Curtailments | | | | | | | | | |
Plan participants\u2019 contribution | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Foreign currency exchange rate differences and other movements | | | | | | | | | |
Benefit obligation at end of the period | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Fair value of plan assets at beginning of the period | | | | | | | | | |
Interest income on plan assets | | | | | | | | | |
Return on plan assets less than discount rate | | | | | | | | | |
| | | | | | | | | |
Plan participants\u2019 contribution | | | | | | | | | |
| | | | | | | | | |
Foreign currency exchange rate differences and other movements | | | | | | | | | |
Fair value of plan assets at end of the period | | | | | | | | | |
| | | | | | | | | |
Present value of the wholly or partly funded obligation | | | | | | | | | |
Fair value of plan assets | | | | | | | | | |
Net present value of the wholly or partly funded obligation | | | | | | | | | |
Present value of the unfunded obligation | | | | | | | | | |
Prepaid due to unrecoverable surpluses | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Net assets related to funded obligations | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Change in unrecoverable surplus | | | | | | | | | |
Unrecoverable surplus at beginning of the period | | | | | | | | | |
Interest cost on unrecoverable surplus | | | | | | | | | |
Change in unrecoverable surplus in excess of interest | | | | | | | | | |
| | | | | | | | | |
Unrecoverable surplus at end of the period | | | | | | | | | |
| | | | | | | | | |
| Year ended December 31, 2021 |
Net periodic pension cost (income) | | | | | | | | | |
| | | | | | | | | |
Past service cost - Plan amendments | | | | | | | | | |
Net interest cost/(income) on net DB liability (asset) | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Year ended December 31, 2020 |
Net periodic pension cost (income) | | | | | | | | | |
| | | | | | | | | |
Past service cost - Plan amendments | | | | | | | | | |
Past service cost - Curtailments | | | | | | | | | |
Net interest cost (income) on net DB liability (asset) | | | | | | | | | |
| | | | | | | | | |
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\u2019s principal operating subsidiaries in 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.
In April 2021, ArcelorMittal Poland and trade unions reached an
agreement on the new CLA. The parties agreed a ten-year
transition period for retirement benefits and jubilee awards. At
the end of the transition period, in 2031, ArcelorMittal Poland will
pay the retirement benefits based on the labor code. In June
2021, the CLA was registered by the National Labor
Inspectorate in Poland and accordingly ArcelorMittal Poland
recognized total plan amendment and curtailment gain of 51 in
cost of sales.
Summary of changes in the other post-employment benefit obligation and changes in plan assets are as follows:
| | | | | | | |
| Year ended December 31, 2022 |
| | | | | | | |
Change in benefit obligation | | | | | | | |
Benefit obligation at beginning of the period | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Foreign currency exchange rate differences and other movements | | | | | | | |
Benefit obligation at end of the period | | | | | | | |
| | | | | | | |
| | | | | | | |
Fair value of plan assets at beginning of the period | | | | | | | |
Return on plan assets less than discount rate | | | | | | | |
Fair value of plan assets at end of the period | | | | | | | |
| | | | | | | |
Present value of the wholly or partly funded obligation | | | | | | | |
Fair value of plan assets | | | | | | | |
Net present value of the wholly or partly funded obligation | | | | | | | |
Present value of the unfunded obligation | | | | | | | |
| | | | | | | |
| | | | | | | |
| Year ended December 31, 2021 |
| | | | | | | |
Change in benefit obligation | | | | | | | |
Benefit obligation at beginning of the period | | | | | | | |
| | | | | | | |
| | | | | | | |
Past service cost - Plan amendments | | | | | | | |
Past service cost - Curtailments | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Foreign currency exchange rate differences and other movements | | | | | | | |
Benefit obligation at end of the period | | | | | | | |
| | | | | | | |
| | | | | | | |
Fair value of plan assets at beginning of the period | | | | | | | |
Return on plan assets greater/(less) than discount rate | | | | | | | |
| | | | | | | |
Fair value of plan assets at end of the period | | | | | | | |
| | | | | | | |
Present value of the wholly or partly funded obligation | | | | | | | |
Fair value of plan assets | | | | | | | |
Net present value of the wholly or partly funded obligation | | | | | | | |
Present value of the unfunded obligation | | | | | | | |
| | | | | | | |
The following tables detail the components of net periodic other post-employment cost:
| | | | | | | |
| Year ended December 31, 2022 |
Components of net periodic OPEB cost (income) | | | | | | | |
| | | | | | | |
Net interest cost (income) on net DB liability (asset) | | | | | | | |
Actuarial gain recognized during the year | | | | | | | |
| | | | | | | |
| | | | | | | |
| Year ended December 31, 2021 |
Components of net periodic OPEB cost (income) | | | | | | | |
| | | | | | | |
Past service cost - Plan amendments | | | | | | | |
Past service cost - Curtailments | | | | | | | |
Net interest cost (income) on net DB liability (asset) | | | | | | | |
Actuarial gain recognized during the year | | | | | | | |
| | | | | | | |
| | | | | | | |
| Year ended December 31, 2020 |
Components of net periodic OPEB cost (income) | | | | | | | |
| | | | | | | |
Past service cost - Plan amendments | | | | | | | |
Past service cost - Curtailments | | | | | | | |
Net interest cost (income) on net DB liability (asset) | | | | | | | |
Actuarial losses recognized during the year | | | | | | | |
| | | | | | | |
The following tables detail where the expense is recognized in the consolidated statements of operations:
| | | | | |
| |
| | | | | |
Net periodic pension cost | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Selling, general and administrative expenses | | | | | |
| | | | | |
| | | | | |
Plan Assets
The weighted-average asset allocations for the funded defined benefit plans by asset category were as follows:
| | | | | | | |
| |
| | | | | | | |
| | | | | | | |
- Asset classes that have a quoted market price in an active market | | | | | | | |
- Asset classes that do not have a quoted market price in an active market | | | | | | | |
Fixed Income Securities (including cash) | | | | | | | |
- Asset classes that have a quoted market price in an active market | | | | | | | |
- Asset classes that do not have a quoted market price in an active market | | | | | | | |
| | | | | | | |
- Asset classes that have a quoted market price in an active market | | | | | | | |
- Asset classes that do not have a quoted market price in an active market | | | | | | | |
| | | | | | | |
- Asset classes that have a quoted market price in an active market | | | | | | | |
- Asset classes that do not have a quoted market price in an active market | | | | | | | |
| | | | | | | |
1
| | | | | | | |
1
| | | | | | | |
| | | | | |
| Other\u00a0Post-employment\u00a0Benefits |
| | | | | |
Healthcare cost trend rate assumed | | | | | |
| | | | | |
| | | | | |
Cash contributions and maturity profile of the plans
In 2023, the Company expects its cash contributions to amount
to 153 for pension plans, 66 for other post-employment benefits
plans and 139 for defined contribution plans. In 2022 and 2021,
cash contributions to defined contributions plans were 141 and
78, respectively.
At December\u00a031, 2022, the weighted average duration of
liabilities related to pension and other post-employment benefits
plans were 12 years\u00a0 and 12 years, respectively. At December
31, 2021,\u00a0 the weighted average duration of liabilities related to
pension and other post-employment benefits plans were 13
years and 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
An increase in corporate bond yields will decrease plan
liabilities, however it will decrease simultaneously the value of
the plans\u2019 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\u2019 benefit obligations.
Assumptions regarding future mortality rates have been set
considering published statistics and, where possible,
ArcelorMittal\u2019s own experience.
The current longevity at retirement underlying the values of the
defined benefit obligation was approximately 23 years.
Healthcare cost trend rate
The majority of the OPEB plans\u2019 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\u2019s pension
plans (as of December\u00a031, 2022, the defined benefit obligation for pension plans was 4,932):
| | | |
| Effect on 2023 Pre-Tax Pension Expense (sum of service cost and interest cost) | | Effect on December 31, 2022 DBO |
| | | |
100 basis points decrease in discount rate | | | |
100 basis points increase in discount rate | | | |
100 basis points decrease in rate of compensation | | | |
100 basis points increase in rate of compensation | | | |
1 year increase of the expected life of the beneficiaries | | | |
Awards made in previous financial years which have not yet
reached the end of the vesting period
ArcelorMittal's Equity Incentive Plan for senior management
including Executive Officers follows the Company's strategy. In
addition to the 2022 grant, the summary of outstanding plans as
of December 31, 2022 is as follows:
| | | | | | | | | | |
| | |
| | PSUs with a three year performance period | | PSUs with a three year performance period |
| Value at grant 100% of base salary for the Executive Chairman and the CEO | |
| | | | |
| | | | | |
| | | | | | |
| | Performance equal to Index | \u2265Performance equal to Index + 2% p.a. outperformance | | Gap to competition (where applicable) | |
| | | | |
| | | | | | | | | | |
| | |
| | PSUs with a three year performance period | | PSUs with a three year performance period |
| Value at grant 100% of base salary for the Executive Chairman and the CEO | | |
| | | |
| | | | | | |
| | | | | | | |
| | | | | | | |
| | Performance equal to Index | \u2265Performance equal to Index + 2% p.a. outperformance | | Gap to competition (where applicable) | | |
| | | | | | | |
| | | | | | | | | |
| | | | | RSUs with a three year vesting\u00a0 period |
| | | | | | | | | |
| | | | | | RSUs with a one year vesting period |
| | | | | | | | | | |
| | | | |
| | PSUs with a three year performance period | | PSUs with a three year performance period |
| Value at grant 100% of base salary for the Executive Chairman and the CEO | | |
| | | |
| | | | | | | |
| TSR\u00a0 vs. peer group (50%) / EPS vs. peer group (20%) | | | | | | \u2265120% weighted average |
| | | | | | | |
| | | | | | | | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | | |
| | | | | | RSUs with a three year vesting\u00a0 period |
| | RSUs with a two year vesting period |
The following table summarizes the Company\u2019s share unit plans outstanding as of December\u00a031, 2022:
| | | | | | | | | | | | | | | | |
| | Number of shares issued as of December 31, 2022 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80NzUvZnJhZzo2NDZkY2JkNDcwYzE0NWFiYjFmMTI3NTkxNDI0OTVkZC90ZXh0cmVnaW9uOjY0NmRjYmQ0NzBjMTQ1YWJiMWYxMjc1OTE0MjQ5NWRkXzI3NDg3NzkwNjk1MzUz_ef3f2518-e081-476b-badc-a0958798ef47": {
"value": "8.1\u00a0 \u00a0 Employees and key management personnel
As of December\u00a031, 2022, 2021 and 2020, ArcelorMittal had
approximately 154,000, 158,000 and 168,000 employees,
respectively, and the total annual compensation of
ArcelorMittal\u2019s employees in 2022, 2021 and 2020 was as
follows:
| | | | | |
| |
| | | | | |
| | | | | |
Defined benefits cost (see note 8.2) | | | | | |
| | | | | |
| | | | | |
The fair value of the shares allocated based on Restricted Share
Unit (\u201cRSU\u201d) and Performance Share Unit (\u201cPSU\u201d) plans to
ArcelorMittal\u2019s key management personnel was recorded as an
expense in the consolidated statements of operations over the
relevant vesting periods.
As of December\u00a031, 2022, 2021 and 2020, ArcelorMittal did not
have any outstanding loans or advances to members of its
Board of Directors or key management personnel, and, as of
December\u00a031, 2022, 2021 and 2020, ArcelorMittal had not given
any guarantees for the benefit of any member of its Board of
Directors or key management personnel.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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"value": "8.3\u00a0 \u00a0 Share-based payments
ArcelorMittal issues equity-settled share-based payments to
certain employees, including 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\u00a0basis over the vesting period, based on the Company\u2019s
estimate of the shares that will eventually vest and adjusted for
the effect of non market-based vesting conditions. Where the
fair value calculation requires modeling of the Company\u2019s
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\u2019s 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 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.
ArcelorMittal Equity Incentive Plan
ArcelorMittal operates a long-term incentive plan (\"the
ArcelorMittal Equity Incentive Plan\") to incentivize shareholder
wealth creation in excess of performance of a peer group and
incentivize executives to achieve strategy. The ArcelorMittal
Equity Incentive Plan is intended to align the interests of the
Company\u2019s 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
Executive Officers) and is designed to incentivize employees,
improve the Company\u2019s long-term performance and retain key
employees.
The grant of PSUs under the ArcelorMittal Equity Incentive Plan
aims to serve as an effective performance-enhancing scheme
based on the employee\u2019s contribution to the eligible
achievement of the Company\u2019s 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 since 2021, environmental, social and governance
(\"ESG\") including health & safety, climate action and diversity &
inclusion, 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.
RSUs granted under the ArcelorMittal Equity Incentive Plan are
designed to provide a retention incentive to eligible employees.
RSUs are subject to \u201ccliff vesting\u201d 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 maximum number of PSUs and RSUs available for grant
during any given year is subject to the prior approval of the
Company\u2019s shareholders at the AGM. The 2020, 2021 and 2022
Caps for the number of PSUs/RSUs that may be allocated to the
Executive Office and other retention and performance based
grants below the Executive Office level, were approved at the
AGMs on June 13, 2020, June 8, 2021 and May 4, 2022
respectively, at a maximum of 4,250,000 shares, 3,500,000
shares and 3,500,000 shares, respectively.
In 2020, 316,684 RSUs were granted as a special grant with a\u00a0
one year vesting period to compensate salary reduction in 2020
contingent upon the continued active employment of the eligible
employee within the Company until the vesting date, i.e.
December 14, 2021.
Conditions of the 2022 grant were as follows:
| | | | | | | | | | |
| | | | |
| | PSUs with a three year performance period | | PSUs with a three year performance period |
| Value at grant 120% of base salary for the Executive Chairman and the CEO | | |
| | | |
| | | | | | | |
| TSR\u00a0 vs. peer group (50%) / EPS vs. peer group (20%) | 100% vs. weighted average | \u2265120% vs. weighted average | | | | \u2265120% weighted average |
| | | | | | | |
| | | | | | | | |
| ESG (30%): H&S 10%, Climate action 10% and D&I 10% | | | | | | |
| | | | | | ESG (20%): H&S 10%, Climate action 5% and D&I 5% | | |
| | | | | | | |
| | | | | | RSUs with a three year vesting period |
Awards made in previous financial years which have not yet
reached the end of the vesting period
ArcelorMittal's Equity Incentive Plan for senior management
including Executive Officers follows the Company's strategy. In
addition to the 2022 grant, the summary of outstanding plans as
of December 31, 2022 is as follows:
| | | | | | | | | | |
| | |
| | PSUs with a three year performance period | | PSUs with a three year performance period |
| Value at grant 100% of base salary for the Executive Chairman and the CEO | |
| | | | |
| | | | | |
| | | | | | |
| | Performance equal to Index | \u2265Performance equal to Index + 2% p.a. outperformance | | Gap to competition (where applicable) | |
| | | | |
| | | | | | | | | | |
| | |
| | PSUs with a three year performance period | | PSUs with a three year performance period |
| Value at grant 100% of base salary for the Executive Chairman and the CEO | | |
| | | |
| | | | | | |
| | | | | | | |
| | | | | | | |
| | Performance equal to Index | \u2265Performance equal to Index + 2% p.a. outperformance | | Gap to competition (where applicable) | | |
| | | | | | | |
| | | | | | | | | |
| | | | | RSUs with a three year vesting\u00a0 period |
| | | | | | | | | |
| | | | | | RSUs with a one year vesting period |
| | | | | | | | | | |
| | | | |
| | PSUs with a three year performance period | | PSUs with a three year performance period |
| Value at grant 100% of base salary for the Executive Chairman and the CEO | | |
| | | |
| | | | | | | |
| TSR\u00a0 vs. peer group (50%) / EPS vs. peer group (20%) | | | | | | \u2265120% weighted average |
| | | | | | | |
| | | | | | | | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | | |
| | | | | | RSUs with a three year vesting\u00a0 period |
| | RSUs with a two year vesting period |
The following table summarizes the Company\u2019s share unit plans outstanding as of December\u00a031, 2022:
| | | | | | | | | | | | | | | | |
| | Number of shares issued as of December 31, 2022 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTermsAndConditionsOfSharebasedPaymentArrangementExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80ODEvZnJhZzpkMWE2ZjA4ZDVhYjI0MTNmYWEyZmYxNDgyZTk1OWE0Ni90ZXh0cmVnaW9uOmQxYTZmMDhkNWFiMjQxM2ZhYTJmZjE0ODJlOTU5YTQ2XzI3NDg3NzkwNzAxODQy_5426ea13-1e17-4a80-beb8-90d22252d16c": {
"value": "8.3\u00a0 \u00a0 Share-based payments
ArcelorMittal issues equity-settled share-based payments to
certain employees, including 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\u00a0basis over the vesting period, based on the Company\u2019s
estimate of the shares that will eventually vest and adjusted for
the effect of non market-based vesting conditions. Where the
fair value calculation requires modeling of the Company\u2019s
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\u2019s 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 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.
ArcelorMittal Equity Incentive Plan
ArcelorMittal operates a long-term incentive plan (\"the
ArcelorMittal Equity Incentive Plan\") to incentivize shareholder
wealth creation in excess of performance of a peer group and
incentivize executives to achieve strategy. The ArcelorMittal
Equity Incentive Plan is intended to align the interests of the
Company\u2019s 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
Executive Officers) and is designed to incentivize employees,
improve the Company\u2019s long-term performance and retain key
employees.
The grant of PSUs under the ArcelorMittal Equity Incentive Plan
aims to serve as an effective performance-enhancing scheme
based on the employee\u2019s contribution to the eligible
achievement of the Company\u2019s 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 since 2021, environmental, social and governance
(\"ESG\") including health & safety, climate action and diversity &
inclusion, 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.
RSUs granted under the ArcelorMittal Equity Incentive Plan are
designed to provide a retention incentive to eligible employees.
RSUs are subject to \u201ccliff vesting\u201d 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 maximum number of PSUs and RSUs available for grant
during any given year is subject to the prior approval of the
Company\u2019s shareholders at the AGM. The 2020, 2021 and 2022
Caps for the number of PSUs/RSUs that may be allocated to the
Executive Office and other retention and performance based
grants below the Executive Office level, were approved at the
AGMs on June 13, 2020, June 8, 2021 and May 4, 2022
respectively, at a maximum of 4,250,000 shares, 3,500,000
shares and 3,500,000 shares, respectively.
In 2020, 316,684 RSUs were granted as a special grant with a\u00a0
one year vesting period to compensate salary reduction in 2020
contingent upon the continued active employment of the eligible
employee within the Company until the vesting date, i.e.
December 14, 2021.
Conditions of the 2022 grant were as follows:
| | | | | | | | | | |
| | | | |
| | PSUs with a three year performance period | | PSUs with a three year performance period |
| Value at grant 120% of base salary for the Executive Chairman and the CEO | | |
| | | |
| | | | | | | |
| TSR\u00a0 vs. peer group (50%) / EPS vs. peer group (20%) | 100% vs. weighted average | \u2265120% vs. weighted average | | | | \u2265120% weighted average |
| | | | | | | |
| | | | | | | | |
| ESG (30%): H&S 10%, Climate action 10% and D&I 10% | | | | | | |
| | | | | | ESG (20%): H&S 10%, Climate action 5% and D&I 5% | | |
| | | | | | | |
| | | | | | RSUs with a three year vesting period |
Awards made in previous financial years which have not yet
reached the end of the vesting period
ArcelorMittal's Equity Incentive Plan for senior management
including Executive Officers follows the Company's strategy. In
addition to the 2022 grant, the summary of outstanding plans as
of December 31, 2022 is as follows:
| | | | | | | | | | |
| | |
| | PSUs with a three year performance period | | PSUs with a three year performance period |
| Value at grant 100% of base salary for the Executive Chairman and the CEO | |
| | | | |
| | | | | |
| | | | | | |
| | Performance equal to Index | \u2265Performance equal to Index + 2% p.a. outperformance | | Gap to competition (where applicable) | |
| | | | |
| | | | | | | | | | |
| | |
| | PSUs with a three year performance period | | PSUs with a three year performance period |
| Value at grant 100% of base salary for the Executive Chairman and the CEO | | |
| | | |
| | | | | | |
| | | | | | | |
| | | | | | | |
| | Performance equal to Index | \u2265Performance equal to Index + 2% p.a. outperformance | | Gap to competition (where applicable) | | |
| | | | | | | |
| | | | | | | | | |
| | | | | RSUs with a three year vesting\u00a0 period |
| | | | | | | | | |
| | | | | | RSUs with a one year vesting period |
| | | | | | | | | | |
| | | | |
| | PSUs with a three year performance period | | PSUs with a three year performance period |
| Value at grant 100% of base salary for the Executive Chairman and the CEO | | |
| | | |
| | | | | | | |
| TSR\u00a0 vs. peer group (50%) / EPS vs. peer group (20%) | | | | | | \u2265120% weighted average |
| | | | | | | |
| | | | | | | | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | | |
| | | | | | RSUs with a three year vesting\u00a0 period |
| | RSUs with a two year vesting period |
The following table summarizes the Company\u2019s share unit plans outstanding as of December\u00a031, 2022:
| | | | | | | | | | | | | | | | |
| | Number of shares issued as of December 31, 2022 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80ODEvZnJhZzpkMWE2ZjA4ZDVhYjI0MTNmYWEyZmYxNDgyZTk1OWE0Ni90ZXh0cmVnaW9uOmQxYTZmMDhkNWFiMjQxM2ZhYTJmZjE0ODJlOTU5YTQ2XzI3NDg3NzkwNzAxODQ0_61a72f96-320c-48b5-9cc4-6a2c153886ff": {
"value": "8.3\u00a0 \u00a0 Share-based payments
ArcelorMittal issues equity-settled share-based payments to
certain employees, including 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\u00a0basis over the vesting period, based on the Company\u2019s
estimate of the shares that will eventually vest and adjusted for
the effect of non market-based vesting conditions. Where the
fair value calculation requires modeling of the Company\u2019s
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\u2019s 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 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.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80ODQvZnJhZzphYTUxNzBiNzI1NTk0YzYzYWUxYjBhNGZjNWY2NzlmYy90ZXh0cmVnaW9uOmFhNTE3MGI3MjU1OTRjNjNhZTFiMGE0ZmM1ZjY3OWZjXzI3NDg3NzkwNzAyMTA0_098a6bca-8f74-475c-8a4a-5a108cbd97a7": {
"value": "
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 (\u201cARO\u201d)
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\u2019s 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\u2019s 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.
These assessments can involve a series of complex judgments
about future events and can rely heavily on estimates and
assumptions. The assessments are based on estimates and
assumptions that have been deemed reasonable by
management. The Company believes that the aggregate
provisions recorded for the above matters are adequate based
upon currently available information. However, given the
inherent uncertainties related to these cases and in estimating
contingent liabilities, the Company could, in the future, incur
judgments that have a material adverse effect on its results of
operations in any particular period. The Company considers it
highly unlikely, however, that any such judgments could have a
material adverse effect on its liquidity or financial condition.
9.3\u00a0 \u00a0 Contingent liabilities
Tax Claims\u00a0
ArcelorMittal is a party to various tax claims. As of
December\u00a031, 2022, ArcelorMittal had recorded short-term and
long-term liabilities related to income tax contingencies of 53
and provisions for non-income tax claims in the aggregate of 73
for which it considers the risk of loss to be probable. Set out
below is a summary description of the tax claims (i) for which
ArcelorMittal had recorded a provision as of December\u00a031,
2022, (ii) that constitute a contingent liability, (iii) that were
resolved in 2022 or (iv) that were resolved and had a financial
impact in 2021 or 2020, in each case involving amounts deemed
material by ArcelorMittal. The Company is vigorously defending
against the pending claims discussed below.\u00a0
Brazil\u00a0
In 2011, ArcelorMittal Brasil (at the time SOL Coqueria Tubar\u00e3o
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 26 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\u2019s 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 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
was filed. In July 2021, the third administrative instance denied
ArcelorMittal Brasil's appeal and upheld the tax assessments.
Following the conclusion of this proceeding at the administrative
level, in September 2021, ArcelorMittal Brasil appealed to the
judicial instance where all of the 21 cases now await a first
instance decision.
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 J\u00fanior Siderurgia (for
the 2006 and 2007 fiscal years), (ii) the amortization of goodwill
arising from the mandatory tender offer (\"MTO\") made by
ArcelorMittal (ex-Mittal Steel N.V.) to minority shareholders of
Arcelor Brasil in connection with 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 now totals 438. 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\u2019s calculations, 120 to 63 (as
calculated at the time of the assessment), while upholding the
remainder of the assessment. The Federal Revenue Service
appealed the administrative tribunal\u2019s decision to reduce the
amount of the original penalty. ArcelorMittal Brasil also appealed
the administrative tribunal\u2019s decision to uphold the tax
authority\u2019s 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.\u00a0
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
J\u00fanior Siderurgia, Dedini Siderurgia and CST, (ii) the
amortization of goodwill arising from the MTO made by
ArcelorMittal (ex-Mittal Steel N.V.) to minority shareholders of
Arcelor Brasil in connection with 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 389. 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 November and December 2022, the
tribunal found in favor of ArcelorMittal Brasil cancelling 98% of
the tax assessment, in particular: (i) the total amount related to
the goodwill of Mendes J\u00fanior Siderurgia was cancelled; (ii)
most of the amounts related to the goodwill of MTO was
cancelled; and (iii) the total amount related to CSL and IRPJ
over profits of controlled companies in Argentina and
Netherlands was cancelled. The decision (a) did not decide the
claim related to the deduction of the MTO\u2019 goodwill amounts
amortized for accounting purposes (this specific matter will be
the subject of a separate legal proceeding) and (b) remitted the
proceeding to the first administrative instance for the analysis of
the arguments related to the subsidiary located in Venezuela.
ArcelorMittal Brasil is currently awaiting the formalization of the
decision and the write-off of the amounts; the remaining claim
under discussion is 8.
In April 2016, ArcelorMittal Brasil received a tax assessment in
relation to (i) the amortization of goodwill resulting from the MTO
made by ArcelorMittal (ex-Mittal Steel N.V.) to the minority
shareholders of Arcelor Brasil in connection with the two-step
merger of Arcelor and Mittal Steel N.V. in 2007 and (ii) the
amortization of goodwill resulting from ArcelorMittal Brasil\u2019s
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 a 63 financial impact arising from a
write off of net operating loss carry forwards with respect to the
2011-2012 tax year. 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, filed a motion for clarification which was denied in
November 2019 and thereafter filed an appeal to the
administrative tribunal of the third instance.\u00a0
In December 2018, ArcelorMittal Brasil received a tax
assessment of 108, which could have an additional 21 financial
impact arising from a write off of net operating loss carry forward
with respect to the 2013-2014 tax years, principally in relation to
the amortization of goodwill resulting from the MTO made by
ArcelorMittal (ex-Mittal Steel N.V.) to the minority shareholders
of Arcelor Brasil in connection with the two-step merger of
Arcelor and Mittal Steel N.V. 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 November 2022, the administrative tribunal of the
second instance cancelled the tax assessment. In January
2023, an appeal to the administrative tribunal of third instance
was filed by the Federal Revenue Service.
In December 2020, ArcelorMittal Brasil received a tax
assessment of 38, which could have an additional 46 financial
impact arising from a write off of net operating loss carry
forwards, with respect to the 2015-2016 tax years, related to the
amortization of goodwill resulting from the MTO made by
ArcelorMittal (ex-Mittal Steel N.V.) to the minority shareholders
of Arcelor Brasil in connection with the two-step merger of
Arcelor and Mittal Steel N.V. in 2007. ArcelorMittal Brasil filed its
defense in the first administrative instance in January 2021
which issued an unfavorable decision in August, 2021. An
appeal to the second administrative instance was filed in
September 2021.
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\u00a055. 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 February 2020, the
appeal to the Supreme Court of Justice was dismissed and, in
July 2020, the Appeal to the Supreme Court was dismissed.
This decision is final and unappealable. In November 2018, a
related tax assessment was received from the Federal Revenue
Service claiming 18 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\u00a0 Brasil\u2019s favor. The case was archived by the
Federal Revenue Service in March 2021. ArcelorMittal Brasil
became aware of this in April 2022 when the contingency was
written off. A further related tax assessment was received in
September 2018 from the Federal Revenue Service claiming 0.2
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.\u00a0
In the period from 2014 to 2018, ArcelorMittal Brasil received six
tax assessments from the Federal Revenue Service in\u00a0the
amount of 39 disputing its use of credits for PIS and COFINS
social security taxes\u00a0in 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 to verify the extent
of the administrative tribunal of the third instance\u2019s decision in
order to proceed with the write-off of amounts due. In August
2020, the tax assessment was reduced by approximately 25%,
reflecting the partially favorable decision. In January 2022,
ArcelorMittal Brasil filed a lawsuit to dispute the remaining
amount which is pending trial at first instance. In the second
case, the administrative tribunal of the first instance found
partially in favor of ArcelorMittal Brasil in December 2016 and an
appeal has been filed to the administrative tribunal of the
second instance. In the third case (this assessment does not
involve a cash payment requirement, but may result in a
financial impact of 3 arising from a write-off of credits in
ArcelorMittal Brasil\u2019s tax books), the administrative tribunal of
the first instance upheld the tax assessment in March 2017, and
ArcelorMittal Brasil appealed to the administrative tribunal of the
second instance. In the fourth case, ArcelorMittal Brasil has filed
its defense to the administrative tribunal of the first instance in
March 2018. In March 2021, a partially favorable decision was
issued and an appeal was filed to the second administrative
instance in April 2021. In the fifth case, a partially favorable
decision was issued in November 2020, and an appeal was
presented in December 2020. In the sixth case, the
administrative tribunal of the first instance issued an unfavorable
decision in April 2017, 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 ruled against the restrictive approach
that the tax authorities have been using towards credit (of the
sort in issue in ArcelorMittal Brasil\u2019s PIS/COFINS cases). In
June 2021, the Supreme Court decided a leading case, not
involving ArcelorMittal Brasil, ensuring the taxpayers\u2019 right to
register the PIS/COFINS credits over scrap acquisition (one of
the inputs being challenged by the tax authority). This binding
precedent is important because it strengthens ArcelorMittal\u2019s
defenses in the six cases in which part of the contingency is
related to scrap acquisition. ArcelorMittal Brasil also filed in
February 2011 a claimant individual lawsuit on the PIS/COFINS
credits over scrap acquisition matter, in which a favorable and
unappealable decision was issued in May 2022. Accordingly and
as a result of this legal clarification, in 2022, ArcelorMittal
recorded PIS/COFINs tax credits in cost of sales in the amount
of 300 with respect to prior periods.\u00a0
In May\u00a02014, ArcelorMittal Comercializadora de Energia
received a tax assessment from the state of Minas Gerais
alleging that\u00a0the company did not correctly calculate tax credits
on interstate sales of electricity from February 2012 to
December 2013. The amount claimed totals 35. ArcelorMittal
Comercializadora de Energia filed its defense in June 2014.
Following an unfavorable administrative decision in November
2014, ArcelorMittal Comercializadora de Energia 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 50, 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.\u00a0In 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 12, 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 7 was finalized in the first case. \u00a0
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 76. 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\u2019s decisions. Each case was decided unfavorably to
ArcelorMittal Brasil at the administrative tribunal of the second
instance. In the period from February 2016 to February 2017,
ArcelorMittal Brasil appealed to the judicial instance, where
there are 5 cases pending. In June 2022, ArcelorMittal Brasil
obtained, in the fifth case, a partially favorable decision and in
September 2022, this decision was confirmed at second
instance. The other cases are still pending a first instance
decision.
On May 17, 2016, ArcelorMittal Brasil received a tax
assessment from the state of Santa Catarina in the amount of
110 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 which was rejected in August 2020.
ArcelorMittal Brasil appealed to the judicial instance in
November 2020.
In January 2023, ArcelorMittal Brasil received a tax assessment
from the Federal Revenue Service in an amount of 132 in which
the tax authority rejected the offsetting of PIS/COFINS credits
used by the company in 2018. The dispute relates to various
types of credits such as credits recognized in Court processes
(exclusion of ICMS from the PIS and COFINS calculation base,
PIS/COFINS credits in the Manaus Free Trade Zone), expenses
related to the acquisition of scrap (including freight), expenses
related to port handling, expenses for freight for finished
products. ArcelorMittal Brasil filed an administrative defense in
February 2023.
Mexico\u00a0
In 2015, the Mexican Tax Administration Service issued a tax
assessment to ArcelorMittal Mexico, 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. The amount of
the tax assessment as of December\u00a031, 2022 is 207.
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. In
November 2019, the Court dismissed the extraordinary appeal
of constitutional review confirming the earlier decision in favor of
the tax authorities. 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 was rejected in June
2020. In September 2020, an annulment complaint was filed
before the Federal Administrative and Tax Justice Court. In
December 2021, a reduction of the penalty component of the tax
assessment was requested, an amount of 20 was paid and the
Court issued a dismissal ruling in respect of this case, thereby
closing the proceedings.
In 2013, the Mexican Tax Administration Service issued a tax
assessment to ArcelorMittal Las Truchas, alleging that
ArcelorMittal Las Truchas owes 89 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 by declaring the illegality of item (i). The tax
authority filed an application for judicial review in January 2019
and in March 2020, the Court upheld the ruling in favor of
ArcelorMittal Las Truchas regarding item (i) which decision is
definitive. ArcelorMittal Las Truchas also filed a nullity lawsuit to
challenge the ruling in respect of items (ii) and (iii), and, in June
2020, the Court upheld the rulings of the Tax Court. ArcelorMittal
Las Truchas promptly thereafter submitted an extraordinary
appeal for constitutional review before the Supreme Court of
Justice regarding items (ii) and (iii).
In October 2018, the Mexican Tax Administration Service issued
a tax assessment to ArcelorMittal Las Truchas, with respect to
2013 due to: (i) improper interest deductions relating to certain
loans (ii) non-deduction of advanced rent payments and (iii)
non-deduction of rolling roll expenses. 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. Therefore,
in August 2019, ArcelorMittal Las Truchas filed an annulment
complaint before a Federal Administrative and Tax Justice
Court, which has not been determined. The amount of the tax
assessment as of December\u00a031, 2022 is 108.
Ukraine\u00a0
In October 2019, ArcelorMittal Kryvyi Rih received tax orders
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 278 for that
period. ArcelorMittal Kryvyi Rih appealed these orders to the tax
authorities resulting in a significant reduction of the amounts
claimed. In January 2020, ArcelorMittal Kryvyi Rih filed three
legal actions with the Kyiv District Administrative Court seeking
to cancel the remaining additional charges amounting to 128.
The three cases were later merged into one case and moved to
the Dnipro District Administrative Court. In February 2023, the
Court dismissed the entirety of the claim except for an amount
of 0.05. The tax authorities may appeal the dismissal.
In October 2020, ArcelorMittal Kryvyi Rih commenced a
separate lawsuit seeking cancellation of additional tax charges
(excise duty, VAT, CIT, fines) of 89 based on the results of a full-
scope tax audit covering 2015 through the first quarter of 2019.
This separate lawsuit was closed in May 2021 at ArcelorMittal
Kryvyi Rih\u2019s request.
In August 2021, ArcelorMittal Kryvyi Rih commenced court
proceedings to dispute the assessment by Ukrainian tax
authorities of a subsoil usage rent/tax (in the amount of
approximately 77) on production activities by ArcelorMittal Kryvyi
Rih for the period from January 2015 to March 2019. In
November 2021, the court found that the tax notice decision was
illegal and cancelled it. The Ukrainian tax authorities and the
Prosecutor\u2019s office appealed this decision. Subsequently, (a) on
November 17, 2021, the Prosecutor General\u2019s office and the
Security Service of Ukraine notified the Chief Financial Officer of
ArcelorMittal Kryvyi Rih that he had been placed under an
investigation on suspicion of alleged tax evasion and official
forgery, and (b) on January 4, 2022 the Prosecutor General\u2019s
office, acting pursuant to a ruling of the Shevchenkivsky District
Court of Kyiv dated November 30, 2021 blocked the accounts of
ArcelorMittal Kryvyi Rih with three banks in Ukraine.
ArcelorMittal Kryvyi Rih promptly appealed the blocking of these
accounts and the restrictions on two of the three accounts were
by court order partially lifted to allow the payment of wages,
taxes and other mandatory payments. In March 2022, the
Prosecutor General closed the criminal proceedings and as a
result the remaining restrictions were lifted. In June 2022, the
Court of Appeal decided that the tax notice decision was illegal
and confirmed its cancellation. In July 2022, the tax authorities
and the Prosecutor\u2019s Office filed a cassation appeal to the
Supreme Court which was rejected in December 2022 and the
case is now closed.
Kazakhstan
In November 2020, ArcelorMittal Temirtau filed a lawsuit in the
Astana investment court against the State revenue committee.
The dispute is related to a tax claim by the said committee
resulting from an audit for the years 2013-2017. The court
hearings started in February 2021 and resulted in a June 2021
judgment against ArcelorMittal Temirtau for 45 for tax and late
payment interest as estimated by the authorities in their
notification of September 28, 2020. ArcelorMittal Temirtau
appealed this decision with the court of second instance, which
confirmed the judgment in September 2021. The judgment
came into force and was satisfied. In November 2021,
ArcelorMittal filed an appeal with the Court of Cassation which in
January 2022, the Court declined to hear the appeal, bringing
the case to an end.
In January 2022, ArcelorMittal Temirtau filed a lawsuit in the
Nur-Sultan (Astana) administrative court against the State
revenue committee. The dispute is related to a tax claim by the
said committee in the amount of 63 resulting from an audit for
the years 2018-2019. In January 2022, ArcelorMittal Temirtau
withdrew the lawsuit and paid the tax due with interest and the
applicable administrative penalty in the first half of 2022.
Competition/Antitrust Claims\u00a0
ArcelorMittal is a party to various competition/antitrust claims. As
of December\u00a031, 2022, ArcelorMittal had recorded a non-
material amount provision 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
2022 or (iii) that were resolved and had a financial impact in
2021 or 2020, 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\u2019s Administrative Council for Economic
Defense (\u201cCADE\u201d) 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\u2019s 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 71 based on
the alleged violations investigated by CADE. The injunction
requested by Federal Prosecution Office was denied.
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. \u00a0
Spain
In November 2018, the Comisi\u00f3n Nacional de los Mercados y la
Competencia (\u201cCNMC\u201d), the Spanish competition authority,
carried out a dawn raid at the offices of ArcelorMittal in
Villaverde (Madrid) in relation to a preliminary investigation
concerning alleged coordination between competitors to fix the
purchase price of scrap. In March 2020, further dawn raids were
carried out extending the investigation to the sale of long
products. In July 2020, CNMC announced that they were
commencing a formal sanctioning procedure against
ArcelorMittal Spain Holding (\"AMSH\") and its subsidiaries
ArcelorMittal Madrid, ArcelorMittal Comercial Perfiles Espa\u00f1a,
ArcelorMittal Aceralia Basque Holding (\u201cAMABH\u201d), and Arcelor
Mittal Espa\u00f1a (and other companies not part of ArcelorMittal
group) in respect of purchases of scrap and sale of finished
steel products, especially long products. In August 2021, the
CNMC issued a statement of objections to AMSH and AMABH,
among other parties. The CNMC stated that it had found
evidence of a purported cartel in terms of the purchase of scrap,
while noting that it had not found evidence of infringement with
regard to the sales of long products. The infringement with
respect to the scrap was alleged to have taken place from 2009
to 2020 and is attributed to AMSH and AMABH. In September
2021, AMSH and AMABH responded to the allegations and
objected to the claims of infringement. In November 2021, the
CNMC notified AMABH and AMSH of its resolution proposal to
be submitted to the Council proposing a sanction for AMABH,
with joint and several liability for AMSH, of 3 (\u20ac2.7\u00a0million which
is 6.5% of a turnover figure of \u20ac42.3\u00a0million) and notified AMSH
and AMABH that it had restricted the alleged infringement due to
certain contacts held from January to August 2018. On
December 16, 2021, AMABH filed its challenge to the resolution
proposal, together with an economic report as proof of market
structure. In March 2022, the CNMC decided on a sanction for
AMABH of 14 (\u20ac12.1\u00a0million based on a turnover which CNMC
determined as \u20ac226.6\u00a0million). In May 2022, AMABH appealed
the decision\u00a0 to the Spanish Court and sought suspension of
payment of the fine. In October 2022, the Court agreed to the
said suspension subject to the provision of a guarantee by
AMABH, filed with the court in December 2022.
Other Legal Claims\u00a0
ArcelorMittal is a party to various other legal claims. As of
December\u00a031, 2022, ArcelorMittal had recorded provisions of
216 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\u00a031,
2022, (ii) that constitute a contingent liability, (iii) that were
resolved in 2022, or (iv) that were resolved and had a financial
impact in 2021 or 2020, 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\u00a0
Over the course of 2007 to 2021, the Argentinian Customs
Office Authority (\u201cAduana\u201d) notified Acindar, 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 and
Bolivian suppliers and from ArcelorMittal Sourcing originally on
39 different claims concerning several shipments made between
2002 and 2021. 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 ordered 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. In addition, other cases have
been dismissed by the National Tax Court. As of February 2023,
the aggregate amount claimed by the Customs Office Authority
in respect of all iron ore shipments is 99 in 18 different cases. Of
these 18 cases, 7 are still in the administrative branch of the
Customs Office Authority and the other 11 cases, in which the
administrative branch of the Customs Office Authority ruled
against Acindar, have been appealed to the Argentinian National
Fiscal Court.
Brazil\u00a0
In 2015, the SINDIMETAL (employees\u2019 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 Vit\u00f3ria/ES, the case was dismissed. SINDIMETAL\u00a0
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 July
2022, the Supreme Court decided the leading case, not
involving ArcelorMittal Brasil, declaring the constitutionality of
Collective Agreements, and this decision may favorably impact
ArcelorMittal Brasil's case. This ruling lifted the suspension of all
lawsuits (including ArcelorMittal\u2019s 2019 appeal), regarding the
validity of collective agreements, the appeal is therefore now
being considered.
In April 2017, a shareholder in Sider\u00fargica Tr\u00eas Lagoas
(\u201cSITREL\u201d) (of which ArcelorMittal Brasil is the other
shareholder), 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\u2019s 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 totaling 33. In October
2021, the CAM-CCBC decided against ArcelorMittal Brasil. In
November 2021, ArcelorMittal Brasil filed a motion for
clarification and disqualification request to the CAM-CCBC in
relation to a conflict of interest concerning the other party's
appointed arbitrator. The CAM-CCBC issued a stay on the
clarification request, pending resolution on the disqualification
challenge. In December 2021, an Independent Arbitrators
Committee was formed to decide on the disqualification claim,
which it rejected in March 2022. In April 2022, a final arbitral
award was issued, which has been satisfied by ArcelorMittal
Brasil. Given ArcelorMittal Brasil\u2019s ownership interest in SITREL,
the financial impact for ArcelorMittal is a net loss after tax of
approximately 126 (67 net of partial recovery through dividend
payment from SITREL).
On March 30, 2022, Votorantim S.A. (\u201cVotorantim\u201d) exercised
the put option right it has under its shareholders\u2019 agreement with
the Company to sell its entire equity interest in ArcelorMittal
Brasil to the Company, following the acquisition of Votorantim's
long steel business in Brazil in 2018. There is a dispute between
the parties as to the value of the put option. Votorantim has
valued the put option at BRL 5.283 billion (i.e. 1,012). In
September 2022, Votorantim commenced an arbitration against
ArcelorMittal Brasil seeking the full amount of its value of the put
option, which would be reduced by the undisputed amount
ArcelorMittal Brasil accepts as the value of the put option and
which was paid in January 2023 for 179 (see note 11.5.2).
Italy\u00a0
In January 2010, ArcelorMittal received notice of a claim filed by
Finmasi S.p.A. relating to a memorandum of agreement (\u201cMoA\u201d)
entered into between ArcelorMittal Distribution Services France
(\u201cAMDSF\u201d) and Finmasi in 2008. The MoA provided that AMDSF
would acquire certain of Finmasi\u2019s businesses for an amount not
to exceed 114, subject to the satisfaction of certain conditions
precedent, which, in AMDSF\u2019s view, were not fulfilled. Finmasi
sued for (i) enforcement of the MoA, (ii) damages of 17 to 29 or
(iii) recovery costs plus quantum damages for Finmasi\u2019s alleged
lost opportunity to sell to another buyer. In September 2011, the
court rejected Finmasi\u2019s claims other than its second claim. The
court appointed an expert to determine the quantum of
damages. In May 2013, the expert\u2019s report was issued and
valued the quantum of damages in the range of 46 to 73.
ArcelorMittal appealed the decision on the merits. In May 2014,
the Court of Appeal issued a decision rejecting ArcelorMittal\u2019s
appeal. On June 20, 2014, ArcelorMittal filed an appeal of the
Court of Appeal\u2019s 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\u2019s 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 29 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\u2019s 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. In August 2020, the
Court of Cassation quashed the Court of Appeal decision on
quantum and referred the case back to the Court of Appeal for
further review of the quantum in respect of which Finmasi
formally served their writ of summons in October 2020 asking
the Court of Appel to confirm the first instance judgment on
quantum. Following the decision of the Court of Cassation,
Finmasi has repaid half of the amount of the guarantee that was
called and provided a bank guarantee for the remainder. In
December 2022, the Court found that AMDSF has the right to
obtain restitution of approximately 28 paid to Finmasi and
ordered Finmasi to pay the half still outstanding (approximately
13.9) plus interest and certain costs. In February 2023, Finmasi
filed an appeal to the Court of Cassation. AMDSF is due to file
its defense in March 2023.
On November 4, 2019, ArcelorMittal sent to the Commissioners
governing the Ilva insolvency procedure (the \u201cCommissioners\u201d)
a notice to withdraw from or terminate the lease agreement with
a conditional obligation to purchase the business of Ilva and
certain of its subsidiaries. This notice was based, among other
things, on provisions of the agreement that allow withdrawal in
the event that a new law affects it\u2019s environmental plan for the
Taranto plant in such a way that materially impairs the ability of
ArcelorMittal Italia to operate the plant or implement its industrial
plan; these provisions were triggered following the Italian
Parliament\u2019s removal, on November 3, 2019, of the legal
protection necessary for ArcelorMittal Italia to implement its
environmental plan without risk of criminal liability. In response,
the Commissioners filed suit in Milan seeking an injunction to
prevent ArcelorMittal's withdrawal and termination of the
agreement. Following negotiation between the parties, on March
4, 2020, ArcelorMittal and the Commissioners entered into a
settlement agreement whereby ArcelorMittal agreed to revoke
its notice to withdraw from the original Ilva lease agreement and
the Ilva Commissioners agreed to withdraw their request for an
injunction.
In addition, 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. Following the (i) search decrees issued by the Milan and
Taranto Prosecution Offices and ensuing seizures of documents
in November 2019, and (ii) restitution decree issued by the
Milan Prosecution Office in September 2020, the Milan Public
Prosecutors closed one of the investigations which began in
November 2019 concluding that there was no evidence to
support allegations of violations of numerous criminal laws
relating principally to ArcelorMittal's withdrawal from the lease
agreement for the Ilva plants and asked the judge for
preliminary investigations to close the case. In August 2022, the
Milan Judge for Preliminary Investigation dismissed the case.
ArcelorMittal Italia (renamed Acciaierie d\u2019Italia in April 2021 after
the formation of a partnership with Invitalia see note 2.3.1) has
not been notified of further developments in the other pending
criminal cases. It is not possible to predict the timing or outcome
or to foresee any charges for Acciaierie d'Italia.
In February 2020, the Mayor of Taranto issued an order to
ArcelorMittal Italia related to certain emissions events that
appear to have occurred in August 2019 and on February 22
and 23, 2020 and that allegedly concern the Taranto plant. The
order required ArcelorMittal Italia to identify the responsible
installations in 30 days and eliminate any anomalies within the
subsequent 30 days or, if necessary, shut down certain
installations relating to such emissions events (provided that, if
no such identification was completed, the shut-down would
extend to substantially the entire \"hot area\" of the plant). The
Mayor of Taranto further alleged that adequate responses
concerning such emissions were not received from the Ministry
of the Environment. In response to this order, ArcelorMittal Italia
filed an appeal on the merits and an application for interim
measures to stay the order with the Regional Administrative
Court in Lecce. In April 2020, the court upheld ArcelorMittal
Italia\u2019s application for interim measures and suspended the
Mayor of Taranto\u2019s order until a further hearing in October 2020.
The interim order further required the Ministry of the
Environment to file reports concerning the emissions events
which served as the basis for the Mayor of Taranto\u2019s order. After
the Ministry provided such reports, the October 2020 hearing
was postponed until December 15, 2020, at which hearing the
Court confirmed the suspension of the order and scheduled the
hearing for the discussion of the merits for January 27, 2021.\u00a0
On February 13, 2021, the Court rejected ArcelorMittal Italia\u2019s
appeal. On February 18, 2021, ArcelorMittal Italia filed an
appeal with the State Council (the highest appellate body in this
case) on the merits and also requested an ex parte order to
suspend the judgment pending a ruling on the merits. On
February 19, 2021, the State Council (i) found that the 30-day
period during which ArcelorMittal Italia would have to shut down
installations has not yet started and would commence only on
March 16, 2021, i.e., after the hearing to discuss the request for
interim measures (which it set for March 11, 2021) and therefore
found a lack at the time of demonstrable \u201cextreme gravity and
urgency\u201d necessary for interim measures, and (ii) set a hearing
date of May 13, 2021 in respect of the merits. On June 23,
2021, the judgment of the Council of State was published,
upholding Acciaierie d'Italia\u2019s appeal, setting aside the Mayor of
Taranto\u2019s order as unlawful on various grounds, and thereby
enabling Acciaierie d'Italia to continue operating the Taranto
plant.
Luxembourg\u00a0
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
61. Given the similarities in the claims, the parties agreed to limit
the pending proceedings to four test claims. In\u00a0April 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 were appealed but were terminated
by the court in November 2021.
France
Certain subsidiaries of the ArcelorMittal group were parties to
proceedings, dating from 2010, against Engie and Engie
Thermique France which claimed damages in the amount of 187
for an alleged wrongful termination of a contract for the
transformation of steel production gas into electricity. The
ArcelorMittal subsidiaries had filed a counterclaim in the amount
of 232. The contract had been entered into in 2006 for a term of
20 years. ArcelorMittal M\u00e9diterran\u00e9e 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 claimed 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 was ordered to pay damages of 3 plus
interest. In February 2020, Engie filed an appeal. A settlement
agreement was signed in July 2021, bringing the litigation to an
end.
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 (\u201cSocial Security\u201d). 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.\u00a0
The number of claims outstanding for asbestos exposure at
December\u00a031, 2022 was 308 as compared to\u00a0300 at
December\u00a031, 2021.
Minority Shareholder Claims Regarding the Exchange Ratio in
the Second-Step Merger of ArcelorMittal into Arcelor\u00a0
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.\u00a0
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.\u00a0
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.\u00a0
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\u2019s and Arcelor\u2019s 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\u2019s 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 221. By judgment dated November
30, 2011, the Luxembourg civil court declared all of the plaintiffs\u2019
claims inadmissible and dismissed them. The judgment was
appealed in May 2012.\u00a0By judgment dated February 15, 2017,
the Luxembourg Court of Appeal declared all but one of the
plaintiffs\u2019 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\u2019s judgment on May
18, 2018. The admissible claimant finally withdrew its claims
before the lower court and by judgment dated January 5, 2022,
the civil court of Luxembourg acknowledged the withdrawal of
the claims without prejudice and ended the procedure.
On May 15, 2012, ArcelorMittal received a writ of summons on
behalf of Association des Actionnaires d'Arcelor (\u201cAAA\u201d), a
French association of former minority shareholders of Arcelor, to
appear before the civil court of Paris. In such writ of summons,
AAA claimed (on grounds similar to those in the Luxembourg
proceedings summarized above) inter alia damages in a
nominal amount and reserved the right to seek additional
remedies including the cancellation of the merger. The
proceedings before the civil court of Paris were stayed, pursuant
to a ruling of such court on July 4, 2013, pending a preparatory
investigation (instruction pr\u00e9paratoire) by a criminal judge
magistrate (juge d\u2019instruction) triggered by the complaints
(plainte avec constitution de partie civile) of AAA and several
hedge funds (who quantified their total alleged damages at 282),
including those who filed the claims before the Luxembourg
courts described (and quantified) above. The dismissal of
charges (non-lieu) ending the preparatory investigation became
final in March 2018. On March 6, 2020 AAA revived its claim
before the civil court of Paris on grounds similar to those of the
Luxembourg civil claims summarized above, on its behalf and
on behalf of the hedge funds who had also filed a criminal
complaint, as well as two new plaintiffs. The complaint filed by
AAA quantifies the total damages claimed at 416 (\u20ac390 million)
(including the claims before the Luxembourg courts described
above). In March 2022, following the end of the Luxembourg
civil proceedings, the Paris civil court decided to address the
remaining procedural objections (lack of standing and res
judicata) together with the merits of the case, and the next
(procedural) hearing is scheduled for March 2023.
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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 (\u201cARO\u201d)
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\u2019s 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\u2019s 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.
These assessments can involve a series of complex judgments
about future events and can rely heavily on estimates and
assumptions. The assessments are based on estimates and
assumptions that have been deemed reasonable by
management. The Company believes that the aggregate
provisions recorded for the above matters are adequate based
upon currently available information. However, given the
inherent uncertainties related to these cases and in estimating
contingent liabilities, the Company could, in the future, incur
judgments that have a material adverse effect on its results of
operations in any particular period. The Company considers it
highly unlikely, however, that any such judgments could have a
material adverse effect on its liquidity or financial condition.
9.2\u00a0 \u00a0 Other long-term obligations
| | | |
| |
| | | |
Derivative financial instruments (notes 6.1 and 6.3) | | | |
Payable from acquisition of financial assets | | | |
| | | |
| | | |
Put option liability ArcelorMittal Texas HBI (note 11.5.2) | | | |
Put option liability Sonasid (note 11.5.2) | | | |
| | | |
| | | |
Unfavorable contracts of 92 and 105 as of December\u00a031, 2022
and 2021, respectively, mainly related to AMSF.\u00a0
As of December 31, 2022, the income tax payable mainly
related to income tax contingencies (in majority unasserted
claims) and withholding tax.\u00a0
9.3\u00a0 \u00a0 Contingent liabilities
Tax Claims\u00a0
ArcelorMittal is a party to various tax claims. As of
December\u00a031, 2022, ArcelorMittal had recorded short-term and
long-term liabilities related to income tax contingencies of 53
and provisions for non-income tax claims in the aggregate of 73
for which it considers the risk of loss to be probable. Set out
below is a summary description of the tax claims (i) for which
ArcelorMittal had recorded a provision as of December\u00a031,
2022, (ii) that constitute a contingent liability, (iii) that were
resolved in 2022 or (iv) that were resolved and had a financial
impact in 2021 or 2020, in each case involving amounts deemed
material by ArcelorMittal. The Company is vigorously defending
against the pending claims discussed below.\u00a0
Brazil\u00a0
In 2011, ArcelorMittal Brasil (at the time SOL Coqueria Tubar\u00e3o
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 26 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\u2019s 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 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
was filed. In July 2021, the third administrative instance denied
ArcelorMittal Brasil's appeal and upheld the tax assessments.
Following the conclusion of this proceeding at the administrative
level, in September 2021, ArcelorMittal Brasil appealed to the
judicial instance where all of the 21 cases now await a first
instance decision.
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 J\u00fanior Siderurgia (for
the 2006 and 2007 fiscal years), (ii) the amortization of goodwill
arising from the mandatory tender offer (\"MTO\") made by
ArcelorMittal (ex-Mittal Steel N.V.) to minority shareholders of
Arcelor Brasil in connection with 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 now totals 438. 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\u2019s calculations, 120 to 63 (as
calculated at the time of the assessment), while upholding the
remainder of the assessment. The Federal Revenue Service
appealed the administrative tribunal\u2019s decision to reduce the
amount of the original penalty. ArcelorMittal Brasil also appealed
the administrative tribunal\u2019s decision to uphold the tax
authority\u2019s 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.\u00a0
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
J\u00fanior Siderurgia, Dedini Siderurgia and CST, (ii) the
amortization of goodwill arising from the MTO made by
ArcelorMittal (ex-Mittal Steel N.V.) to minority shareholders of
Arcelor Brasil in connection with 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 389. 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 November and December 2022, the
tribunal found in favor of ArcelorMittal Brasil cancelling 98% of
the tax assessment, in particular: (i) the total amount related to
the goodwill of Mendes J\u00fanior Siderurgia was cancelled; (ii)
most of the amounts related to the goodwill of MTO was
cancelled; and (iii) the total amount related to CSL and IRPJ
over profits of controlled companies in Argentina and
Netherlands was cancelled. The decision (a) did not decide the
claim related to the deduction of the MTO\u2019 goodwill amounts
amortized for accounting purposes (this specific matter will be
the subject of a separate legal proceeding) and (b) remitted the
proceeding to the first administrative instance for the analysis of
the arguments related to the subsidiary located in Venezuela.
ArcelorMittal Brasil is currently awaiting the formalization of the
decision and the write-off of the amounts; the remaining claim
under discussion is 8.
In April 2016, ArcelorMittal Brasil received a tax assessment in
relation to (i) the amortization of goodwill resulting from the MTO
made by ArcelorMittal (ex-Mittal Steel N.V.) to the minority
shareholders of Arcelor Brasil in connection with the two-step
merger of Arcelor and Mittal Steel N.V. in 2007 and (ii) the
amortization of goodwill resulting from ArcelorMittal Brasil\u2019s
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 a 63 financial impact arising from a
write off of net operating loss carry forwards with respect to the
2011-2012 tax year. 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, filed a motion for clarification which was denied in
November 2019 and thereafter filed an appeal to the
administrative tribunal of the third instance.\u00a0
In December 2018, ArcelorMittal Brasil received a tax
assessment of 108, which could have an additional 21 financial
impact arising from a write off of net operating loss carry forward
with respect to the 2013-2014 tax years, principally in relation to
the amortization of goodwill resulting from the MTO made by
ArcelorMittal (ex-Mittal Steel N.V.) to the minority shareholders
of Arcelor Brasil in connection with the two-step merger of
Arcelor and Mittal Steel N.V. 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 November 2022, the administrative tribunal of the
second instance cancelled the tax assessment. In January
2023, an appeal to the administrative tribunal of third instance
was filed by the Federal Revenue Service.
In December 2020, ArcelorMittal Brasil received a tax
assessment of 38, which could have an additional 46 financial
impact arising from a write off of net operating loss carry
forwards, with respect to the 2015-2016 tax years, related to the
amortization of goodwill resulting from the MTO made by
ArcelorMittal (ex-Mittal Steel N.V.) to the minority shareholders
of Arcelor Brasil in connection with the two-step merger of
Arcelor and Mittal Steel N.V. in 2007. ArcelorMittal Brasil filed its
defense in the first administrative instance in January 2021
which issued an unfavorable decision in August, 2021. An
appeal to the second administrative instance was filed in
September 2021.
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\u00a055. 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 February 2020, the
appeal to the Supreme Court of Justice was dismissed and, in
July 2020, the Appeal to the Supreme Court was dismissed.
This decision is final and unappealable. In November 2018, a
related tax assessment was received from the Federal Revenue
Service claiming 18 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\u00a0 Brasil\u2019s favor. The case was archived by the
Federal Revenue Service in March 2021. ArcelorMittal Brasil
became aware of this in April 2022 when the contingency was
written off. A further related tax assessment was received in
September 2018 from the Federal Revenue Service claiming 0.2
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.\u00a0
In the period from 2014 to 2018, ArcelorMittal Brasil received six
tax assessments from the Federal Revenue Service in\u00a0the
amount of 39 disputing its use of credits for PIS and COFINS
social security taxes\u00a0in 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 to verify the extent
of the administrative tribunal of the third instance\u2019s decision in
order to proceed with the write-off of amounts due. In August
2020, the tax assessment was reduced by approximately 25%,
reflecting the partially favorable decision. In January 2022,
ArcelorMittal Brasil filed a lawsuit to dispute the remaining
amount which is pending trial at first instance. In the second
case, the administrative tribunal of the first instance found
partially in favor of ArcelorMittal Brasil in December 2016 and an
appeal has been filed to the administrative tribunal of the
second instance. In the third case (this assessment does not
involve a cash payment requirement, but may result in a
financial impact of 3 arising from a write-off of credits in
ArcelorMittal Brasil\u2019s tax books), the administrative tribunal of
the first instance upheld the tax assessment in March 2017, and
ArcelorMittal Brasil appealed to the administrative tribunal of the
second instance. In the fourth case, ArcelorMittal Brasil has filed
its defense to the administrative tribunal of the first instance in
March 2018. In March 2021, a partially favorable decision was
issued and an appeal was filed to the second administrative
instance in April 2021. In the fifth case, a partially favorable
decision was issued in November 2020, and an appeal was
presented in December 2020. In the sixth case, the
administrative tribunal of the first instance issued an unfavorable
decision in April 2017, 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 ruled against the restrictive approach
that the tax authorities have been using towards credit (of the
sort in issue in ArcelorMittal Brasil\u2019s PIS/COFINS cases). In
June 2021, the Supreme Court decided a leading case, not
involving ArcelorMittal Brasil, ensuring the taxpayers\u2019 right to
register the PIS/COFINS credits over scrap acquisition (one of
the inputs being challenged by the tax authority). This binding
precedent is important because it strengthens ArcelorMittal\u2019s
defenses in the six cases in which part of the contingency is
related to scrap acquisition. ArcelorMittal Brasil also filed in
February 2011 a claimant individual lawsuit on the PIS/COFINS
credits over scrap acquisition matter, in which a favorable and
unappealable decision was issued in May 2022. Accordingly and
as a result of this legal clarification, in 2022, ArcelorMittal
recorded PIS/COFINs tax credits in cost of sales in the amount
of 300 with respect to prior periods.\u00a0
In May\u00a02014, ArcelorMittal Comercializadora de Energia
received a tax assessment from the state of Minas Gerais
alleging that\u00a0the company did not correctly calculate tax credits
on interstate sales of electricity from February 2012 to
December 2013. The amount claimed totals 35. ArcelorMittal
Comercializadora de Energia filed its defense in June 2014.
Following an unfavorable administrative decision in November
2014, ArcelorMittal Comercializadora de Energia 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 50, 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.\u00a0In 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 12, 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 7 was finalized in the first case. \u00a0
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 76. 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\u2019s decisions. Each case was decided unfavorably to
ArcelorMittal Brasil at the administrative tribunal of the second
instance. In the period from February 2016 to February 2017,
ArcelorMittal Brasil appealed to the judicial instance, where
there are 5 cases pending. In June 2022, ArcelorMittal Brasil
obtained, in the fifth case, a partially favorable decision and in
September 2022, this decision was confirmed at second
instance. The other cases are still pending a first instance
decision.
On May 17, 2016, ArcelorMittal Brasil received a tax
assessment from the state of Santa Catarina in the amount of
110 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 which was rejected in August 2020.
ArcelorMittal Brasil appealed to the judicial instance in
November 2020.
In January 2023, ArcelorMittal Brasil received a tax assessment
from the Federal Revenue Service in an amount of 132 in which
the tax authority rejected the offsetting of PIS/COFINS credits
used by the company in 2018. The dispute relates to various
types of credits such as credits recognized in Court processes
(exclusion of ICMS from the PIS and COFINS calculation base,
PIS/COFINS credits in the Manaus Free Trade Zone), expenses
related to the acquisition of scrap (including freight), expenses
related to port handling, expenses for freight for finished
products. ArcelorMittal Brasil filed an administrative defense in
February 2023.
Mexico\u00a0
In 2015, the Mexican Tax Administration Service issued a tax
assessment to ArcelorMittal Mexico, 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. The amount of
the tax assessment as of December\u00a031, 2022 is 207.
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. In
November 2019, the Court dismissed the extraordinary appeal
of constitutional review confirming the earlier decision in favor of
the tax authorities. 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 was rejected in June
2020. In September 2020, an annulment complaint was filed
before the Federal Administrative and Tax Justice Court. In
December 2021, a reduction of the penalty component of the tax
assessment was requested, an amount of 20 was paid and the
Court issued a dismissal ruling in respect of this case, thereby
closing the proceedings.
In 2013, the Mexican Tax Administration Service issued a tax
assessment to ArcelorMittal Las Truchas, alleging that
ArcelorMittal Las Truchas owes 89 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 by declaring the illegality of item (i). The tax
authority filed an application for judicial review in January 2019
and in March 2020, the Court upheld the ruling in favor of
ArcelorMittal Las Truchas regarding item (i) which decision is
definitive. ArcelorMittal Las Truchas also filed a nullity lawsuit to
challenge the ruling in respect of items (ii) and (iii), and, in June
2020, the Court upheld the rulings of the Tax Court. ArcelorMittal
Las Truchas promptly thereafter submitted an extraordinary
appeal for constitutional review before the Supreme Court of
Justice regarding items (ii) and (iii).
In October 2018, the Mexican Tax Administration Service issued
a tax assessment to ArcelorMittal Las Truchas, with respect to
2013 due to: (i) improper interest deductions relating to certain
loans (ii) non-deduction of advanced rent payments and (iii)
non-deduction of rolling roll expenses. 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. Therefore,
in August 2019, ArcelorMittal Las Truchas filed an annulment
complaint before a Federal Administrative and Tax Justice
Court, which has not been determined. The amount of the tax
assessment as of December\u00a031, 2022 is 108.
Ukraine\u00a0
In October 2019, ArcelorMittal Kryvyi Rih received tax orders
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 278 for that
period. ArcelorMittal Kryvyi Rih appealed these orders to the tax
authorities resulting in a significant reduction of the amounts
claimed. In January 2020, ArcelorMittal Kryvyi Rih filed three
legal actions with the Kyiv District Administrative Court seeking
to cancel the remaining additional charges amounting to 128.
The three cases were later merged into one case and moved to
the Dnipro District Administrative Court. In February 2023, the
Court dismissed the entirety of the claim except for an amount
of 0.05. The tax authorities may appeal the dismissal.
In October 2020, ArcelorMittal Kryvyi Rih commenced a
separate lawsuit seeking cancellation of additional tax charges
(excise duty, VAT, CIT, fines) of 89 based on the results of a full-
scope tax audit covering 2015 through the first quarter of 2019.
This separate lawsuit was closed in May 2021 at ArcelorMittal
Kryvyi Rih\u2019s request.
In August 2021, ArcelorMittal Kryvyi Rih commenced court
proceedings to dispute the assessment by Ukrainian tax
authorities of a subsoil usage rent/tax (in the amount of
approximately 77) on production activities by ArcelorMittal Kryvyi
Rih for the period from January 2015 to March 2019. In
November 2021, the court found that the tax notice decision was
illegal and cancelled it. The Ukrainian tax authorities and the
Prosecutor\u2019s office appealed this decision. Subsequently, (a) on
November 17, 2021, the Prosecutor General\u2019s office and the
Security Service of Ukraine notified the Chief Financial Officer of
ArcelorMittal Kryvyi Rih that he had been placed under an
investigation on suspicion of alleged tax evasion and official
forgery, and (b) on January 4, 2022 the Prosecutor General\u2019s
office, acting pursuant to a ruling of the Shevchenkivsky District
Court of Kyiv dated November 30, 2021 blocked the accounts of
ArcelorMittal Kryvyi Rih with three banks in Ukraine.
ArcelorMittal Kryvyi Rih promptly appealed the blocking of these
accounts and the restrictions on two of the three accounts were
by court order partially lifted to allow the payment of wages,
taxes and other mandatory payments. In March 2022, the
Prosecutor General closed the criminal proceedings and as a
result the remaining restrictions were lifted. In June 2022, the
Court of Appeal decided that the tax notice decision was illegal
and confirmed its cancellation. In July 2022, the tax authorities
and the Prosecutor\u2019s Office filed a cassation appeal to the
Supreme Court which was rejected in December 2022 and the
case is now closed.
Kazakhstan
In November 2020, ArcelorMittal Temirtau filed a lawsuit in the
Astana investment court against the State revenue committee.
The dispute is related to a tax claim by the said committee
resulting from an audit for the years 2013-2017. The court
hearings started in February 2021 and resulted in a June 2021
judgment against ArcelorMittal Temirtau for 45 for tax and late
payment interest as estimated by the authorities in their
notification of September 28, 2020. ArcelorMittal Temirtau
appealed this decision with the court of second instance, which
confirmed the judgment in September 2021. The judgment
came into force and was satisfied. In November 2021,
ArcelorMittal filed an appeal with the Court of Cassation which in
January 2022, the Court declined to hear the appeal, bringing
the case to an end.
In January 2022, ArcelorMittal Temirtau filed a lawsuit in the
Nur-Sultan (Astana) administrative court against the State
revenue committee. The dispute is related to a tax claim by the
said committee in the amount of 63 resulting from an audit for
the years 2018-2019. In January 2022, ArcelorMittal Temirtau
withdrew the lawsuit and paid the tax due with interest and the
applicable administrative penalty in the first half of 2022.
Competition/Antitrust Claims\u00a0
ArcelorMittal is a party to various competition/antitrust claims. As
of December\u00a031, 2022, ArcelorMittal had recorded a non-
material amount provision 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
2022 or (iii) that were resolved and had a financial impact in
2021 or 2020, 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\u2019s Administrative Council for Economic
Defense (\u201cCADE\u201d) 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\u2019s 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 71 based on
the alleged violations investigated by CADE. The injunction
requested by Federal Prosecution Office was denied.
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. \u00a0
Spain
In November 2018, the Comisi\u00f3n Nacional de los Mercados y la
Competencia (\u201cCNMC\u201d), the Spanish competition authority,
carried out a dawn raid at the offices of ArcelorMittal in
Villaverde (Madrid) in relation to a preliminary investigation
concerning alleged coordination between competitors to fix the
purchase price of scrap. In March 2020, further dawn raids were
carried out extending the investigation to the sale of long
products. In July 2020, CNMC announced that they were
commencing a formal sanctioning procedure against
ArcelorMittal Spain Holding (\"AMSH\") and its subsidiaries
ArcelorMittal Madrid, ArcelorMittal Comercial Perfiles Espa\u00f1a,
ArcelorMittal Aceralia Basque Holding (\u201cAMABH\u201d), and Arcelor
Mittal Espa\u00f1a (and other companies not part of ArcelorMittal
group) in respect of purchases of scrap and sale of finished
steel products, especially long products. In August 2021, the
CNMC issued a statement of objections to AMSH and AMABH,
among other parties. The CNMC stated that it had found
evidence of a purported cartel in terms of the purchase of scrap,
while noting that it had not found evidence of infringement with
regard to the sales of long products. The infringement with
respect to the scrap was alleged to have taken place from 2009
to 2020 and is attributed to AMSH and AMABH. In September
2021, AMSH and AMABH responded to the allegations and
objected to the claims of infringement. In November 2021, the
CNMC notified AMABH and AMSH of its resolution proposal to
be submitted to the Council proposing a sanction for AMABH,
with joint and several liability for AMSH, of 3 (\u20ac2.7\u00a0million which
is 6.5% of a turnover figure of \u20ac42.3\u00a0million) and notified AMSH
and AMABH that it had restricted the alleged infringement due to
certain contacts held from January to August 2018. On
December 16, 2021, AMABH filed its challenge to the resolution
proposal, together with an economic report as proof of market
structure. In March 2022, the CNMC decided on a sanction for
AMABH of 14 (\u20ac12.1\u00a0million based on a turnover which CNMC
determined as \u20ac226.6\u00a0million). In May 2022, AMABH appealed
the decision\u00a0 to the Spanish Court and sought suspension of
payment of the fine. In October 2022, the Court agreed to the
said suspension subject to the provision of a guarantee by
AMABH, filed with the court in December 2022.
Other Legal Claims\u00a0
ArcelorMittal is a party to various other legal claims. As of
December\u00a031, 2022, ArcelorMittal had recorded provisions of
216 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\u00a031,
2022, (ii) that constitute a contingent liability, (iii) that were
resolved in 2022, or (iv) that were resolved and had a financial
impact in 2021 or 2020, 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\u00a0
Over the course of 2007 to 2021, the Argentinian Customs
Office Authority (\u201cAduana\u201d) notified Acindar, 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 and
Bolivian suppliers and from ArcelorMittal Sourcing originally on
39 different claims concerning several shipments made between
2002 and 2021. 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 ordered 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. In addition, other cases have
been dismissed by the National Tax Court. As of February 2023,
the aggregate amount claimed by the Customs Office Authority
in respect of all iron ore shipments is 99 in 18 different cases. Of
these 18 cases, 7 are still in the administrative branch of the
Customs Office Authority and the other 11 cases, in which the
administrative branch of the Customs Office Authority ruled
against Acindar, have been appealed to the Argentinian National
Fiscal Court.
Brazil\u00a0
In 2015, the SINDIMETAL (employees\u2019 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 Vit\u00f3ria/ES, the case was dismissed. SINDIMETAL\u00a0
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 July
2022, the Supreme Court decided the leading case, not
involving ArcelorMittal Brasil, declaring the constitutionality of
Collective Agreements, and this decision may favorably impact
ArcelorMittal Brasil's case. This ruling lifted the suspension of all
lawsuits (including ArcelorMittal\u2019s 2019 appeal), regarding the
validity of collective agreements, the appeal is therefore now
being considered.
In April 2017, a shareholder in Sider\u00fargica Tr\u00eas Lagoas
(\u201cSITREL\u201d) (of which ArcelorMittal Brasil is the other
shareholder), 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\u2019s 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 totaling 33. In October
2021, the CAM-CCBC decided against ArcelorMittal Brasil. In
November 2021, ArcelorMittal Brasil filed a motion for
clarification and disqualification request to the CAM-CCBC in
relation to a conflict of interest concerning the other party's
appointed arbitrator. The CAM-CCBC issued a stay on the
clarification request, pending resolution on the disqualification
challenge. In December 2021, an Independent Arbitrators
Committee was formed to decide on the disqualification claim,
which it rejected in March 2022. In April 2022, a final arbitral
award was issued, which has been satisfied by ArcelorMittal
Brasil. Given ArcelorMittal Brasil\u2019s ownership interest in SITREL,
the financial impact for ArcelorMittal is a net loss after tax of
approximately 126 (67 net of partial recovery through dividend
payment from SITREL).
On March 30, 2022, Votorantim S.A. (\u201cVotorantim\u201d) exercised
the put option right it has under its shareholders\u2019 agreement with
the Company to sell its entire equity interest in ArcelorMittal
Brasil to the Company, following the acquisition of Votorantim's
long steel business in Brazil in 2018. There is a dispute between
the parties as to the value of the put option. Votorantim has
valued the put option at BRL 5.283 billion (i.e. 1,012). In
September 2022, Votorantim commenced an arbitration against
ArcelorMittal Brasil seeking the full amount of its value of the put
option, which would be reduced by the undisputed amount
ArcelorMittal Brasil accepts as the value of the put option and
which was paid in January 2023 for 179 (see note 11.5.2).
Italy\u00a0
In January 2010, ArcelorMittal received notice of a claim filed by
Finmasi S.p.A. relating to a memorandum of agreement (\u201cMoA\u201d)
entered into between ArcelorMittal Distribution Services France
(\u201cAMDSF\u201d) and Finmasi in 2008. The MoA provided that AMDSF
would acquire certain of Finmasi\u2019s businesses for an amount not
to exceed 114, subject to the satisfaction of certain conditions
precedent, which, in AMDSF\u2019s view, were not fulfilled. Finmasi
sued for (i) enforcement of the MoA, (ii) damages of 17 to 29 or
(iii) recovery costs plus quantum damages for Finmasi\u2019s alleged
lost opportunity to sell to another buyer. In September 2011, the
court rejected Finmasi\u2019s claims other than its second claim. The
court appointed an expert to determine the quantum of
damages. In May 2013, the expert\u2019s report was issued and
valued the quantum of damages in the range of 46 to 73.
ArcelorMittal appealed the decision on the merits. In May 2014,
the Court of Appeal issued a decision rejecting ArcelorMittal\u2019s
appeal. On June 20, 2014, ArcelorMittal filed an appeal of the
Court of Appeal\u2019s 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\u2019s 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 29 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\u2019s 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. In August 2020, the
Court of Cassation quashed the Court of Appeal decision on
quantum and referred the case back to the Court of Appeal for
further review of the quantum in respect of which Finmasi
formally served their writ of summons in October 2020 asking
the Court of Appel to confirm the first instance judgment on
quantum. Following the decision of the Court of Cassation,
Finmasi has repaid half of the amount of the guarantee that was
called and provided a bank guarantee for the remainder. In
December 2022, the Court found that AMDSF has the right to
obtain restitution of approximately 28 paid to Finmasi and
ordered Finmasi to pay the half still outstanding (approximately
13.9) plus interest and certain costs. In February 2023, Finmasi
filed an appeal to the Court of Cassation. AMDSF is due to file
its defense in March 2023.
On November 4, 2019, ArcelorMittal sent to the Commissioners
governing the Ilva insolvency procedure (the \u201cCommissioners\u201d)
a notice to withdraw from or terminate the lease agreement with
a conditional obligation to purchase the business of Ilva and
certain of its subsidiaries. This notice was based, among other
things, on provisions of the agreement that allow withdrawal in
the event that a new law affects it\u2019s environmental plan for the
Taranto plant in such a way that materially impairs the ability of
ArcelorMittal Italia to operate the plant or implement its industrial
plan; these provisions were triggered following the Italian
Parliament\u2019s removal, on November 3, 2019, of the legal
protection necessary for ArcelorMittal Italia to implement its
environmental plan without risk of criminal liability. In response,
the Commissioners filed suit in Milan seeking an injunction to
prevent ArcelorMittal's withdrawal and termination of the
agreement. Following negotiation between the parties, on March
4, 2020, ArcelorMittal and the Commissioners entered into a
settlement agreement whereby ArcelorMittal agreed to revoke
its notice to withdraw from the original Ilva lease agreement and
the Ilva Commissioners agreed to withdraw their request for an
injunction.
In addition, 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. Following the (i) search decrees issued by the Milan and
Taranto Prosecution Offices and ensuing seizures of documents
in November 2019, and (ii) restitution decree issued by the
Milan Prosecution Office in September 2020, the Milan Public
Prosecutors closed one of the investigations which began in
November 2019 concluding that there was no evidence to
support allegations of violations of numerous criminal laws
relating principally to ArcelorMittal's withdrawal from the lease
agreement for the Ilva plants and asked the judge for
preliminary investigations to close the case. In August 2022, the
Milan Judge for Preliminary Investigation dismissed the case.
ArcelorMittal Italia (renamed Acciaierie d\u2019Italia in April 2021 after
the formation of a partnership with Invitalia see note 2.3.1) has
not been notified of further developments in the other pending
criminal cases. It is not possible to predict the timing or outcome
or to foresee any charges for Acciaierie d'Italia.
In February 2020, the Mayor of Taranto issued an order to
ArcelorMittal Italia related to certain emissions events that
appear to have occurred in August 2019 and on February 22
and 23, 2020 and that allegedly concern the Taranto plant. The
order required ArcelorMittal Italia to identify the responsible
installations in 30 days and eliminate any anomalies within the
subsequent 30 days or, if necessary, shut down certain
installations relating to such emissions events (provided that, if
no such identification was completed, the shut-down would
extend to substantially the entire \"hot area\" of the plant). The
Mayor of Taranto further alleged that adequate responses
concerning such emissions were not received from the Ministry
of the Environment. In response to this order, ArcelorMittal Italia
filed an appeal on the merits and an application for interim
measures to stay the order with the Regional Administrative
Court in Lecce. In April 2020, the court upheld ArcelorMittal
Italia\u2019s application for interim measures and suspended the
Mayor of Taranto\u2019s order until a further hearing in October 2020.
The interim order further required the Ministry of the
Environment to file reports concerning the emissions events
which served as the basis for the Mayor of Taranto\u2019s order. After
the Ministry provided such reports, the October 2020 hearing
was postponed until December 15, 2020, at which hearing the
Court confirmed the suspension of the order and scheduled the
hearing for the discussion of the merits for January 27, 2021.\u00a0
On February 13, 2021, the Court rejected ArcelorMittal Italia\u2019s
appeal. On February 18, 2021, ArcelorMittal Italia filed an
appeal with the State Council (the highest appellate body in this
case) on the merits and also requested an ex parte order to
suspend the judgment pending a ruling on the merits. On
February 19, 2021, the State Council (i) found that the 30-day
period during which ArcelorMittal Italia would have to shut down
installations has not yet started and would commence only on
March 16, 2021, i.e., after the hearing to discuss the request for
interim measures (which it set for March 11, 2021) and therefore
found a lack at the time of demonstrable \u201cextreme gravity and
urgency\u201d necessary for interim measures, and (ii) set a hearing
date of May 13, 2021 in respect of the merits. On June 23,
2021, the judgment of the Council of State was published,
upholding Acciaierie d'Italia\u2019s appeal, setting aside the Mayor of
Taranto\u2019s order as unlawful on various grounds, and thereby
enabling Acciaierie d'Italia to continue operating the Taranto
plant.
Luxembourg\u00a0
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
61. Given the similarities in the claims, the parties agreed to limit
the pending proceedings to four test claims. In\u00a0April 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 were appealed but were terminated
by the court in November 2021.
France
Certain subsidiaries of the ArcelorMittal group were parties to
proceedings, dating from 2010, against Engie and Engie
Thermique France which claimed damages in the amount of 187
for an alleged wrongful termination of a contract for the
transformation of steel production gas into electricity. The
ArcelorMittal subsidiaries had filed a counterclaim in the amount
of 232. The contract had been entered into in 2006 for a term of
20 years. ArcelorMittal M\u00e9diterran\u00e9e 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 claimed 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 was ordered to pay damages of 3 plus
interest. In February 2020, Engie filed an appeal. A settlement
agreement was signed in July 2021, bringing the litigation to an
end.
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 (\u201cSocial Security\u201d). 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.\u00a0
The number of claims outstanding for asbestos exposure at
December\u00a031, 2022 was 308 as compared to\u00a0300 at
December\u00a031, 2021.
Minority Shareholder Claims Regarding the Exchange Ratio in
the Second-Step Merger of ArcelorMittal into Arcelor\u00a0
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.\u00a0
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.\u00a0
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.\u00a0
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\u2019s and Arcelor\u2019s 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\u2019s 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 221. By judgment dated November
30, 2011, the Luxembourg civil court declared all of the plaintiffs\u2019
claims inadmissible and dismissed them. The judgment was
appealed in May 2012.\u00a0By judgment dated February 15, 2017,
the Luxembourg Court of Appeal declared all but one of the
plaintiffs\u2019 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\u2019s judgment on May
18, 2018. The admissible claimant finally withdrew its claims
before the lower court and by judgment dated January 5, 2022,
the civil court of Luxembourg acknowledged the withdrawal of
the claims without prejudice and ended the procedure.
On May 15, 2012, ArcelorMittal received a writ of summons on
behalf of Association des Actionnaires d'Arcelor (\u201cAAA\u201d), a
French association of former minority shareholders of Arcelor, to
appear before the civil court of Paris. In such writ of summons,
AAA claimed (on grounds similar to those in the Luxembourg
proceedings summarized above) inter alia damages in a
nominal amount and reserved the right to seek additional
remedies including the cancellation of the merger. The
proceedings before the civil court of Paris were stayed, pursuant
to a ruling of such court on July 4, 2013, pending a preparatory
investigation (instruction pr\u00e9paratoire) by a criminal judge
magistrate (juge d\u2019instruction) triggered by the complaints
(plainte avec constitution de partie civile) of AAA and several
hedge funds (who quantified their total alleged damages at 282),
including those who filed the claims before the Luxembourg
courts described (and quantified) above. The dismissal of
charges (non-lieu) ending the preparatory investigation became
final in March 2018. On March 6, 2020 AAA revived its claim
before the civil court of Paris on grounds similar to those of the
Luxembourg civil claims summarized above, on its behalf and
on behalf of the hedge funds who had also filed a criminal
complaint, as well as two new plaintiffs. The complaint filed by
AAA quantifies the total damages claimed at 416 (\u20ac390 million)
(including the claims before the Luxembourg courts described
above). In March 2022, following the end of the Luxembourg
civil proceedings, the Paris civil court decided to address the
remaining procedural objections (lack of standing and res
judicata) together with the merits of the case, and the next
(procedural) hearing is scheduled for March 2023.
9.4\u00a0 \u00a0 Commitments
| | | |
| |
| | | |
Commitments related to purchases of raw materials and energy | | | |
Guarantees, pledges and other collateral | | | |
Capital expenditure commitments | | | |
| | | |
| | | |
60% guarantee of the 5,146
ten-year term loan agreement entered into by the AMNS India
joint venture with various Japanese banks on March 16, 2020.
As of December\u00a031, 2022, pledges and other collateral mainly
related to (i) mortgages entered into by the Company\u2019s
operating subsidiaries and (ii) inventories and receivables
pledged to secure the South African Rand revolving borrowing
base finance facility for the amount drawn of 147 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 98 and 111 as of December\u00a031, 2022 and 2021,
respectively. Other sureties, first demand guarantees, letters of
credit, pledges and other collateral included 375 and 406 of
commitments given on behalf of associates as of December\u00a031,
2022 and 2021, respectively, and 598 and 452 of commitments
given on behalf of joint ventures as of December\u00a031, 2022 and
2021, respectively.
Capital expenditure commitments
Capital expenditure commitments relate to commitments with
respect to purchases of property, plant and equipment including
in the context of expansion and improvement projects.
Capital expenditure commitments include 340 at December 31,
2022 relating to ArcelorMittal Liberia Ltd in connection with
Phase 2 expansion project that envisages the construction of
15\u00a0million tonnes of concentrate sinter fines capacity and
associated infrastructure.
Capital expenditure commitments include 394 at December 31,
2022 relating to ArcelorMittal Dofasco (Canada) mainly with
respect to the construction of DRI \u2013 EAF facilities in the
framework of the plant's decarbonization project.
Capital expenditure commitments also include 182 at the iron
ore Serra Azul mine (Brazil) at December 31, 2022 in
connection with the construction of facilities to produce 4.5
million tonnes per annum of DRI quality pellet feed.
AMSA was committed to an investment program in connection
with the competition commission settlement. The remaining
capital expenditure commitment was 100 as of December 31,
2021. The commitment related to this investment program
expired during 2022.
Capital expenditure commitments included 158 as of December
31, 2021 for the 1 billion investment program at the Company's
Mexican operations, which is focused on building ArcelorMittal
Mexico\u2019s downstream capabilities. The main investment was
related to the new hot strip mill with capacity of approximately
2.5 million tonnes. The investment program was completed
during 2022.
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 Tubar\u00e3o 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. As of December 31, 2022 and 2021,
ArcelorMittal Brasil estimated the underlying costs to implement
those investments at 115 and 87, respectively. The non-
compliance with ECA would lead to fines amounting to a
maximum of 19 and 18 as of December 31, 2022 and 2021,
respectively. On November 19, 2021, following a protocol of
intent agreed between the Minas Gerais State Government,
ArcelorMittal Brasil and BMB Belgo Mineira Bekaert Artefatos
De Arame Ltd (\"BMB\"), ArcelorMittal Brasil committed to carry
out capital expenditures at the Monlevade site to complete the
expansion project by the second half of 2024. As of December
31, 2022 and 2021, commitments related to this project were
420 and 442, respectively.
Commitments to sell
In addition to the commitments presented above, the Company
has firm commitments to sell for which it also has firm
commitments to purchase included in purchase commitments
for 368 and 292 as of December\u00a031, 2022 and 2021,
respectively, and mainly related to natural gas and electricity.
Other
On December 20, 2022, ArcelorMittal, the Fonds d'Urbanisation
et d'Am\u00e9nagement du Plateau de Kirchberg and the State of the
Grand-Duchy of Luxembourg entered into an agreement
whereby the Company granted to the State the right to acquire
50% of ArcelorMittal's future new headquarters and related
right-of-use of land in the Kirchberg district of the city of
Luxembourg. The right is exercisable within a twelve-month
period ending on December 20, 2023 and after ratification of the
acquisition by the Luxembourg Parliament. The acquisition price
is based on construction cost.
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"value": "
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 (\u201cARO\u201d)
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\u2019s 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\u2019s 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.
These assessments can involve a series of complex judgments
about future events and can rely heavily on estimates and
assumptions. The assessments are based on estimates and
assumptions that have been deemed reasonable by
management. The Company believes that the aggregate
provisions recorded for the above matters are adequate based
upon currently available information. However, given the
inherent uncertainties related to these cases and in estimating
contingent liabilities, the Company could, in the future, incur
judgments that have a material adverse effect on its results of
operations in any particular period. The Company considers it
highly unlikely, however, that any such judgments could have a
material adverse effect on its liquidity or financial condition.",
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"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
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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 (\u201cARO\u201d)
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\u2019s 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\u2019s 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.
These assessments can involve a series of complex judgments
about future events and can rely heavily on estimates and
assumptions. The assessments are based on estimates and
assumptions that have been deemed reasonable by
management. The Company believes that the aggregate
provisions recorded for the above matters are adequate based
upon currently available information. However, given the
inherent uncertainties related to these cases and in estimating
contingent liabilities, the Company could, in the future, incur
judgments that have a material adverse effect on its results of
operations in any particular period. The Company considers it
highly unlikely, however, that any such judgments could have a
material adverse effect on its liquidity or financial condition.
9.1\u00a0 \u00a0 Provisions
| | | | | | | | | |
| Balance at December\u00a031, 2021 | | | | | | Effects of foreign exchange and other movements | | Balance at December\u00a031, 2022 |
| | | | | | | | | |
| | | | | | | | | |
Asset retirement obligations | | | | | | | | | |
| | | | | | | | | |
Staff related obligations | | | | | | | | | |
Voluntary separation plans | | | | | | | | | |
Litigation and other (see note 9.3) | | | | | | | | | |
| | | | | | | | | |
\u00a0 Other legal claims | | | | | | | | | |
Commercial agreements and onerous contracts | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Balance at December\u00a031, 2020 | | | | | | Effects of foreign exchange and other movements | | Balance at December\u00a031, 2021 |
| | | | | | | | | |
| | | | | | | | | |
Asset retirement obligations | | | | | | | | | |
| | | | | | | | | |
Staff related obligations | | | | | | | | | |
Voluntary separation plans | | | | | | | | | |
Litigation and other (see note 9.3) | | | | | | | | | |
| | | | | | | | | |
\u00a0 Other legal claims | | | | | | | | | |
Commercial agreements and onerous contracts | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
1.Additions exclude provisions reversed or utilized during the same year.
\u00a0
The Company uses derivative financial instruments and spot
purchases to manage its exposure to fluctuations in prices of
emission rights allowances. See note 6.3 for the details of the
cash flow hedging in place for emission rights, note 4.5 for CO2
emission rights held as current assets and note 5.1 for CO2
emission rights held as Intangible non-current assets. 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 and
Poland, of which 79 and 98 at December 31, 2022 and 2021,
respectively, with respect to the dismantling of the Florange
liquid phase.\u00a0
Provisions for staff related obligations primarily concern Brazil
and are related to various employees\u2019 compensation.
Provisions for voluntary separation plans primarily relate to
plans in Spain, France, Brazil, Luxembourg and Germany, 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.
In 2022 and 2021 provisions for commercial agreements and
onerous contracts are primarily linked to onerous contracts
recognized in Poland, Spain and Brazil.
Other provisions increased by 240 as a result of the
Complementary Agreement Term signed on June 7, 2021
between ArcelorMittal Brasil, the Federal and State Prosecutor
Offices and the Commission representing affected people with
respect to the precautionary evacuation of the communities
close to the Serra Azul dam as well as the commitment to
implement action plans in order to ensure the stability, security
and decommissioning of the tailing dam. As of December 31,
2022 such provisions amounted to 187 (217 on December 31,
2021). Other provisions comprise as well technical warranties
and guarantees.
In 2021, other provisions decreased by 98 with respect to the
indemnification arrangement between the Company and Global
Chartering (see note 2.3.1) following a revision of the shipping
market rate outlook for certain of Global Chartering's fleet lease
terms.
Environmental Liabilities\u00a0
ArcelorMittal\u2019s 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\u00a031, 2022, excluding asset
retirement obligations, ArcelorMittal had established provisions
of 566 for environmental remedial activities and liabilities. The
provisions for all operations by geographic area included mainly
399 in Europe, 118 in South Africa and 44 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.\u00a0
Europe\u00a0
Environmental provisions for ArcelorMittal\u2019s operations in
Europe total 399 and are mainly related to the investigation and
remediation of environmental contamination at current and
former operating sites in Belgium (206), France (58),
Luxembourg (55), Poland (44), Germany (28) 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.\u00a0
Belgium\u00a0
In Belgium, environmental provisions\u00a0 amount to 206, of which
the most significant elements are legal site remediation
obligations linked to the closure of the primary installations at
ArcelorMittal Belgium (Li\u00e8ge). The provisions also concern the
external recovery and disposal of waste, residues or by-
products that cannot be recovered internally at the ArcelorMittal
Ghent and Li\u00e8ge sites and the removal and disposal of material
containing asbestos.\u00a0
France\u00a0
In France, environmental provisions of 58 principally relate 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.\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
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 the Thionville coke plant, soil remediation has
been completed, while additional investigations are ongoing for
groundwater.
ArcelorMittal is responsible for closure and final rehabilitation of
the rest of the site corresponding to the former Conroy and
P\u00e9rotin slag-heaps, for which the administrative procedure for
cessation of activity is underway but due to the COVID-19
pandemic the project slowed down and the remediation has
been postponed to 2023 due to change of regulator. In other
sites, ArcelorMittal France is responsible for monitoring the
concentration of organic compound and heavy metals in soil and
groundwater on all former sites closed and/or already
remediated. The Florange coke plant shut down in 2020 and is
now under investigation for its demolition and remediation.
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. Environmental provisions also include
treatment of slag dumps at the Florange and Dunkirk sites as
well as removal and disposal of material containing asbestos at
the Dunkirk and Mardyck sites.\u00a0
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 as the stocking areas at the Dunkirk
site need to be restored to comply with local law.
Luxembourg\u00a0
In Luxembourg, environmental provisions of 55 relate to the
post-closure monitoring and remediation of former production
sites, waste disposal areas, slag deposits and mining sites.\u00a0
ArcelorMittal Luxembourg is contractually liable to clean the
former Ehlerange slag deposit\u00a0 (93 hectares) and moves
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 ladle
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 the end of 2021. At the end of 2022, the
studies for the covering process of this dump were completed. A
49 provision relates to such obligations.\u00a0
ArcelorMittal Belval and Differdange has an environmental
provision of 6 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\u2019s environmental provision of 44 includes 27
for cleaning and remediation costs recognized in 2020 following
the closure of primary facilities in Krak\u00f3w; the remaining 17
relates to the obligation to reclaim landfills in Krak\u00f3w,
Zdzieszowice, Dabrowa G\u00f3rnicza and to dispose the residues
from a landfill in Lip\u00f3wka which cannot be internally recycled or
externally recovered in Dabrowa Gornicza, the storage and
disposal of iron-bearing sludge which cannot be reused in the
manufacturing process under the environmental law (i.e., waste
storage time cannot exceed three years) and also land
remediation in post-industrial areas in Ruszcza (district of
Krak\u00f3w).
Germany\u00a0
In Germany, the environmental provision of 28 essentially
relates to ArcelorMittal Bremen\u2019s post-closure obligations mainly
established for soil remediation, groundwater treatment and
monitoring at the Prosper coke plant in Bottrop.\u00a0
Spain\u00a0
In Spain, ArcelorMittal Espa\u00f1a 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.\u00a0
South Africa\u00a0
AMSA has environmental provisions of 118 to be used over 13
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 obtaining the
necessary environmental authorizations.\u00a0
A provision of 37 relates to the decommissioned Pretoria Works
site. This site is in a state of partial decommissioning and
rehabilitation with only 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 in
terms of a remediation order received during October 2021 and
commenced with remediation during 2022.\u00a0
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. Provisions relating to this
site amount to 18.\u00a0
The Newcastle Works site is the main long carbon steel
operation of AMSA. A provision of 24 relates 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,
waste site remediation and storm water management.
A provision of 35 relates to the environmental rehabilitation of
the Thabazimbi mine. AMSA holds an environmental trust which
holds investments for a value of 24 that will be used for
rehabilitation purposes.\u00a0
The remainder of the obligation of 4 relates to Vereeniging site
for the historical pollution that needs to be remediated at waste
disposal sites, waste water dams and groundwater aquifers.\u00a0
Canada\u00a0
In Canada, ArcelorMittal Dofasco has an environmental
provision of 44 for the expected cost of remediating toxic
sediment located in the Company\u2019s East Boatslip site, of which
1 is expected to be spent in 2023-2024.
Asset Retirement Obligations (\u201cAROs\u201d)\u00a0
AROs arise from legal requirements and represent
management\u2019s 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, mainly in connection with mining
operations. As of December\u00a031, 2022, ArcelorMittal had
established provisions for asset retirement obligations of 349,
including mainly 133 for Canada, 52 for Mexico, 41 for Ukraine,
36 for Germany, 22 for Brazil, 21 for Kazakhstan, 19 for Liberia
and 18 for South Africa. As of December 31, 2022, AROs related
to mining activities and total undiscounted amount of site
restoration obligations amounted to 287 and 934, respectively.
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. In addition,
Dofasco has legal obligations for the former Sherman Mine site
near Temagami, Ontario.
AROs in Mexico relate to the restoration costs following the
closure of the Las Truchas, El Volcan, San Jose and the joint
operation of Pe\u00f1a Colorada iron ore mines.\u00a0
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.\u00a0
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.
In Kazakhstan, AROs relate to the restoration obligations of the
iron ore and coal mines.
In Liberia, 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.
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.\u00a0
In Belgium, AROs are to cover the demolition costs for the
primary facilities at the Li\u00e8ge site.\u00a0
In Brazil, 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 fully settled up to 2072 and 2078, respectively.\u00a0
In Bosnia and Herzegovina, ARO relates to re-cultivation of
dump yard of old iron ore pit Jezero and closing dam Medjedja.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfProvisionsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV80ODcvZnJhZzplM2ViY2NmNGFlNjY0MDc2YmU2M2E1OGZkZmMwYTRkNS90ZXh0cmVnaW9uOmUzZWJjY2Y0YWU2NjQwNzZiZTYzYTU4ZmRmYzBhNGQ1XzI3NDg3NzkwNzE5MDY2_4104a421-1c8e-430f-90b6-d16d845c4fa0": {
"value": "9.1\u00a0 \u00a0 Provisions
| | | | | | | | | |
| Balance at December\u00a031, 2021 | | | | | | Effects of foreign exchange and other movements | | Balance at December\u00a031, 2022 |
| | | | | | | | | |
| | | | | | | | | |
Asset retirement obligations | | | | | | | | | |
| | | | | | | | | |
Staff related obligations | | | | | | | | | |
Voluntary separation plans | | | | | | | | | |
Litigation and other (see note 9.3) | | | | | | | | | |
| | | | | | | | | |
\u00a0 Other legal claims | | | | | | | | | |
Commercial agreements and onerous contracts | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Balance at December\u00a031, 2020 | | | | | | Effects of foreign exchange and other movements | | Balance at December\u00a031, 2021 |
| | | | | | | | | |
| | | | | | | | | |
Asset retirement obligations | | | | | | | | | |
| | | | | | | | | |
Staff related obligations | | | | | | | | | |
Voluntary separation plans | | | | | | | | | |
Litigation and other (see note 9.3) | | | | | | | | | |
| | | | | | | | | |
\u00a0 Other legal claims | | | | | | | | | |
Commercial agreements and onerous contracts | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
1.Additions exclude provisions reversed or utilized during the same year.
\u00a0
The Company uses derivative financial instruments and spot
purchases to manage its exposure to fluctuations in prices of
emission rights allowances. See note 6.3 for the details of the
cash flow hedging in place for emission rights, note 4.5 for CO2
emission rights held as current assets and note 5.1 for CO2
emission rights held as Intangible non-current assets. 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 and
Poland, of which 79 and 98 at December 31, 2022 and 2021,
respectively, with respect to the dismantling of the Florange
liquid phase.\u00a0
Provisions for staff related obligations primarily concern Brazil
and are related to various employees\u2019 compensation.
Provisions for voluntary separation plans primarily relate to
plans in Spain, France, Brazil, Luxembourg and Germany, 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.
In 2022 and 2021 provisions for commercial agreements and
onerous contracts are primarily linked to onerous contracts
recognized in Poland, Spain and Brazil.
Other provisions increased by 240 as a result of the
Complementary Agreement Term signed on June 7, 2021
between ArcelorMittal Brasil, the Federal and State Prosecutor
Offices and the Commission representing affected people with
respect to the precautionary evacuation of the communities
close to the Serra Azul dam as well as the commitment to
implement action plans in order to ensure the stability, security
and decommissioning of the tailing dam. As of December 31,
2022 such provisions amounted to 187 (217 on December 31,
2021). Other provisions comprise as well technical warranties
and guarantees.
In 2021, other provisions decreased by 98 with respect to the
indemnification arrangement between the Company and Global
Chartering (see note 2.3.1) following a revision of the shipping
market rate outlook for certain of Global Chartering's fleet lease
terms.
Environmental Liabilities\u00a0
ArcelorMittal\u2019s 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\u00a031, 2022, excluding asset
retirement obligations, ArcelorMittal had established provisions
of 566 for environmental remedial activities and liabilities. The
provisions for all operations by geographic area included mainly
399 in Europe, 118 in South Africa and 44 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.\u00a0
Europe\u00a0
Environmental provisions for ArcelorMittal\u2019s operations in
Europe total 399 and are mainly related to the investigation and
remediation of environmental contamination at current and
former operating sites in Belgium (206), France (58),
Luxembourg (55), Poland (44), Germany (28) 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.\u00a0
Belgium\u00a0
In Belgium, environmental provisions\u00a0 amount to 206, of which
the most significant elements are legal site remediation
obligations linked to the closure of the primary installations at
ArcelorMittal Belgium (Li\u00e8ge). The provisions also concern the
external recovery and disposal of waste, residues or by-
products that cannot be recovered internally at the ArcelorMittal
Ghent and Li\u00e8ge sites and the removal and disposal of material
containing asbestos.\u00a0
France\u00a0
In France, environmental provisions of 58 principally relate 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.\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
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 the Thionville coke plant, soil remediation has
been completed, while additional investigations are ongoing for
groundwater.
ArcelorMittal is responsible for closure and final rehabilitation of
the rest of the site corresponding to the former Conroy and
P\u00e9rotin slag-heaps, for which the administrative procedure for
cessation of activity is underway but due to the COVID-19
pandemic the project slowed down and the remediation has
been postponed to 2023 due to change of regulator. In other
sites, ArcelorMittal France is responsible for monitoring the
concentration of organic compound and heavy metals in soil and
groundwater on all former sites closed and/or already
remediated. The Florange coke plant shut down in 2020 and is
now under investigation for its demolition and remediation.
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. Environmental provisions also include
treatment of slag dumps at the Florange and Dunkirk sites as
well as removal and disposal of material containing asbestos at
the Dunkirk and Mardyck sites.\u00a0
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 as the stocking areas at the Dunkirk
site need to be restored to comply with local law.
Luxembourg\u00a0
In Luxembourg, environmental provisions of 55 relate to the
post-closure monitoring and remediation of former production
sites, waste disposal areas, slag deposits and mining sites.\u00a0
ArcelorMittal Luxembourg is contractually liable to clean the
former Ehlerange slag deposit\u00a0 (93 hectares) and moves
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 ladle
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 the end of 2021. At the end of 2022, the
studies for the covering process of this dump were completed. A
49 provision relates to such obligations.\u00a0
ArcelorMittal Belval and Differdange has an environmental
provision of 6 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\u2019s environmental provision of 44 includes 27
for cleaning and remediation costs recognized in 2020 following
the closure of primary facilities in Krak\u00f3w; the remaining 17
relates to the obligation to reclaim landfills in Krak\u00f3w,
Zdzieszowice, Dabrowa G\u00f3rnicza and to dispose the residues
from a landfill in Lip\u00f3wka which cannot be internally recycled or
externally recovered in Dabrowa Gornicza, the storage and
disposal of iron-bearing sludge which cannot be reused in the
manufacturing process under the environmental law (i.e., waste
storage time cannot exceed three years) and also land
remediation in post-industrial areas in Ruszcza (district of
Krak\u00f3w).
Germany\u00a0
In Germany, the environmental provision of 28 essentially
relates to ArcelorMittal Bremen\u2019s post-closure obligations mainly
established for soil remediation, groundwater treatment and
monitoring at the Prosper coke plant in Bottrop.\u00a0
Spain\u00a0
In Spain, ArcelorMittal Espa\u00f1a 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.\u00a0
South Africa\u00a0
AMSA has environmental provisions of 118 to be used over 13
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 obtaining the
necessary environmental authorizations.\u00a0
A provision of 37 relates to the decommissioned Pretoria Works
site. This site is in a state of partial decommissioning and
rehabilitation with only 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 in
terms of a remediation order received during October 2021 and
commenced with remediation during 2022.\u00a0
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. Provisions relating to this
site amount to 18.\u00a0
The Newcastle Works site is the main long carbon steel
operation of AMSA. A provision of 24 relates 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,
waste site remediation and storm water management.
A provision of 35 relates to the environmental rehabilitation of
the Thabazimbi mine. AMSA holds an environmental trust which
holds investments for a value of 24 that will be used for
rehabilitation purposes.\u00a0
The remainder of the obligation of 4 relates to Vereeniging site
for the historical pollution that needs to be remediated at waste
disposal sites, waste water dams and groundwater aquifers.\u00a0
Canada\u00a0
In Canada, ArcelorMittal Dofasco has an environmental
provision of 44 for the expected cost of remediating toxic
sediment located in the Company\u2019s East Boatslip site, of which
1 is expected to be spent in 2023-2024.
Asset Retirement Obligations (\u201cAROs\u201d)\u00a0
AROs arise from legal requirements and represent
management\u2019s 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, mainly in connection with mining
operations. As of December\u00a031, 2022, ArcelorMittal had
established provisions for asset retirement obligations of 349,
including mainly 133 for Canada, 52 for Mexico, 41 for Ukraine,
36 for Germany, 22 for Brazil, 21 for Kazakhstan, 19 for Liberia
and 18 for South Africa. As of December 31, 2022, AROs related
to mining activities and total undiscounted amount of site
restoration obligations amounted to 287 and 934, respectively.
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. In addition,
Dofasco has legal obligations for the former Sherman Mine site
near Temagami, Ontario.
AROs in Mexico relate to the restoration costs following the
closure of the Las Truchas, El Volcan, San Jose and the joint
operation of Pe\u00f1a Colorada iron ore mines.\u00a0
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.\u00a0
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.
In Kazakhstan, AROs relate to the restoration obligations of the
iron ore and coal mines.
In Liberia, 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.
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.\u00a0
In Belgium, AROs are to cover the demolition costs for the
primary facilities at the Li\u00e8ge site.\u00a0
In Brazil, 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 fully settled up to 2072 and 2078, respectively.\u00a0
In Bosnia and Herzegovina, ARO relates to re-cultivation of
dump yard of old iron ore pit Jezero and closing dam Medjedja.
9.2\u00a0 \u00a0 Other long-term obligations
| | | |
| |
| | | |
Derivative financial instruments (notes 6.1 and 6.3) | | | |
Payable from acquisition of financial assets | | | |
| | | |
| | | |
Put option liability ArcelorMittal Texas HBI (note 11.5.2) | | | |
Put option liability Sonasid (note 11.5.2) | | | |
| | | |
| | | |
Unfavorable contracts of 92 and 105 as of December\u00a031, 2022
and 2021, respectively, mainly related to AMSF.\u00a0
As of December 31, 2022, the income tax payable mainly
related to income tax contingencies (in majority unasserted
claims) and withholding tax.\u00a0
9.3\u00a0 \u00a0 Contingent liabilities
Tax Claims\u00a0
ArcelorMittal is a party to various tax claims. As of
December\u00a031, 2022, ArcelorMittal had recorded short-term and
long-term liabilities related to income tax contingencies of 53
and provisions for non-income tax claims in the aggregate of 73
for which it considers the risk of loss to be probable. Set out
below is a summary description of the tax claims (i) for which
ArcelorMittal had recorded a provision as of December\u00a031,
2022, (ii) that constitute a contingent liability, (iii) that were
resolved in 2022 or (iv) that were resolved and had a financial
impact in 2021 or 2020, in each case involving amounts deemed
material by ArcelorMittal. The Company is vigorously defending
against the pending claims discussed below.\u00a0
Brazil\u00a0
In 2011, ArcelorMittal Brasil (at the time SOL Coqueria Tubar\u00e3o
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 26 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\u2019s 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 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
was filed. In July 2021, the third administrative instance denied
ArcelorMittal Brasil's appeal and upheld the tax assessments.
Following the conclusion of this proceeding at the administrative
level, in September 2021, ArcelorMittal Brasil appealed to the
judicial instance where all of the 21 cases now await a first
instance decision.
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 J\u00fanior Siderurgia (for
the 2006 and 2007 fiscal years), (ii) the amortization of goodwill
arising from the mandatory tender offer (\"MTO\") made by
ArcelorMittal (ex-Mittal Steel N.V.) to minority shareholders of
Arcelor Brasil in connection with 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 now totals 438. 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\u2019s calculations, 120 to 63 (as
calculated at the time of the assessment), while upholding the
remainder of the assessment. The Federal Revenue Service
appealed the administrative tribunal\u2019s decision to reduce the
amount of the original penalty. ArcelorMittal Brasil also appealed
the administrative tribunal\u2019s decision to uphold the tax
authority\u2019s 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.\u00a0
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
J\u00fanior Siderurgia, Dedini Siderurgia and CST, (ii) the
amortization of goodwill arising from the MTO made by
ArcelorMittal (ex-Mittal Steel N.V.) to minority shareholders of
Arcelor Brasil in connection with 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 389. 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 November and December 2022, the
tribunal found in favor of ArcelorMittal Brasil cancelling 98% of
the tax assessment, in particular: (i) the total amount related to
the goodwill of Mendes J\u00fanior Siderurgia was cancelled; (ii)
most of the amounts related to the goodwill of MTO was
cancelled; and (iii) the total amount related to CSL and IRPJ
over profits of controlled companies in Argentina and
Netherlands was cancelled. The decision (a) did not decide the
claim related to the deduction of the MTO\u2019 goodwill amounts
amortized for accounting purposes (this specific matter will be
the subject of a separate legal proceeding) and (b) remitted the
proceeding to the first administrative instance for the analysis of
the arguments related to the subsidiary located in Venezuela.
ArcelorMittal Brasil is currently awaiting the formalization of the
decision and the write-off of the amounts; the remaining claim
under discussion is 8.
In April 2016, ArcelorMittal Brasil received a tax assessment in
relation to (i) the amortization of goodwill resulting from the MTO
made by ArcelorMittal (ex-Mittal Steel N.V.) to the minority
shareholders of Arcelor Brasil in connection with the two-step
merger of Arcelor and Mittal Steel N.V. in 2007 and (ii) the
amortization of goodwill resulting from ArcelorMittal Brasil\u2019s
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 a 63 financial impact arising from a
write off of net operating loss carry forwards with respect to the
2011-2012 tax year. 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, filed a motion for clarification which was denied in
November 2019 and thereafter filed an appeal to the
administrative tribunal of the third instance.\u00a0
In December 2018, ArcelorMittal Brasil received a tax
assessment of 108, which could have an additional 21 financial
impact arising from a write off of net operating loss carry forward
with respect to the 2013-2014 tax years, principally in relation to
the amortization of goodwill resulting from the MTO made by
ArcelorMittal (ex-Mittal Steel N.V.) to the minority shareholders
of Arcelor Brasil in connection with the two-step merger of
Arcelor and Mittal Steel N.V. 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 November 2022, the administrative tribunal of the
second instance cancelled the tax assessment. In January
2023, an appeal to the administrative tribunal of third instance
was filed by the Federal Revenue Service.
In December 2020, ArcelorMittal Brasil received a tax
assessment of 38, which could have an additional 46 financial
impact arising from a write off of net operating loss carry
forwards, with respect to the 2015-2016 tax years, related to the
amortization of goodwill resulting from the MTO made by
ArcelorMittal (ex-Mittal Steel N.V.) to the minority shareholders
of Arcelor Brasil in connection with the two-step merger of
Arcelor and Mittal Steel N.V. in 2007. ArcelorMittal Brasil filed its
defense in the first administrative instance in January 2021
which issued an unfavorable decision in August, 2021. An
appeal to the second administrative instance was filed in
September 2021.
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\u00a055. 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 February 2020, the
appeal to the Supreme Court of Justice was dismissed and, in
July 2020, the Appeal to the Supreme Court was dismissed.
This decision is final and unappealable. In November 2018, a
related tax assessment was received from the Federal Revenue
Service claiming 18 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\u00a0 Brasil\u2019s favor. The case was archived by the
Federal Revenue Service in March 2021. ArcelorMittal Brasil
became aware of this in April 2022 when the contingency was
written off. A further related tax assessment was received in
September 2018 from the Federal Revenue Service claiming 0.2
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.\u00a0
In the period from 2014 to 2018, ArcelorMittal Brasil received six
tax assessments from the Federal Revenue Service in\u00a0the
amount of 39 disputing its use of credits for PIS and COFINS
social security taxes\u00a0in 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 to verify the extent
of the administrative tribunal of the third instance\u2019s decision in
order to proceed with the write-off of amounts due. In August
2020, the tax assessment was reduced by approximately 25%,
reflecting the partially favorable decision. In January 2022,
ArcelorMittal Brasil filed a lawsuit to dispute the remaining
amount which is pending trial at first instance. In the second
case, the administrative tribunal of the first instance found
partially in favor of ArcelorMittal Brasil in December 2016 and an
appeal has been filed to the administrative tribunal of the
second instance. In the third case (this assessment does not
involve a cash payment requirement, but may result in a
financial impact of 3 arising from a write-off of credits in
ArcelorMittal Brasil\u2019s tax books), the administrative tribunal of
the first instance upheld the tax assessment in March 2017, and
ArcelorMittal Brasil appealed to the administrative tribunal of the
second instance. In the fourth case, ArcelorMittal Brasil has filed
its defense to the administrative tribunal of the first instance in
March 2018. In March 2021, a partially favorable decision was
issued and an appeal was filed to the second administrative
instance in April 2021. In the fifth case, a partially favorable
decision was issued in November 2020, and an appeal was
presented in December 2020. In the sixth case, the
administrative tribunal of the first instance issued an unfavorable
decision in April 2017, 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 ruled against the restrictive approach
that the tax authorities have been using towards credit (of the
sort in issue in ArcelorMittal Brasil\u2019s PIS/COFINS cases). In
June 2021, the Supreme Court decided a leading case, not
involving ArcelorMittal Brasil, ensuring the taxpayers\u2019 right to
register the PIS/COFINS credits over scrap acquisition (one of
the inputs being challenged by the tax authority). This binding
precedent is important because it strengthens ArcelorMittal\u2019s
defenses in the six cases in which part of the contingency is
related to scrap acquisition. ArcelorMittal Brasil also filed in
February 2011 a claimant individual lawsuit on the PIS/COFINS
credits over scrap acquisition matter, in which a favorable and
unappealable decision was issued in May 2022. Accordingly and
as a result of this legal clarification, in 2022, ArcelorMittal
recorded PIS/COFINs tax credits in cost of sales in the amount
of 300 with respect to prior periods.\u00a0
In May\u00a02014, ArcelorMittal Comercializadora de Energia
received a tax assessment from the state of Minas Gerais
alleging that\u00a0the company did not correctly calculate tax credits
on interstate sales of electricity from February 2012 to
December 2013. The amount claimed totals 35. ArcelorMittal
Comercializadora de Energia filed its defense in June 2014.
Following an unfavorable administrative decision in November
2014, ArcelorMittal Comercializadora de Energia 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 50, 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.\u00a0In 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 12, 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 7 was finalized in the first case. \u00a0
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 76. 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\u2019s decisions. Each case was decided unfavorably to
ArcelorMittal Brasil at the administrative tribunal of the second
instance. In the period from February 2016 to February 2017,
ArcelorMittal Brasil appealed to the judicial instance, where
there are 5 cases pending. In June 2022, ArcelorMittal Brasil
obtained, in the fifth case, a partially favorable decision and in
September 2022, this decision was confirmed at second
instance. The other cases are still pending a first instance
decision.
On May 17, 2016, ArcelorMittal Brasil received a tax
assessment from the state of Santa Catarina in the amount of
110 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 which was rejected in August 2020.
ArcelorMittal Brasil appealed to the judicial instance in
November 2020.
In January 2023, ArcelorMittal Brasil received a tax assessment
from the Federal Revenue Service in an amount of 132 in which
the tax authority rejected the offsetting of PIS/COFINS credits
used by the company in 2018. The dispute relates to various
types of credits such as credits recognized in Court processes
(exclusion of ICMS from the PIS and COFINS calculation base,
PIS/COFINS credits in the Manaus Free Trade Zone), expenses
related to the acquisition of scrap (including freight), expenses
related to port handling, expenses for freight for finished
products. ArcelorMittal Brasil filed an administrative defense in
February 2023.
Mexico\u00a0
In 2015, the Mexican Tax Administration Service issued a tax
assessment to ArcelorMittal Mexico, 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. The amount of
the tax assessment as of December\u00a031, 2022 is 207.
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. In
November 2019, the Court dismissed the extraordinary appeal
of constitutional review confirming the earlier decision in favor of
the tax authorities. 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 was rejected in June
2020. In September 2020, an annulment complaint was filed
before the Federal Administrative and Tax Justice Court. In
December 2021, a reduction of the penalty component of the tax
assessment was requested, an amount of 20 was paid and the
Court issued a dismissal ruling in respect of this case, thereby
closing the proceedings.
In 2013, the Mexican Tax Administration Service issued a tax
assessment to ArcelorMittal Las Truchas, alleging that
ArcelorMittal Las Truchas owes 89 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 by declaring the illegality of item (i). The tax
authority filed an application for judicial review in January 2019
and in March 2020, the Court upheld the ruling in favor of
ArcelorMittal Las Truchas regarding item (i) which decision is
definitive. ArcelorMittal Las Truchas also filed a nullity lawsuit to
challenge the ruling in respect of items (ii) and (iii), and, in June
2020, the Court upheld the rulings of the Tax Court. ArcelorMittal
Las Truchas promptly thereafter submitted an extraordinary
appeal for constitutional review before the Supreme Court of
Justice regarding items (ii) and (iii).
In October 2018, the Mexican Tax Administration Service issued
a tax assessment to ArcelorMittal Las Truchas, with respect to
2013 due to: (i) improper interest deductions relating to certain
loans (ii) non-deduction of advanced rent payments and (iii)
non-deduction of rolling roll expenses. 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. Therefore,
in August 2019, ArcelorMittal Las Truchas filed an annulment
complaint before a Federal Administrative and Tax Justice
Court, which has not been determined. The amount of the tax
assessment as of December\u00a031, 2022 is 108.
Ukraine\u00a0
In October 2019, ArcelorMittal Kryvyi Rih received tax orders
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 278 for that
period. ArcelorMittal Kryvyi Rih appealed these orders to the tax
authorities resulting in a significant reduction of the amounts
claimed. In January 2020, ArcelorMittal Kryvyi Rih filed three
legal actions with the Kyiv District Administrative Court seeking
to cancel the remaining additional charges amounting to 128.
The three cases were later merged into one case and moved to
the Dnipro District Administrative Court. In February 2023, the
Court dismissed the entirety of the claim except for an amount
of 0.05. The tax authorities may appeal the dismissal.
In October 2020, ArcelorMittal Kryvyi Rih commenced a
separate lawsuit seeking cancellation of additional tax charges
(excise duty, VAT, CIT, fines) of 89 based on the results of a full-
scope tax audit covering 2015 through the first quarter of 2019.
This separate lawsuit was closed in May 2021 at ArcelorMittal
Kryvyi Rih\u2019s request.
In August 2021, ArcelorMittal Kryvyi Rih commenced court
proceedings to dispute the assessment by Ukrainian tax
authorities of a subsoil usage rent/tax (in the amount of
approximately 77) on production activities by ArcelorMittal Kryvyi
Rih for the period from January 2015 to March 2019. In
November 2021, the court found that the tax notice decision was
illegal and cancelled it. The Ukrainian tax authorities and the
Prosecutor\u2019s office appealed this decision. Subsequently, (a) on
November 17, 2021, the Prosecutor General\u2019s office and the
Security Service of Ukraine notified the Chief Financial Officer of
ArcelorMittal Kryvyi Rih that he had been placed under an
investigation on suspicion of alleged tax evasion and official
forgery, and (b) on January 4, 2022 the Prosecutor General\u2019s
office, acting pursuant to a ruling of the Shevchenkivsky District
Court of Kyiv dated November 30, 2021 blocked the accounts of
ArcelorMittal Kryvyi Rih with three banks in Ukraine.
ArcelorMittal Kryvyi Rih promptly appealed the blocking of these
accounts and the restrictions on two of the three accounts were
by court order partially lifted to allow the payment of wages,
taxes and other mandatory payments. In March 2022, the
Prosecutor General closed the criminal proceedings and as a
result the remaining restrictions were lifted. In June 2022, the
Court of Appeal decided that the tax notice decision was illegal
and confirmed its cancellation. In July 2022, the tax authorities
and the Prosecutor\u2019s Office filed a cassation appeal to the
Supreme Court which was rejected in December 2022 and the
case is now closed.
Kazakhstan
In November 2020, ArcelorMittal Temirtau filed a lawsuit in the
Astana investment court against the State revenue committee.
The dispute is related to a tax claim by the said committee
resulting from an audit for the years 2013-2017. The court
hearings started in February 2021 and resulted in a June 2021
judgment against ArcelorMittal Temirtau for 45 for tax and late
payment interest as estimated by the authorities in their
notification of September 28, 2020. ArcelorMittal Temirtau
appealed this decision with the court of second instance, which
confirmed the judgment in September 2021. The judgment
came into force and was satisfied. In November 2021,
ArcelorMittal filed an appeal with the Court of Cassation which in
January 2022, the Court declined to hear the appeal, bringing
the case to an end.
In January 2022, ArcelorMittal Temirtau filed a lawsuit in the
Nur-Sultan (Astana) administrative court against the State
revenue committee. The dispute is related to a tax claim by the
said committee in the amount of 63 resulting from an audit for
the years 2018-2019. In January 2022, ArcelorMittal Temirtau
withdrew the lawsuit and paid the tax due with interest and the
applicable administrative penalty in the first half of 2022.
Competition/Antitrust Claims\u00a0
ArcelorMittal is a party to various competition/antitrust claims. As
of December\u00a031, 2022, ArcelorMittal had recorded a non-
material amount provision 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
2022 or (iii) that were resolved and had a financial impact in
2021 or 2020, 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\u2019s Administrative Council for Economic
Defense (\u201cCADE\u201d) 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\u2019s 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 71 based on
the alleged violations investigated by CADE. The injunction
requested by Federal Prosecution Office was denied.
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. \u00a0
Spain
In November 2018, the Comisi\u00f3n Nacional de los Mercados y la
Competencia (\u201cCNMC\u201d), the Spanish competition authority,
carried out a dawn raid at the offices of ArcelorMittal in
Villaverde (Madrid) in relation to a preliminary investigation
concerning alleged coordination between competitors to fix the
purchase price of scrap. In March 2020, further dawn raids were
carried out extending the investigation to the sale of long
products. In July 2020, CNMC announced that they were
commencing a formal sanctioning procedure against
ArcelorMittal Spain Holding (\"AMSH\") and its subsidiaries
ArcelorMittal Madrid, ArcelorMittal Comercial Perfiles Espa\u00f1a,
ArcelorMittal Aceralia Basque Holding (\u201cAMABH\u201d), and Arcelor
Mittal Espa\u00f1a (and other companies not part of ArcelorMittal
group) in respect of purchases of scrap and sale of finished
steel products, especially long products. In August 2021, the
CNMC issued a statement of objections to AMSH and AMABH,
among other parties. The CNMC stated that it had found
evidence of a purported cartel in terms of the purchase of scrap,
while noting that it had not found evidence of infringement with
regard to the sales of long products. The infringement with
respect to the scrap was alleged to have taken place from 2009
to 2020 and is attributed to AMSH and AMABH. In September
2021, AMSH and AMABH responded to the allegations and
objected to the claims of infringement. In November 2021, the
CNMC notified AMABH and AMSH of its resolution proposal to
be submitted to the Council proposing a sanction for AMABH,
with joint and several liability for AMSH, of 3 (\u20ac2.7\u00a0million which
is 6.5% of a turnover figure of \u20ac42.3\u00a0million) and notified AMSH
and AMABH that it had restricted the alleged infringement due to
certain contacts held from January to August 2018. On
December 16, 2021, AMABH filed its challenge to the resolution
proposal, together with an economic report as proof of market
structure. In March 2022, the CNMC decided on a sanction for
AMABH of 14 (\u20ac12.1\u00a0million based on a turnover which CNMC
determined as \u20ac226.6\u00a0million). In May 2022, AMABH appealed
the decision\u00a0 to the Spanish Court and sought suspension of
payment of the fine. In October 2022, the Court agreed to the
said suspension subject to the provision of a guarantee by
AMABH, filed with the court in December 2022.
Other Legal Claims\u00a0
ArcelorMittal is a party to various other legal claims. As of
December\u00a031, 2022, ArcelorMittal had recorded provisions of
216 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\u00a031,
2022, (ii) that constitute a contingent liability, (iii) that were
resolved in 2022, or (iv) that were resolved and had a financial
impact in 2021 or 2020, 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\u00a0
Over the course of 2007 to 2021, the Argentinian Customs
Office Authority (\u201cAduana\u201d) notified Acindar, 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 and
Bolivian suppliers and from ArcelorMittal Sourcing originally on
39 different claims concerning several shipments made between
2002 and 2021. 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 ordered 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. In addition, other cases have
been dismissed by the National Tax Court. As of February 2023,
the aggregate amount claimed by the Customs Office Authority
in respect of all iron ore shipments is 99 in 18 different cases. Of
these 18 cases, 7 are still in the administrative branch of the
Customs Office Authority and the other 11 cases, in which the
administrative branch of the Customs Office Authority ruled
against Acindar, have been appealed to the Argentinian National
Fiscal Court.
Brazil\u00a0
In 2015, the SINDIMETAL (employees\u2019 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 Vit\u00f3ria/ES, the case was dismissed. SINDIMETAL\u00a0
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 July
2022, the Supreme Court decided the leading case, not
involving ArcelorMittal Brasil, declaring the constitutionality of
Collective Agreements, and this decision may favorably impact
ArcelorMittal Brasil's case. This ruling lifted the suspension of all
lawsuits (including ArcelorMittal\u2019s 2019 appeal), regarding the
validity of collective agreements, the appeal is therefore now
being considered.
In April 2017, a shareholder in Sider\u00fargica Tr\u00eas Lagoas
(\u201cSITREL\u201d) (of which ArcelorMittal Brasil is the other
shareholder), 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\u2019s 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 totaling 33. In October
2021, the CAM-CCBC decided against ArcelorMittal Brasil. In
November 2021, ArcelorMittal Brasil filed a motion for
clarification and disqualification request to the CAM-CCBC in
relation to a conflict of interest concerning the other party's
appointed arbitrator. The CAM-CCBC issued a stay on the
clarification request, pending resolution on the disqualification
challenge. In December 2021, an Independent Arbitrators
Committee was formed to decide on the disqualification claim,
which it rejected in March 2022. In April 2022, a final arbitral
award was issued, which has been satisfied by ArcelorMittal
Brasil. Given ArcelorMittal Brasil\u2019s ownership interest in SITREL,
the financial impact for ArcelorMittal is a net loss after tax of
approximately 126 (67 net of partial recovery through dividend
payment from SITREL).
On March 30, 2022, Votorantim S.A. (\u201cVotorantim\u201d) exercised
the put option right it has under its shareholders\u2019 agreement with
the Company to sell its entire equity interest in ArcelorMittal
Brasil to the Company, following the acquisition of Votorantim's
long steel business in Brazil in 2018. There is a dispute between
the parties as to the value of the put option. Votorantim has
valued the put option at BRL 5.283 billion (i.e. 1,012). In
September 2022, Votorantim commenced an arbitration against
ArcelorMittal Brasil seeking the full amount of its value of the put
option, which would be reduced by the undisputed amount
ArcelorMittal Brasil accepts as the value of the put option and
which was paid in January 2023 for 179 (see note 11.5.2).
Italy\u00a0
In January 2010, ArcelorMittal received notice of a claim filed by
Finmasi S.p.A. relating to a memorandum of agreement (\u201cMoA\u201d)
entered into between ArcelorMittal Distribution Services France
(\u201cAMDSF\u201d) and Finmasi in 2008. The MoA provided that AMDSF
would acquire certain of Finmasi\u2019s businesses for an amount not
to exceed 114, subject to the satisfaction of certain conditions
precedent, which, in AMDSF\u2019s view, were not fulfilled. Finmasi
sued for (i) enforcement of the MoA, (ii) damages of 17 to 29 or
(iii) recovery costs plus quantum damages for Finmasi\u2019s alleged
lost opportunity to sell to another buyer. In September 2011, the
court rejected Finmasi\u2019s claims other than its second claim. The
court appointed an expert to determine the quantum of
damages. In May 2013, the expert\u2019s report was issued and
valued the quantum of damages in the range of 46 to 73.
ArcelorMittal appealed the decision on the merits. In May 2014,
the Court of Appeal issued a decision rejecting ArcelorMittal\u2019s
appeal. On June 20, 2014, ArcelorMittal filed an appeal of the
Court of Appeal\u2019s 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\u2019s 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 29 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\u2019s 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. In August 2020, the
Court of Cassation quashed the Court of Appeal decision on
quantum and referred the case back to the Court of Appeal for
further review of the quantum in respect of which Finmasi
formally served their writ of summons in October 2020 asking
the Court of Appel to confirm the first instance judgment on
quantum. Following the decision of the Court of Cassation,
Finmasi has repaid half of the amount of the guarantee that was
called and provided a bank guarantee for the remainder. In
December 2022, the Court found that AMDSF has the right to
obtain restitution of approximately 28 paid to Finmasi and
ordered Finmasi to pay the half still outstanding (approximately
13.9) plus interest and certain costs. In February 2023, Finmasi
filed an appeal to the Court of Cassation. AMDSF is due to file
its defense in March 2023.
On November 4, 2019, ArcelorMittal sent to the Commissioners
governing the Ilva insolvency procedure (the \u201cCommissioners\u201d)
a notice to withdraw from or terminate the lease agreement with
a conditional obligation to purchase the business of Ilva and
certain of its subsidiaries. This notice was based, among other
things, on provisions of the agreement that allow withdrawal in
the event that a new law affects it\u2019s environmental plan for the
Taranto plant in such a way that materially impairs the ability of
ArcelorMittal Italia to operate the plant or implement its industrial
plan; these provisions were triggered following the Italian
Parliament\u2019s removal, on November 3, 2019, of the legal
protection necessary for ArcelorMittal Italia to implement its
environmental plan without risk of criminal liability. In response,
the Commissioners filed suit in Milan seeking an injunction to
prevent ArcelorMittal's withdrawal and termination of the
agreement. Following negotiation between the parties, on March
4, 2020, ArcelorMittal and the Commissioners entered into a
settlement agreement whereby ArcelorMittal agreed to revoke
its notice to withdraw from the original Ilva lease agreement and
the Ilva Commissioners agreed to withdraw their request for an
injunction.
In addition, 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. Following the (i) search decrees issued by the Milan and
Taranto Prosecution Offices and ensuing seizures of documents
in November 2019, and (ii) restitution decree issued by the
Milan Prosecution Office in September 2020, the Milan Public
Prosecutors closed one of the investigations which began in
November 2019 concluding that there was no evidence to
support allegations of violations of numerous criminal laws
relating principally to ArcelorMittal's withdrawal from the lease
agreement for the Ilva plants and asked the judge for
preliminary investigations to close the case. In August 2022, the
Milan Judge for Preliminary Investigation dismissed the case.
ArcelorMittal Italia (renamed Acciaierie d\u2019Italia in April 2021 after
the formation of a partnership with Invitalia see note 2.3.1) has
not been notified of further developments in the other pending
criminal cases. It is not possible to predict the timing or outcome
or to foresee any charges for Acciaierie d'Italia.
In February 2020, the Mayor of Taranto issued an order to
ArcelorMittal Italia related to certain emissions events that
appear to have occurred in August 2019 and on February 22
and 23, 2020 and that allegedly concern the Taranto plant. The
order required ArcelorMittal Italia to identify the responsible
installations in 30 days and eliminate any anomalies within the
subsequent 30 days or, if necessary, shut down certain
installations relating to such emissions events (provided that, if
no such identification was completed, the shut-down would
extend to substantially the entire \"hot area\" of the plant). The
Mayor of Taranto further alleged that adequate responses
concerning such emissions were not received from the Ministry
of the Environment. In response to this order, ArcelorMittal Italia
filed an appeal on the merits and an application for interim
measures to stay the order with the Regional Administrative
Court in Lecce. In April 2020, the court upheld ArcelorMittal
Italia\u2019s application for interim measures and suspended the
Mayor of Taranto\u2019s order until a further hearing in October 2020.
The interim order further required the Ministry of the
Environment to file reports concerning the emissions events
which served as the basis for the Mayor of Taranto\u2019s order. After
the Ministry provided such reports, the October 2020 hearing
was postponed until December 15, 2020, at which hearing the
Court confirmed the suspension of the order and scheduled the
hearing for the discussion of the merits for January 27, 2021.\u00a0
On February 13, 2021, the Court rejected ArcelorMittal Italia\u2019s
appeal. On February 18, 2021, ArcelorMittal Italia filed an
appeal with the State Council (the highest appellate body in this
case) on the merits and also requested an ex parte order to
suspend the judgment pending a ruling on the merits. On
February 19, 2021, the State Council (i) found that the 30-day
period during which ArcelorMittal Italia would have to shut down
installations has not yet started and would commence only on
March 16, 2021, i.e., after the hearing to discuss the request for
interim measures (which it set for March 11, 2021) and therefore
found a lack at the time of demonstrable \u201cextreme gravity and
urgency\u201d necessary for interim measures, and (ii) set a hearing
date of May 13, 2021 in respect of the merits. On June 23,
2021, the judgment of the Council of State was published,
upholding Acciaierie d'Italia\u2019s appeal, setting aside the Mayor of
Taranto\u2019s order as unlawful on various grounds, and thereby
enabling Acciaierie d'Italia to continue operating the Taranto
plant.
Luxembourg\u00a0
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
61. Given the similarities in the claims, the parties agreed to limit
the pending proceedings to four test claims. In\u00a0April 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 were appealed but were terminated
by the court in November 2021.
France
Certain subsidiaries of the ArcelorMittal group were parties to
proceedings, dating from 2010, against Engie and Engie
Thermique France which claimed damages in the amount of 187
for an alleged wrongful termination of a contract for the
transformation of steel production gas into electricity. The
ArcelorMittal subsidiaries had filed a counterclaim in the amount
of 232. The contract had been entered into in 2006 for a term of
20 years. ArcelorMittal M\u00e9diterran\u00e9e 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 claimed 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 was ordered to pay damages of 3 plus
interest. In February 2020, Engie filed an appeal. A settlement
agreement was signed in July 2021, bringing the litigation to an
end.
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 (\u201cSocial Security\u201d). 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.\u00a0
The number of claims outstanding for asbestos exposure at
December\u00a031, 2022 was 308 as compared to\u00a0300 at
December\u00a031, 2021.
Minority Shareholder Claims Regarding the Exchange Ratio in
the Second-Step Merger of ArcelorMittal into Arcelor\u00a0
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.\u00a0
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.\u00a0
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.\u00a0
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\u2019s and Arcelor\u2019s 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\u2019s 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 221. By judgment dated November
30, 2011, the Luxembourg civil court declared all of the plaintiffs\u2019
claims inadmissible and dismissed them. The judgment was
appealed in May 2012.\u00a0By judgment dated February 15, 2017,
the Luxembourg Court of Appeal declared all but one of the
plaintiffs\u2019 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\u2019s judgment on May
18, 2018. The admissible claimant finally withdrew its claims
before the lower court and by judgment dated January 5, 2022,
the civil court of Luxembourg acknowledged the withdrawal of
the claims without prejudice and ended the procedure.
On May 15, 2012, ArcelorMittal received a writ of summons on
behalf of Association des Actionnaires d'Arcelor (\u201cAAA\u201d), a
French association of former minority shareholders of Arcelor, to
appear before the civil court of Paris. In such writ of summons,
AAA claimed (on grounds similar to those in the Luxembourg
proceedings summarized above) inter alia damages in a
nominal amount and reserved the right to seek additional
remedies including the cancellation of the merger. The
proceedings before the civil court of Paris were stayed, pursuant
to a ruling of such court on July 4, 2013, pending a preparatory
investigation (instruction pr\u00e9paratoire) by a criminal judge
magistrate (juge d\u2019instruction) triggered by the complaints
(plainte avec constitution de partie civile) of AAA and several
hedge funds (who quantified their total alleged damages at 282),
including those who filed the claims before the Luxembourg
courts described (and quantified) above. The dismissal of
charges (non-lieu) ending the preparatory investigation became
final in March 2018. On March 6, 2020 AAA revived its claim
before the civil court of Paris on grounds similar to those of the
Luxembourg civil claims summarized above, on its behalf and
on behalf of the hedge funds who had also filed a criminal
complaint, as well as two new plaintiffs. The complaint filed by
AAA quantifies the total damages claimed at 416 (\u20ac390 million)
(including the claims before the Luxembourg courts described
above). In March 2022, following the end of the Luxembourg
civil proceedings, the Paris civil court decided to address the
remaining procedural objections (lack of standing and res
judicata) together with the merits of the case, and the next
(procedural) hearing is scheduled for March 2023.
9.4\u00a0 \u00a0 Commitments
| | | |
| |
| | | |
Commitments related to purchases of raw materials and energy | | | |
Guarantees, pledges and other collateral | | | |
Capital expenditure commitments | | | |
| | | |
| | | |
60% guarantee of the 5,146
ten-year term loan agreement entered into by the AMNS India
joint venture with various Japanese banks on March 16, 2020.
As of December\u00a031, 2022, pledges and other collateral mainly
related to (i) mortgages entered into by the Company\u2019s
operating subsidiaries and (ii) inventories and receivables
pledged to secure the South African Rand revolving borrowing
base finance facility for the amount drawn of 147 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 98 and 111 as of December\u00a031, 2022 and 2021,
respectively. Other sureties, first demand guarantees, letters of
credit, pledges and other collateral included 375 and 406 of
commitments given on behalf of associates as of December\u00a031,
2022 and 2021, respectively, and 598 and 452 of commitments
given on behalf of joint ventures as of December\u00a031, 2022 and
2021, respectively.
Capital expenditure commitments
Capital expenditure commitments relate to commitments with
respect to purchases of property, plant and equipment including
in the context of expansion and improvement projects.
Capital expenditure commitments include 340 at December 31,
2022 relating to ArcelorMittal Liberia Ltd in connection with
Phase 2 expansion project that envisages the construction of
15\u00a0million tonnes of concentrate sinter fines capacity and
associated infrastructure.
Capital expenditure commitments include 394 at December 31,
2022 relating to ArcelorMittal Dofasco (Canada) mainly with
respect to the construction of DRI \u2013 EAF facilities in the
framework of the plant's decarbonization project.
Capital expenditure commitments also include 182 at the iron
ore Serra Azul mine (Brazil) at December 31, 2022 in
connection with the construction of facilities to produce 4.5
million tonnes per annum of DRI quality pellet feed.
AMSA was committed to an investment program in connection
with the competition commission settlement. The remaining
capital expenditure commitment was 100 as of December 31,
2021. The commitment related to this investment program
expired during 2022.
Capital expenditure commitments included 158 as of December
31, 2021 for the 1 billion investment program at the Company's
Mexican operations, which is focused on building ArcelorMittal
Mexico\u2019s downstream capabilities. The main investment was
related to the new hot strip mill with capacity of approximately
2.5 million tonnes. The investment program was completed
during 2022.
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 Tubar\u00e3o 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. As of December 31, 2022 and 2021,
ArcelorMittal Brasil estimated the underlying costs to implement
those investments at 115 and 87, respectively. The non-
compliance with ECA would lead to fines amounting to a
maximum of 19 and 18 as of December 31, 2022 and 2021,
respectively. On November 19, 2021, following a protocol of
intent agreed between the Minas Gerais State Government,
ArcelorMittal Brasil and BMB Belgo Mineira Bekaert Artefatos
De Arame Ltd (\"BMB\"), ArcelorMittal Brasil committed to carry
out capital expenditures at the Monlevade site to complete the
expansion project by the second half of 2024. As of December
31, 2022 and 2021, commitments related to this project were
420 and 442, respectively.
Commitments to sell
In addition to the commitments presented above, the Company
has firm commitments to sell for which it also has firm
commitments to purchase included in purchase commitments
for 368 and 292 as of December\u00a031, 2022 and 2021,
respectively, and mainly related to natural gas and electricity.
Other
On December 20, 2022, ArcelorMittal, the Fonds d'Urbanisation
et d'Am\u00e9nagement du Plateau de Kirchberg and the State of the
Grand-Duchy of Luxembourg entered into an agreement
whereby the Company granted to the State the right to acquire
50% of ArcelorMittal's future new headquarters and related
right-of-use of land in the Kirchberg district of the city of
Luxembourg. The right is exercisable within a twelve-month
period ending on December 20, 2023 and after ratification of the
acquisition by the Luxembourg Parliament. The acquisition price
is based on construction cost.
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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\u2019s
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.\u00a0
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.
Uncertain (income) tax positions are periodically assessed by
the Company based on management\u2019s best judgment given any
changes in the facts, circumstances and information available
and applicable tax laws. When it is probable that the tax
authorities will not accept the position taken, the Group
establishes provisions based on the most likely amount of the
liability (recovery) or weighted average of various possible
outcomes to reflect the effect of the uncertainty in determining
the related taxable profit (tax loss), tax bases, unused tax
losses, unused tax credits or tax rates, to the extent that a
reliable estimate can be made.
10.1\u00a0 \u00a0 Income tax expense
The components of income tax expense (benefit) are
summarized as follows:
| | | | | |
| |
| | | | | |
Total current tax expense | | | | | |
Total deferred tax expense | | | | | |
| | | | | |
The following table reconciles the expected tax expense at the
statutory rates applicable in the countries where the Company
operates to the total income tax expense as calculated:
| | | | | |
| |
| | | | | |
Net income (loss) (including non- controlling interests) | | | | | |
| | | | | |
| | | | | |
Tax expense at the statutory rates applicable to income in the countries1 | | | | | |
| | | | | |
| | | | | |
Net change in measurement of deferred tax assets | | | | | |
Tax effects of foreign currency translation | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
1.Tax expense at the statutory rates is based on income before tax excluding
income from investments in associates, joint ventures and other investments.
ArcelorMittal\u2019s consolidated income tax expense 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.
| | | | | |
| |
| | | | | |
Taxable reversals of (tax deductible) write-downs on shares and receivables | | | | | |
Juros sobre o Capital Pr\u00f3prio | | | | | |
| | | | | |
| | | | | |
for goodwill and property, plant and equipment, 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 Pr\u00f3prio: 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.
Rate changes
The 2021 tax expense from rate changes of 12 is mainly due to
the impact of the change of the tax rate on deferred taxes in
Argentina.
Net change in measurement of deferred tax assets
The 2022 net change in measurement of deferred tax assets of
(1,154) mainly consists of recognition of deferred tax assets in
Luxembourg of (1,227) including mainly (676) effect of the
utilization of unrecognized tax losses carried forward following
higher profitability of the current year (net of write-downs of
shares), (579) recognition of tax losses carried forward based
on revised taxable income forecast, derecognition of deferred
tax assets on losses and deductible temporary differences in
Ukraine of 178, and (105) utilization of deferred tax assets in\u00a0
other tax jurisdictions, following profits generated during the
year.
The 2021 net change in measurement of deferred tax assets of
(2,956) mainly consists of recognition of deferred tax assets in
Luxembourg of (1,166) following higher profitability of the
current year and increase of the available deferred tax liabilities,
recognition of deferred tax assets on current year taxable
reversal of write-downs of the value of shares and receivables of
consolidated subsidiaries in Luxembourg (735), and (1,055) net
recognition and utilization of deferred tax assets on losses and
temporary differences in the United States and other tax
jurisdictions, following significant profits generated during the
year.
The 2020 net change in measurement of deferred tax assets of\u00a0
454 mainly consists of derecognition and utilization of deferred
tax assets in Luxembourg of 709 following lower income
expectation mainly as a result of the disposal of ArcelorMittal
USA, recognition of deferred tax assets on current year taxable
reversal of write-downs of the value of shares and receivables of
consolidated subsidiaries in Luxembourg (630), and 375 net
non-recognition and derecognition of deferred tax assets on
losses and temporary differences in other tax jurisdictions.
Tax effects of foreign currency translation
The tax effects of foreign currency translation of\u00a0(34), nil\u00a0and 41
at December\u00a031, 2022, 2021 and 2020, 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.
Tax credits
The tax credits are mainly attributable to the Company\u2019s
operating subsidiaries in Brazil. They relate to credits claimed
on foreign investments, credits for research and development
and other 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
Ajout\u00e9e des Entreprises (\"CVAE'') in France. Other taxes
decreased in 2022 mainly as a result of a decrease in mining
taxes in Canada and lower expectation of withholding taxes on
dividends.
| | | | | |
| |
| | | | | |
Tax contingencies/settlements | | | | | |
| | | | | |
| | | | | |
| | | | | |
10.3\u00a0 \u00a0 Uncertain tax positions
The Company\u00a0operates in multiple jurisdictions with complex
legal and tax regulatory environments. In certain of these
jurisdictions, ArcelorMittal has taken income tax positions that
management believes are supportable and are intended to
withstand challenge by tax authorities. Some of these positions
are inherently uncertain and include those relating to transfer
pricing matters and the interpretation of income tax laws applied
in complex transactions. The Company periodically reassesses
its tax positions. Changes to the financial statement recognition,
measurement and disclosure of tax positions are based on
management\u2019s best judgment given any changes in the facts,
circumstances, information available and applicable tax
laws.\u00a0Considering all\u00a0available information and the\u00a0history of
resolving income tax uncertainties, the Company believes that
the ultimate resolution of such matters will not have a material
effect on the Company\u2019s financial position, statements of
operations or cash flows (see note 9.3).
10.4\u00a0 \u00a0 Deferred tax assets and liabilities
The origin of the deferred tax assets and liabilities is as follows:
| | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Property, plant and equipment | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Tax losses and other tax benefits carried forward | | | | | | | | | | | |
Tax credits carried forward | | | | | | | | | | | |
Deferred tax assets (liabilities) | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Deferred tax assets recognized by the Company as of December\u00a031, 2022 included the following:
| | | | | | | |
| | | Total deferred tax assets | | Recognized deferred tax assets | | Unrecognized deferred tax assets |
Tax losses and other tax benefits carried forward | | | | | | | |
Tax credits carried forward | | | | | | | |
Other temporary differences | | | | | | | |
| | | | | | | |
Deferred tax assets recognized by the Company as of December\u00a031, 2021 included the following:
| | | | | | | |
| | | Total deferred tax assets | | Recognized deferred tax assets | | Unrecognized deferred tax assets |
Tax losses and other tax benefits carried forward | | | | | | | |
Tax credits carried forward | | | | | | | |
Other temporary differences | | | | | | | |
| | | | | | | |
As of December\u00a031, 2022, the majority of unrecognized deferred
tax assets relates to tax losses carried forward attributable to
various subsidiaries located in different jurisdictions (primarily
France, Germany, Luxembourg, Spain and USA) with different
statutory tax rates. At 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 recognized and unrecognized deferred
tax assets 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.\u00a0
At December\u00a031, 2022, the total amount of accumulated tax
losses in Luxembourg with respect to the ArcelorMittal S.A. tax
integration amounted to 110.7 billion, of which 34.0 billion is
considered realizable, resulting in the recognition of 8.5 billion of
deferred tax assets at the applicable income tax rate in
Luxembourg. At December\u00a031, 2021, the total amount of
accumulated tax losses in Luxembourg with respect to the main
tax consolidation amounted to approximately 115.6 billion, of
which 34.1 billion was considered realizable, resulting in the
recognition of 8.5 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\u2019s holding companies in Luxembourg. Of
the total tax losses carried forward, 50.9 billion may be subject
to recapture in the future if the write-downs that caused them
are reversed creating taxable income unless the Company
crystallizes them 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\u2019s consolidated
subsidiaries, leading to significant amounts of taxable interest
income on outstanding and future loans as updated based on
most recent funding strategy, (iv) the expected level of interest
expenses in Luxembourg driven by the Group net debt level, (v)
the industrial franchise agreement 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\u2019s European and worldwide operating subsidiaries
for centralized distribution and procurement activities performed
in Luxembourg. The Company has also considered the
implications of the net-zero path and its carbon emissions
intensity reduction targets on its future taxable profits
expectations in relation to the existing business models and the
potential future financing of such projects, resulting in no major
impact on the estimated level of future taxable profit. 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\u00a031, 2022, 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 recognized deferred
tax assets of 8.6 billion. The amount of future taxable income
required to be generated by ArcelorMittal\u2019s subsidiaries to utilize
the deferred tax assets of 8.6 billion is at least 34.4 billion.
Historically, the Company has been able to generate sufficient
taxable income and believes that it will generate sufficient levels
of taxable income in the coming years to allow the Company to
utilize tax benefits associated with tax losses carried forward
and other deferred tax assets that have been recognized in its
consolidated financial statements. Where the Company has had
a history of recent losses, it relied on convincing other evidence
such as the character of (historical) losses and planning
opportunities to support the deferred tax assets recognized.
As of December\u00a031, 2022, ArcelorMittal recorded 146 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 as compared to 225 as of
December\u00a031, 2021. 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 795 at
December 31, 2022 (796 at December 31, 2021).
10.5\u00a0 \u00a0 Tax losses, tax credits and other tax benefits carried
forward
At December\u00a031, 2022, the Company had total estimated tax
losses carried forward and other tax benefits of 126.7\u00a0billion.
This includes net operating losses and other tax benefits of 5.2
billion primarily related to subsidiaries in the Basque Country in
Spain, Luxembourg and the United States, which expire as
follows:\u00a0
The remaining tax losses carried forward and other tax benefits
for an amount of 121.5\u00a0billion (of which 36.8\u00a0billion are
recognized and 84.7\u00a0billion are unrecognized) are carried
forward for unlimited period of time and primarily relate to the
Company\u2019s operations in France, Germany, Luxembourg, Spain
and in the United States.
At December\u00a031, 2022, the Company also had total estimated
tax credits carried forward of 600.
Such amount includes tax credits of 495 (of which 65
recognized and 430 unrecognized) and primarily attributable to
subsidiaries in the Basque country in Spain which expire as
follows:
The remaining tax credits for an amount of 105 (of which 63 are
recognized and 42 are unrecognized) are indefinite and
primarily attributable to the Company\u2019s operations in Spain and
the United States.
Tax losses, tax credits and other tax benefits carried forward are
denominated in the currency of the countries in which the
respective subsidiaries are located and operate, except for
Luxembourg where the tax losses are mainly denominated in
U.S. dollar. Fluctuations in currency exchange rates could
impact the U.S. dollar equivalent value of these tax losses
carried forward in future years.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MDIvZnJhZzo1OWVkNTkyMGI2NjE0MjM0ODI5M2Y2ODUyNjJjNWFmMC90ZXh0cmVnaW9uOjU5ZWQ1OTIwYjY2MTQyMzQ4MjkzZjY4NTI2MmM1YWYwXzI3NDg3NzkwNjk5NDk1_9331a09e-6228-4d8e-8df7-86b277bc91e4": {
"value": "
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\u2019s
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.\u00a0
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.
Uncertain (income) tax positions are periodically assessed by
the Company based on management\u2019s best judgment given any
changes in the facts, circumstances and information available
and applicable tax laws. When it is probable that the tax
authorities will not accept the position taken, the Group
establishes provisions based on the most likely amount of the
liability (recovery) or weighted average of various possible
outcomes to reflect the effect of the uncertainty in determining
the related taxable profit (tax loss), tax bases, unused tax
losses, unused tax credits or tax rates, to the extent that a
reliable estimate can be made.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MTQvZnJhZzo0Y2I2YjVjY2FmNDQ0ZDc2ODhjMDI0YTI2NmI0MWYzNS90ZXh0cmVnaW9uOjRjYjZiNWNjYWY0NDRkNzY4OGMwMjRhMjY2YjQxZjM1XzI3NDg3NzkwNzAxNDI4_17242d6e-db73-413d-a3f2-1e7fbcbccf0f": {
"value": "10.4\u00a0 \u00a0 Deferred tax assets and liabilities
The origin of the deferred tax assets and liabilities is as follows:
| | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Property, plant and equipment | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Tax losses and other tax benefits carried forward | | | | | | | | | | | |
Tax credits carried forward | | | | | | | | | | | |
Deferred tax assets (liabilities) | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Deferred tax assets recognized by the Company as of December\u00a031, 2022 included the following:
| | | | | | | |
| | | Total deferred tax assets | | Recognized deferred tax assets | | Unrecognized deferred tax assets |
Tax losses and other tax benefits carried forward | | | | | | | |
Tax credits carried forward | | | | | | | |
Other temporary differences | | | | | | | |
| | | | | | | |
Deferred tax assets recognized by the Company as of December\u00a031, 2021 included the following:
| | | | | | | |
| | | Total deferred tax assets | | Recognized deferred tax assets | | Unrecognized deferred tax assets |
Tax losses and other tax benefits carried forward | | | | | | | |
Tax credits carried forward | | | | | | | |
Other temporary differences | | | | | | | |
| | | | | | | |
As of December\u00a031, 2022, the majority of unrecognized deferred
tax assets relates to tax losses carried forward attributable to
various subsidiaries located in different jurisdictions (primarily
France, Germany, Luxembourg, Spain and USA) with different
statutory tax rates. At 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 recognized and unrecognized deferred
tax assets 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.\u00a0
At December\u00a031, 2022, the total amount of accumulated tax
losses in Luxembourg with respect to the ArcelorMittal S.A. tax
integration amounted to 110.7 billion, of which 34.0 billion is
considered realizable, resulting in the recognition of 8.5 billion of
deferred tax assets at the applicable income tax rate in
Luxembourg. At December\u00a031, 2021, the total amount of
accumulated tax losses in Luxembourg with respect to the main
tax consolidation amounted to approximately 115.6 billion, of
which 34.1 billion was considered realizable, resulting in the
recognition of 8.5 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\u2019s holding companies in Luxembourg. Of
the total tax losses carried forward, 50.9 billion may be subject
to recapture in the future if the write-downs that caused them
are reversed creating taxable income unless the Company
crystallizes them 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\u2019s consolidated
subsidiaries, leading to significant amounts of taxable interest
income on outstanding and future loans as updated based on
most recent funding strategy, (iv) the expected level of interest
expenses in Luxembourg driven by the Group net debt level, (v)
the industrial franchise agreement 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\u2019s European and worldwide operating subsidiaries
for centralized distribution and procurement activities performed
in Luxembourg. The Company has also considered the
implications of the net-zero path and its carbon emissions
intensity reduction targets on its future taxable profits
expectations in relation to the existing business models and the
potential future financing of such projects, resulting in no major
impact on the estimated level of future taxable profit. 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\u00a031, 2022, 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 recognized deferred
tax assets of 8.6 billion. The amount of future taxable income
required to be generated by ArcelorMittal\u2019s subsidiaries to utilize
the deferred tax assets of 8.6 billion is at least 34.4 billion.
Historically, the Company has been able to generate sufficient
taxable income and believes that it will generate sufficient levels
of taxable income in the coming years to allow the Company to
utilize tax benefits associated with tax losses carried forward
and other deferred tax assets that have been recognized in its
consolidated financial statements. Where the Company has had
a history of recent losses, it relied on convincing other evidence
such as the character of (historical) losses and planning
opportunities to support the deferred tax assets recognized.
As of December\u00a031, 2022, ArcelorMittal recorded 146 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 as compared to 225 as of
December\u00a031, 2021. 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 795 at
December 31, 2022 (796 at December 31, 2021).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MjAvZnJhZzo4NThjNDk1OGVhMjE0MmRiOTMwMjAwOWU2NDNiNGM0MC90ZXh0cmVnaW9uOjg1OGM0OTU4ZWEyMTQyZGI5MzAyMDA5ZTY0M2I0YzQwXzg_a5f137fa-b5b5-4078-9ad0-53945928cbc3": {
"value": "NOTE 11: EQUITY
11.1\u00a0 \u00a0 Share details
On May 14, 2020, the Company completed an offering of
common shares, without nominal value for 750 at a price of
$9.27 per share. The Significant Shareholder participated in the
offerings by contributing an amount of 100 for the shares.
Following the offering of common shares described above with
net proceeds of 740 (net of transaction costs of 10), on May 14,
2020, the Company issued 80,906,149 fully paid up shares. The
Company allocated 29 to share capital, which increased from
364 at December 31, 2019 to 393 at December 31, 2020 and
the remainder of 711 to additional paid-in-capital.
Under the terms of the offerings, there was a 180-day lock-up
period for the Company on issuances or sales of shares and
securities exchangeable for or convertible into shares, subject to
customary exceptions.
Following the approval by the extraordinary general meeting of
shareholders on June 8, 2021 to cancel all the shares
repurchased by the Company under its share buyback programs
up to a maximum of 165 million shares, the Company
decreased issued share capital on August 4, 2021 and
September 22, 2021 through the cancellation of 70 million and
50 million treasury shares, respectively. Accordingly, the
aggregate number of shares issued and fully paid up decreased
from 1,102,809,772 to 982,809,772 and share capital decreased
by 43 from 393 at December 31, 2020 to 350 at December 31,
2021.
On January 14, 2022 and May 18, 2022, ArcelorMittal cancelled
45 million and 60\u00a0million treasury shares, respectively, to keep
the number of treasury shares within appropriate levels. These
cancellations took into account the shares already purchased
under the 1,000 share buyback programs announced on
November 17, 2021, which were completed on December 28,
2021 and on May 5, 2022, respectively. Following these
cancellations, the aggregate number of shares issued and fully
paid up and share capital decreased from 982,809,772 and 350
as of December 31, 2021 to 877,809,772 and 312 as of
December 31, 2022, respectively.
The Company\u2019s shares consist of the following:
The number of issued shares was 1,102,809,772 at December
31, 2020, 982,809,772 at December 31, 2021 and 877,809,772
at December 31, 2022.\u00a0
Authorized shares
On August 4, 2021, following the cancellation of 70 million
treasury shares, the authorized share capital decreased from
485 represented by 1,361,418,599 ordinary shares without
nominal value to 460 represented by 1,291,418,599 ordinary
shares without nominal value. On September 22, 2021,
following the cancellation of 50 million treasury shares, the
authorized share capital decreased further to 442 represented
by 1,241,418,599 ordinary shares without nominal value.
Following the cancellations of treasury shares on January 14,
2022 and May 18, 2022, authorized share capital decreased
from 442 represented by 1,241,418,599 ordinary shares without
nominal value as of December 31, 2021 to 404 represented by
1,136,418,599 ordinary shares without nominal value as of
December 31, 2022.
Share buyback\u00a0
On October 30, 2020, the Company completed a share buyback
program in connection with the announced sale of 100% of the
shares of ArcelorMittal USA. ArcelorMittal repurchased
35,636,253 shares at an average price per share of \u20ac11.92
($14.03) for a total value of \u20ac425\u00a0million (500).
The shares acquired through the buyback program were
recognized as treasury shares. On December 15, 2020,
ArcelorMittal signed separate, privately negotiated exchange
agreements with a limited number of holders of the MCNs for
which it delivered 22,653,933 shares out of treasury shares (see
note 11.2).
On March 3, 2021, ArcelorMittal completed its first share
buyback program in 2021 and repurchased 27.1 million shares
for a total amount of \u20ac537 million (650) at an average price per
share of \u20ac19.79 ($23.97).
On June 17, 2021, ArcelorMittal completed a second share
buyback program and repurchased 17.8 million shares for a
total amount of \u20ac469 million (570) at an average price per share
of \u20ac26.27 ($31.94).
On July 5, 2021, ArcelorMittal completed a third share buyback
program and repurchased 24.5 million shares for a total amount
of \u20ac630 million (750) at an average price per share of \u20ac25.77
($30.66).
On November 16, 2021, ArcelorMittal completed a fourth share
buyback program and repurchased 67.4 million shares for a
total value of \u20ac1,881 million (2,200) at an average price per
share of \u20ac27.91 ($32.64).
On December 28, 2021, completed a fifth share buyback
program and repurchased 34.1 million shares for a total value of
\u20ac886 million (1,000) at an average price per share of \u20ac25.99
($29.34).
During 2021, the Company repurchased 62.2\u00a0million shares
from the Significant Shareholder under its five share buyback
programs to maintain Significant Shareholder's current level of
voting rights (pursuant to the Share Repurchase Agreement
signed on February 12, 2021) for \u20ac1,600\u00a0million (1,878).
On April 25, 2022, ArcelorMittal completed its 1,000 share
buyback program announced on February 11, 2022 under the
authorization given by the annual general meeting of
shareholders of June 8, 2021 and repurchased 31.8 million
shares for a total value of \u20ac911\u00a0million (equivalent to 1,000) at
an approximate average price per share of \u20ac28.68 ($31.49).
On June 8, 2022, ArcelorMittal completed a second share
buyback program in the amount of 1,000 under the authorization
given by the annual general meeting of shareholders of May 4,
2022, bringing the total 2022 buybacks announced so far to
2,000. ArcelorMittal repurchased 33.3 million shares for a total
value of \u20ac943\u00a0million (equivalent to 1,000) at an approximate
average price per share of \u20ac28.26 ($29.99).
On July 29, 2022, the Company announced a third share
buyback program of 60.4 million shares (approximately 1.4
billion based on share price as of July 26, 2022) to be
completed by the end of May 2023 (subject to market
conditions) under the authorization given by the annual general
meeting of shareholders of May 4, 2022. The Significant
Shareholder has decided not to participate in the program
consistent with the position announced on February 25, 2022.
As of December 31, 2022, the Company had repurchased 41.3
million shares for an amount of \u20ac939 million (937) at an average
price per share of \u20ac22.73 ($22.67). As of March 3, 2023, the
Company has repurchased 44.8 million shares for an amount of
\u20ac1,037 million (1,040) at an average price per share of \u20ac23.14
($23.22).
The shares acquired under the different programs are intended
to meet ArcelorMittal\u2019s obligations under debt obligations
exchangeable into equity securities; to reduce ArcelorMittal\u2019s
share capital, and/or to meet ArcelorMittal\u2019s obligations arising
from employee share programs.
Treasury shares
ArcelorMittal held, indirectly and directly, 72.5 million and 71.9
million treasury shares as of December 31, 2022 and\u00a0
December 31, 2021, respectively.
11.2\u00a0 \u00a0 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 Cr\u00e9dit 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
has extended the conversion date for the mandatory convertible
bonds from time to time.
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, 2020, the
remaining notes were linked to the value of the shares of China
Oriental (see note 6.1.5).
On December 22, 2020, the maturity of the mandatory
convertible bonds was extended from January 29, 2021 to
January 31, 2024. 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 869
(net of cumulative tax and fees) and other liabilities for 131. The
derecognition of the previous instrument and the recognition at
fair value of the new instrument resulted in a 178 expense
included in financing costs-net in the consolidated statement of
operations and a 53 increase in non-controlling interests.
Mandatorily convertible subordinated notes
On May 18, 2020, following the offering of common shares
described in note 11.1, the Company completed an offering of\u00a0
mandatorily convertible subordinated notes (\u201cMCNs\u201d) for 1,250.
The MCNs have a three-year maturity, were issued at 100% of
the principal amount and will be mandatorily converted into
common shares of the Company upon maturity unless
converted earlier at the option of the holders or ArcelorMittal
during the conversion period or upon occurrence of certain
defined events.
In all cases, ArcelorMittal may exercise its right to convert early,
taking precedent over the other options. In case of an early
conversion, ArcelorMittal must deliver shares at the \u201cMaximum
Conversion Ratio.\u201d The mandatorily convertible notes pay a
coupon of 5.50% per annum, payable quarterly in arrears. The
minimum conversion price of the mandatorily convertible notes
is equal to $9.06, corresponding to the offering price of the
shares as described above, and the maximum conversion price
is 117.5% of the minimum conversion price or $10.64 as
adjusted from time to time. ArcelorMittal intends to use the net
proceeds from the offerings for general corporate purposes, to
deleverage and to enhance liquidity, thereby building additional
resilience going forward in what remains an uncertain
environment.
The Significant Shareholder participated in the offerings by
contributing an amount of 100 for the MCNs.
The Company determined that the MCNs are a hybrid
instrument including an equity component and a debt
component. The Company assessed whether there is actual
economic or other business reasons that it would exercise its
option to convert prior to maturity, whether the MCNs would
have been priced differently if the early settlement option had
not been included in the contractual terms and other factors
such as the term of the instrument, the width of the range
between the cap and the floor, ArcelorMittal\u2019s share price and
the volatility of the share price as important criterion in this
conclusion. The early conversion right has economic substance
with respect to maintaining the current credit rating if early
conversion can help in preventing a rating downgrade. In this
event, future savings of credit interest is expected to be more
than the cost of early conversion. The debt component of 190
(net of transaction costs of 2) at issuance corresponded to the
net present value of the future interest payments and is included
in accrued expenses and other liabilities and other long-term
obligations. The remaining amount of 1,047 (net of transaction
costs of 11) was the equity instrument.
On December 15, 2020, ArcelorMittal signed separate, privately
negotiated exchange agreements with a limited number of
holders of MCNs exchanging 247 in aggregate principal amount
of MCNs for an aggregate of 22,653,933 treasury shares at the
minimum conversion ratio plus 25 paid in cash (including
accrued interest on the exchanged MCNs up to, but excluding,
the settlement date). The Company allocated the share
consideration to the debt (30) and equity (207) components
consistent with the original allocation using net present value of
the future interest payments at the date of exchange. As of
December 31, 2020 and following the exchange, the debt and
equity components were 123 and 840 (presented separately in
the statements of changes in equity), net of transaction fees
respectively.
On December 23, 2021, ArcelorMittal completed separate,
privately negotiated agreements with a limited number of
holders of MCNs to repurchase 395 in aggregate principal
amount of MCNs at the minimum conversion ratio for an
aggregate cash consideration of 1,196. The Company allocated
the cash consideration to the debt (30) and equity (331)
components of the instrument and recognized in financing costs
- net a 61 loss relating to the liability component and a 774 (589
net of tax) decrease in retained earnings relating to the equity
component consistent with the original allocation using net
present value of the future interest payments at the date of
exchange. As of December 31, 2022, the debt and equity
components were 13 and 509 (presented separately in the
statements of changes in equity), net of transaction fees,
respectively.
11.3\u00a0 \u00a0 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. 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 whenever the
conversion results in a dilutive effect.
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, 2022, 2021 and 2020.
| | | | | |
| |
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Net income (loss) attributable to equity holders of the parent | | | | | |
Weighted average common shares outstanding (in millions) for the purposes of basic earnings per share | | | | | |
Incremental shares from assumed conversion of restricted share units and performance share units (in millions) | | | | | |
Weighted average common shares outstanding (in millions) for the purposes of diluted earnings per share | | | | | |
For the purpose of calculating earnings per common share,
diluted weighted average common shares outstanding excludes
nil, nil and 9 million potential common shares from share unit
plans for the year ended December\u00a031, 2022, 2021 and 2020,
respectively.
11.4\u00a0 \u00a0 Dividends
Calculations to determine the amounts available for dividends
are based on ArcelorMittal\u2019s financial statements (\u201cArcelorMittal
S.A.\u201d) 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\u2019 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.
dollar and are payable in either U.S. dollar or in euros.
| | | | | | | |
| | | | | | | |
Dividend for financial year 2019 | Annual general shareholders\u2019 meeting on June 13, 2020 | | | | | | |
Dividend for financial year 2020 | Annual general shareholders\u2019 meeting on June 8, 2021 | | | | | | |
Dividend for financial year 2021 | Annual general shareholders\u2019 meeting on May 4, 2022 | | | | | | |
On May 4, 2022 at the annual general meeting of shareholders,
the shareholders approved the Company\u2019s dividend of $0.38 per
share. The dividend amounted to 332 and was paid on June 10,
2022.
In February 2023, the Board of Directors recommended an
increase of the base annual dividend to $0.44 per share, from
$0.38 per share, to be paid in two equal installments in June
and December 2023, subject to the approval of shareholders at
the annual general meeting of shareholders in May 2023.
11.5\u00a0 \u00a0 Non-controlling interests 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\u00a031, 2022 and 2021
and for the years ended December\u00a031, 2022, 2021 and 2020.
| | | | | | | | | | | | | | | | |
| | Country of incorporation and operation | | % of non- controlling interests and non- controlling voting rights at December 31, 2022 | | % of non- controlling interests and non- controlling voting rights at December 31, 2021 | | Net income (loss) attributable to non- controlling interests for the year ended December 31, 2022 | | Non- controlling interests at December 31, 2022 | | Net income (loss) attributable to non- controlling interests for the year ended December 31, 2021 | | Non- controlling interests at December 31, 2021 | | Net income (loss) attributable to non- controlling interests for the year ended December 31, 2020 |
| | | | | | | | | | | | | | | | |
Soci\u00e9t\u00e9 Nationale de Sid\u00e9rurgie S.A. (\"Sonasid\")1 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Belgo Bekaert Arames (\"BBA\") | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | |
ArcelorMittal Liberia Ltd3 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
1.Sonasid - ArcelorMittal holds a controlling stake of 50% in Nouvelles Sid\u00e9rurgies Industrielles (\"NSI\"). ArcelorMittal controls NSI on the basis of a shareholders\u2019 agreement
which includes deadlock arrangements in favor of the Company. NSI holds a 64.86% stake in Sonasid. The total non-controlling interests in Sonasid of 67.57% are the
result of ArcelorMittal\u2019s indirect ownership percentage in Sonasid of 32.43% through its controlling stake in NSI.
2.Hera Ermac - The non-controlling interests correspond to the equity component net of transaction fees of the mandatory convertible bonds maturing on January 31, 2024
(see note 11.2).
3.ArcelorMittal Liberia Ltd is incorporated in Cyprus. On December 20, 2022, ArcelorMittal fully settled a 300 capital increase in ArcelorMittal Liberia Ltd including 45 on
behalf of non-controlling interests.
4.On June 30, 2022, ArcelorMittal acquired a 80% controlling stake in ArcelorMittal Texas HBI (see note 2.2.4).
The tables below provide summarized statements of financial position for the above-mentioned subsidiaries as of December\u00a031, 2022
and 2021 and summarized statements of operations and summarized statements of cash flows for the years ended December\u00a031,
2022, 2021 and 2020.
| | | | | | | | | | | | | | | | | |
| |
Summarized statements of financial position | | | | | | | | | | | | | | | | | ArcelorMittal Texas HBI LLC |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| |
Summarized statements of operations | | | | | | | | | | | | | | | | | ArcelorMittal Texas HBI LLC |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| |
Summarized statements of financial position | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| |
Summarized statements of operations | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| |
Summarized statements of operations | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | | | | | | |
business in Brazil in 2018, which was subsequently renamed
ArcelorMittal Sul Fluminense (\"AMSF\"). The exercise price of
the put option is calculated pursuant to an agreed formula in the
shareholders\u2019 agreement which applies a 6 times multiple of
ArcelorMittal Brasil Longs Business EBITDA in the four
immediately preceding calendar quarters from the date of the
put option exercise (subject to certain adjustments, such as the
exclusion of any unusual, infrequent or abnormal events) less
an assumed net debt of BRL 6.2 billion times 15%. 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 of AMSF a 328 financial liability at
amortized cost and measured at the present value of the
redemption amount. As of December 31, 2022, the Company
calculated the put option exercise price in the amount of BRL
1.0\u00a0billion (179 see note 4.8). Votorantim S.A. has indicated that
it does not agree with ArcelorMittal Brasil\u2019s calculation of the
exercise price and filed a request for arbitration on September
28, 2022. The definition of the final put option exercise price will
be subject to the arbitration procedure, whose estimated timing
for resolution is currently unknown. In January 2023,
ArcelorMittal Brasil settled the undisputed amount it accepts as
the value of the put option for 179 (see note 9.3).
On June 3, 2021, following an amendment to the shareholders'
agreement signed between the Company and non-controlling
interests in NSI, an entity in which ArcelorMittal holds a 50%
controlling stake and which holds a 64.86% interest in Sonasid
in Morocco, the Company granted to such non-controlling
interests a put option to buy the totality of their shares in NSI
exercisable by its holders during three periods between
December 5, 2022 to December 4, 2024, December 5, 2027 to
December 4, 2029 and December 5, 2032 to December 4,
2034. The Company recognized a financial liability at amortized
cost against equity of 119 (122 as of December 31, 2022) and
measured at the present value of the redemption amount (see
note 9.2).
In conjunction with the acquisition of an 80% interest in
ArcelorMittal Texas HBI on June 30, 2022, ArcelorMittal granted
to voestalpine a put option exercisable at the end of the fifth,
tenth and fifteenth year subsequently to the acquisition date.
The Company recognized at inception a 177 (181 as of
December 31, 2022) financial liability at amortized cost
measured at the present value of the redemption amount of the
written put option based on the lower of equity value increased
by an annual contractual return and fair value (see notes 2.2.4
and 9.2).
",
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"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MjMvZnJhZzozMzg0ZmFiMWZlYTE0MGQ1YWExZWY0MDhiNmNiMGQxZS90ZXh0cmVnaW9uOjMzODRmYWIxZmVhMTQwZDVhYTFlZjQwOGI2Y2IwZDFlXzI3NDg3NzkwNzA1MDEw_27f0164f-638c-4f8a-ab3b-c52626fc4775": {
"value": "11.1\u00a0 \u00a0 Share details
On May 14, 2020, the Company completed an offering of
common shares, without nominal value for 750 at a price of
$9.27 per share. The Significant Shareholder participated in the
offerings by contributing an amount of 100 for the shares.
Following the offering of common shares described above with
net proceeds of 740 (net of transaction costs of 10), on May 14,
2020, the Company issued 80,906,149 fully paid up shares. The
Company allocated 29 to share capital, which increased from
364 at December 31, 2019 to 393 at December 31, 2020 and
the remainder of 711 to additional paid-in-capital.
Under the terms of the offerings, there was a 180-day lock-up
period for the Company on issuances or sales of shares and
securities exchangeable for or convertible into shares, subject to
customary exceptions.
Following the approval by the extraordinary general meeting of
shareholders on June 8, 2021 to cancel all the shares
repurchased by the Company under its share buyback programs
up to a maximum of 165 million shares, the Company
decreased issued share capital on August 4, 2021 and
September 22, 2021 through the cancellation of 70 million and
50 million treasury shares, respectively. Accordingly, the
aggregate number of shares issued and fully paid up decreased
from 1,102,809,772 to 982,809,772 and share capital decreased
by 43 from 393 at December 31, 2020 to 350 at December 31,
2021.
On January 14, 2022 and May 18, 2022, ArcelorMittal cancelled
45 million and 60\u00a0million treasury shares, respectively, to keep
the number of treasury shares within appropriate levels. These
cancellations took into account the shares already purchased
under the 1,000 share buyback programs announced on
November 17, 2021, which were completed on December 28,
2021 and on May 5, 2022, respectively. Following these
cancellations, the aggregate number of shares issued and fully
paid up and share capital decreased from 982,809,772 and 350
as of December 31, 2021 to 877,809,772 and 312 as of
December 31, 2022, respectively.
The Company\u2019s shares consist of the following:
The number of issued shares was 1,102,809,772 at December
31, 2020, 982,809,772 at December 31, 2021 and 877,809,772
at December 31, 2022.\u00a0
Authorized shares
On August 4, 2021, following the cancellation of 70 million
treasury shares, the authorized share capital decreased from
485 represented by 1,361,418,599 ordinary shares without
nominal value to 460 represented by 1,291,418,599 ordinary
shares without nominal value. On September 22, 2021,
following the cancellation of 50 million treasury shares, the
authorized share capital decreased further to 442 represented
by 1,241,418,599 ordinary shares without nominal value.
Following the cancellations of treasury shares on January 14,
2022 and May 18, 2022, authorized share capital decreased
from 442 represented by 1,241,418,599 ordinary shares without
nominal value as of December 31, 2021 to 404 represented by
1,136,418,599 ordinary shares without nominal value as of
December 31, 2022.
Share buyback\u00a0
On October 30, 2020, the Company completed a share buyback
program in connection with the announced sale of 100% of the
shares of ArcelorMittal USA. ArcelorMittal repurchased
35,636,253 shares at an average price per share of \u20ac11.92
($14.03) for a total value of \u20ac425\u00a0million (500).
The shares acquired through the buyback program were
recognized as treasury shares. On December 15, 2020,
ArcelorMittal signed separate, privately negotiated exchange
agreements with a limited number of holders of the MCNs for
which it delivered 22,653,933 shares out of treasury shares (see
note 11.2).
On March 3, 2021, ArcelorMittal completed its first share
buyback program in 2021 and repurchased 27.1 million shares
for a total amount of \u20ac537 million (650) at an average price per
share of \u20ac19.79 ($23.97).
On June 17, 2021, ArcelorMittal completed a second share
buyback program and repurchased 17.8 million shares for a
total amount of \u20ac469 million (570) at an average price per share
of \u20ac26.27 ($31.94).
On July 5, 2021, ArcelorMittal completed a third share buyback
program and repurchased 24.5 million shares for a total amount
of \u20ac630 million (750) at an average price per share of \u20ac25.77
($30.66).
On November 16, 2021, ArcelorMittal completed a fourth share
buyback program and repurchased 67.4 million shares for a
total value of \u20ac1,881 million (2,200) at an average price per
share of \u20ac27.91 ($32.64).
On December 28, 2021, completed a fifth share buyback
program and repurchased 34.1 million shares for a total value of
\u20ac886 million (1,000) at an average price per share of \u20ac25.99
($29.34).
During 2021, the Company repurchased 62.2\u00a0million shares
from the Significant Shareholder under its five share buyback
programs to maintain Significant Shareholder's current level of
voting rights (pursuant to the Share Repurchase Agreement
signed on February 12, 2021) for \u20ac1,600\u00a0million (1,878).
On April 25, 2022, ArcelorMittal completed its 1,000 share
buyback program announced on February 11, 2022 under the
authorization given by the annual general meeting of
shareholders of June 8, 2021 and repurchased 31.8 million
shares for a total value of \u20ac911\u00a0million (equivalent to 1,000) at
an approximate average price per share of \u20ac28.68 ($31.49).
On June 8, 2022, ArcelorMittal completed a second share
buyback program in the amount of 1,000 under the authorization
given by the annual general meeting of shareholders of May 4,
2022, bringing the total 2022 buybacks announced so far to
2,000. ArcelorMittal repurchased 33.3 million shares for a total
value of \u20ac943\u00a0million (equivalent to 1,000) at an approximate
average price per share of \u20ac28.26 ($29.99).
On July 29, 2022, the Company announced a third share
buyback program of 60.4 million shares (approximately 1.4
billion based on share price as of July 26, 2022) to be
completed by the end of May 2023 (subject to market
conditions) under the authorization given by the annual general
meeting of shareholders of May 4, 2022. The Significant
Shareholder has decided not to participate in the program
consistent with the position announced on February 25, 2022.
As of December 31, 2022, the Company had repurchased 41.3
million shares for an amount of \u20ac939 million (937) at an average
price per share of \u20ac22.73 ($22.67). As of March 3, 2023, the
Company has repurchased 44.8 million shares for an amount of
\u20ac1,037 million (1,040) at an average price per share of \u20ac23.14
($23.22).
The shares acquired under the different programs are intended
to meet ArcelorMittal\u2019s obligations under debt obligations
exchangeable into equity securities; to reduce ArcelorMittal\u2019s
share capital, and/or to meet ArcelorMittal\u2019s obligations arising
from employee share programs.
Treasury shares
ArcelorMittal held, indirectly and directly, 72.5 million and 71.9
million treasury shares as of December 31, 2022 and\u00a0
December 31, 2021, respectively.
",
"dimensions": {
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"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MjMvZnJhZzozMzg0ZmFiMWZlYTE0MGQ1YWExZWY0MDhiNmNiMGQxZS90ZXh0cmVnaW9uOjMzODRmYWIxZmVhMTQwZDVhYTFlZjQwOGI2Y2IwZDFlXzI3NDg3NzkwNzA1MDEw_f0d0ae4a-e17c-4719-8879-13cd7fecd345": {
"value": "11.1\u00a0 \u00a0 Share details
On May 14, 2020, the Company completed an offering of
common shares, without nominal value for 750 at a price of
$9.27 per share. The Significant Shareholder participated in the
offerings by contributing an amount of 100 for the shares.
Following the offering of common shares described above with
net proceeds of 740 (net of transaction costs of 10), on May 14,
2020, the Company issued 80,906,149 fully paid up shares. The
Company allocated 29 to share capital, which increased from
364 at December 31, 2019 to 393 at December 31, 2020 and
the remainder of 711 to additional paid-in-capital.
Under the terms of the offerings, there was a 180-day lock-up
period for the Company on issuances or sales of shares and
securities exchangeable for or convertible into shares, subject to
customary exceptions.
Following the approval by the extraordinary general meeting of
shareholders on June 8, 2021 to cancel all the shares
repurchased by the Company under its share buyback programs
up to a maximum of 165 million shares, the Company
decreased issued share capital on August 4, 2021 and
September 22, 2021 through the cancellation of 70 million and
50 million treasury shares, respectively. Accordingly, the
aggregate number of shares issued and fully paid up decreased
from 1,102,809,772 to 982,809,772 and share capital decreased
by 43 from 393 at December 31, 2020 to 350 at December 31,
2021.
On January 14, 2022 and May 18, 2022, ArcelorMittal cancelled
45 million and 60\u00a0million treasury shares, respectively, to keep
the number of treasury shares within appropriate levels. These
cancellations took into account the shares already purchased
under the 1,000 share buyback programs announced on
November 17, 2021, which were completed on December 28,
2021 and on May 5, 2022, respectively. Following these
cancellations, the aggregate number of shares issued and fully
paid up and share capital decreased from 982,809,772 and 350
as of December 31, 2021 to 877,809,772 and 312 as of
December 31, 2022, respectively.
The Company\u2019s shares consist of the following:
The number of issued shares was 1,102,809,772 at December
31, 2020, 982,809,772 at December 31, 2021 and 877,809,772
at December 31, 2022.\u00a0
Authorized shares
On August 4, 2021, following the cancellation of 70 million
treasury shares, the authorized share capital decreased from
485 represented by 1,361,418,599 ordinary shares without
nominal value to 460 represented by 1,291,418,599 ordinary
shares without nominal value. On September 22, 2021,
following the cancellation of 50 million treasury shares, the
authorized share capital decreased further to 442 represented
by 1,241,418,599 ordinary shares without nominal value.
Following the cancellations of treasury shares on January 14,
2022 and May 18, 2022, authorized share capital decreased
from 442 represented by 1,241,418,599 ordinary shares without
nominal value as of December 31, 2021 to 404 represented by
1,136,418,599 ordinary shares without nominal value as of
December 31, 2022.
Share buyback\u00a0
On October 30, 2020, the Company completed a share buyback
program in connection with the announced sale of 100% of the
shares of ArcelorMittal USA. ArcelorMittal repurchased
35,636,253 shares at an average price per share of \u20ac11.92
($14.03) for a total value of \u20ac425\u00a0million (500).
The shares acquired through the buyback program were
recognized as treasury shares. On December 15, 2020,
ArcelorMittal signed separate, privately negotiated exchange
agreements with a limited number of holders of the MCNs for
which it delivered 22,653,933 shares out of treasury shares (see
note 11.2).
On March 3, 2021, ArcelorMittal completed its first share
buyback program in 2021 and repurchased 27.1 million shares
for a total amount of \u20ac537 million (650) at an average price per
share of \u20ac19.79 ($23.97).
On June 17, 2021, ArcelorMittal completed a second share
buyback program and repurchased 17.8 million shares for a
total amount of \u20ac469 million (570) at an average price per share
of \u20ac26.27 ($31.94).
On July 5, 2021, ArcelorMittal completed a third share buyback
program and repurchased 24.5 million shares for a total amount
of \u20ac630 million (750) at an average price per share of \u20ac25.77
($30.66).
On November 16, 2021, ArcelorMittal completed a fourth share
buyback program and repurchased 67.4 million shares for a
total value of \u20ac1,881 million (2,200) at an average price per
share of \u20ac27.91 ($32.64).
On December 28, 2021, completed a fifth share buyback
program and repurchased 34.1 million shares for a total value of
\u20ac886 million (1,000) at an average price per share of \u20ac25.99
($29.34).
During 2021, the Company repurchased 62.2\u00a0million shares
from the Significant Shareholder under its five share buyback
programs to maintain Significant Shareholder's current level of
voting rights (pursuant to the Share Repurchase Agreement
signed on February 12, 2021) for \u20ac1,600\u00a0million (1,878).
On April 25, 2022, ArcelorMittal completed its 1,000 share
buyback program announced on February 11, 2022 under the
authorization given by the annual general meeting of
shareholders of June 8, 2021 and repurchased 31.8 million
shares for a total value of \u20ac911\u00a0million (equivalent to 1,000) at
an approximate average price per share of \u20ac28.68 ($31.49).
On June 8, 2022, ArcelorMittal completed a second share
buyback program in the amount of 1,000 under the authorization
given by the annual general meeting of shareholders of May 4,
2022, bringing the total 2022 buybacks announced so far to
2,000. ArcelorMittal repurchased 33.3 million shares for a total
value of \u20ac943\u00a0million (equivalent to 1,000) at an approximate
average price per share of \u20ac28.26 ($29.99).
On July 29, 2022, the Company announced a third share
buyback program of 60.4 million shares (approximately 1.4
billion based on share price as of July 26, 2022) to be
completed by the end of May 2023 (subject to market
conditions) under the authorization given by the annual general
meeting of shareholders of May 4, 2022. The Significant
Shareholder has decided not to participate in the program
consistent with the position announced on February 25, 2022.
As of December 31, 2022, the Company had repurchased 41.3
million shares for an amount of \u20ac939 million (937) at an average
price per share of \u20ac22.73 ($22.67). As of March 3, 2023, the
Company has repurchased 44.8 million shares for an amount of
\u20ac1,037 million (1,040) at an average price per share of \u20ac23.14
($23.22).
The shares acquired under the different programs are intended
to meet ArcelorMittal\u2019s obligations under debt obligations
exchangeable into equity securities; to reduce ArcelorMittal\u2019s
share capital, and/or to meet ArcelorMittal\u2019s obligations arising
from employee share programs.
Treasury shares
ArcelorMittal held, indirectly and directly, 72.5 million and 71.9
million treasury shares as of December 31, 2022 and\u00a0
December 31, 2021, respectively.
",
"dimensions": {
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"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MjkvZnJhZzo5MzgwNTgyYWI1MTc0MTQzODAyMjM0MDE2YTg5ZjZhMC90ZXh0cmVnaW9uOjkzODA1ODJhYjUxNzQxNDM4MDIyMzQwMTZhODlmNmEwXzI3NDg3NzkwNjk1NDM0_bb82560d-ac01-4f84-81bc-6d5998d446a9": {
"value": "11.3\u00a0 \u00a0 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. 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 whenever the
conversion results in a dilutive effect.
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, 2022, 2021 and 2020.
| | | | | |
| |
| | | | | |
Net income (loss) attributable to equity holders of the parent | | | | | |
Weighted average common shares outstanding (in millions) for the purposes of basic earnings per share | | | | | |
Incremental shares from assumed conversion of restricted share units and performance share units (in millions) | | | | | |
Weighted average common shares outstanding (in millions) for the purposes of diluted earnings per share | | | | | |
For the purpose of calculating earnings per common share,
diluted weighted average common shares outstanding excludes
nil, nil and 9 million potential common shares from share unit
plans for the year ended December\u00a031, 2022, 2021 and 2020,
respectively.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MjkvZnJhZzo5MzgwNTgyYWI1MTc0MTQzODAyMjM0MDE2YTg5ZjZhMC90ZXh0cmVnaW9uOjkzODA1ODJhYjUxNzQxNDM4MDIyMzQwMTZhODlmNmEwXzI3NDg3NzkwNjk1NDM1_12cfd6b2-bb65-4b99-a5d7-1843d10a7877": {
"value": "11.3\u00a0 \u00a0 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. 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 whenever the
conversion results in a dilutive effect.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MzIvZnJhZzo0ZGEyNmJkODVlZmY0NTljODM5ZjBiMmNiODY4YzgxMS90ZXh0cmVnaW9uOjRkYTI2YmQ4NWVmZjQ1OWM4MzlmMGIyY2I4NjhjODExXzI3NDg3NzkwNjk2MDc2_68e22389-9af7-45f1-b1be-3d927a05eb23": {
"value": "11.4\u00a0 \u00a0 Dividends
Calculations to determine the amounts available for dividends
are based on ArcelorMittal\u2019s financial statements (\u201cArcelorMittal
S.A.\u201d) 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\u2019 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.
dollar and are payable in either U.S. dollar or in euros.
| | | | | | | |
| | | | | | | |
Dividend for financial year 2019 | Annual general shareholders\u2019 meeting on June 13, 2020 | | | | | | |
Dividend for financial year 2020 | Annual general shareholders\u2019 meeting on June 8, 2021 | | | | | | |
Dividend for financial year 2021 | Annual general shareholders\u2019 meeting on May 4, 2022 | | | | | | |
On May 4, 2022 at the annual general meeting of shareholders,
the shareholders approved the Company\u2019s dividend of $0.38 per
share. The dividend amounted to 332 and was paid on June 10,
2022.
In February 2023, the Board of Directors recommended an
increase of the base annual dividend to $0.44 per share, from
$0.38 per share, to be paid in two equal installments in June
and December 2023, subject to the approval of shareholders at
the annual general meeting of shareholders in May 2023.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDividendsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MzIvZnJhZzo0ZGEyNmJkODVlZmY0NTljODM5ZjBiMmNiODY4YzgxMS90ZXh0cmVnaW9uOjRkYTI2YmQ4NWVmZjQ1OWM4MzlmMGIyY2I4NjhjODExXzI3NDg3NzkwNjk2MDc3_0bca594e-b71f-4dd1-8ad7-448658a791a4": {
"value": "11.4\u00a0 \u00a0 Dividends
Calculations to determine the amounts available for dividends
are based on ArcelorMittal\u2019s financial statements (\u201cArcelorMittal
S.A.\u201d) 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\u2019 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.
dollar and are payable in either U.S. dollar or in euros.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MzIvZnJhZzo0ZGEyNmJkODVlZmY0NTljODM5ZjBiMmNiODY4YzgxMS90YWJsZTpkNzAzNmQxODNlOWI0OGZiYWQzMjUwM2FhNzBhNTRhNy90YWJsZXJhbmdlOmQ3MDM2ZDE4M2U5YjQ4ZmJhZDMyNTAzYWE3MGE1NGE3XzEtMy0xLTEtMjkxMjQ3_20ce5184-f994-4e2e-a676-cac988235540": {
"value": "0",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2020-01-01T00:00:00/2021-01-01T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MzIvZnJhZzo0ZGEyNmJkODVlZmY0NTljODM5ZjBiMmNiODY4YzgxMS90YWJsZTpkNzAzNmQxODNlOWI0OGZiYWQzMjUwM2FhNzBhNTRhNy90YWJsZXJhbmdlOmQ3MDM2ZDE4M2U5YjQ4ZmJhZDMyNTAzYWE3MGE1NGE3XzItMy0xLTEtMjkxMjQ3_9a4ca91b-361a-4b8e-95e9-d97a1a30eaf7": {
"value": "0.30",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MzIvZnJhZzo0ZGEyNmJkODVlZmY0NTljODM5ZjBiMmNiODY4YzgxMS90YWJsZTpkNzAzNmQxODNlOWI0OGZiYWQzMjUwM2FhNzBhNTRhNy90YWJsZXJhbmdlOmQ3MDM2ZDE4M2U5YjQ4ZmJhZDMyNTAzYWE3MGE1NGE3XzMtMy0xLTEtMjkxMjQ3_f4d3350d-f94d-401c-b0f9-1928d77b76fe": {
"value": "0.38",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MzIvZnJhZzo0ZGEyNmJkODVlZmY0NTljODM5ZjBiMmNiODY4YzgxMS90ZXh0cmVnaW9uOjRkYTI2YmQ4NWVmZjQ1OWM4MzlmMGIyY2I4NjhjODExXzE2NDkyNjc0NDMwMDM_f4d3350d-f94d-401c-b0f9-1928d77b76fe": {
"value": "0.38",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81MzUvZnJhZzphNTBiYmE2NmI2ZDU0YzVmYWUyNGRiOTVlOTU4OTNhMS90ZXh0cmVnaW9uOmE1MGJiYTY2YjZkNTRjNWZhZTI0ZGI5NWU5NTg5M2ExXzI3NDg3NzkwNjk0NDEz_1ad8e9d2-b74b-414d-9f6c-55190f479356": {
"value": "11.5\u00a0 \u00a0 Non-controlling interests
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\u00a031, 2022 and 2021
and for the years ended December\u00a031, 2022, 2021 and 2020.
| | | | | | | | | | | | | | | | |
| | Country of incorporation and operation | | % of non- controlling interests and non- controlling voting rights at December 31, 2022 | | % of non- controlling interests and non- controlling voting rights at December 31, 2021 | | Net income (loss) attributable to non- controlling interests for the year ended December 31, 2022 | | Non- controlling interests at December 31, 2022 | | Net income (loss) attributable to non- controlling interests for the year ended December 31, 2021 | | Non- controlling interests at December 31, 2021 | | Net income (loss) attributable to non- controlling interests for the year ended December 31, 2020 |
| | | | | | | | | | | | | | | | |
Soci\u00e9t\u00e9 Nationale de Sid\u00e9rurgie S.A. (\"Sonasid\")1 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Belgo Bekaert Arames (\"BBA\") | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
ArcelorMittal Liberia Ltd3 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
1.Sonasid - ArcelorMittal holds a controlling stake of 50% in Nouvelles Sid\u00e9rurgies Industrielles (\"NSI\"). ArcelorMittal controls NSI on the basis of a shareholders\u2019 agreement
which includes deadlock arrangements in favor of the Company. NSI holds a 64.86% stake in Sonasid. The total non-controlling interests in Sonasid of 67.57% are the
result of ArcelorMittal\u2019s indirect ownership percentage in Sonasid of 32.43% through its controlling stake in NSI.
2.Hera Ermac - The non-controlling interests correspond to the equity component net of transaction fees of the mandatory convertible bonds maturing on January 31, 2024
(see note 11.2).
3.ArcelorMittal Liberia Ltd is incorporated in Cyprus. On December 20, 2022, ArcelorMittal fully settled a 300 capital increase in ArcelorMittal Liberia Ltd including 45 on
behalf of non-controlling interests.
4.On June 30, 2022, ArcelorMittal acquired a 80% controlling stake in ArcelorMittal Texas HBI (see note 2.2.4).
The tables below provide summarized statements of financial position for the above-mentioned subsidiaries as of December\u00a031, 2022
and 2021 and summarized statements of operations and summarized statements of cash flows for the years ended December\u00a031,
2022, 2021 and 2020.
| | | | | | | | | | | | | | | | | |
| |
Summarized statements of financial position | | | | | | | | | | | | | | | | | ArcelorMittal Texas HBI LLC |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| |
Summarized statements of operations | | | | | | | | | | | | | | | | | ArcelorMittal Texas HBI LLC |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| |
Summarized statements of financial position | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| |
Summarized statements of operations | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| |
Summarized statements of operations | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total comprehensive income (loss) | | | | | | | | | | | | | | | |
business in Brazil in 2018, which was subsequently renamed
ArcelorMittal Sul Fluminense (\"AMSF\"). The exercise price of
the put option is calculated pursuant to an agreed formula in the
shareholders\u2019 agreement which applies a 6 times multiple of
ArcelorMittal Brasil Longs Business EBITDA in the four
immediately preceding calendar quarters from the date of the
put option exercise (subject to certain adjustments, such as the
exclusion of any unusual, infrequent or abnormal events) less
an assumed net debt of BRL 6.2 billion times 15%. 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 of AMSF a 328 financial liability at
amortized cost and measured at the present value of the
redemption amount. As of December 31, 2022, the Company
calculated the put option exercise price in the amount of BRL
1.0\u00a0billion (179 see note 4.8). Votorantim S.A. has indicated that
it does not agree with ArcelorMittal Brasil\u2019s calculation of the
exercise price and filed a request for arbitration on September
28, 2022. The definition of the final put option exercise price will
be subject to the arbitration procedure, whose estimated timing
for resolution is currently unknown. In January 2023,
ArcelorMittal Brasil settled the undisputed amount it accepts as
the value of the put option for 179 (see note 9.3).
On June 3, 2021, following an amendment to the shareholders'
agreement signed between the Company and non-controlling
interests in NSI, an entity in which ArcelorMittal holds a 50%
controlling stake and which holds a 64.86% interest in Sonasid
in Morocco, the Company granted to such non-controlling
interests a put option to buy the totality of their shares in NSI
exercisable by its holders during three periods between
December 5, 2022 to December 4, 2024, December 5, 2027 to
December 4, 2029 and December 5, 2032 to December 4,
2034. The Company recognized a financial liability at amortized
cost against equity of 119 (122 as of December 31, 2022) and
measured at the present value of the redemption amount (see
note 9.2).
In conjunction with the acquisition of an 80% interest in
ArcelorMittal Texas HBI on June 30, 2022, ArcelorMittal granted
to voestalpine a put option exercisable at the end of the fifth,
tenth and fifteenth year subsequently to the acquisition date.
The Company recognized at inception a 177 (181 as of
December 31, 2022) financial liability at amortized cost
measured at the present value of the redemption amount of the
written put option based on the lower of equity value increased
by an annual contractual return and fair value (see notes 2.2.4
and 9.2).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory",
"language": "en",
"entity": "scheme:2EULGUTUI56JI9SAL165",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjdjYzkwNGFmMjU4ZDQxMTk5ZDRkMjZjMDgyZTIwYmVlL3NlYzo3Y2M5MDRhZjI1OGQ0MTE5OWQ0ZDI2YzA4MmUyMGJlZV81NDQvZnJhZzplOWVhODhjZDc0N2I0ZWVkOTM3ZmNkZDIwNGMwMGQ3Ny90ZXh0cmVnaW9uOmU5ZWE4OGNkNzQ3YjRlZWQ5MzdmY2RkMjA0YzAwZDc3Xzc1MQ_3dc7b5b9-c466-457f-9ea2-a8628a03379f": {
"value": "
NOTE 12: RELATED PARTIES\u00a0
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, together with
shares owned directly by Mr. and Mrs. Mittal, 37.65% of
ArcelorMittal\u2019s issued ordinary shares.
Transactions with related parties of the Company mainly relate
to sales and purchases of raw materials and steel products and
were as follows:
12.1\u00a0 \u00a0 Sales and trade receivables
| | | | | | | | | | | |
| | | | | |
| | | | | |
Related parties and their subsidiaries where applicable | | | | | | | | | | | |
| | | | | | | | | | | |
Gonvarri Steel Industries 1 | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
ArcelorMittal CLN Distribuzione Italia | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Coils Lamiere Nastri (C.L.N.) | | | | | | | | | | | |
| | | | | | | | | | | |
ArcelorMittal RZK \u00c7elik Servis Merkezi | | | | | | | | | | | |
Acciaierie d'Italia\u00a0 3 | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |