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ArcelorMittal (\u201cArcelorMittal\u201d or the \u201cCompany\u201d), together with its
subsidiaries, owns and operates steel manufacturing and mining
facilities in Europe, North and South America, Asia and Africa.
Collectively, these subsidiaries and facilities are referred to in
the consolidated financial statements as the \u201coperating
subsidiaries\u201d. These consolidated financial statements were
authorized for issuance on February 28, 2024 by the Company\u2019s
Board of Directors.
1.2 Climate change disclosures
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 Company's decarbonization roadmap is
broken down by country, plant and project to achieve the
Company's objectives and features five sets of actions and
initiatives that act as stepping-stones toward the goal of
achieving net-zero carbon emissions by 2050:
\u2022 Transforming the Company's steelmaking assets: this
involves switching where applicable from the BF-BOF
(\"Blast Furnace-Basic Oxygen Furnace\") to low-carbon
steelmaking technologies through the DRI (\"Direct
Reduced Iron\") and from iron ore preparation in the
sinter plant (using heat or pressure to compact a
material) to the pellet plant (which compresses or
moulds the iron material into the shape of a pellet).
Ironmaking with pellets in the DRI is usually coupled
with an EAF (\"Electric Arc Furnace\"). To achieve its
2030 global carbon emissions intensity reduction
target, ArcelorMittal has estimated the gross capital
cost required to be approximately 10 billion, with the
expectation that public funding covers 50% of the total
cost of decarbonization, addressing both capital
expenditures and the higher operating expenditures.
The Company lists below the main announced or
ongoing projects:
Hamilton (Canada)
In October 2022, ArcelorMittal, broke ground on its decarbonization project (the governments of Canada and
Ontario having committed CAD$400 million and CAD$500 million, respectively, to the overall project cost) at the
ArcelorMittal Dofasco plant in Hamilton, Ontario, Canada, which is expected to contribute to a considerable
reduction of CO2\u2009emissions. The project includes the construction of a 2.5 million tonnes DRI facility and one EAF.
Gij\u00f3n and Sestao
(Spain)
ArcelorMittal is planning to invest \u20ac1 billion in the Company's plant in Gij\u00f3n including the construction of a 2.3
million-tonne hydrogen DRI plant. This investment is expected to deliver a reduction in carbon emissions at the
Spanish operations of up to 50%. At a later stage, around 1 million tonnes per year of DRI would be supplied to
Sestao to be used as feedstock for the plant\u2019s two EAFs. On February 17, 2023, the European Commission
approved, under EU state aid rules, a \u20ac450 million Spanish measure to support ArcelorMittal Espa\u00f1a in
construction of the new DRI installation in Gij\u00f3n. The Company is also planning to construct a new EAF for long
products.
Hamburg
(Germany)
ArcelorMittal already operates Europe\u2019s only DRI-EAF plant in Hamburg, where the switch to using hydrogen
instead of natural gas in the iron ore reduction process is being prepared.\u00a0 The Company is planning to test the
ability of hydrogen DRI on an industrial scale, as well as testing carbon-free DRI in the EAF steelmaking process.
The European Commission approved \u20ac55 million of funding support from the German Federal Government
towards the plant construction.
Dunkirk(France)
In Dunkirk, ArcelorMittal would build a 2.5 million tonnes per year DRI. This DRI will be coupled with an innovative
technology electric furnace and complemented by an additional EAF. On July 20, 2023, the Company received the
European Commission\u2019s approval of \u20ac850 million in state aid for the funding of this project.
Bremen and
Eisenh\u00fcttenstadt
(Germany)
ArcelorMittal is developing a project to build a large-scale industrial plant for the DRI based steelmaking at its site
in Bremen, as well as EAFs in Bremen and Eisenh\u00fcttenstadt, following the announcement of the planned
expansion of Germany\u2019s hydrogen infrastructure and alongside its existing H2 Hamburg project. In February 2024,
the Company received the European Commission's approval of \u20ac1.3 billion in state aid.
Ghent (Belgium)
ArcelorMittal Belgium is planning to build a 2.5 million-tonnes per year DRI plant and two EAFs at its Ghent site.\u00a0
The DRI plant and EAF facility will operate alongside Ghent\u2019s state-of-the-art blast furnace that is ready to take
waste wood and plastic as a substitute for fossil carbon. On June 22, 2023 the Company received the European
Commission approval of \u20ac280 million in state aid for the funding of the project.
\u2022 Increasing the proportion of scrap used in the steelmaking
process: the Company can increase the use of low-quality
scrap in the BF-BOF steelmaking process by improving
steel scrap sorting and classification, installing scrap pre-
melting technology, and adjusting the steelmaking process
to accommodate scrap. In 2022 and 2023, the Company
completed the acquisition of three specialist scrap metal
recyclers as the Company continually seeks to enhance its
ability to source scrap steel (see note 2.2.4).
\u2022 Transforming the energy used in the steelmaking process:
this is expected to involve shifting to one or a combination
of three alternatives: clean electricity (which could be in the
form of green hydrogen), carbon capture usage (\"CCU\")
coupled with carbon capture storage (\"CCS\") to ensure no
carbon is emitted, and use of circular carbon either through
natural or synthetic carbon cycles. In November 2023,
industrial production of ethanol commenced at
ArcelorMittal\u2019s commercial flagship carbon capture and
utilization facility in Ghent, Belgium. The \u20ac200 million
Steelanol facility is a first of its kind for the European steel
industry, deploying technology developed by leading carbon
utilization company LanzaTech. This facility captures
carbon-rich waste gases from steelmaking and biologically
convert them into advanced ethanol through LanzaTech\u2019s
biobased process. The facility not only reduces CO2
emissions at the plant by 125,000 tonnes per year, but also
results in the production of 80 million liters of bio-ethanol
per annum, which can be blended with traditional gasoline
as a low-carbon alternative fuel for the transport sector.
\u2022 Investing in clean electricity used in the steelmaking
process: The Company plans to look for more and varied
opportunities in the renewables sector to provide sufficient
access to clean energy at affordable prices, purchase
renewable energy certificates and make more use of direct
power purchase agreements with suppliers from
renewables projects. In March 2022, ArcelorMittal
announced that it had established a strategic partnership
with Greenko Group, India\u2019s leading energy transition
company, to develop a \u2018round the clock\u2019 renewable energy
project with 975 MW of nominal capacity. The 0.6 billion
project with commissioning expected by mid-2024 will
combine solar and wind power and be supported by
Greenko\u2019s hydro pumped storage project, which helps to
overcome the intermittent nature of wind and solar power
generation. The project provides for 250 MW of
uninterrupted renewable power to be supplied annually to
AMNS India (ArcelorMittal\u2019s joint venture company in India)
resulting in over 20% of the electricity requirement at AMNS
India\u2019s Hazira plant coming from renewable sources,
reducing carbon emissions by approximately 1.5 million
tonnes per year. In May 2023, ArcelorMittal formed a joint
venture with Casa dos Ventos, one of Brazil\u2019s largest
developers and producers of renewable energy projects, to
develop a 554 MW wind power project\u00a0 aiming to secure
and decarbonize a considerable proportion of the
Company's wholly-owned subsidiary ArcelorMittal Brasil\u2019s
future electricity needs.
\u2022 Offsetting residual emissions: For these residual emissions,
which today the Company estimates will be 5% - 10% of
today\u2019s emissions, ArcelorMittal plans to buy high-quality
offsets or launch projects to generate high-quality carbon
credits that would not have happened without the
Company\u2019s intervention.
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, CCS 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. 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
Considering the risks related to climate change and the
Company's commitment established under the Paris agreement,
ArcelorMittal provides explicit information in the notes to these
consolidated financial statements regarding how climate change
affects the Company's financial information. The Company
presents below the references to the various notes where issues
associated with climate change are addressed:
Topic
Note
Content
Estimate and judgment
Note 1.3 Use of judgment and
estimates
Judgments and estimates made in assessing the impact of climate change and the
transition to a low carbon economy: useful lives of property, plant and equipment,
estimates of future cash flow projections for impairment of non-financial assets,
decommissioning costs
Sustainable investment
\u2022 Note 2.2.4 Acquisitions
\u2022 Note 2.4.1 Joint ventures
\u2022 Note 2.5 Other investments
\u2022 Note 5.2 Property, plant and
equipment and biological assets
Investments in renewable energy projects, scrap metal recycling businesses and
breakthrough technologies through ArcelorMittal XCarb\u00ae Innovation Fund
Measurement of non-
financial assets
Note 5.1 Goodwill and intangible
assets
Recognition and measurement of emission rights
Note 5.2 Property, plant and
equipment and biological assets
Residual useful lives of certain assets, capital expenditures with respect to
decarbonization strategy
Note 5.3 Impairment of intangible
assets, including goodwill, and
tangible assets
Inclusion of climate-related risks in the assumptions for impairment testing
Provisions
Note 9.1 Provisions
Recognition of emission obligations
Share-based payments
Note 8.3 Share-based payments
Description of equity incentive plans requiring achievement of specific climate-
related targets
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-605": { "value": "owns and operates steel manufacturing and mining facilities", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-606": { "value": "Europe, North and South America, Asia and Africa", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-607": { "value": "These consolidated financial statements were
authorized for issuance on February 28, 2024 by the Company\u2019s
Board of Directors.", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-609": { "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.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-608": { "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.
", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-610": { "value": "
1.3\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 (see also below judgments and estimates
made in assessing the impact of climate change and the
transition to a low carbon economy). Discount rates are
reviewed annually.
Impairment of associates and joint ventures (note 2.4.4.):
Whenever there is an indication of impairment related to
investments accounted for under the equity method, the
Company performs an impairment test based, amongst others,
on an estimate of its share in the present value of the projected
future cash flows expected to be generated by operations of
associates and joint ventures and, similarly to impairment
testing of tangible and intangible assets, including goodwill, 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.
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:
\u2022 The fair value of identifiable intangible assets
(generally patents, customer relationships, technology,
brand or favorable contracts) is estimated based on the
above-mentioned income approach;
\u2022 Property, plant and equipment is recorded at market
value, or, if not available, depreciated replacement
cost;
\u2022 The 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.
\u2022 Inventories are estimated based on expected selling
prices at the date of acquisition reduced by an estimate
of selling expenses and a normal profit margin.
\u2022 Adjustments 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.
Mineral reserve and resource estimates (note 5.2): Proven iron
ore 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.
Judgments and estimates made in assessing the impact of
climate change and the transition to a low carbon economy
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. The main judgements and
estimates made by ArcelorMittal when preparing the 2023
consolidated financial statements related to the expected effects
of climate change and the transition to a low carbon economy
are described below.
\u2022 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 steel operations in the EU and in Canada.
\u2022 Impairment of tangible and intangible assets, including
goodwill: Value in use calculations relating to flat steel
operations in the EU and in Canada, which apply the BF-
BOF route, include the impact of decarbonization at the
level of cash flow projections as decarbonization is
necessary to maintain the level of economic benefits
expected to arise from the assets in their current condition
considering the legal obligation of carbon neutrality for
these operations; accordingly the Company developed
assumptions in determining related capital expenditures
which reflect announced commitments and initiatives in
place, costs associated with operating the new technologies
which are expected to be deployed in the short to medium
term, 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. For other operations, discount rates are
increased to include a risk premium relative to the future
estimated decarbonization cost. 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, level of public
funding and other assumptions are inherently uncertain,
which could result in significant changes to value in use
calculations in future periods and affect impairment
assessments.
\u2022 Decommissioning 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 1.0 million tonnes of steel in 2023 (1.2 million
tonnes in 2022), and (captive) mines that produced 4.6 million
tonnes of iron ore in 2023 (4.9 million tonnes in 2022); the
related property, plant and equipment had a carrying value of
0.7 billion on the Company\u2019s statement of financial position at
December 31, 2023 (0.6 billion at December 31, 2022). In 2023,
the Company\u2019s Ukrainian operations (and in particular its Kryvyi
Rih steel plant) recorded 0.9 million of steel shipments (1.1
million tonnes in 2022), generating 1.2 billion of sales (1.4 billion
in 2022) including 0.5 billion of sales (0.4 billion in 2022) 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 ArcelorMittal's Kryvyi Rih (\"AMKR\") pig
iron 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. During the first half of 2023,
the Company continued to ramp up operations and has been
operating two of three blast furnaces until end of May 2023
following the restart of blast furnace No.8 on April 14, 2023. On
June 6, 2023, following the destruction of the Nova Kakhovka
reservoir's dam, AMKR temporarily suspended steelmaking and
production of rolled products to reduce water consumption. As a
result, the Company shut down blast furnace No.6 slightly
earlier than planned for a major planned repair but continued to
operate blast furnace No.8. In July 2023, AMKR announced that
it had completed the construction of a new pumping station and
5 kilometers pipeline to supply water to the city and to ensure
full coverage of its production needs. AMKR is currently
operating its mining and steel facilities at 45% and 30%,
respectively. ArcelorMittal continued to exercise control over its
Ukrainian operations and key production assets have not been
seriously damaged at the date of this report. 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 in 2022 a 1,026 impairment loss of property, plant
and equipment and intangibles (see note 5.3). In 2023, the
Company revised its value in use calculation and timing
expectations regarding return to pre-war conditions. It applied
separate discount rates over the discrete projections period,
including a higher country risk premium for the cash flow
projections until the end of 2024 and a return to a pre-war
country risk premium after 2024 and for the terminal value
calculation as value in use is sensitive to a difference in country
risk for different periods. It concluded that the recoverable
amount remains in excess of the carrying amount. Conversely, if
the ongoing conflict between Russia and Ukraine persists, it
could continue to have a material effect on the overall
macroeconomic environment potentially affecting steel and iron
ore demand and prices as well as energy costs. It could also
result in further reduced production, sales and income with
respect to the Company's Ukrainian operations thus increasing
the risk that the Company may need to record an additional
impairment charge with respect to such operations in the future.
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 since early 2022. In 2023, while energy prices declined
and inflationary pressure started to dissipate, high interest rates
continued to constrain activity. As of October 1, 2023, when
goodwill was tested for impairment, discount rates applied for
value in use calculations included a higher risk-free rate as
compared to October 1, 2022. The Company sees signs of
improvement of apparent demand conditions as the destocking
phase reaches maturity and remains focused on executing its
strategic growth and decarbonization projects.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-611": { "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 (see also below judgments and estimates
made in assessing the impact of climate change and the
transition to a low carbon economy). Discount rates are
reviewed annually.
Impairment of associates and joint ventures (note 2.4.4.):
Whenever there is an indication of impairment related to
investments accounted for under the equity method, the
Company performs an impairment test based, amongst others,
on an estimate of its share in the present value of the projected
future cash flows expected to be generated by operations of
associates and joint ventures and, similarly to impairment
testing of tangible and intangible assets, including goodwill, 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.
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:
\u2022 The fair value of identifiable intangible assets
(generally patents, customer relationships, technology,
brand or favorable contracts) is estimated based on the
above-mentioned income approach;
\u2022 Property, plant and equipment is recorded at market
value, or, if not available, depreciated replacement
cost;
\u2022 The 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.
\u2022 Inventories are estimated based on expected selling
prices at the date of acquisition reduced by an estimate
of selling expenses and a normal profit margin.
\u2022 Adjustments 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.
Mineral reserve and resource estimates (note 5.2): Proven iron
ore 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.
Judgments and estimates made in assessing the impact of
climate change and the transition to a low carbon economy
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. The main judgements and
estimates made by ArcelorMittal when preparing the 2023
consolidated financial statements related to the expected effects
of climate change and the transition to a low carbon economy
are described below.
\u2022 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 steel operations in the EU and in Canada.
\u2022 Impairment of tangible and intangible assets, including
goodwill: Value in use calculations relating to flat steel
operations in the EU and in Canada, which apply the BF-
BOF route, include the impact of decarbonization at the
level of cash flow projections as decarbonization is
necessary to maintain the level of economic benefits
expected to arise from the assets in their current condition
considering the legal obligation of carbon neutrality for
these operations; accordingly the Company developed
assumptions in determining related capital expenditures
which reflect announced commitments and initiatives in
place, costs associated with operating the new technologies
which are expected to be deployed in the short to medium
term, 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. For other operations, discount rates are
increased to include a risk premium relative to the future
estimated decarbonization cost. 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, level of public
funding and other assumptions are inherently uncertain,
which could result in significant changes to value in use
calculations in future periods and affect impairment
assessments.
\u2022 Decommissioning 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 1.0 million tonnes of steel in 2023 (1.2 million
tonnes in 2022), and (captive) mines that produced 4.6 million
tonnes of iron ore in 2023 (4.9 million tonnes in 2022); the
related property, plant and equipment had a carrying value of
0.7 billion on the Company\u2019s statement of financial position at
December 31, 2023 (0.6 billion at December 31, 2022). In 2023,
the Company\u2019s Ukrainian operations (and in particular its Kryvyi
Rih steel plant) recorded 0.9 million of steel shipments (1.1
million tonnes in 2022), generating 1.2 billion of sales (1.4 billion
in 2022) including 0.5 billion of sales (0.4 billion in 2022) 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 ArcelorMittal's Kryvyi Rih (\"AMKR\") pig
iron 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. During the first half of 2023,
the Company continued to ramp up operations and has been
operating two of three blast furnaces until end of May 2023
following the restart of blast furnace No.8 on April 14, 2023. On
June 6, 2023, following the destruction of the Nova Kakhovka
reservoir's dam, AMKR temporarily suspended steelmaking and
production of rolled products to reduce water consumption. As a
result, the Company shut down blast furnace No.6 slightly
earlier than planned for a major planned repair but continued to
operate blast furnace No.8. In July 2023, AMKR announced that
it had completed the construction of a new pumping station and
5 kilometers pipeline to supply water to the city and to ensure
full coverage of its production needs. AMKR is currently
operating its mining and steel facilities at 45% and 30%,
respectively. ArcelorMittal continued to exercise control over its
Ukrainian operations and key production assets have not been
seriously damaged at the date of this report. 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 in 2022 a 1,026 impairment loss of property, plant
and equipment and intangibles (see note 5.3). In 2023, the
Company revised its value in use calculation and timing
expectations regarding return to pre-war conditions. It applied
separate discount rates over the discrete projections period,
including a higher country risk premium for the cash flow
projections until the end of 2024 and a return to a pre-war
country risk premium after 2024 and for the terminal value
calculation as value in use is sensitive to a difference in country
risk for different periods. It concluded that the recoverable
amount remains in excess of the carrying amount. Conversely, if
the ongoing conflict between Russia and Ukraine persists, it
could continue to have a material effect on the overall
macroeconomic environment potentially affecting steel and iron
ore demand and prices as well as energy costs. It could also
result in further reduced production, sales and income with
respect to the Company's Ukrainian operations thus increasing
the risk that the Company may need to record an additional
impairment charge with respect to such operations in the future.
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 since early 2022. In 2023, while energy prices declined
and inflationary pressure started to dissipate, high interest rates
continued to constrain activity. As of October 1, 2023, when
goodwill was tested for impairment, discount rates applied for
value in use calculations included a higher risk-free rate as
compared to October 1, 2022. The Company sees signs of
improvement of apparent demand conditions as the destocking
phase reaches maturity and remains focused on executing its
strategic growth and decarbonization projects.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-612": { "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 position
taken in the tax return will not be accepted by the tax authorities,
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.
The Company has adopted International Tax Reform \u2013 Pillar
Two Model Rules (Amendments to IAS 12 upon their release on
May 23, 2023). The Amendments provide a temporary
mandatory exception from deferred tax accounting for the top-up
tax, which is effective immediately, and require new disclosures
about the Pillar Two exposure as of December 31, 2023. The
Company has applied a temporary mandatory relief from
deferred tax accounting for the impacts of the top-up tax and
accounts for it as a current tax when incurred.
Pillar Two legislation has been enacted or substantively enacted
in the jurisdiction of ArcelorMittal S.A., the ultimate parent of the
Group, and in certain other jurisdictions where the Company
operates. The legislation is effective for the Company\u2019s financial
year beginning January 1, 2024.\u00a0 Based on the applicable
criteria, the Company is subject to Pillar Two minimum tax and
has substantially performed the assessment of its potential
exposure. The assessment that is being carried out is based on
the latest available tax filings, country-by-country reporting for
2022, and the latest financial information for 2023, and
considers the Pillar Two legislation as enacted in Luxembourg
and published by OECD rules and guidelines. Based on the
assessment carried out so far, ArcelorMittal does not expect a
material impact of the Pillar Two legislation to the consolidated
financial statements. Nevertheless, as the rules are complex,
uncertainty exists and unforeseen outcomes of the Pillar Two
legislation may exceptionally result in additional top-up tax.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-613": { "value": "
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 assets resulting from this calculation are
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 net financing costs 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 based on
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.
\u2022 Discount 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.
\u2022 Rate 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.
\u2022 Healthcare 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.
\u2022 Mortality 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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-614": { "value": "
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": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-616": { "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 (see also below judgments and estimates
made in assessing the impact of climate change and the
transition to a low carbon economy). Discount rates are
reviewed annually.
Impairment of associates and joint ventures (note 2.4.4.):
Whenever there is an indication of impairment related to
investments accounted for under the equity method, the
Company performs an impairment test based, amongst others,
on an estimate of its share in the present value of the projected
future cash flows expected to be generated by operations of
associates and joint ventures and, similarly to impairment
testing of tangible and intangible assets, including goodwill, 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.
Impairment of tangible and intangible assets, including
goodwill: Value in use calculations relating to flat steel
operations in the EU and in Canada, which apply the BF-
BOF route, include the impact of decarbonization at the
level of cash flow projections as decarbonization is
necessary to maintain the level of economic benefits
expected to arise from the assets in their current condition
considering the legal obligation of carbon neutrality for
these operations; accordingly the Company developed
assumptions in determining related capital expenditures
which reflect announced commitments and initiatives in
place, costs associated with operating the new technologies
which are expected to be deployed in the short to medium
term, 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. For other operations, discount rates are
increased to include a risk premium relative to the future
estimated decarbonization cost. 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, level of public
funding and other assumptions are inherently uncertain,
which could result in significant changes to value in use
calculations in future periods and affect 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 2023
impairment test of goodwill did not include the GCGU
corresponding to the Mining segment as goodwill allocated to
this GCGU was fully impaired in 2015. The key assumptions for
the value in use calculations are primarily the discount rates,
growth rates, expected changes to average selling prices,
shipments and direct costs during the period. Assumptions for
average selling prices and shipments are based on historical
experience and expectations of future changes in the market. In
addition, with respect to raw material price assumptions, the
Company applied a range of $70 per tonne to $114 per tonne for
iron ore ($70 per tonne to $110 per tonne in 2022) and $185 per
tonne to $250 per tonne ($170 per tonne to $268 per tonne in
2022) 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 also additional opportunities as customers
deepen their understanding of embedded and lifecycle
emissions of the materials where steel compares favorably.
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 in the Company's future cash flow projections.
ArcelorMittal acknowledges that CGUs and GCGUs applying the
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 the future estimated decarbonization cost for such
operations is reflected through an additional risk premium
embedded in 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.
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. On
April 25, 2023, the EU adopted a revision of the ETS Directive
including a regulation establishing a carbon border adjustment
mechanism (\u201cCBAM\u201d) which entered into force on May 17, 2023.
The ETS and CBAM regulations will impact the carbon
emissions allowances from the second trading period of Phase
IV (2026-2030) onwards as they will be gradually phased out
(2.5% by 2026, 5% by 2027, 10% by 2028, 22.5% by 2029,\u00a0
48.5% by 2030, 61% by 2031, 73.5% by 2032, 86% by 2033
and 100% by 2034). 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 under the ETS
scheme 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. With respect to the EU ETS scheme, the
assumption for carbon emission cost includes also the gradual
phasing out of free emission allowances and the forecast market
price of emission rights, for which the Company considered in its
five-year cash flow projections internal estimates of 85\u20ac/t for
2024, 90\u20ac/t for 2025 and 100\u20ac/t for the period 2026-2028.
The assumptions used in the value in use calculations are
inherently uncertain and require management judgment as
described in note 1.3. 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. 2023 was impacted by a negative price-cost
effect predominantly on account of lower average steel selling
prices and lower steel shipments. The decline in steel spreads
resulted from the pace of the decline in steel prices being
greater than the reduction in the raw material basket and energy
costs. At the end of the year, apparent demand conditions
showed however signs of improvement as the destocking phase
reached maturity.
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 2023 and 2022:
\u00a0
NAFTA
Brazil
Europe
ACIS
GCGU weighted average pre-tax discount rate used in 2023 (in %)
13.0
17.2
11.5
20.8
GCGU weighted average pre-tax discount rate used in 2022 (in %)
13.3
18.7
10.6
18.4
Once recognized, impairment losses for goodwill are not
reversed.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-615": { "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 (see also below judgments and estimates
made in assessing the impact of climate change and the
transition to a low carbon economy). Discount rates are
reviewed annually.
Impairment of associates and joint ventures (note 2.4.4.):
Whenever there is an indication of impairment related to
investments accounted for under the equity method, the
Company performs an impairment test based, amongst others,
on an estimate of its share in the present value of the projected
future cash flows expected to be generated by operations of
associates and joint ventures and, similarly to impairment
testing of tangible and intangible assets, including goodwill, 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.
Impairment of tangible and intangible assets, including
goodwill: Value in use calculations relating to flat steel
operations in the EU and in Canada, which apply the BF-
BOF route, include the impact of decarbonization at the
level of cash flow projections as decarbonization is
necessary to maintain the level of economic benefits
expected to arise from the assets in their current condition
considering the legal obligation of carbon neutrality for
these operations; accordingly the Company developed
assumptions in determining related capital expenditures
which reflect announced commitments and initiatives in
place, costs associated with operating the new technologies
which are expected to be deployed in the short to medium
term, 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. For other operations, discount rates are
increased to include a risk premium relative to the future
estimated decarbonization cost. 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, level of public
funding and other assumptions are inherently uncertain,
which could result in significant changes to value in use
calculations in future periods and affect 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 2023
impairment test of goodwill did not include the GCGU
corresponding to the Mining segment as goodwill allocated to
this GCGU was fully impaired in 2015. The key assumptions for
the value in use calculations are primarily the discount rates,
growth rates, expected changes to average selling prices,
shipments and direct costs during the period. Assumptions for
average selling prices and shipments are based on historical
experience and expectations of future changes in the market. In
addition, with respect to raw material price assumptions, the
Company applied a range of $70 per tonne to $114 per tonne for
iron ore ($70 per tonne to $110 per tonne in 2022) and $185 per
tonne to $250 per tonne ($170 per tonne to $268 per tonne in
2022) 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 also additional opportunities as customers
deepen their understanding of embedded and lifecycle
emissions of the materials where steel compares favorably.
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 in the Company's future cash flow projections.
ArcelorMittal acknowledges that CGUs and GCGUs applying the
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 the future estimated decarbonization cost for such
operations is reflected through an additional risk premium
embedded in 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.
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. On
April 25, 2023, the EU adopted a revision of the ETS Directive
including a regulation establishing a carbon border adjustment
mechanism (\u201cCBAM\u201d) which entered into force on May 17, 2023.
The ETS and CBAM regulations will impact the carbon
emissions allowances from the second trading period of Phase
IV (2026-2030) onwards as they will be gradually phased out
(2.5% by 2026, 5% by 2027, 10% by 2028, 22.5% by 2029,\u00a0
48.5% by 2030, 61% by 2031, 73.5% by 2032, 86% by 2033
and 100% by 2034). 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 under the ETS
scheme 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. With respect to the EU ETS scheme, the
assumption for carbon emission cost includes also the gradual
phasing out of free emission allowances and the forecast market
price of emission rights, for which the Company considered in its
five-year cash flow projections internal estimates of 85\u20ac/t for
2024, 90\u20ac/t for 2025 and 100\u20ac/t for the period 2026-2028.
The assumptions used in the value in use calculations are
inherently uncertain and require management judgment as
described in note 1.3. 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. 2023 was impacted by a negative price-cost
effect predominantly on account of lower average steel selling
prices and lower steel shipments. The decline in steel spreads
resulted from the pace of the decline in steel prices being
greater than the reduction in the raw material basket and energy
costs. At the end of the year, apparent demand conditions
showed however signs of improvement as the destocking phase
reached maturity.
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 2023 and 2022:
\u00a0
NAFTA
Brazil
Europe
ACIS
GCGU weighted average pre-tax discount rate used in 2023 (in %)
13.0
17.2
11.5
20.8
GCGU weighted average pre-tax discount rate used in 2022 (in %)
13.3
18.7
10.6
18.4
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, 2023 and December 31, 2022, the Company
determined it has 46 cash-generating units.
An impairment loss, related to intangible assets other than
goodwill and tangible assets recognized in prior years is
reversed if, and only if, there has been a change in the
estimates used to determine the asset\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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-617": { "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:
\u2022 The fair value of identifiable intangible assets
(generally patents, customer relationships, technology,
brand or favorable contracts) is estimated based on the
above-mentioned income approach;
\u2022 Property, plant and equipment is recorded at market
value, or, if not available, depreciated replacement
cost;
\u2022 The 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.
\u2022 Inventories are estimated based on expected selling
prices at the date of acquisition reduced by an estimate
of selling expenses and a normal profit margin.
\u2022 Adjustments 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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-618": { "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.
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 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
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:
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.
Call option on MCB
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-619": { "value": "
Mineral reserve and resource estimates (note 5.2): Proven iron
ore 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:
\u2022 Asset carrying amounts may be affected due to
changes in estimated future cash flows.
\u2022 Depreciation, depletion and amortization charged in the
consolidated statements of operations may change
where such charges are determined by the units of
production basis, or where the useful economic lives of
assets change.
\u2022 Overburden removal costs recognized in the
consolidated statements of financial position or
charged to the consolidated statements of operations
may change due to changes in stripping ratios or the
units of production basis of depreciation.
\u2022 Decommissioning, site restoration and environmental
provisions may change where changes in estimated
reserves affect expectations about the timing or cost of
these activities.
Stripping and overburden removal costs
In open pit and underground mining operations, it is often
necessary to remove overburden and other waste materials to
access the deposit from which minerals can be extracted. This
process is referred to as stripping. Stripping costs can be
incurred before the mining production commences
(\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:
\u2022 If mining of the second and subsequent pits is
conducted consecutively with that of the first pit, rather
than concurrently.
\u2022 If separate investment decisions are made to develop
each pit, rather than a single investment decision being
made at the outset.
\u2022 If the pits are operated as separate units in terms of
mine planning and the sequencing of overburden and
ore mining, rather than as an integrated unit.
\u2022 If expenditures for additional infrastructure to support
the second and subsequent pits are relatively large.
\u2022 If the pits extract ore from separate and distinct ore
bodies, rather than from a single ore body.
The relative importance of each factor is considered by local
management to determine whether the stripping costs should be
attributed to the individual pit or to the combined output from
several pits.
Developmental stripping costs contribute to the future economic
benefits of mining operations when the production begins and
so are capitalized as tangible assets (construction in progress),
whereas production stripping is a part of on-going activities and
commences when the production stage of mining operations
begins and continues throughout the life of a mine.
Capitalization of developmental stripping costs ends when the
commercial production of the minerals commences.
Production stripping costs are incurred to extract the ore in the
form of inventories and/or to improve access to an additional
component of an ore body or deeper levels of material.
Production stripping costs are accounted for as inventories to
the extent the benefit from production stripping activity is
realized in the form of inventories. Production stripping costs are
recognized as a non-current asset (\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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-620": { "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 steel 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.
Asset Category
Useful Life\u00a0Range
Land
Not\u00a0depreciated
Buildings
10 to 50 years
Property plant & equipment
15 to 64 years
Auxiliary facilities
15 to 60 years
Other facilities
5 to 20 years
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 BF
and BOF, 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. Accordingly, depreciation charge
increased by 168 in 2023 and\u00a0 is expected to increase by 168,
142, 124, 28 and 26 for the years ended December 31, 2024,
2025, 2026, 2027 and 2028, respectively.
Mining assets comprise:
\u2022 Mineral rights acquired;
\u2022 Capitalized 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:
\u2022 Asset carrying amounts may be affected due to
changes in estimated future cash flows.
\u2022 Depreciation, depletion and amortization charged in the
consolidated statements of operations may change
where such charges are determined by the units of
production basis, or where the useful economic lives of
assets change.
\u2022 Overburden removal costs recognized in the
consolidated statements of financial position or
charged to the consolidated statements of operations
may change due to changes in stripping ratios or the
units of production basis of depreciation.
\u2022 Decommissioning, site restoration and environmental
provisions may change where changes in estimated
reserves affect expectations about the timing or cost of
these activities.
Stripping and overburden removal costs
In open pit and underground mining operations, it is often
necessary to remove overburden and other waste materials to
access the deposit from which minerals can be extracted. This
process is referred to as stripping. Stripping costs can be
incurred before the mining production commences
(\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:
\u2022 If mining of the second and subsequent pits is
conducted consecutively with that of the first pit, rather
than concurrently.
\u2022 If separate investment decisions are made to develop
each pit, rather than a single investment decision being
made at the outset.
\u2022 If the pits are operated as separate units in terms of
mine planning and the sequencing of overburden and
ore mining, rather than as an integrated unit.
\u2022 If expenditures for additional infrastructure to support
the second and subsequent pits are relatively large.
\u2022 If the pits extract ore from separate and distinct ore
bodies, rather than from a single ore body.
The relative importance of each factor is considered by local
management to determine whether the stripping costs should be
attributed to the individual pit or to the combined output from
several pits.
Developmental stripping costs contribute to the future economic
benefits of mining operations when the production begins and
so are capitalized as tangible assets (construction in progress),
whereas production stripping is a part of on-going activities and
commences when the production stage of mining operations
begins and continues throughout the life of a mine.
Capitalization of developmental stripping costs ends when the
commercial production of the minerals commences.
Production stripping costs are incurred to extract the ore in the
form of inventories and/or to improve access to an additional
component of an ore body or deeper levels of material.
Production stripping costs are accounted for as inventories to
the extent the benefit from production stripping activity is
realized in the form of inventories. Production stripping costs are
recognized as a non-current asset (\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:
\u2022 researching and analyzing historical exploration data;
\u2022 conducting topographical, geological, geochemical and
geophysical studies;
\u2022 carrying out exploratory drilling, trenching and sampling
activities;
\u2022 drilling, trenching and sampling activities to determine
the quantity and grade of the deposit;
\u2022 examining and testing extraction methods and
metallurgical or treatment processes; and
\u2022 detailed economic feasibility evaluations to determine
whether development of the reserves is commercially
justified and to plan methods for mine development.
Exploration and evaluation expenditure is charged to the
consolidated statements of operations as incurred except in the
following circumstances, in which case the expenditure is
capitalized: (i) the exploration and evaluation activity is within an
area of interest which was previously acquired in a business
combination and measured at fair value on acquisition; or (ii)
when management has a high degree of confidence in the
project\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:
\u2022 sinking shafts and underground drifts (often called
mine development);
\u2022 making permanent excavations;
\u2022 developing passageways and rooms or galleries;
\u2022 building roads and tunnels; and
\u2022 advance removal of overburden and waste rock.
Development (or construction) also includes the installation of
infrastructure (e.g., roads, utilities and housing), machinery,
equipment and facilities.
When reserves are determined and development is approved,
expenditures capitalized as exploration and evaluation are
reclassified as construction in progress and are reported as a
component of property, plant and equipment. All subsequent
development expenditures are capitalized and classified as
construction in progress. On completion of development, all
assets included in construction in progress are individually
reclassified to the appropriate category of property, plant and
equipment and depreciated accordingly.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-621": { "value": "1.4\u00a0 \u00a0 Accounting standards applied
1.4.1 Adoption of new IFRS standards, amendments and
interpretations applicable from January 1, 2023\u00a0
On January 1, 2023, the Company adopted IFRS 17 \"Insurance
Contracts\", which is designed to achieve the goal of a
consistent, principle-based accounting for insurance contracts.
IFRS 17 requires insurance liabilities to be measured at a
current fulfillment value and provides a more uniform
measurement and presentation approach for all insurance
contracts. IFRS 17 supersedes IFRS 4 \"Insurance Contracts\"
and related interpretations. On June 25, 2020, the IASB issued
amendments to IFRS 17, including a deferral of the effective
date to periods beginning on or after January 1, 2023. IFRS 17
should be applied retrospectively unless impracticable, with
earlier adoption permitted if both IFRS 15 \"Revenue from
Contracts with Customers\" and IFRS 9 \"Financial Instruments\"
have also been applied. On December 9, 2021, the IASB issued
a narrow-scope amendment to the transition requirements of
IFRS 17 for entities that first apply IFRS 17 and IFRS 9 at the
same time whereby an entity is permitted to present
comparative information about a financial asset as if the
classification and measurement requirements of IFRS 9 had
been applied to that financial asset before. As the Company
does not issue insurance contracts and considering the limited
extent of its reinsurance activities, the adoption of this standard
did not have a material impact to the Company's consolidated
financial statements.
In addition, on January 1, 2023, the Company adopted the
following amendments:
\u2022 Amendments to IAS 8. The amendments clarify the
distinction between a change in accounting policies and a
change in accounting estimates.
\u2022 Amendments to IAS 1 and IFRS Practice Statement 2. The
amendments are intended to help preparers in deciding
which accounting policies to disclose in their financial
statements and gives further clarity on the materiality
assessment of accounting policies. Changes in accounting
policies are to be applied retrospectively while changes in
accounting estimates are to be applied prospectively.
\u2022 Amendments\u00a0 to IAS 12 \"Income Taxes\" for deferred taxes
related to assets and liabilities arising from a single
transaction. The amendments clarify how to account for
deferred tax on transactions such as leases and
decommissioning obligations.
On May 23, 2023, the IASB issued 'International Tax Reform \u2014
Pillar Two Model Rules (Amendments to IAS 12)' to respond to
stakeholders\u2019 concerns about the potential implications of the
imminent implementation of the OECD Pillar Two model rules on
the accounting for income taxes. As a mandatory temporary
exception to the accounting for deferred taxes arising from the
implementation of the Pillar Two model rules, an entity does not
recognize and does not disclose information about deferred tax
assets and liabilities related to the OECD Pillar Two income
taxes. Also, in periods in which Pillar Two legislation is enacted
or substantively enacted, but not yet in effect, an entity should
disclose known or reasonably estimable information that helps
users of financial statements understand the entity\u2019s exposure to
Pillar Two income taxes arising from that legislation. The
Company adopted this amendment and accordingly applied this
exception immediately upon issuance of the amendment and
retrospectively as of January 1, 2023.
The adoption of the above-mentioned amendments did not have
a material impact to the Company's consolidated financial
statements.
1.4.2 New IFRS standards, amendments and interpretations
applicable from 2024 onward
On January 23, 2020, the IASB issued narrow-scope
amendments to IAS 1 to clarify how to classify debt and other
liabilities as current or non-current. The amendments aim to
promote consistency in applying the requirements by helping
companies determine whether, in the statement of financial
position, debt and other liabilities with an uncertain settlement
date should be classified as current (due or potentially due to be
settled within one year) or non-current. The amendments
include clarifying the classification requirements for debt a
company might settle by converting it into equity. On June 22,
2021, the IASB postponed the effective date of the
amendments. The amendments are effective for annual periods
beginning on or after January 1, 2024 and are to be applied
retrospectively, with early adoption permitted.
On October 31, 2022, the IASB has issued 'Non-current
Liabilities with Covenants (Amendments to IAS 1)' to clarify how
conditions with which an entity must comply within twelve
months after the reporting period affect the classification of a
liability. The amendments are effective for annual periods
beginning on or after January 1, 2024 and are to be applied
retrospectively, with early adoption permitted.
On September 22, 2022, the IASB issued amendments to IFRS
16\u00a0 \"Leases\" with respect to the lease liability in a sale and
leaseback transaction. The amendments require a seller-lessee
to subsequently measure lease liabilities arising from a
leaseback in a way that it does not recognize any amount of the
gain or loss that relates to the right of use it retains. The new
requirements do not prevent a seller-lessee from recognizing in
profit or loss any gain or loss relating to the partial or full
termination of a lease. The amendments are effective for annual
periods beginning on or after January 1, 2024 with early
adoption permitted. The amendments are to be applied
retrospectively.
The Company does not expect that the adoption of these
amendments will have a material impact to its consolidated
financial statements. The Company does not plan to early adopt
any amendments.
1.4.3 New IFRS standards, amendments and interpretations not
yet endorsed by the European Union
On May 25, 2023, the IASB has published 'Supplier Finance
Arrangements (Amendments to IAS 7 and IFRS 7)' to add
disclosure requirements, and \u2018signposts\u2019 within existing
disclosure requirements, which require entities to provide
qualitative and quantitative information about supplier finance
arrangements. In particular, entities will have to disclose in the
notes information that enables users of financial statements to
(i) assess how supplier finance arrangements affect an entity\u2019s
liabilities and cash flows and to (ii) understand the effect of
supplier finance arrangements on an entity\u2019s exposure to
liquidity risk and how the entity might be affected if the
arrangements were no longer available to it. The amendments
to IAS 7 are effective for annual reporting periods beginning on
or after January 1, 2024 (with earlier application permitted) and
the amendments to IFRS 7 when it applies the amendments to
IAS 7.
On August 15, 2023, the IASB has published 'Lack of
Exchangeability (Amendments to IAS 21)' that contains
guidance to specify when a currency is exchangeable and how
to determine the exchange rate when it is not and how an entity
determines the exchange rate to apply when a currency is not
exchangeable. The amendments also require the disclosure of
additional information when a currency is not exchangeable.
The amendments are effective for annual periods beginning on
or after January 1, 2025 with early adoption permitted. The
amendments do not apply retrospectively. An entity recognizes
any effect of initially applying the amendments as an adjustment
to the opening balance of retained earnings when the entity
reports foreign currency transactions. When an entity uses a
presentation currency other than its functional currency, it
recognizes the cumulative amount of translation differences in
equity.
The Company is still assessing the potential impact of the
amendments to IAS 7, IFRS 7 and IAS 21 to its consolidated
financial statements.", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-622": { "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 and 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 (see
also note 2.4.4).
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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-623": { "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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-626": { "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 and 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 (see
also note 2.4.4).
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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-625": { "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 and 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 (see
also note 2.4.4).
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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-624": { "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 and 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 (see
also note 2.4.4).
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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-627": { "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 (see
also note 2.4.4).
2.4.4 Impairment of associates and joint ventures
In the fourth quarter of 2023, Acciaierie d'Italia's financial
condition has deteriorated due in particular to the continued high
cost of energy and the repeal of relief measures for energy-
intensive companies. It has been experiencing liquidity issues,
which have resulted in conflicts with suppliers. ArcelorMittal, the
Italian Government and Invitalia discussed the terms and
conditions of a possible support to Acciaierie d'Italia to address
its short-term cash needs and the funding requirements to
enable it to complete the acquisition of Ilva\u2019s business units but
the parties were not able to reach agreement on how to address
Acciaierie d'Italia\u2019s funding needs. The Company assessed the
above facts as indicators of impairment with respect to its
investment, further confirmed by the extraordinary
administration of Acciaierie d'Italia effective February 20, 2024
(see note 2.4.1), and performed accordingly a value in use
calculation resulting in a 1,405 impairment loss considering the
uncertainty about Acciaierie d'Italia's future.
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 i mpairment charges/(reversals) were as follows:
\u00a0
Year ended December 31,
Type of asset
2023
2022
2021
Goodwill
194
\u2014
\u2014
Intangible assets
\u2014
6
\u2014
Tangible assets
844
1,020
(218)
Total
1,038
1,026
(218)
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 2023
impairment test of goodwill did not include the GCGU
corresponding to the Mining segment as goodwill allocated to
this GCGU was fully impaired in 2015. The key assumptions for
the value in use calculations are primarily the discount rates,
growth rates, expected changes to average selling prices,
shipments and direct costs during the period. Assumptions for
average selling prices and shipments are based on historical
experience and expectations of future changes in the market. In
addition, with respect to raw material price assumptions, the
Company applied a range of $70 per tonne to $114 per tonne for
iron ore ($70 per tonne to $110 per tonne in 2022) and $185 per
tonne to $250 per tonne ($170 per tonne to $268 per tonne in
2022) 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 also additional opportunities as customers
deepen their understanding of embedded and lifecycle
emissions of the materials where steel compares favorably.
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 in the Company's future cash flow projections.
ArcelorMittal acknowledges that CGUs and GCGUs applying the
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 the future estimated decarbonization cost for such
operations is reflected through an additional risk premium
embedded in 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.
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. On
April 25, 2023, the EU adopted a revision of the ETS Directive
including a regulation establishing a carbon border adjustment
mechanism (\u201cCBAM\u201d) which entered into force on May 17, 2023.
The ETS and CBAM regulations will impact the carbon
emissions allowances from the second trading period of Phase
IV (2026-2030) onwards as they will be gradually phased out
(2.5% by 2026, 5% by 2027, 10% by 2028, 22.5% by 2029,\u00a0
48.5% by 2030, 61% by 2031, 73.5% by 2032, 86% by 2033
and 100% by 2034). 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 under the ETS
scheme 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. With respect to the EU ETS scheme, the
assumption for carbon emission cost includes also the gradual
phasing out of free emission allowances and the forecast market
price of emission rights, for which the Company considered in its
five-year cash flow projections internal estimates of 85\u20ac/t for
2024, 90\u20ac/t for 2025 and 100\u20ac/t for the period 2026-2028.
The assumptions used in the value in use calculations are
inherently uncertain and require management judgment as
described in note 1.3. 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. 2023 was impacted by a negative price-cost
effect predominantly on account of lower average steel selling
prices and lower steel shipments. The decline in steel spreads
resulted from the pace of the decline in steel prices being
greater than the reduction in the raw material basket and energy
costs. At the end of the year, apparent demand conditions
showed however signs of improvement as the destocking phase
reached maturity.
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 2023 and 2022:
\u00a0
NAFTA
Brazil
Europe
ACIS
GCGU weighted average pre-tax discount rate used in 2023 (in %)
13.0
17.2
11.5
20.8
GCGU weighted average pre-tax discount rate used in 2022 (in %)
13.3
18.7
10.6
18.4
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, 2023 and October 1, 2022. In 2023, in connection
with the sale of ArcelorMittal Temirtau, the Company recognized
a 194 impairment loss relating to a portion of ACIS segment
goodwill allocated to the disposal group in proportion of the total
sale consideration to the recoverable amount of the remaining
ACIS operations. The total value in use calculated for all
GCGUs decreased overall in 2023 as compared to 2022
primarily as a result of higher discount rates in Europe and ACIS
and lower cash flow projections for certain GCGUs.
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,
2023, the Company believes that reasonably possible changes
in key assumptions could cause an additional impairment loss to
be recognized in respect of the ACIS segment.
ACIS produces a combination of flat and long products.
Following the sale of the Company's operations in Kazakhstan,
ACIS operations include facilities in South Africa and Ukraine.
ACIS is significantly sufficient in iron ore. 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 since
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 AMKR and such conditions are expected to
continue throughout 2024. The ACIS value in use model
anticipates an increase in sales volumes in 2024 (5.0\u00a0million
tonnes) as compared to 2023 (3.4\u00a0million tonnes excluding
shipments from the Company's operations in Kazakhstan) with
higher 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.
ACIS
Excess of recoverable amount over carrying amount
149
Increase in pre-tax discount rate (change in basis points)
97
Decrease in average selling price (change in %)
1.3%
Decrease in shipments (change in %)
4.3%
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, 2023 and December 31, 2022, the Company
determined it has 46 cash-generating units.
An impairment loss, related to intangible assets other than
goodwill and tangible assets recognized in prior years is
reversed if, and only if, there has been a change in the
estimates used to determine the asset\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.
Impairment charges and reversals relating to property, plant and
equipment and intangibles (excluding goodwill) were as follows
for the years ended December\u00a031, 2023, 2022 and 2021:
2023
In 2023, ArcelorMittal recognized a 732 impairment charge
related to property, plant and equipment with respect to the sale
on December 7, 2023 of its Kazakhstan operations in the ACIS
segment to Qazaqstan Investment Corporation, a state-
controlled direct investment fund. The impairment loss resulted
from the adjustment of the carrying amount of the disposal
group to the net sales proceeds of 278 (see note 2.3).
On November 28, 2023, AMSA announced that it contemplates
the wind down of its Longs Business subject to a due diligence
and a consultative process involving key customers, suppliers,
organized labour, and other stakeholders. Since making the
announcement, AMSA has been engaging with various
stakeholders, including Government. These stakeholders have
expressed widespread concern regarding the negative
economic impact of the closure. AMSA was requested to
consider what support was needed to change the closure
decision. Discussions are currently still ongoing. The Company
assessed the recoverable amount of its Longs Business in
South Africa based on a value in use calculation and recognized
accordingly a 112 impairment charge of property, plant and
equipment.
Cash Generating Unit
Region
Operating
Segment
Recoverable
Amount (Value
in Use)
Total
Impairment
Recorded
2023 Pre-Tax
Discount Rate
2022 Pre-Tax
Discount Rate
Carrying Amount of
property, plant and
equipment as of
December 31, 2023
Long Products South Africa
South Africa
ACIS
264
112
17.3%
17.5%
86
2022
In 2022, the Company recognized a 1,026 impairment charge
related to property, plant and equipment (1,020) and intangibles
(6) with respect to AMKR (Ukraine) in the ACIS segment as a
result of the ongoing conflict in Russia, which resulted in low
level of production, sales and net income and created significant
uncertainty about the timing and ability of operations to return to
a normal level of activity. Adverse geopolitical conditions, which
resulted in a substantial increase in the discount rate applied by
the Company in its recoverable amount (value in use)
calculation, deteriorated further during the fourth quarter of 2022
following attacks against Ukrainian power infrastructures
causing additional operational issues for AMKR and the
concerns about an intensification of the conflict in connection
with the announcements of delivery of heavy military equipment
by western countries. The Company applied separate discount
rates over the discrete projections period, including a higher
country risk premium for 2023 cash flow projections and a return
to pre-war country risk premium in the course of 2024 and for
the terminal value calculation as value in use is sensitive to a
difference in country risk for different periods.
Cash-Generating Unit
Region
Operating
Segment
Recoverable
Amount
(Value in Use)
Total
Impairment
Recorded
2022 Pre-Tax Discount Rates
2021 Pre-Tax
Discount Rate
Carrying amount of
property, plant and
equipment as of
December 31, 2022
Applied to
2023
projections
Applied to
subsequent
projections
AMKR
Ukraine
ACIS
1,003
1,026
47.1%
20.0%
16.9%
655
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.
Cash-Generating Unit
Region
Operating
Segment
Impairment
Reversed
2021 Pre-Tax
Discount Rate
2020 Pre-Tax
Discount Rate
Carrying amount of property,
plant and equipment as of
December 31, 2021
Europe flat products
Europe
Europe
218
8.5%
8.5%
11,005
", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-629": { "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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-628": { "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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-630": { "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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-631": { "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, 2023. Unless otherwise stated, the
subsidiaries listed below have share capital consisting solely of ordinary shares or voting interests in the case of partnerships, which are
held directly or indirectly by the Company and the proportion of ownership interests held equals to the voting rights held by the
Company. The country of incorporation corresponds to their principal place of operations.
Name of Subsidiary
Country
% of Ownership
NAFTA
ArcelorMittal Dofasco G.P.
Canada
100.00%
ArcelorMittal M\u00e9xico S.A. de C.V.
Mexico
100.00%
ArcelorMittal Long Products Canada G.P.
Canada
100.00%
ArcelorMittal Texas HBI LLC
USA
80.00%
Brazil and neighboring countries (\"Brazil\")
ArcelorMittal Brasil S.A.
Brazil
97.08%
Acindar Industria Argentina de Aceros S.A. (\"Acindar\")
Argentina
100.00%
ArcelorMittal Pec\u00e9m 1
Brazil
100.00%
Europe
ArcelorMittal France S.A.S.
France
100.00%
ArcelorMittal Belgium N.V.
Belgium
100.00%
ArcelorMittal Espa\u00f1a S.A.
Spain
99.85%
ArcelorMittal Flat Carbon Europe S.A.
Luxembourg
100.00%
ArcelorMittal Poland S.A.
Poland
100.00%
ArcelorMittal Eisenh\u00fcttenstadt GmbH
Germany
100.00%
ArcelorMittal Bremen GmbH
Germany
100.00%
ArcelorMittal M\u00e9diterran\u00e9e S.A.S.
France
100.00%
ArcelorMittal Belval & Differdange S.A.
Luxembourg
100.00%
ArcelorMittal Hamburg GmbH
Germany
100.00%
ArcelorMittal Duisburg GmbH
Germany
100.00%
ArcelorMittal International Luxembourg S.A.
Luxembourg
100.00%
Africa and Commonwealth of Independent States (\"ACIS\")
ArcelorMittal South Africa Ltd. (\"AMSA\")
South Africa
69.22%
JSC ArcelorMittal Temirtau 3
Kazakhstan
\u2014
PJSC ArcelorMittal Kryvyi Rih (\"AM Kryvyi Rih\")
Ukraine
95.13%
Mining
ArcelorMittal Mining Canada G.P. and ArcelorMittal Infrastructure Canada G.P. (\"AMMC\")
Canada
85.00%
ArcelorMittal Liberia Ltd2
Liberia
85.00%
1. Acquisition during the year. For more details see note 2.2.4.
2. ArcelorMittal Liberia Ltd is incorporated in Cyprus.
3. On December 7, 2023, the Company completed the sale of ArcelorMittal Temirtau, its Kazakh steel and mining operation see note 2.3.
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.
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 211.4%, 94.8% and 50.3%
for the year ended December 31, 2023, 2022 and 2021,
respectively, for this purpose. As a result of the inflation-related
adjustments on non-monetary items, a loss of 105 and\u00a0 4 and a
gain of 33 was recognized in net financing costs for the year
ended December 31, 2023, 2022 and 2021, 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 190%, 207% and 686% for the years ended December\u00a031,
2023, 2022 and 2021, respectively, for this purpose. As a result
of the inflation related adjustments a gain of 8, 5 and 14 was
recognized in net financing cost for the years ended
December\u00a031, 2023, 2022 and 2021, respectively.
2.2.3 Business combinations
Business combinations are accounted for using the acquisition
method as of the acquisition date, which is the date on which
control is transferred to ArcelorMittal. The Company controls an
entity when it is exposed to or has rights to variable returns from
its involvement with the entity and has the ability to affect those
returns through its power over the entity.
The Company measures goodwill at the acquisition date as the
total of the fair value of consideration transferred, plus the
proportionate amount of any non-controlling interest, plus the
fair value of any previously held equity interest in the acquiree, if
any, less the net recognized amount (generally at fair value) of
the identifiable assets acquired and liabilities assumed.
In a business combination in which the fair value of the
identifiable net assets acquired exceeds the cost of the acquired
business, the Company reassesses the fair value of the assets
acquired and liabilities assumed. If, after reassessment,
ArcelorMittal\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
In January 2023, ArcelorMittal Brasil settled the undisputed
amount it accepts as the value of the Votorantim put option for
179 (see note 11.5.2).
On March 9, 2023, following receipt of customary regulatory
approvals, ArcelorMittal completed the acquisition of Companhia
Sider\u00fargica do Pec\u00e9m subsequently renamed ArcelorMittal
Pec\u00e9m for total cash consideration of 2,193. The Company
recognized acquisition-related costs of 4 in selling, general and
administrative expenses. ArcelorMittal Pec\u00e9m is a world-class
operation, producing high-quality slab at a globally competitive
cost. ArcelorMittal Pec\u00e9m\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. ArcelorMittal Pec\u00e9m
operates within Brazil\u2019s first Export Processing Zone, and
benefits from various tax incentives including a low corporate
income tax rate. The Company\u00a0 completed its measurement of
the acquisition-date fair value of the identifiable assets and
liabilities of ArcelorMittal Pec\u00e9m. Acquired current assets and
other liabilities include 2,605 and 2,605 of restricted cash held in
escrow and debt, respectively, which were settled after
acquisition date. The Company presented these settlements as
non-cash transactions in the consolidated statements of cash
flows. It recognized also 3,123 (including trade receivables of
60), 1,824 and 100 of current assets, property, plant and
equipment and intangible assets, respectively. ArcelorMittal
recognized 164 goodwill resulting from operational and financial
synergies. Revenue and net income since acquisition date were
1,497 and 340, respectively. ArcelorMittal Pec\u00e9m is part of the
Brazil reportable segment.
During the first half of 2023, the Company also completed two
acquisitions relating to ArcelorMittal Downstream Solutions
within the Europe reportable segment (\"AMDS acquisitions\").
On January 3, 2023, ArcelorMittal completed the acquisition of
Riwald Recycling, a state-of-the-art ferrous scrap metal
recycling business based in the Netherlands. The acquisition is
part of ArcelorMittal's strategy of increasing the use of scrap
steel to lower CO2 emissions from steelmaking in both the EAF
and BF-BOF routes. On March 10, 2023, the Company also
completed the acquisition of the German insulation panel
manufacturer Italpannelli Germany (subsequently renamed Trier
Insulated Panels), which will complement the existing
geographic presence and strengthen the product portfolio of
ArcelorMittal Downstream Solutions' construction business. The
total cash consideration paid for the AMDS acquisitions was
\u20ac144 million (152 net of cash acquired of 4) including debt
assumed of 15. The Company completed the measurement of
the acquisition-date fair value of the identifiable assets and
liabilities of the AMDS acquisitions and recognized goodwill of
57, which is primarily attributable to the expected synergies and
other benefits from combining the activities of the AMDS
acquisitions with those of the Company. Goodwill is not
deductible for income tax purposes. Revenue and net loss since
acquisition date were 87 and 4, respectively.
Revenue and net income attributable to the equity holders of the
parent of the Company for the twelve months ended December
31, 2023 were 68,579 and 910, respectively, as though
ArcelorMittal had completed the ArcelorMittal Pec\u00e9m and AMDS
acquisitions as of January 1, 2023.
During 2022, among others, the Company completed the
acquisition of three 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 EAF and BF-BOF 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 till December 31, 2022 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 till December 31, 2022 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 till December 31, 2022 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 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. 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 till December 31, 2022 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 till December 31, 2022 were 87 and 1,
respectively. ALBA is part of the Europe reportable segment.
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 2023, 2022 and 2021:
2023
2022
2021
ArcelorMittal
Pec\u00e9m
AMDS
acquisitions
JLM
ASL
CSM
ArcelorMittal
Texas HBI
ALBA
Condesa
Current assets
3,123
25
10
11
68
283
34
92
Property, plant and equipment
1,824
75
10
14
16
949
53
39
Intangible assets
100
32
24
16
\u2014
11
30
\u2014
Other non-current assets
138
8
\u2014
1
1
\u2014
\u2014
10
Total assets
5,185
140
44
42
85
1,243
117
141
Deferred tax liabilities
\u2014
(14)
(8)
(6)
\u2014
(30)
(13)
\u2014
Other liabilities
(3,156)
(46)
(13)
(10)
(51)
(82)
(70)
(84)
Total liabilities
(3,156)
(60)
(21)
(16)
(51)
(112)
(83)
(84)
Net assets acquired
2,029
80
23
26
34
1,131
34
57
Consideration paid net of cash acquired
2,193
152
43
39
7
805
45
25
Deferred consideration
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
11
\u2014
Non-controlling interests
\u2014
\u2014
\u2014
\u2014
4
229
\u2014
\u2014
Debt assumed
\u2014
(15)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Fair value of previously held interests at
acquisition date
\u2014
\u2014
\u2014
\u2014
20
\u2014
\u2014
11
Remeasurement gain relating to the
equity interest previously held
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(3)
Goodwill/(bargain purchase gain)
164
57
20
13
(3)
(97)
22
(24)
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-632": { "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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-633": { "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 211.4%, 94.8% and 50.3%
for the year ended December 31, 2023, 2022 and 2021,
respectively, for this purpose. As a result of the inflation-related
adjustments on non-monetary items, a loss of 105 and\u00a0 4 and a
gain of 33 was recognized in net financing costs for the year
ended December 31, 2023, 2022 and 2021, 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 190%, 207% and 686% for the years ended December\u00a031,
2023, 2022 and 2021, respectively, for this purpose. As a result
of the inflation related adjustments a gain of 8, 5 and 14 was
recognized in net financing cost for the years ended
December\u00a031, 2023, 2022 and 2021, respectively.
", "dimensions": { "concept": "ifrs-full:DisclosureOfHyperinflationaryReportingExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-634": { "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
In January 2023, ArcelorMittal Brasil settled the undisputed
amount it accepts as the value of the Votorantim put option for
179 (see note 11.5.2).
On March 9, 2023, following receipt of customary regulatory
approvals, ArcelorMittal completed the acquisition of Companhia
Sider\u00fargica do Pec\u00e9m subsequently renamed ArcelorMittal
Pec\u00e9m for total cash consideration of 2,193. The Company
recognized acquisition-related costs of 4 in selling, general and
administrative expenses. ArcelorMittal Pec\u00e9m is a world-class
operation, producing high-quality slab at a globally competitive
cost. ArcelorMittal Pec\u00e9m\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. ArcelorMittal Pec\u00e9m
operates within Brazil\u2019s first Export Processing Zone, and
benefits from various tax incentives including a low corporate
income tax rate. The Company\u00a0 completed its measurement of
the acquisition-date fair value of the identifiable assets and
liabilities of ArcelorMittal Pec\u00e9m. Acquired current assets and
other liabilities include 2,605 and 2,605 of restricted cash held in
escrow and debt, respectively, which were settled after
acquisition date. The Company presented these settlements as
non-cash transactions in the consolidated statements of cash
flows. It recognized also 3,123 (including trade receivables of
60), 1,824 and 100 of current assets, property, plant and
equipment and intangible assets, respectively. ArcelorMittal
recognized 164 goodwill resulting from operational and financial
synergies. Revenue and net income since acquisition date were
1,497 and 340, respectively. ArcelorMittal Pec\u00e9m is part of the
Brazil reportable segment.
During the first half of 2023, the Company also completed two
acquisitions relating to ArcelorMittal Downstream Solutions
within the Europe reportable segment (\"AMDS acquisitions\").
On January 3, 2023, ArcelorMittal completed the acquisition of
Riwald Recycling, a state-of-the-art ferrous scrap metal
recycling business based in the Netherlands. The acquisition is
part of ArcelorMittal's strategy of increasing the use of scrap
steel to lower CO2 emissions from steelmaking in both the EAF
and BF-BOF routes. On March 10, 2023, the Company also
completed the acquisition of the German insulation panel
manufacturer Italpannelli Germany (subsequently renamed Trier
Insulated Panels), which will complement the existing
geographic presence and strengthen the product portfolio of
ArcelorMittal Downstream Solutions' construction business. The
total cash consideration paid for the AMDS acquisitions was
\u20ac144 million (152 net of cash acquired of 4) including debt
assumed of 15. The Company completed the measurement of
the acquisition-date fair value of the identifiable assets and
liabilities of the AMDS acquisitions and recognized goodwill of
57, which is primarily attributable to the expected synergies and
other benefits from combining the activities of the AMDS
acquisitions with those of the Company. Goodwill is not
deductible for income tax purposes. Revenue and net loss since
acquisition date were 87 and 4, respectively.
Revenue and net income attributable to the equity holders of the
parent of the Company for the twelve months ended December
31, 2023 were 68,579 and 910, respectively, as though
ArcelorMittal had completed the ArcelorMittal Pec\u00e9m and AMDS
acquisitions as of January 1, 2023.
During 2022, among others, the Company completed the
acquisition of three 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 EAF and BF-BOF 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 till December 31, 2022 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 till December 31, 2022 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 till December 31, 2022 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 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. 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 till December 31, 2022 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 till December 31, 2022 were 87 and 1,
respectively. ALBA is part of the Europe reportable segment.
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 2023, 2022 and 2021:
2023
2022
2021
ArcelorMittal
Pec\u00e9m
AMDS
acquisitions
JLM
ASL
CSM
ArcelorMittal
Texas HBI
ALBA
Condesa
Current assets
3,123
25
10
11
68
283
34
92
Property, plant and equipment
1,824
75
10
14
16
949
53
39
Intangible assets
100
32
24
16
\u2014
11
30
\u2014
Other non-current assets
138
8
\u2014
1
1
\u2014
\u2014
10
Total assets
5,185
140
44
42
85
1,243
117
141
Deferred tax liabilities
\u2014
(14)
(8)
(6)
\u2014
(30)
(13)
\u2014
Other liabilities
(3,156)
(46)
(13)
(10)
(51)
(82)
(70)
(84)
Total liabilities
(3,156)
(60)
(21)
(16)
(51)
(112)
(83)
(84)
Net assets acquired
2,029
80
23
26
34
1,131
34
57
Consideration paid net of cash acquired
2,193
152
43
39
7
805
45
25
Deferred consideration
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
11
\u2014
Non-controlling interests
\u2014
\u2014
\u2014
\u2014
4
229
\u2014
\u2014
Debt assumed
\u2014
(15)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Fair value of previously held interests at
acquisition date
\u2014
\u2014
\u2014
\u2014
20
\u2014
\u2014
11
Remeasurement gain relating to the
equity interest previously held
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(3)
Goodwill/(bargain purchase gain)
164
57
20
13
(3)
(97)
22
(24)
", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-635": { "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.
An operation is classified as discontinued when it represents a
separate major line of business or geographical area of
operations that either has been disposed of or is classified as
held for sale. Discontinued operations are reported on a single
line in the Company's consolidated statements of operations. It
reflects the after-tax net income from discontinued operations
until the date of disposal and the gains or losses net of taxes
realized on the disposals of these operations. In addition, cash
flows generated by the discontinued operations are reported on
a separate line in the consolidated statement of cash flows for
the relevant periods.
Divestments in 2023
On December 7, 2023, ArcelorMittal completed the sale of
ArcelorMittal Temirtau, its steel and mining operations in
Kazakhstan, to Qazaqstan Investment Corporation (\"QIC\"), a
state-controlled direct investment fund. Under the terms of the
transaction, on closing ArcelorMittal received consideration of
286 (254 net of cash disposed of 24 and 8 transaction costs) for
net assets and a further 250 as repayment of outstanding intra-
group receivables. ArcelorMittal will also receive an additional
sovereign-fund guaranteed payment of 450, paid in four equal
annual installments, as repayment of an intra-group loan. All
ArcelorMittal Temirtau assets were transferred on an \u2018as is\u2019
operational basis, meaning QIC assumed control and
accountability for ArcelorMittal Temirtau\u2019s operations. As a result
of loss of control, the Company derecognized assets and
liabilities of 1,650 and 1,372, respectively. ArcelorMittal
recognized in cost of sales a 732 impairment loss of property,
plant and equipment upon measuring the recoverable amount
based on sales proceeds (see note 5.3). The Company also
recognized in cost of sales a 194 impairment loss of goodwill
following the allocation to the disposal group of a portion of the
ACIS goodwill in proportion of the consideration received to the
total recoverable amount of ACIS operations (see notes 5.1 and
5.3). In addition, it reclassified 1,469 of foreign exchange
translation losses from other comprehensive income to cost of
sales in the consolidated statements of operations.
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:
\u2022 The 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;
\u2022 The 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.
The table below summarizes the significant divestments
completed in 2023 and 2021 (there were no divestments in
2022):
2023
2021
ArcelorMittal
Temirtau
Acciaerie d'Italia
Cash and cash equivalents
24
4
Other current assets
645
2,446
Intangible assets
\u2014
17
Property, plant\u00a0and equipment
972
1,875
Other assets
9
297
Total assets
1,650
4,639
Current liabilities
882
2,204
Other long-term liabilities
490
1,669
Total liabilities
1,372
3,873
Total net assets
278
766
% of net assets sold
100%
100%
Total net assets disposed of
278
766
ArcelorMittal retained interest 62%
\u2014
1,205
Goodwill allocation
(194)
(52)
Consideration
278
\u2014
Reclassification of foreign exchange
and other
(1,469)
(283)
Gain (loss) on disposal/
derecognition
(1,663)
104
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-637": { "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:
December 31,
Category
2023
2022
Joint ventures
5,611
6,372
Associates
3,109
3,060
Individually immaterial joint ventures and associates1
1,358
1,333
Total
10,078
10,765
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, 2023 and 2022, and none of them have a carrying value exceeding 150 at December\u00a031, 2023 and 2022.
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:
December 31, 2023
Joint Ventures
AMNS India
Calvert
VAMA
Tameh
Bor\u00e7elik
Al Jubail
VdSA
Total
Place of incorporation and operation 1
India
United
States
China
Poland
Turkey
Saudi
Arabia
Brazil
Principal Activity
Integrated
flat steel
producer 4,5
Automotive
steel
finishing 6
Automotive
steel
finishing
Energy
production
and supply
Manufacturing
and sale of
steel 2,3
Production
and sale
seamless
line pipes
and tubes
Renewable
energy
production
and supply
Ownership and voting rights at
December 31, 2023
60.00%
50.00%
50.00%
50.00%
50.00%
33.34%
55.00%
Current assets
3,653
1,798
853
389
559
935
93
8,280
of which cash, cash equivalents and
restricted cash
926
83
201
46
12
297
3
1,568
Non-current assets
10,208
2,125
788
454
238
1,149
190
15,152
Current liabilities
1,617
1,017
557
462
329
542
7
4,531
of which trade and other payables
and provisions
1,310
169
449
368
323
404
7
3,030
Non-current liabilities
6,763
1,103
51
37
39
633
\u2014
8,626
of which trade and other payables
and provisions
997
\u2014
1
28
39
61
\u2014
1,126
Non-controlling interest
27
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
27
Net assets attributable to equity
holders of the parent
5,454
1,803
1,033
344
429
909
276
10,248
Company's share of net assets
3,272
902
517
172
215
303
151
5,532
Adjustments for differences in
accounting policies and other
139
(6)
\u2014
(20)
(40)
6
\u2014
79
Carrying amount in the statements of
financial position
3,411
896
517
152
175
309
151
5,611
Revenue
6,710
4,860
1,787
945
1,549
1,205
\u2014
17,056
Depreciation and amortization
(446)
(70)
(36)
(37)
(25)
(69)
\u2014
(683)
Interest income
54
\u2014
2
2
1
\u2014
\u2014
59
Interest expense
(207)
(51)
(5)
(14)
(35)
(49)
\u2014
(361)
Income tax benefit (expense)
(279)
\u2014
(53)
(7)
(33)
21
\u2014
(351)
Income (loss) from continuing
operations
1,070
99
352
7
29
274
\u2014
1,831
Other comprehensive income (loss)
(998)
(20)
\u2014
(14)
(6)
\u2014
\u2014
(1,038)
Total comprehensive income (loss)
72
79
352
(7)
23
274
\u2014
793
Cash dividends received by the
Company
\u2014
58
\u2014
\u2014
21
\u2014
\u2014
79
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, 2023;\u00a0 voting interest was 48.01%
at December\u00a031, 2023.\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. Adjustments in Calvert primarily relate to differences in accounting policies regarding inventory valuation.
December 31, 2022
Joint Ventures
AMNS India
Acciaierie
d'Italia
Calvert
VAMA
Tameh
Bor\u00e7elik
Al Jubail
Total
Place of incorporation and operation 1
India
Italy
United
States
China
Poland
Turkey
Saudi
Arabia
Principal Activity
Integrated
flat steel
producer 4,5
Integrated
flat steel
producer6
Automotive
steel
finishing 7
Automotive
steel
finishing
Energy
production
and supply
Manufacturin
g and sale of
steel 2,3
Production
and sale
seamless
line pipes
and tubes
Ownership and voting rights at
December 31, 2022
60.00%
62.00%
50.00%
50.00%
50.00%
50.00%
33.34%
Current assets
3,494
2,558
2,019
534
448
624
662
10,339
of which cash, cash equivalents and
restricted cash
800
179
216
159
26
70
101
1,551
Non-current assets
9,680
2,765
1,764
761
436
254
1,137
16,797
Current liabilities
1,809
2,754
968
533
434
390
429
7,317
of which trade and other payables
and provisions
1,567
1,844
203
388
390
333
265
4,990
Non-current liabilities
5,928
908
975
61
120
34
738
8,764
of which trade and other payables
and provisions
602
153
\u2014
\u2014
27
34
29
845
Non-controlling interest
3
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
3
Net assets attributable to equity
holders of the parent
5,434
1,661
1,840
701
330
454
632
11,052
Company's share of net assets
3,260
1,030
920
351
165
227
211
6,164
Adjustments for differences in
accounting policies and other
144
146
(36)
\u2014
\u2014
(42)
(4)
208
Carrying amount in the statements of
financial position
3,404
1,176
884
351
165
185
207
6,372
Revenue
7,287
4,525
4,969
1,495
1,080
1,868
918
22,142
Depreciation and amortization
(350)
(157)
(67)
(32)
(45)
(25)
(71)
(747)
Interest income
70
\u2014
\u2014
2
3
2
\u2014
77
Interest expense
(162)
(34)
(36)
(5)
(16)
(22)
(43)
(318)
Income tax benefit (expense)
(273)
25
\u2014
(37)
(13)
(55)
(8)
(361)
Income (loss) from continuing
operations
323
106
102
249
57
90
29
956
Other comprehensive income (loss)
(139)
\u2014
71
\u2014
6
22
(1)
(41)
Total comprehensive income (loss)
184
106
173
249
63
112
28
915
Cash dividends received by the
Company
\u2014
\u2014
65
\u2014
13
52
\u2014
130
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; 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).
7. Adjustments in Calvert primarily relate to differences in accounting policies regarding inventory valuation.
December 31, 2021
Joint Ventures
AMNS
India
Acciaierie
d'Italia
Calvert
VAMA
Tameh
Bor\u00e7elik
Al Jubail
Total
Place of incorporation and operation1
India
Italy
United
States
China
Poland
Turkey
Saudi
Arabia
Principal Activity
Integrated
flat steel
producer 5,6
Integrated
flat steel
producer7
Automotive
steel
finishing8
Automotive
steel
finishing
Energy
production
and supply
Manufacturi
ng and sale
of steel 2,3,4
Production
and sale
seamless
line pipes
and tubes 9
Ownership and voting rights at
December 31, 2021
60.00%
62.00%
50.00%
50.00%
50.00%
50.00%
29.23%
Current assets
5,536
3,643
2,334
293
356
983
573
13,718
of which cash and cash equivalents
1,285
92
256
56
62
155
88
1,994
Non-current assets
6,260
2,669
1,418
679
497
243
1,197
12,963
Current liabilities
764
3,313
1,162
466
376
723
533
7,337
of which trade and other payables
and provisions
620
2,840
202
272
330
581
120
4,965
Non-current liabilities
5,770
1,365
790
8
169
56
640
8,798
of which trade and other payables
and provisions
331
1,342
\u2014
\u2014
24
44
45
1,786
Net assets
5,262
1,634
1,800
498
308
447
597
10,546
Company's share of net assets
3,157
1,013
900
249
154
224
175
5,872
Adjustments for differences in
accounting policies and other
148
146
(34)
\u2014
\u2014
(29)
(16)
215
Carrying amount in the statements of
financial position
3,305
1,159
866
249
154
195
159
6,087
Revenue
7,226
3,291
4,808
1,452
721
1,791
334
19,623
Depreciation and amortization
(378)
(119)
(65)
(34)
(34)
(24)
(42)
(696)
Interest income
53
\u2014
\u2014
3
\u2014
1
\u2014
57
Interest expense
(139)
(12)
(28)
(7)
(6)
(18)
(27)
(237)
Income tax benefit (expense)
(71)
211
\u2014
(12)
(4)
(65)
\u2014
59
Income (loss) from continuing
operations
1,436
393
861
95
18
105
(85)
2,823
Other comprehensive income (loss)
818
\u2014
9
\u2014
8
9
\u2014
844
Total comprehensive income (loss)
2,254
393
870
95
26
114
(85)
3,667
Cash dividends received by the
Company
\u2014
\u2014
50
\u2014
10
13
\u2014
73
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;\u00a0 voting interest was 48.01%
at December\u00a031, 2021.\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.
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).
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 the full year 2021 including Jubail Energy Services Company (\"JESCO\") results after July 31,
2021.
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
\u2013 two iron ore beneficiation plants close to the mines in
Kirandul and Dabuna, with slurry pipelines that then
transport the beneficiated iron ore slurry to the pellet
plants in the Kirandul-Vizag and Dabuna-Paradeep
systems;\u00a0
\u2013 downstream facilities in Pune, Khopoli and
Gandhidham; and\u00a0
\u2013 six 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
In terms of iron ore pellet capacity, the Kirandul-Vizag system
has 8 million tonnes of annual pellet capacity; and the Dabuna-
Paradeep system has 12 million tonnes of annual pellet
capacity. AMNS India intends to further debottleneck existing
operations (steel shop and rolling parts) in the medium term.
The first phase of expansion represents capital expenditures of
approximately 7.4 billion (0.8 billion for debottlenecking, 1.0
billion for downstream projects and 5.6 billion for upstream
projects) and started in October 2022. It aims to increase
production at the Hazira facility to 15 million tonnes of rolled
products by the first half of 2026 (Phase 1A) following the
construction of two blast furnaces (blast furnace 2 to start in
2025 and blast furnace 3 in 2026), the capacity increase of the
existing blast furnace 1 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, etc.)
and raw material handling. Feasibility studies are ongoing to
further increase production in a second stage from 15 to 20
million tonnes per annum (Phase 1B).
The resolution plan submitted for the acquisition of AMNS India
in 2018 includes a capital expenditure plan of approximately 2.6
billion to be implemented in two stages over six years. The first
stage involves investments which increase production of
finished steel goods to 7.6 million tonnes per annum. It includes
capital expenditure projects with respect to third line CSP caster,
Paradeep pellet plant (completed), as well as coke oven,
second sinter plant and Dabuna beneficiation plant (in
progress). The first stage also includes investment in
maintenance to restore current assets, the implementation of an
environmental management plan and the implementation of
ArcelorMittal\u2019s best practices on raw material sourcing, plant
operations, sales and product mix (in particular through greater
sophistication of the quality and markets of the steel produced
with a focus on developing sales to the automotive industry),
people management and health & safety. The second stage
involving capital expenditure projects to increase the production
of finished steel goods from 7.6 million tonnes per annum to 8.6
million tonnes per annum is now included in the expansion
investment plan launched in October 2022 as described above.
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. On March 30,
2023, AMNS Luxembourg entered into an additional 5 billion
ten-year term loan agreement at floating rate with various
Japanese banks. The proceeds of the loan, which is guaranteed
by ArcelorMittal and NSC in proportion to their respective
interests in the joint venture, will be used for the purposes of
financing the expenditures necessary for the implementation of
phase 1A of expansion to increase production at the Hazira
facility to 15 million tonnes. The loan consists of Tranche A,
Tranche B and Tranche C of 2 billion, 1 billion and 2 billion,
respectively, is arranged to be disbursed by April 30, 2026 at the
request of AMNS Luxembourg.
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 and the
Ghoraburhani-Sagasahi mine in the Sudargarh district of
Odisha. 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.
On May 6, 2023, AMNS India completed the acquisition of
Indian Steel Corporation Limited subsequently renamed AMNS
Gandhidham specialized in cold-rolled, galvanized and non-
ferrous steel products for the automotive, construction, home
appliance and general engineering sectors.
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) 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 would be increased
to 60% and ArcelorMittal\u2019s would reduce to 40%. The settlement
of Invitalia\u2019s shareholder loan was completed on February 17,
2023.
On February 20, 2024, the Italian Government issued a decree
placing\u00a0 Acciaierie d\u2019Italia in extraordinary administration
subsequent to the request of Invitalia, thereby passing control of
the company from its current shareholders, ArcelorMittal and
Invitalia, to government appointed commissioners. Acciaierie
d\u2019Italia will in all likelihood not be able to complete the
acquisition of Ilva\u2019s assets.
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. In April
2023 VAMA announced the start of production for its second
continuous galvanization line with an annual capacity of 450,000
tonnes, bringing its total capacity to 2 millions tonnes per year.
Equipment is currently in the ramp-up phase which is expected
to be completed by the second half of 2024.
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 by the
end of 2024.
VdSA
On May 5, 2023, following approval by the Brazilian antitrust
authority CADE on April 13, 2023, ArcelorMittal formed the joint
venture Ventos de Santo Ant\u00f4nio Comercializadora de Energia
S.A. (\"VdSA\") with Casa dos Ventos, one of Brazil\u2019s largest
developers and producers of renewable energy projects, to
develop a 554 MW wind power project, with ArcelorMittal
holding a 55% stake and Casa dos Ventos holding the
remaining 45%. The project Ventos de Santo Antonio aims to
secure and decarbonize a considerable proportion of the
Company's wholly-owned subsidiary ArcelorMittal Brazil\u2019s future
electricity needs through a 20-year power purchasing power
agreement starting on January 1, 2026. Through the agreement,
both ArcelorMittal and Casa dos Ventos are guaranteed equal
board representation and participation in all significant financial
and operating decisions. The Company has therefore
determined that VdSA is a joint venture subject to joint control
as it does not control the entity, even though it holds a 55%
interest. The Company accounted for its investment in VdSA
under the equity method with an initial carrying amount of 147,
of which paid cash consideration of 73.
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.
Following the occurrence of a deadlock situation, both Tauron
Group and ArcelorMittal had the ability to exercise a put option
right, allowing each partner to sell its shares to the other one. As
per the shareholders' agreement, the declaration of acceptance
of an offer that is submitted first shall prevail. ArcelorMittal
successfully served its declaration on Tauron on January 2,
2024. Tauron challenged this assertion and both parties
continue discussions.
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:
December 31, 2023
December 31, 2022
Associates
Joint
Ventures
Total
Associates
Joint
Ventures
Total
Carrying amount of interests in associates and joint ventures
481
877
1,358
422
911
1,333
Share of:
Income from continuing operations
56
81
137
79
239
318
Other comprehensive income (loss)
4
(2)
2
2
5
7
Total comprehensive income (loss)
60
79
139
81
244
325
2.4.4 Impairment of associates and joint ventures
In the fourth quarter of 2023, Acciaierie d'Italia's financial
condition has deteriorated due in particular to the continued high
cost of energy and the repeal of relief measures for energy-
intensive companies. It has been experiencing liquidity issues,
which have resulted in conflicts with suppliers. ArcelorMittal, the
Italian Government and Invitalia discussed the terms and
conditions of a possible support to Acciaierie d'Italia to address
its short-term cash needs and the funding requirements to
enable it to complete the acquisition of Ilva\u2019s business units but
the parties were not able to reach agreement on how to address
Acciaierie d'Italia\u2019s funding needs. The Company assessed the
above facts as indicators of impairment with respect to its
investment, further confirmed by the extraordinary
administration of Acciaierie d'Italia effective February 20, 2024
(see note 2.4.1), and performed accordingly a value in use
calculation resulting in a 1,405 impairment loss considering the
uncertainty about Acciaierie d'Italia's future.
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.
2.4.5 Investments in joint operations
The Company had investments in the following joint operations
as of December\u00a031, 2023 and 2022:\u00a0
Pe\u00f1a Colorada
Pe\u00f1a Colorada is an iron ore mine located in Mexico in which
ArcelorMittal holds a 50.00% interest. Pe\u00f1a Colorada operates
an open pit mine as well as concentrating facility and two-line
pelletizing facility. Pe\u00f1a Colorada is part of the NAFTA segment.
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:
Year ended December 31,
2023
2022
2021
Share in net earnings of
equity-accounted companies
1,181
1,193
2,091
Impairment charges
(1,405)
\u2014
\u2014
Gain (loss) on disposal
\u2014
\u2014
16
Dividend income 1
3
124
97
Total
(221)
1,317
2,204
1. Mainly 117 and 89 dividend income from Erdemir in 2022 and 2021,
respectively.
For the year ended December 31, 2021, the gain on disposal
corresponded to the gain on dilution of the Company's interest
in Al Jubail.", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-636": { "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:
December 31,
Category
2023
2022
Joint ventures
5,611
6,372
Associates
3,109
3,060
Individually immaterial joint ventures and associates1
1,358
1,333
Total
10,078
10,765
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, 2023 and 2022, and none of them have a carrying value exceeding 150 at December\u00a031, 2023 and 2022.
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:
December 31, 2023
Associates
China Oriental
DHS Group
Gonvarri Steel
Industries
Baffinland 6
Total
Financial statements reporting date
June 30, 2023
September 30,
2023
September 30,
2023
December 31,
2023
Place of incorporation and operation1
Bermuda
Germany
Spain
Canada
Principal Activity
Iron and steel
manufacturing
Steel
manufacturing 3
Steel
manufacturing 4
Extraction of
iron ore 5
Ownership and voting rights at December 31, 2023
37.00%
33.43%
35.00%
25.23%
Current assets
3,681
1,919
3,351
720
9,671
Non-current assets
3,124
2,430
2,086
10,572
18,212
Current liabilities
2,909
505
1,857
905
6,176
Non-current liabilities
395
994
940
3,335
5,664
Non-controlling interests
369
125
448
\u2014
942
Net assets attributable to equity holders of the parent
3,132
2,725
2,192
7,052
15,101
Company's share of net assets
1,159
911
767
1,779
4,616
Adjustments for differences in accounting policies and
other
\u2014
134
(40)
(1,479)
(1,385)
Other adjustments2
48
(190)
20
\u2014
(122)
Carrying amount in the statements of financial position
1,207
855
747
300
3,109
Revenue
3,183
2,800
5,874
536
12,393
Income / (loss) from continuing operations
40
184
222
(227)
219
Other comprehensive income
1
(1)
(25)
\u2014
(25)
Total comprehensive income (loss)
41
183
197
(227)
194
Cash dividends received by the Company
5
43
35
\u2014
83
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, 2023 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.
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.
December 31, 2022
Associates
China Oriental
DHS Group
Gonvarri Steel
Industries
Baffinland6
Total
Financial statements reporting date
June 30, 2022
September 30,
2022
September 30,
2022
December 31,
2022
Place of incorporation and operation1
Bermuda
Germany
Spain
Canada
Principal Activity
Iron and steel
manufacturing
Steel
manufacturing 3
Steel
manufacturing 4
Extraction of
iron ore 5
Ownership and voting rights at December 31, 2022
37.00%
33.43%
35.00%
25.23%
Current assets
5,081
1,827
3,400
758
11,066
Non-current assets
3,218
2,257
1,802
10,700
17,977
Current liabilities
4,134
640
2,067
770
7,611
Non-current liabilities
314
863
815
3,379
5,371
Non-controlling interests
348
115
416
\u2014
879
Net assets attributable to equity holders of the parent
3,503
2,466
1,904
7,309
15,182
Company's share of net assets
1,296
824
666
1,844
4,630
Adjustments for differences in accounting policies and
other
\u2014
150
(43)
(1,488)
(1,381)
Other adjustments2
(56)
(183)
50
\u2014
(189)
Carrying amount in the statements of financial position
1,240
791
673
356
3,060
Revenue
3,857
2,715
5,628
482
12,682
Income / (loss) from continuing operations
190
428
236
(136)
718
Other comprehensive income (loss)
4
18
62
\u2014
84
Total comprehensive income (loss)
193
446
298
(136)
801
Cash dividends received by the Company
28
10
26
\u2014
64
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 as of the reporting dates described in the table above.
3. The amount for DHS Group includes an adjustment to align the German GAAP financial information with the Company\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.
December 31, 2021
Associates
China Oriental
DHS Group
Gonvarri Steel
Industries
Baffinland 6
Total
Financial statements reporting date
June 30, 2021
September 30,
2021
September 30,
2021
December 31,
2021
Place of incorporation and operation1
Bermuda
Germany
Spain
Canada
Principal Activity
Iron and steel
manufacturing
Steel
manufacturing 3
Steel
manufacturing 4
Extraction of
iron ore 5
Ownership and voting rights at December 31, 2021
37.00%
33.43%
35.00%
25.23%
Current assets
4,636
1,364
2,840
479
9,319
Non-current assets
2,978
2,668
1,797
10,790
18,233
Current liabilities
3,571
472
1,568
477
6,088
Non-current liabilities
533
1,107
716
3,365
5,721
Non-controlling interests
88
103
415
\u2014
606
Net assets attributable to equity holders of the parent
3,422
2,350
1,938
7,427
15,137
Company's share of net assets
1,266
786
678
1,874
4,604
Adjustments for differences in accounting policies and
other
\u2014
55
(47)
(1,488)
(1,480)
Other adjustments 2
66
(191)
(14)
\u2014
(139)
Carrying amount in the statements of financial position
1,332
650
617
386
2,985
Revenue
3,863
2,011
4,465
676
11,015
Net income (loss)
250
(44)
197
(45)
358
Other comprehensive income (loss)
\u2014
7
33
\u2014
40
Total comprehensive income (loss)
250
(37)
230
(45)
398
Cash dividends received by the Company
36
\u2014
17
\u2014
53
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, 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.
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.
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).\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).
2.4.3 Other associates and joint ventures that are not
individually material
The Company has interests in a number of other joint ventures
and associates, none of which are regarded as individually
material. The following table summarizes the financial
information of all individually immaterial joint ventures and
associates that are accounted for using the equity method:
December 31, 2023
December 31, 2022
Associates
Joint
Ventures
Total
Associates
Joint
Ventures
Total
Carrying amount of interests in associates and joint ventures
481
877
1,358
422
911
1,333
Share of:
Income from continuing operations
56
81
137
79
239
318
Other comprehensive income (loss)
4
(2)
2
2
5
7
Total comprehensive income (loss)
60
79
139
81
244
325
2.4.4 Impairment of associates and joint ventures
In the fourth quarter of 2023, Acciaierie d'Italia's financial
condition has deteriorated due in particular to the continued high
cost of energy and the repeal of relief measures for energy-
intensive companies. It has been experiencing liquidity issues,
which have resulted in conflicts with suppliers. ArcelorMittal, the
Italian Government and Invitalia discussed the terms and
conditions of a possible support to Acciaierie d'Italia to address
its short-term cash needs and the funding requirements to
enable it to complete the acquisition of Ilva\u2019s business units but
the parties were not able to reach agreement on how to address
Acciaierie d'Italia\u2019s funding needs. The Company assessed the
above facts as indicators of impairment with respect to its
investment, further confirmed by the extraordinary
administration of Acciaierie d'Italia effective February 20, 2024
(see note 2.4.1), and performed accordingly a value in use
calculation resulting in a 1,405 impairment loss considering the
uncertainty about Acciaierie d'Italia's future.
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.
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:
Year ended December 31,
2023
2022
2021
Share in net earnings of
equity-accounted companies
1,181
1,193
2,091
Impairment charges
(1,405)
\u2014
\u2014
Gain (loss) on disposal
\u2014
\u2014
16
Dividend income 1
3
124
97
Total
(221)
1,317
2,204
1. Mainly 117 and 89 dividend income from Erdemir in 2022 and 2021,
respectively.
For the year ended December 31, 2021, the gain on disposal
corresponded to the gain on dilution of the Company's interest
in Al Jubail.", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-638": { "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:
December 31,
2023
2022
Erdemir
205
910
ArcelorMittal XCarb
152
76
Stalprodukt S.A.
65
58
Others
91
75
Investments in equity instruments at
FVOCI
513
1,119
The Company\u2019s significant investments in equity instruments at
FVOCI at December\u00a031, 2023 and 2022 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.
During the first half of 2023, the Company's interest in Erdemir
decreased from 12% to 4% following the sale at the Istanbul
stock exchange of 265 million shares for the net proceeds of
626. As the investment was classified at FVOCI, the
accumulated revaluation gain of 333 was transferred from other
comprehensive income to retained earnings.
Unrealized (losses) gains recognized in other comprehensive
income were (105) and 66 for the year ended December\u00a031,
2023 and 2022, 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. It is vertically integrated from
mining through iron making, steelmaking, rolling, finishing and
downstream with hot and cold stamping of steel parts and
components.
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 invests up
to 100 annually in groundbreaking companies developing
pioneering or breakthrough technologies which will accelerate
the steel industry's transition to carbon neutral steelmaking.
Since the launch of the XCarbTM innovation fund in March 2021,
ArcelorMittal has invested 189, including 66 and 43 in 2023 and
2022, of which 66 and 43, respectively, in equity instruments at
FVOCI.
In 2021, ArcelorMittal completed a 30 investment in the carbon
recycling company LanzaTech and a 20 investment in Heliogen,
a renewable energy technology company. ArcelorMittal is also a
lead investor in Form Energy, a company working to accelerate
the development of its breakthrough low-cost energy storage
technology to enable a reliable, secure, and fully-renewable
electric grid year-round, with a 25 equity injection delivered in
2021 and an additional 17.5 in 2022. In addition, in 2022,
ArcelorMittal invested 25 in nuclear innovation company
TerraPower.
On January 26, 2023, ArcelorMittal invested 36 in Boston Metal,
which is developing and commercializing a patented Molten
Oxide Electrolysis (MOE) platform for decarbonizing primary
steelmaking and is targeting commercialization of this
technology by 2026. On June 30, 2023, ArcelorMittal completed
also a second 25 investment in TerraPower and on July 4, 2023
invested 5 in Char Technologies which is is developing a high
temperature pyrolysis (\"HTP\") technology that transforms
organic waste streams into valuable energy outputs.
Unrealized (losses) gains recognized in other comprehensive
income were (18) and 50 for the year ended December\u00a031, 2023
and 2022, respectively.
Stalprodukt S.A.\u00a0
Stalprodukt S.A. is a leading manufacturer and exporter of
highly processed steel products based in Poland. Unrealized
gains (losses) recognized in other comprehensive income were
8 and (7) for the year ended December\u00a031, 2023 and 2022,
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.
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:
Year ended December 31,
2023
2022
2021
Share in net earnings of
equity-accounted companies
1,181
1,193
2,091
Impairment charges
(1,405)
\u2014
\u2014
Gain (loss) on disposal
\u2014
\u2014
16
Dividend income 1
3
124
97
Total
(221)
1,317
2,204
1. Mainly 117 and 89 dividend income from Erdemir in 2022 and 2021,
respectively.
For the year ended December 31, 2021, the gain on disposal
corresponded to the gain on dilution of the Company's interest
in Al Jubail.", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-639": { "value": "NOTE 3: SEGMENT REPORTING
3.1\u00a0 \u00a0 Reportable segments
The Company is organized in five operating and reportable
segments, which are components engaged in business activities
from which they earn revenues and incur expenses (including
revenues and expenses relating to transactions with other
components of the Company), for which discrete financial
information is available and whose operating results are
evaluated regularly by the chief operating decision maker
(\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, 2023 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:
\u2022 NAFTA represents the flat, long and tubular facilities of
the Company located in Canada, Mexico and the
United States.\u00a0 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 to supply the steel facilities.
\u2022 Brazil 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.
\u2022 Europe is the largest flat steel producer in Europe, with
operations that range from Spain in the west to
Romania in the east, and covering the flat carbon steel
product portfolio in all major countries and markets.
Europe produces hot-rolled coil, cold-rolled coil, coated
products, tinplate, plate and slab. These products are
sold primarily to customers in the automotive, general
and packaging sectors. Europe also produces long
products consisting of sections, wire rod, rebar, billets,
blooms and wire drawing, and tubular products. In
addition, it includes Downstream Solutions, primarily an
in-house trading and distribution arm of ArcelorMittal.
Downstream Solutions also provides value-added and
customized steel solutions through further steel
processing to meet specific customer requirements.
The raw material supply of Europe operations includes
sourcing from iron ore captive mines in Bosnia &
Herzegovina.\u00a0
\u2022 ACIS produces a combination of flat, long and tubular
products. Its steel facilities are located in South Africa,
Ukraine and Kazakhstan (before the Company's
disposal of its steel making operations in Kazakhstan,
see note 2.3). 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 (before the Company's disposal
of its coal and iron ore mining operations in
Kazakhstan, see note 2.3).\u00a0
\u2022 The 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.
As from January 1, 2024, ArcelorMittal implemented changes to
its organizational structure. India and joint ventures will be
reported as a new operating segment including the joint
ventures AMNS India, VAMA and Calvert as well as other
associates, joint ventures and other investments. The segment
Sustainable Solutions will be composed of a number of high-
growth, niche, capital light businesses playing an important role
in supporting climate action (including renewables, special
projects and construction business). They are currently reported
within the Europe segment and will be reported as a separate
operating segment. The NAFTA segment will be renamed North
America. Finally, following the sale of the Company\u2019s operations
in Kazakhstan, the remaining parts of the former ACIS segment
will be assigned to Others.
The following table summarizes certain financial data for ArcelorMittal\u2019s operations by reportable segments.
NAFTA
Brazil
Europe
ACIS
Mining
Others 1
Elimination
Total
Year ended December 31, 2023
Sales to external customers
12,856
11,185
37,919
5,124
1,171
20
\u2014
68,275
Intersegment sales 2
122
1,978
386
298
1,906
18
(4,708)
\u2014
Operating income (loss)
1,917
1,461
1,104
(3,021)
1,144
(341)
76
2,340
Depreciation and amortization
(535)
(341)
(1,241)
(278)
(238)
(42)
\u2014
(2,675)
Impairment
\u2014
\u2014
\u2014
(1,038)
\u2014
\u2014
\u2014
(1,038)
Capital expenditures
426
917
1,612
406
784
479
(11)
4,613
Year ended December 31, 2022
Sales to external customers
13,716
11,929
47,015
5,863
1,305
16
\u2014
79,844
Intersegment sales 2
58
1,803
248
505
2,091
16
(4,721)
\u2014
Operating income (loss)
2,818
2,775
4,292
(930)
1,483
(315)
149
10,272
Depreciation and amortization
(427)
(246)
(1,268)
(369)
(234)
(36)
\u2014
(2,580)
Impairment
\u2014
\u2014
\u2014
(1,026)
\u2014
\u2014
\u2014
(1,026)
Capital expenditures
500
708
1,204
483
488
85
\u2014
3,468
Year ended December 31, 2021
Sales to external customers
12,492
10,830
43,200
8,392
1,640
17
\u2014
76,571
Intersegment sales 2
38
2,026
134
1,462
2,405
17
(6,082)
\u2014
Operating income (loss)
2,800
3,798
5,672
2,705
2,371
(228)
(142)
16,976
Depreciation and amortization
(325)
(228)
(1,252)
(450)
(228)
(40)
\u2014
(2,523)
Impairment reversal
\u2014
\u2014
218
\u2014
\u2014
\u2014
\u2014
218
Capital expenditures
369
412
1,282
619
302
24
\u2014
3,008
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:
Year ended December 31,
2023
2022
2021
Operating income
2,340
10,272
16,976
Income from investments in
associates and joint ventures
1,184
1,317
2,204
Impairments of equity method
investments
(1,405)
\u2014
\u2014
Financing costs - net
(859)
(334)
(1,155)
Income before taxes
1,260
11,255
18,025
Income tax expense
238
1,717
2,460
Net income (including non-
controlling interests)
1,022
9,538
15,565
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)
Year ended December 31,
\u00a0
2023
2022
2021
Americas
\u00a0
\u00a0
\u00a0
United States
8,886
8,835
7,300
Brazil
8,243
8,715
8,204
Canada
3,485
4,188
4,282
Mexico
3,288
2,876
2,356
Argentina
1,233
1,908
1,440
Others
1,110
1,538
1,826
Total Americas
26,245
28,060
25,408
Europe
\u00a0
\u00a0
\u00a0
Germany
6,550
7,761
6,541
Poland
4,466
5,930
5,298
France
4,611
5,703
4,874
Spain
3,981
4,737
4,187
Italy1
2,608
4,017
5,426
Czech Republic
1,183
1,432
1,362
Turkey
1,119
1,231
1,508
United Kingdom
1,341
1,593
1,519
Belgium
2,061
2,110
1,847
Netherlands
1,445
1,774
1,623
Russia
901
996
1,583
Romania
386
461
443
Ukraine
508
464
948
Others
4,620
6,310
5,025
Total Europe
35,780
44,519
42,184
Asia & Africa
South Africa
1,862
2,259
2,448
Morocco
745
806
689
Rest of Africa
524
499
1,068
China
764
765
943
Kazakhstan2
503
625
747
South Korea
410
383
608
India
102
131
142
Rest of Asia
1,340
1,797
2,334
Total Asia & Africa
6,250
7,265
8,979
Total
68,275
79,844
76,571
1. Sales in Italy include sales from Acciaierie d'Italia until April 14, 2021 (see
note 2.3).
2. On December 7, 2023, the Company completed the divestment of
ArcelorMittal Temirtau. Sales of ArcelorMittal Temirtau were consolidated
until that date see note 2.3.
Revenues from external customers attributed to the country of
domicile (Luxembourg) were 128, 206 and 185 for the years
ended December\u00a031, 2023, 2022 and 2021, respectively.
Non-current assets1 per significant country:
December 31,
2023
2022
Americas
\u00a0
\u00a0
Canada
5,141
5,105
Brazil2
7,103
4,075
United States
963
1,079
Mexico
1,767
1,747
Argentina
289
404
Venezuela
32
24
Others
21
19
Total Americas
15,316
12,453
Europe
France
4,190
3,618
Germany
2,629
2,457
Belgium
2,800
2,534
Poland
2,545
2,302
Ukraine
695
658
Spain
2,058
1,978
Luxembourg
1,898
1,998
Bosnia and Herzegovina
159
161
Romania
37
26
Czech Republic
25
27
Others
368
271
Total Europe
17,404
16,030
Asia & Africa
Kazakhstan3
\u2014
1,555
South Africa
424
567
Liberia
915
420
Morocco
103
88
India
587
80
Others
101
110
Total Asia & Africa
2,130
2,820
Unallocated assets
25,827
26,126
Total
60,677
57,429
1. Non-current assets do not include goodwill, deferred tax assets, investments
in associates and joint ventures, other investments and other non-current
financial assets (as they are not allocated to the individual countries). Such
assets are presented under the caption \u201cUnallocated assets\u201d.
2. Brazil includes ArcelorMittal Pec\u00e9m acquired on March 9, 2023 (see note
2.2.4).
3. On December 7, 2023, the Company completed the sale of ArcelorMittal
Temirtau (see note 2.3).
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.
\u00a0
Year ended December 31,
\u00a0
2023
2022
2021
Flat products
38,647
44,776
41,895
Long products
14,124
17,486
18,118
Tubular products
2,160
2,683
2,233
Mining products
1,269
1,391
1,860
Others
12,075
13,508
12,465
Total
68,275
79,844
76,571
3.4\u00a0 \u00a0 Disaggregated revenue
Disaggregated revenue\u00a0
The tables below summarize the disaggregated revenue recognized from contracts with customers:
Year ended December 31, 2023
NAFTA\u00a0
Brazil
Europe
ACIS
Mining
Others
Total
Steel sales
11,830
10,393
33,569
4,234
\u2014
\u2014
60,026
Non-steel sales 1
541
160
1,585
424
1,140
\u2014
3,850
By-product sales 2
94
174
1,305
168
\u2014
\u2014
1,741
Other sales 3
391
458
1,460
298
31
20
2,658
Total
12,856
11,185
37,919
5,124
1,171
20
68,275
Year ended December 31, 2022
NAFTA
Brazil
Europe
ACIS
Mining
Others
Total
Steel sales
12,796
11,133
41,804
5,061
\u2014
\u2014
70,794
Non-steel sales 1
491
189
2,212
373
1,274
\u2014
4,539
By-product sales 2
97
125
1,397
173
\u2014
\u2014
1,792
Other sales 3
332
482
1,602
256
31
16
2,719
Total
13,716
11,929
47,015
5,863
1,305
16
79,844
Year ended December 31, 2021
NAFTA
Brazil
Europe
ACIS
Mining
Others
Total
Steel sales
12,127
10,225
38,302
7,148
\u2014
\u2014
67,802
Non-steel sales 1
1
202
2,240
769
1,607
\u2014
4,819
By-product sales 2
132
111
943
171
\u2014
\u2014
1,357
Other sales 3
232
292
1,715
304
33
17
2,593
Total
12,492
10,830
43,200
8,392
1,640
17
76,571
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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-640": { "value": "3.1\u00a0 \u00a0 Reportable segments
The Company is organized in five operating and reportable
segments, which are components engaged in business activities
from which they earn revenues and incur expenses (including
revenues and expenses relating to transactions with other
components of the Company), for which discrete financial
information is available and whose operating results are
evaluated regularly by the chief operating decision maker
(\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, 2023 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.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-642": { "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.
\u00a0
Year ended December 31,
\u00a0
2023
2022
2021
Flat products
38,647
44,776
41,895
Long products
14,124
17,486
18,118
Tubular products
2,160
2,683
2,233
Mining products
1,269
1,391
1,860
Others
12,075
13,508
12,465
Total
68,275
79,844
76,571
3.4\u00a0 \u00a0 Disaggregated revenue
Disaggregated revenue\u00a0
The tables below summarize the disaggregated revenue recognized from contracts with customers:
Year ended December 31, 2023
NAFTA\u00a0
Brazil
Europe
ACIS
Mining
Others
Total
Steel sales
11,830
10,393
33,569
4,234
\u2014
\u2014
60,026
Non-steel sales 1
541
160
1,585
424
1,140
\u2014
3,850
By-product sales 2
94
174
1,305
168
\u2014
\u2014
1,741
Other sales 3
391
458
1,460
298
31
20
2,658
Total
12,856
11,185
37,919
5,124
1,171
20
68,275
Year ended December 31, 2022
NAFTA
Brazil
Europe
ACIS
Mining
Others
Total
Steel sales
12,796
11,133
41,804
5,061
\u2014
\u2014
70,794
Non-steel sales 1
491
189
2,212
373
1,274
\u2014
4,539
By-product sales 2
97
125
1,397
173
\u2014
\u2014
1,792
Other sales 3
332
482
1,602
256
31
16
2,719
Total
13,716
11,929
47,015
5,863
1,305
16
79,844
Year ended December 31, 2021
NAFTA
Brazil
Europe
ACIS
Mining
Others
Total
Steel sales
12,127
10,225
38,302
7,148
\u2014
\u2014
67,802
Non-steel sales 1
1
202
2,240
769
1,607
\u2014
4,819
By-product sales 2
132
111
943
171
\u2014
\u2014
1,357
Other sales 3
232
292
1,715
304
33
17
2,593
Total
12,492
10,830
43,200
8,392
1,640
17
76,571
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:
\u2013 Product Rejection - Product shipped and billed to an
end customer that did not meet previously agreed
customer specifications. Claims typically result from
physical defects in the goods, goods shipped to the
wrong location, goods produced with incorrect
specifications and goods shipped outside acceptable
time parameters.
\u2013 Consequential Damages - Damages reported by the
customer not directly related to the value of the
rejected goods (for example: customer processing cost
or mill down time, sampling, storage, sorting,
administrative cost, replacement cost, etc.).
The Company estimates the variable consideration for such
claims using the expected value method and reduces the
amount of revenue recognized.
Warranties:
The warranties and claims arise when the product fails on the
criteria mentioned above. Sales-related warranties associated
with the goods cannot be purchased separately and they serve
as an assurance that the products sold comply with agreed
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 351 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, 2023 to be recognized as revenue during 2024
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, 2023, 2022 and 2021.
Year ended December 31,
2023
2022
2021
Trade accounts receivable and
other - opening balance
3,839
5,143
3,072
Performance obligations
satisfied
68,275
79,844
76,571
Payments received
(68,590)
(80,977)
(74,036)
Impairment of receivables (net
of write backs and utilization)
(165)
\u2014
(69)
Reclassification of the period-
end receivables from /(to) held
for sale and recognition
(derecognition) of receivables
related to business combination
and divestments 1
189
190
182
TSR receivables retained in
ArcelorMittal USA divestment 2
\u2014
\u2014
(260)
Foreign exchange and others
113
(361)
(317)
Trade accounts receivable and
other - closing balance
3,661
3,839
5,143
1. 2023 mainly included receivables acquired as part of acquisition of
ArcelorMittal Pec\u00e9m (see note 2.2.4) and receivables from\u00a0 ArcelorMittal
Temirtau recognized upon disposal partially offset by the derecognition of
ArcelorMittal Temirtau's receivables (see note 2.3). 2022 included mainly
receivables acquired as part of acquisition of ArcelorMittal Texas HBI (see
note 2.2.4). 2021 included mainly receivables from the joint venture
Acciaierie d'Italia (see note 2.3).
2. Cash collateral provided by the Company for the TSR receivables retained in
ArcelorMittal USA at the time of disposal in 2020, subsequently fully realized
in 2021.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-641": { "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.
\u00a0
Year ended December 31,
\u00a0
2023
2022
2021
Flat products
38,647
44,776
41,895
Long products
14,124
17,486
18,118
Tubular products
2,160
2,683
2,233
Mining products
1,269
1,391
1,860
Others
12,075
13,508
12,465
Total
68,275
79,844
76,571
3.4\u00a0 \u00a0 Disaggregated revenue
Disaggregated revenue\u00a0
The tables below summarize the disaggregated revenue recognized from contracts with customers:
Year ended December 31, 2023
NAFTA\u00a0
Brazil
Europe
ACIS
Mining
Others
Total
Steel sales
11,830
10,393
33,569
4,234
\u2014
\u2014
60,026
Non-steel sales 1
541
160
1,585
424
1,140
\u2014
3,850
By-product sales 2
94
174
1,305
168
\u2014
\u2014
1,741
Other sales 3
391
458
1,460
298
31
20
2,658
Total
12,856
11,185
37,919
5,124
1,171
20
68,275
Year ended December 31, 2022
NAFTA
Brazil
Europe
ACIS
Mining
Others
Total
Steel sales
12,796
11,133
41,804
5,061
\u2014
\u2014
70,794
Non-steel sales 1
491
189
2,212
373
1,274
\u2014
4,539
By-product sales 2
97
125
1,397
173
\u2014
\u2014
1,792
Other sales 3
332
482
1,602
256
31
16
2,719
Total
13,716
11,929
47,015
5,863
1,305
16
79,844
Year ended December 31, 2021
NAFTA
Brazil
Europe
ACIS
Mining
Others
Total
Steel sales
12,127
10,225
38,302
7,148
\u2014
\u2014
67,802
Non-steel sales 1
1
202
2,240
769
1,607
\u2014
4,819
By-product sales 2
132
111
943
171
\u2014
\u2014
1,357
Other sales 3
232
292
1,715
304
33
17
2,593
Total
12,492
10,830
43,200
8,392
1,640
17
76,571
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:
\u2013 Product Rejection - Product shipped and billed to an
end customer that did not meet previously agreed
customer specifications. Claims typically result from
physical defects in the goods, goods shipped to the
wrong location, goods produced with incorrect
specifications and goods shipped outside acceptable
time parameters.
\u2013 Consequential Damages - Damages reported by the
customer not directly related to the value of the
rejected goods (for example: customer processing cost
or mill down time, sampling, storage, sorting,
administrative cost, replacement cost, etc.).
The Company estimates the variable consideration for such
claims using the expected value method and reduces the
amount of revenue recognized.
Warranties:
The warranties and claims arise when the product fails on the
criteria mentioned above. Sales-related warranties associated
with the goods cannot be purchased separately and they serve
as an assurance that the products sold comply with agreed
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 351 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, 2023 to be recognized as revenue during 2024
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, 2023, 2022 and 2021.
Year ended December 31,
2023
2022
2021
Trade accounts receivable and
other - opening balance
3,839
5,143
3,072
Performance obligations
satisfied
68,275
79,844
76,571
Payments received
(68,590)
(80,977)
(74,036)
Impairment of receivables (net
of write backs and utilization)
(165)
\u2014
(69)
Reclassification of the period-
end receivables from /(to) held
for sale and recognition
(derecognition) of receivables
related to business combination
and divestments 1
189
190
182
TSR receivables retained in
ArcelorMittal USA divestment 2
\u2014
\u2014
(260)
Foreign exchange and others
113
(361)
(317)
Trade accounts receivable and
other - closing balance
3,661
3,839
5,143
1. 2023 mainly included receivables acquired as part of acquisition of
ArcelorMittal Pec\u00e9m (see note 2.2.4) and receivables from\u00a0 ArcelorMittal
Temirtau recognized upon disposal partially offset by the derecognition of
ArcelorMittal Temirtau's receivables (see note 2.3). 2022 included mainly
receivables acquired as part of acquisition of ArcelorMittal Texas HBI (see
note 2.2.4). 2021 included mainly receivables from the joint venture
Acciaierie d'Italia (see note 2.3).
2. Cash collateral provided by the Company for the TSR receivables retained in
ArcelorMittal USA at the time of disposal in 2020, subsequently fully realized
in 2021.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-643": { "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:
\u2013 Product Rejection - Product shipped and billed to an
end customer that did not meet previously agreed
customer specifications. Claims typically result from
physical defects in the goods, goods shipped to the
wrong location, goods produced with incorrect
specifications and goods shipped outside acceptable
time parameters.
\u2013 Consequential Damages - Damages reported by the
customer not directly related to the value of the
rejected goods (for example: customer processing cost
or mill down time, sampling, storage, sorting,
administrative cost, replacement cost, etc.).
The Company estimates the variable consideration for such
claims using the expected value method and reduces the
amount of revenue recognized.
Warranties:
The warranties and claims arise when the product fails on the
criteria mentioned above. Sales-related warranties associated
with the goods cannot be purchased separately and they serve
as an assurance that the products sold comply with agreed
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 351 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, 2023 to be recognized as revenue during 2024
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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-644": { "value": "4.2\u00a0 \u00a0 Cost of sales
Cost of sales includes the following components:
\u00a0
Year ended December 31,
\u00a0
2023
2022
2021
Materials
46,422
51,353
42,737
Labor costs
7,038
6,721
6,886
Logistic expenses
4,028
4,096
3,931
Depreciation and amortization
2,675
2,580
2,523
Net impairment charges/
(reversal) (note 5.3)
1,038
1,026
(218)
Foreign exchange translation
losses upon disposal of
Kazakhstan operations (note
2.3)
1,469
\u2014
\u2014
Other
868
1,533
1,478
Total
63,538
67,309
57,337
", "dimensions": { "concept": "ifrs-full:DisclosureOfCostOfSalesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-646": { "value": "4.3\u00a0 \u00a0 Trade accounts receivable and other
Trade accounts receivable are initially recorded at their
transaction price and do not carry any interest. ArcelorMittal
maintains an allowance for lifetime expected credit loss at an
amount that it considers to be a reliable estimate of expected
credit losses resulting from the inability of its customers to make
required payments. In judging the adequacy of the allowance for
expected credit losses, ArcelorMittal considers multiple factors
including historical bad debt experience, the current and forward
looking economic environment and the aging of the receivables.
Recoveries of trade receivables previously reserved in the
allowance for expected credit losses are recognized as gains in
selling, general and administrative expenses.
ArcelorMittal\u2019s policy is to record an allowance for expected
lifetime credit losses and a charge in selling, general and
administrative expense when a specific account is deemed
uncollectible. The Company concluded that a trade receivable is
in default when it is overdue by more than 180 days. Based on
historical experience and analysis, the Company concluded that
there is a risk of default as such receivables are generally not
recoverable and therefore provided for, unless the collectability
can be clearly demonstrated. Uninsured trade receivables and
the associated allowance are written off when ArcelorMittal has
exhausted its recovery efforts and enforcement options.
ArcelorMittal continuously considered the impacts on the current
economic environment in its risk of default assessment for
receivables outstanding less than 180 days. 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.
Trade accounts receivable and allowance for lifetime expected
credit losses\u00a0
\u00a0
December 31,
\u00a0
2023
2022
Gross amount
4,025
4,029
Allowance for lifetime expected credit losses
(364)
(190)
Total
3,661
3,839
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:
\u00a0
December 31,
\u00a0
2023
2022
NAFTA
337
289
Brazil
1,400
1,127
Europe
1,587
2,011
ACIS
264
347
Mining
73
65
Total
3,661
3,839
Aging of trade accounts receivable
\u00a0
December 31,
December 31,
\u00a0
2023
2022
\u00a0
Gross
Allowance
Total
Gross
Allowance
Total
Not past due
3,070
(19)
3,051
3,063
(17)
3,046
Overdue 1-30 days
303
(1)
302
366
(2)
364
Overdue 31-60 days
83
(2)
81
120
(1)
119
Overdue 61-90 days
44
(1)
43
40
\u2014
40
Overdue 91-180 days
143
(12)
131
97
(2)
95
More than 180 days
382
(329)
53
343
(168)
175
Total
4,025
(364)
3,661
4,029
(190)
3,839
The movements in the allowance are calculated based on
lifetime expected credit loss model for 2023, 2022 and 2021.
The allowances in respect of trade accounts receivable during
the periods presented are as follows :
Year ended December 31,
2023
2022
2021
Allowance - opening
balance
190
206
136
Additions
178
19
87
Write backs / utilization
(13)
(19)
(18)
Foreign exchange and
others
9
(16)
1
Allowance - closing
balance
364
190
206
The Company has established a number of programs for sales
without recourse of trade accounts receivable to various
financial institutions (referred to as true sale of receivables
(\u201cTSR\u201d). Through the TSR programs, certain operating
subsidiaries of ArcelorMittal surrender the control, risks and
benefits associated with the accounts receivable sold; therefore,
the amount of receivables sold is recorded as a sale of financial
assets and the balances are derecognized from the
consolidated statements of financial position at the moment of
sale. The Company classifies trade receivables subject to TSR
as financial assets that are held to collect or to sell and
recognizes them at FVOCI (see note 6). The fair value
measurement is determined based on the invoice amount net of
TSR expense payable, a Level 3 unobservable input. The TSR
expense is insignificant due to the rate applicable and the short
timeframe between the time of sale and the invoice due date.
Any loss allowance for these trade receivables is recognized in
OCI. As of December 31, 2023 and 2022, the total amount of
trade accounts receivables sold amounted to 4.5\u00a0billion and 5.3
billion, respectively.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-645": { "value": "4.3\u00a0 \u00a0 Trade accounts receivable and other
Trade accounts receivable are initially recorded at their
transaction price and do not carry any interest. ArcelorMittal
maintains an allowance for lifetime expected credit loss at an
amount that it considers to be a reliable estimate of expected
credit losses resulting from the inability of its customers to make
required payments. In judging the adequacy of the allowance for
expected credit losses, ArcelorMittal considers multiple factors
including historical bad debt experience, the current and forward
looking economic environment and the aging of the receivables.
Recoveries of trade receivables previously reserved in the
allowance for expected credit losses are recognized as gains in
selling, general and administrative expenses.
ArcelorMittal\u2019s policy is to record an allowance for expected
lifetime credit losses and a charge in selling, general and
administrative expense when a specific account is deemed
uncollectible. The Company concluded that a trade receivable is
in default when it is overdue by more than 180 days. Based on
historical experience and analysis, the Company concluded that
there is a risk of default as such receivables are generally not
recoverable and therefore provided for, unless the collectability
can be clearly demonstrated. Uninsured trade receivables and
the associated allowance are written off when ArcelorMittal has
exhausted its recovery efforts and enforcement options.
ArcelorMittal continuously considered the impacts on the current
economic environment in its risk of default assessment for
receivables outstanding less than 180 days. 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.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-647": { "value": "
Trade accounts receivable and allowance for lifetime expected
credit losses\u00a0
\u00a0
December 31,
\u00a0
2023
2022
Gross amount
4,025
4,029
Allowance for lifetime expected credit losses
(364)
(190)
Total
3,661
3,839
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:
\u00a0
December 31,
\u00a0
2023
2022
NAFTA
337
289
Brazil
1,400
1,127
Europe
1,587
2,011
ACIS
264
347
Mining
73
65
Total
3,661
3,839
Aging of trade accounts receivable
\u00a0
December 31,
December 31,
\u00a0
2023
2022
\u00a0
Gross
Allowance
Total
Gross
Allowance
Total
Not past due
3,070
(19)
3,051
3,063
(17)
3,046
Overdue 1-30 days
303
(1)
302
366
(2)
364
Overdue 31-60 days
83
(2)
81
120
(1)
119
Overdue 61-90 days
44
(1)
43
40
\u2014
40
Overdue 91-180 days
143
(12)
131
97
(2)
95
More than 180 days
382
(329)
53
343
(168)
175
Total
4,025
(364)
3,661
4,029
(190)
3,839
The movements in the allowance are calculated based on
lifetime expected credit loss model for 2023, 2022 and 2021.
The allowances in respect of trade accounts receivable during
the periods presented are as follows :
Year ended December 31,
2023
2022
2021
Allowance - opening
balance
190
206
136
Additions
178
19
87
Write backs / utilization
(13)
(19)
(18)
Foreign exchange and
others
9
(16)
1
Allowance - closing
balance
364
190
206
The Company has established a number of programs for sales
without recourse of trade accounts receivable to various
financial institutions (referred to as true sale of receivables
(\u201cTSR\u201d). Through the TSR programs, certain operating
subsidiaries of ArcelorMittal surrender the control, risks and
benefits associated with the accounts receivable sold; therefore,
the amount of receivables sold is recorded as a sale of financial
assets and the balances are derecognized from the
consolidated statements of financial position at the moment of
sale. The Company classifies trade receivables subject to TSR
as financial assets that are held to collect or to sell and
recognizes them at FVOCI (see note 6). The fair value
measurement is determined based on the invoice amount net of
TSR expense payable, a Level 3 unobservable input. The TSR
expense is insignificant due to the rate applicable and the short
timeframe between the time of sale and the invoice due date.
Any loss allowance for these trade receivables is recognized in
OCI. As of December 31, 2023 and 2022, the total amount of
trade accounts receivables sold amounted to 4.5\u00a0billion and 5.3
billion, respectively.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-649": { "value": "4.4\u00a0 \u00a0 Inventories
Inventories are carried at the lower of cost or net realizable
value. Cost is determined using the average cost method. Costs
of production in process and finished goods include the
purchase costs of raw materials and conversion costs such as
direct labor and an allocation of fixed and variable production
overheads. Raw materials and spare parts are valued at cost,
inclusive of freight, shipping, handling as well as any other costs
incurred in bringing the inventories to their present location and
condition. Interest charges, if any, on purchases have been
recorded as financing costs. Costs incurred when production
levels are abnormally low are capitalized as inventories based
on normal capacity with the remaining costs incurred recorded
as a component of cost of sales in the consolidated statements
of operations.
Net realizable value represents the estimated selling price at
which the inventories can be realized in the normal course of
business after allowing for the cost of conversion from their
existing state to a finished condition and for the cost of
marketing, selling, and distribution. Net realizable value is
estimated based on the most reliable evidence available at the
time the estimates were made of being the amount that the
inventory is expected to realize, taking into account the purpose
for which the inventory is held.
Previous write-downs are reversed in case the circumstances
that previously caused inventories to be written down below cost
no longer exist.
Inventories, net of allowance for slow-moving inventory, excess
of cost over net realizable value and obsolescence of 1,434 and
1,629 as of December\u00a031, 2023 and 2022, respectively, are
comprised of the following:
\u00a0
December 31,
\u00a0
2023
2022
Finished products
5,372
5,906
Production in process
4,741
5,343
Raw materials
6,334
6,639
Manufacturing supplies, spare parts and
other 1
2,312
2,199
Total
18,759
20,087
1. Including spare parts of 1.7 billion and 1.5 billion , and manufacturing and other
supplies of 0.6 billion and 0.7 billion as of December\u00a031, 2023 and 2022,
respectively.\u00a0
Movements in the inventory write-downs are as follows:
Year ended December 31,
2023
2022
2021
Inventory write-downs -
opening balance
1,629
1,023
1,079
Additions 1
516
759
178
Deductions / Releases 2
(681)
(136)
(236)
Foreign exchange and others
(30)
(17)
2
Inventory write-downs -
closing balance
1,434
1,629
1,023
1. Additions refer to write-downs of inventories excluding those utilized or written
back during the same financial year.
2. Deductions/releases correspond to write-backs and utilization related to the
prior periods.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-648": { "value": "4.4\u00a0 \u00a0 Inventories
Inventories are carried at the lower of cost or net realizable
value. Cost is determined using the average cost method. Costs
of production in process and finished goods include the
purchase costs of raw materials and conversion costs such as
direct labor and an allocation of fixed and variable production
overheads. Raw materials and spare parts are valued at cost,
inclusive of freight, shipping, handling as well as any other costs
incurred in bringing the inventories to their present location and
condition. Interest charges, if any, on purchases have been
recorded as financing costs. Costs incurred when production
levels are abnormally low are capitalized as inventories based
on normal capacity with the remaining costs incurred recorded
as a component of cost of sales in the consolidated statements
of operations.
Net realizable value represents the estimated selling price at
which the inventories can be realized in the normal course of
business after allowing for the cost of conversion from their
existing state to a finished condition and for the cost of
marketing, selling, and distribution. Net realizable value is
estimated based on the most reliable evidence available at the
time the estimates were made of being the amount that the
inventory is expected to realize, taking into account the purpose
for which the inventory is held.
Previous write-downs are reversed in case the circumstances
that previously caused inventories to be written down below cost
no longer exist.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-650": { "value": "4.5\u00a0 \u00a0 Prepaid expenses and other current assets
December 31,
2023
2022
VAT receivables
792
1,144
Prepaid expenses and non-trade
receivables
658
732
Financial amounts receivable2
247
122
Income tax receivable
209
158
Receivables from public authorities
206
152
Receivables from sale of intangible, tangible
and financial assets
81
67
Derivative financial instruments (notes\u00a0 6.1
and 6.3)
643
737
CO2 emission rights
3
491
Other 1
198
175
Total
3,037
3,778
1. Other included mainly advances to employees, accrued interest and other
miscellaneous receivables.
2. Includes at December 31, 2023 114 of outstanding receivables in connection
with the sale of ArcelorMittal Temirtau (see note 2.3).", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-651": { "value": "4.6\u00a0 \u00a0 Other assets
Other assets consisted of the following:
\u00a0
December 31,
\u00a0
2023
2022
Derivative financial instruments (notes 6.1
and 6.3)
163
835
Financial amounts receivable2
785
429
Long-term VAT receivables
215
74
Cash guarantees and deposits
178
155
Receivables from public authorities
115
73
Accrued interest
27
24
Receivables from sale of intangible, tangible
and financial assets
100
139
Income tax receivable
91
68
Other 1
185
124
Total
1,859
1,921
1. Other mainly includes assets in pension funds and other amounts receivable.
2. Includes at December 31, 2023 342 of outstanding receivables in connection
with the sale of ArcelorMittal Temirtau (see note 2.3).", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-653": { "value": "4.7\u00a0 \u00a0 Trade accounts payable and other
Trade accounts payable are obligations to pay for goods that
have been acquired in the ordinary course of business from
suppliers. Trade accounts payable have maturities from 15 to
180 days depending on the type of material, the geographic
area in which the purchase transaction occurs and the various
contractual agreements. The carrying value of trade accounts
payable approximates fair value. The Company\u2019s average
outstanding number of trade payable days amounted to 80 over
the last 5 years. The ability of suppliers to provide payment
terms may be dependent on their ability to obtain funding for
their own working capital needs and or their ability to early
discount their receivables at their own discretion (the Company
estimates that about 2.9 billion of trade payables were subject to
early discount by its suppliers in 2023 as compared to 2.8 billion
in 2022).
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-652": { "value": "4.7\u00a0 \u00a0 Trade accounts payable and other
Trade accounts payable are obligations to pay for goods that
have been acquired in the ordinary course of business from
suppliers. Trade accounts payable have maturities from 15 to
180 days depending on the type of material, the geographic
area in which the purchase transaction occurs and the various
contractual agreements. The carrying value of trade accounts
payable approximates fair value.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-654": { "value": "4.8\u00a0 \u00a0 Accrued expenses and other liabilities
Accrued expenses and other liabilities were comprised of the
following:
December 31,
2023
2022
Accrued payroll and employee related
expenses
1,403
1,415
Accrued interest and other payables
1,134
1,049
Payable from acquisition of intangible,
tangible & financial assets
1,270
1,123
Other amounts due to public authorities
691
652
Derivative financial instruments (notes 6.1
and 6.3)
360
379
Put option liability ArcelorMittal Sul
Fluminense (note 11.5.2)
\u2014
179
Unearned revenue and accrued payables
109
67
Total
4,967
4,864
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-656": { "value": "
NOTE 5: GOODWILL, INTANGIBLE AND TANGIBLE ASSETS
5.1\u00a0 \u00a0 Goodwill and intangible assets
T he carrying amounts of goodwill and intangible asset s are
summarized as follows:
\u00a0
December 31,
\u00a0
2023
2022
Goodwill on acquisitions
3,908
3,767
Concessions, patents and licenses
266
208
Customer relationships and trade marks
155
133
Emission rights
642
748
Other
131
47
Total
5,102
4,903
Goodwill
Goodwill arising on an acquisition is recognized as previously
described within the business combinations section in note
2.2.3. Goodwill is allocated to those groups of cash-generating
units that are expected to benefit from the business combination
in which the goodwill arose and in all cases is at the operating
segment level, which represents the lowest level at which
goodwill is monitored for internal management purposes.
Goodwill acquired in business combinations for each of the
Company\u2019s operating segments is as follows:
\u00a0
December
31, 2022
Acquisitions1
Foreign
exchange
differences
and other
movements
Divestments2
December
31, 2023
NAFTA
1,540
\u2014
23
\u2014
1,563
Brazil
1,070
164
82
\u2014
1,316
Europe
523
57
33
\u2014
613
ACIS
634
\u2014
(24)
(194)
416
Total
3,767
221
114
(194)
3,908
\u00a0
December
31, 2021
Acquisitions1
Foreign exchange
differences and
other movements
December
31, 2022
NAFTA
1,576
\u2014
(36)
1,540
Brazil
1,010
\u2014
60
1,070
Europe
499
55
(31)
523
ACIS
846
\u2014
(212)
634
Total
3,931
55
(219)
3,767
1. See note 2.2.4
2. See note 2.3
Intangible assets are recognized only when it is probable that
the expected future economic benefits attributable to the assets
will accrue to the Company and the cost can be reliably
measured. Intangible assets acquired separately by
ArcelorMittal are initially recorded at cost and those acquired in
a business combination are initially recorded at fair value at the
date of the business combination. These primarily include the
cost of technology and licenses purchased from third parties
and operating authorizations granted by governments or other
public bodies (concessions). Intangible assets are amortized on
a straight-line basis over their estimated economic useful lives,
which typically do not exceed five years . Amortization is
included in the consolidated statements of operations as part of
cost of sales.
ArcelorMittal\u2019s industrial sites which are regulated by the
European Directive 2003/87/EC of October\u00a013, 2003 on carbon
dioxide (\u201cCO2\u201d) emission rights, effective as of January\u00a01, 2005,
are located primarily in Belgium, France, Germany,
Luxembourg, Poland and Spain. In Ontario, Canada,
ArcelorMittal's operations have been subject to output based
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:
\u00a0
Concessions,
patents and
licenses
Customer
relationships and
trade marks
Other
Total
Cost
\u00a0
\u00a0
\u00a0
\u00a0
At December 31, 2021
417
1,081
390
1,888
Acquisitions1
54
\u2014
743
797
Acquisitions through business combinations (note 2.2.4)
11
70
\u2014
81
Disposals
\u2014
\u2014
(3)
(3)
Foreign exchange differences
(43)
(60)
(12)
(115)
Transfers and other movements
7
\u2014
(128)
(121)
At December 31, 2022
446
1,091
990
2,527
Acquisitions1
75
\u2014
102
177
Acquisitions through business combination (note 2.2.4)
8
24
100
132
Disposal
\u2014
\u2014
(222)
(222)
Divestment (note 2.3)
(18)
\u2014
\u2014
(18)
Foreign exchange differences
32
49
36
117
Transfers and other movements
13
4
18
35
At December 31, 2023
556
1,168
1,024
2,748
Accumulated amortization and impairment losses
At December 31, 2021
222
1,001
171
1,394
Amortization charge
50
6
31
87
Impairment charge (note 5.3)
6
\u2014
\u2014
6
Foreign exchange differences
(33)
(50)
(7)
(90)
Transfers and other movements
(7)
1
\u2014
(6)
At December 31, 2022
238
958
195
1,391
Divestment (note 2.3)
(18)
\u2014
\u2014
(18)
Amortization charge
59
12
52
123
Foreign exchange differences
23
43
8
74
Transfers and other movements
(12)
\u2014
(4)
(16)
At December 31, 2023
290
1,013
251
1,554
Carrying amount
At December 31, 2022
208
133
795
1,136
At December 31, 2023
266
155
773
1,194
1. Acquisitions in 'other' mainly relate to CO2 emission rights.
Disposal of other intangible assets resulted in a 414 gain.
Research and development costs not meeting the criteria for
capitalization are expensed as incurred. These costs amounted
to 299, 286 and 270 for the years ended December\u00a031, 2023,
2022 and 2021, respectively and were recognized in selling,
general and administrative expenses.", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-655": { "value": "
NOTE 5: GOODWILL, INTANGIBLE AND TANGIBLE ASSETS
5.1\u00a0 \u00a0 Goodwill and intangible assets
T he carrying amounts of goodwill and intangible asset s are
summarized as follows:
\u00a0
December 31,
\u00a0
2023
2022
Goodwill on acquisitions
3,908
3,767
Concessions, patents and licenses
266
208
Customer relationships and trade marks
155
133
Emission rights
642
748
Other
131
47
Total
5,102
4,903
Goodwill
Goodwill arising on an acquisition is recognized as previously
described within the business combinations section in note
2.2.3. Goodwill is allocated to those groups of cash-generating
units that are expected to benefit from the business combination
in which the goodwill arose and in all cases is at the operating
segment level, which represents the lowest level at which
goodwill is monitored for internal management purposes.
Goodwill acquired in business combinations for each of the
Company\u2019s operating segments is as follows:
\u00a0
December
31, 2022
Acquisitions1
Foreign
exchange
differences
and other
movements
Divestments2
December
31, 2023
NAFTA
1,540
\u2014
23
\u2014
1,563
Brazil
1,070
164
82
\u2014
1,316
Europe
523
57
33
\u2014
613
ACIS
634
\u2014
(24)
(194)
416
Total
3,767
221
114
(194)
3,908
\u00a0
December
31, 2021
Acquisitions1
Foreign exchange
differences and
other movements
December
31, 2022
NAFTA
1,576
\u2014
(36)
1,540
Brazil
1,010
\u2014
60
1,070
Europe
499
55
(31)
523
ACIS
846
\u2014
(212)
634
Total
3,931
55
(219)
3,767
1. See note 2.2.4
2. See note 2.3
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-657": { "value": "5.1\u00a0 \u00a0 Goodwill and intangible assets
T he carrying amounts of goodwill and intangible asset s are
summarized as follows:
\u00a0
December 31,
\u00a0
2023
2022
Goodwill on acquisitions
3,908
3,767
Concessions, patents and licenses
266
208
Customer relationships and trade marks
155
133
Emission rights
642
748
Other
131
47
Total
5,102
4,903
Goodwill
Goodwill arising on an acquisition is recognized as previously
described within the business combinations section in note
2.2.3. Goodwill is allocated to those groups of cash-generating
units that are expected to benefit from the business combination
in which the goodwill arose and in all cases is at the operating
segment level, which represents the lowest level at which
goodwill is monitored for internal management purposes.
Goodwill acquired in business combinations for each of the
Company\u2019s operating segments is as follows:
\u00a0
December
31, 2022
Acquisitions1
Foreign
exchange
differences
and other
movements
Divestments2
December
31, 2023
NAFTA
1,540
\u2014
23
\u2014
1,563
Brazil
1,070
164
82
\u2014
1,316
Europe
523
57
33
\u2014
613
ACIS
634
\u2014
(24)
(194)
416
Total
3,767
221
114
(194)
3,908
\u00a0
December
31, 2021
Acquisitions1
Foreign exchange
differences and
other movements
December
31, 2022
NAFTA
1,576
\u2014
(36)
1,540
Brazil
1,010
\u2014
60
1,070
Europe
499
55
(31)
523
ACIS
846
\u2014
(212)
634
Total
3,931
55
(219)
3,767
1. See note 2.2.4
2. See note 2.3
Intangible assets are recognized only when it is probable that
the expected future economic benefits attributable to the assets
will accrue to the Company and the cost can be reliably
measured. Intangible assets acquired separately by
ArcelorMittal are initially recorded at cost and those acquired in
a business combination are initially recorded at fair value at the
date of the business combination. These primarily include the
cost of technology and licenses purchased from third parties
and operating authorizations granted by governments or other
public bodies (concessions). Intangible assets are amortized on
a straight-line basis over their estimated economic useful lives,
which typically do not exceed five years . Amortization is
included in the consolidated statements of operations as part of
cost of sales.
ArcelorMittal\u2019s industrial sites which are regulated by the
European Directive 2003/87/EC of October\u00a013, 2003 on carbon
dioxide (\u201cCO2\u201d) emission rights, effective as of January\u00a01, 2005,
are located primarily in Belgium, France, Germany,
Luxembourg, Poland and Spain. In Ontario, Canada,
ArcelorMittal's operations have been subject to output based
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:
\u00a0
Concessions,
patents and
licenses
Customer
relationships and
trade marks
Other
Total
Cost
\u00a0
\u00a0
\u00a0
\u00a0
At December 31, 2021
417
1,081
390
1,888
Acquisitions1
54
\u2014
743
797
Acquisitions through business combinations (note 2.2.4)
11
70
\u2014
81
Disposals
\u2014
\u2014
(3)
(3)
Foreign exchange differences
(43)
(60)
(12)
(115)
Transfers and other movements
7
\u2014
(128)
(121)
At December 31, 2022
446
1,091
990
2,527
Acquisitions1
75
\u2014
102
177
Acquisitions through business combination (note 2.2.4)
8
24
100
132
Disposal
\u2014
\u2014
(222)
(222)
Divestment (note 2.3)
(18)
\u2014
\u2014
(18)
Foreign exchange differences
32
49
36
117
Transfers and other movements
13
4
18
35
At December 31, 2023
556
1,168
1,024
2,748
Accumulated amortization and impairment losses
At December 31, 2021
222
1,001
171
1,394
Amortization charge
50
6
31
87
Impairment charge (note 5.3)
6
\u2014
\u2014
6
Foreign exchange differences
(33)
(50)
(7)
(90)
Transfers and other movements
(7)
1
\u2014
(6)
At December 31, 2022
238
958
195
1,391
Divestment (note 2.3)
(18)
\u2014
\u2014
(18)
Amortization charge
59
12
52
123
Foreign exchange differences
23
43
8
74
Transfers and other movements
(12)
\u2014
(4)
(16)
At December 31, 2023
290
1,013
251
1,554
Carrying amount
At December 31, 2022
208
133
795
1,136
At December 31, 2023
266
155
773
1,194
1. Acquisitions in 'other' mainly relate to CO2 emission rights.
Disposal of other intangible assets resulted in a 414 gain.
Research and development costs not meeting the criteria for
capitalization are expensed as incurred. These costs amounted
to 299, 286 and 270 for the years ended December\u00a031, 2023,
2022 and 2021, respectively and were recognized in selling,
general and administrative expenses.", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-658": { "value": "
Intangible assets are recognized only when it is probable that
the expected future economic benefits attributable to the assets
will accrue to the Company and the cost can be reliably
measured. Intangible assets acquired separately by
ArcelorMittal are initially recorded at cost and those acquired in
a business combination are initially recorded at fair value at the
date of the business combination. These primarily include the
cost of technology and licenses purchased from third parties
and operating authorizations granted by governments or other
public bodies (concessions). Intangible assets are amortized on
a straight-line basis over their estimated economic useful lives,
which typically do not exceed five years . Amortization is
included in the consolidated statements of operations as part of
cost of sales.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-659": { "value": "
Research and development costs not meeting the criteria for
capitalization are expensed as incurred. These costs amounted
to 299, 286 and 270 for the years ended December\u00a031, 2023,
2022 and 2021, respectively and were recognized in selling,
general and administrative expenses.
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:
\u2022 sinking shafts and underground drifts (often called
mine development);
\u2022 making permanent excavations;
\u2022 developing passageways and rooms or galleries;
\u2022 building roads and tunnels; and
\u2022 advance removal of overburden and waste rock.
Development (or construction) also includes the installation of
infrastructure (e.g., roads, utilities and housing), machinery,
equipment and facilities.
When reserves are determined and development is approved,
expenditures capitalized as exploration and evaluation are
reclassified as construction in progress and are reported as a
component of property, plant and equipment. All subsequent
development expenditures are capitalized and classified as
construction in progress. On completion of development, all
assets included in construction in progress are individually
reclassified to the appropriate category of property, plant and
equipment and depreciated accordingly.", "dimensions": { "concept": "ifrs-full:DisclosureOfResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-661": { "value": "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.
Asset Category
Useful Life\u00a0Range
Land
Not\u00a0depreciated
Buildings
10 to 50 years
Property plant & equipment
15 to 64 years
Auxiliary facilities
15 to 60 years
Other facilities
5 to 20 years
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 BF
and BOF, 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. Accordingly, depreciation charge
increased by 168 in 2023 and\u00a0 is expected to increase by 168,
142, 124, 28 and 26 for the years ended December 31, 2024,
2025, 2026, 2027 and 2028, respectively.
Mining assets comprise:
\u2022 Mineral rights acquired;
\u2022 Capitalized 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:
\u2022 Asset carrying amounts may be affected due to
changes in estimated future cash flows.
\u2022 Depreciation, depletion and amortization charged in the
consolidated statements of operations may change
where such charges are determined by the units of
production basis, or where the useful economic lives of
assets change.
\u2022 Overburden removal costs recognized in the
consolidated statements of financial position or
charged to the consolidated statements of operations
may change due to changes in stripping ratios or the
units of production basis of depreciation.
\u2022 Decommissioning, site restoration and environmental
provisions may change where changes in estimated
reserves affect expectations about the timing or cost of
these activities.
Stripping and overburden removal costs
In open pit and underground mining operations, it is often
necessary to remove overburden and other waste materials to
access the deposit from which minerals can be extracted. This
process is referred to as stripping. Stripping costs can be
incurred before the mining production commences
(\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:
\u2022 If mining of the second and subsequent pits is
conducted consecutively with that of the first pit, rather
than concurrently.
\u2022 If separate investment decisions are made to develop
each pit, rather than a single investment decision being
made at the outset.
\u2022 If the pits are operated as separate units in terms of
mine planning and the sequencing of overburden and
ore mining, rather than as an integrated unit.
\u2022 If expenditures for additional infrastructure to support
the second and subsequent pits are relatively large.
\u2022 If the pits extract ore from separate and distinct ore
bodies, rather than from a single ore body.
The relative importance of each factor is considered by local
management to determine whether the stripping costs should be
attributed to the individual pit or to the combined output from
several pits.
Developmental stripping costs contribute to the future economic
benefits of mining operations when the production begins and
so are capitalized as tangible assets (construction in progress),
whereas production stripping is a part of on-going activities and
commences when the production stage of mining operations
begins and continues throughout the life of a mine.
Capitalization of developmental stripping costs ends when the
commercial production of the minerals commences.
Production stripping costs are incurred to extract the ore in the
form of inventories and/or to improve access to an additional
component of an ore body or deeper levels of material.
Production stripping costs are accounted for as inventories to
the extent the benefit from production stripping activity is
realized in the form of inventories. Production stripping costs are
recognized as a non-current asset (\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:
\u2022 researching and analyzing historical exploration data;
\u2022 conducting topographical, geological, geochemical and
geophysical studies;
\u2022 carrying out exploratory drilling, trenching and sampling
activities;
\u2022 drilling, trenching and sampling activities to determine
the quantity and grade of the deposit;
\u2022 examining and testing extraction methods and
metallurgical or treatment processes; and
\u2022 detailed economic feasibility evaluations to determine
whether development of the reserves is commercially
justified and to plan methods for mine development.
Exploration and evaluation expenditure is charged to the
consolidated statements of operations as incurred except in the
following circumstances, in which case the expenditure is
capitalized: (i) the exploration and evaluation activity is within an
area of interest which was previously acquired in a business
combination and measured at fair value on acquisition; or (ii)
when management has a high degree of confidence in the
project\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:
\u2022 sinking shafts and underground drifts (often called
mine development);
\u2022 making permanent excavations;
\u2022 developing passageways and rooms or galleries;
\u2022 building roads and tunnels; and
\u2022 advance removal of overburden and waste rock.
Development (or construction) also includes the installation of
infrastructure (e.g., roads, utilities and housing), machinery,
equipment and facilities.
When reserves are determined and development is approved,
expenditures capitalized as exploration and evaluation are
reclassified as construction in progress and are reported as a
component of property, plant and equipment. All subsequent
development expenditures are capitalized and classified as
construction in progress. On completion of development, all
assets included in construction in progress are individually
reclassified to the appropriate category of property, plant and
equipment and depreciated accordingly.
Biological assets
Biological assets are part of the Brazil operating segment and
consist of eucalyptus forests located in the Brazilian state of
Minas Gerais exclusively from renewable plantations and
intended for the production of charcoal to be utilized as fuel and
a source of carbon in the direct reduction process of pig iron
production in some of the Company\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.
Power purchase agreements
Power purchase agreements, which provide for the physical
delivery of renewable energy and which do not comply neither
with the requirements of IFRS 10 for the existence of control or
joint control over a company, IFRS 11 regarding the existence of
joint operation over an asset, IFRS 16 for the recognition of a
lease, nor with the definition of a derivative under IFRS 9 are
accounted for as an executory contract on the basis of the own
use exemption when the relevant conditions are met.
Property, plant and equipment and biological assets are summarized as follows:\u00a0
\u00a0
Land,
buildings\u00a0and
Improvements
Machinery,\u00a0
equipment
and other2
Construction
in progress
Right-of-use
assets
Mining
\u00a0Assets
Total
Cost
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At December 31, 2021
10,121
35,348
4,533
1,750
3,407
55,159
Additions
34
220
3,533
381
33
4,201
Acquisitions through business combinations (note
2.2.4)
193
742
70
37
\u2014
1,042
Foreign exchange differences
(811)
(3,344)
(109)
(124)
(87)
(4,475)
Disposals
(137)
(545)
(4)
\u2014
(18)
(704)
Other movements 1
76
1,712
(2,136)
(41)
105
(284)
At December 31, 2022
9,476
34,133
5,887
2,003
3,440
54,939
Additions
61
291
4,372
258
52
5,034
Acquisitions through business combinations (note
2.2.4)
789
1,057
23
30
\u2014
1,899
Foreign exchange differences
473
1,458
112
68
7
2,118
Disposals
(191)
(850)
(1)
\u2014
(7)
(1,049)
Divestments (note 2.3)
(40)
(2,074)
(550)
\u2014
(661)
(3,325)
Other movements 1
282
1,950
(2,500)
(87)
201
(154)
At December 31, 2023
10,850
35,965
7,343
2,272
3,032
59,462
Accumulated depreciation and impairment
At December 31, 2021
3,643
17,596
999
678
2,168
25,084
Depreciation charge for the year
283
1,893
\u2014
193
124
2,493
Impairment (note 5.3)
146
688
155
10
21
1,020
Disposals
(109)
(502)
(1)
\u2014
(18)
(630)
Foreign exchange differences
(496)
(2,403)
(9)
(59)
(68)
(3,035)
Other movements 1
(19)
(71)
(17)
(29)
(24)
(160)
At December 31, 2022
3,448
17,201
1,127
793
2,203
24,772
Depreciation charge for the year
315
1,875
\u2014
235
127
2,552
Impairment (note 5.3)
16
529
233
\u2014
66
844
Disposals
(187)
(808)
\u2014
\u2014
(7)
(1,002)
Foreign exchange differences
248
977
(2)
12
6
1,241
Divestments (note 2.3)
(26)
(1,521)
(235)
\u2014
(571)
(2,353)
Other movements 1
5
(101)
(40)
(112)
\u2014
(248)
At December 31, 2023
3,819
18,152
1,083
928
1,824
25,806
Carrying amount
At December 31, 2022
6,028
16,932
4,760
1,210
1,237
30,167
At December 31, 2023
7,031
17,813
6,260
1,344
1,208
33,656
1. Other movements predominantly represent transfers from construction in progress to other categories and retirement of fully depreciated assets.\u00a0
2. Machinery, equipment and other includes biological assets of\u00a064 and 47 as of December\u00a031, 2023 and 2022, respectively, and bearer plants of 51 and 37 as of
December\u00a031, 2023 and 2022, respectively.
Capital expenditures relating to decarbonization and renewable
energy projects
In 2023 and 2022, capital expenditures relating to
decarbonization projects amounted to 0.2 billion mainly with
respect to the ArcelorMittal Dofasco (Canada) DRI/EAF project.
The carrying amount of temporarily idle property, plant and
equipment at December\u00a031, 2023 and 2022 was 264 and 380
including 41 and 39 in Brazil, 6 and 6 in NAFTA, 112 and 89 in
the Europe segment and 105 and 246 in the ACIS segment,
respectively.\u00a0
The carrying amount of property, plant and equipment retired
from active use and not classified as held for sale was 22 and nil
at December\u00a031, 2023 and 2022 respectively. Such assets are
carried at their recoverable amount.
Assets pledged as security
See note 9.4 for information about assets pledged as security by
the Company.
Capital commitments
See note 9.4 for information about contractual commitments for
acquisition of property, plant and equipment by the Company.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBiologicalAssetsAndGovernmentGrantsForAgriculturalActivityExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-660": { "value": "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.
Asset Category
Useful Life\u00a0Range
Land
Not\u00a0depreciated
Buildings
10 to 50 years
Property plant & equipment
15 to 64 years
Auxiliary facilities
15 to 60 years
Other facilities
5 to 20 years
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 BF
and BOF, 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. Accordingly, depreciation charge
increased by 168 in 2023 and\u00a0 is expected to increase by 168,
142, 124, 28 and 26 for the years ended December 31, 2024,
2025, 2026, 2027 and 2028, respectively.
Mining assets comprise:
\u2022 Mineral rights acquired;
\u2022 Capitalized 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:
\u2022 Asset carrying amounts may be affected due to
changes in estimated future cash flows.
\u2022 Depreciation, depletion and amortization charged in the
consolidated statements of operations may change
where such charges are determined by the units of
production basis, or where the useful economic lives of
assets change.
\u2022 Overburden removal costs recognized in the
consolidated statements of financial position or
charged to the consolidated statements of operations
may change due to changes in stripping ratios or the
units of production basis of depreciation.
\u2022 Decommissioning, site restoration and environmental
provisions may change where changes in estimated
reserves affect expectations about the timing or cost of
these activities.
Stripping and overburden removal costs
In open pit and underground mining operations, it is often
necessary to remove overburden and other waste materials to
access the deposit from which minerals can be extracted. This
process is referred to as stripping. Stripping costs can be
incurred before the mining production commences
(\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:
\u2022 If mining of the second and subsequent pits is
conducted consecutively with that of the first pit, rather
than concurrently.
\u2022 If separate investment decisions are made to develop
each pit, rather than a single investment decision being
made at the outset.
\u2022 If the pits are operated as separate units in terms of
mine planning and the sequencing of overburden and
ore mining, rather than as an integrated unit.
\u2022 If expenditures for additional infrastructure to support
the second and subsequent pits are relatively large.
\u2022 If the pits extract ore from separate and distinct ore
bodies, rather than from a single ore body.
The relative importance of each factor is considered by local
management to determine whether the stripping costs should be
attributed to the individual pit or to the combined output from
several pits.
Developmental stripping costs contribute to the future economic
benefits of mining operations when the production begins and
so are capitalized as tangible assets (construction in progress),
whereas production stripping is a part of on-going activities and
commences when the production stage of mining operations
begins and continues throughout the life of a mine.
Capitalization of developmental stripping costs ends when the
commercial production of the minerals commences.
Production stripping costs are incurred to extract the ore in the
form of inventories and/or to improve access to an additional
component of an ore body or deeper levels of material.
Production stripping costs are accounted for as inventories to
the extent the benefit from production stripping activity is
realized in the form of inventories. Production stripping costs are
recognized as a non-current asset (\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:
\u2022 researching and analyzing historical exploration data;
\u2022 conducting topographical, geological, geochemical and
geophysical studies;
\u2022 carrying out exploratory drilling, trenching and sampling
activities;
\u2022 drilling, trenching and sampling activities to determine
the quantity and grade of the deposit;
\u2022 examining and testing extraction methods and
metallurgical or treatment processes; and
\u2022 detailed economic feasibility evaluations to determine
whether development of the reserves is commercially
justified and to plan methods for mine development.
Exploration and evaluation expenditure is charged to the
consolidated statements of operations as incurred except in the
following circumstances, in which case the expenditure is
capitalized: (i) the exploration and evaluation activity is within an
area of interest which was previously acquired in a business
combination and measured at fair value on acquisition; or (ii)
when management has a high degree of confidence in the
project\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:
\u2022 sinking shafts and underground drifts (often called
mine development);
\u2022 making permanent excavations;
\u2022 developing passageways and rooms or galleries;
\u2022 building roads and tunnels; and
\u2022 advance removal of overburden and waste rock.
Development (or construction) also includes the installation of
infrastructure (e.g., roads, utilities and housing), machinery,
equipment and facilities.
When reserves are determined and development is approved,
expenditures capitalized as exploration and evaluation are
reclassified as construction in progress and are reported as a
component of property, plant and equipment. All subsequent
development expenditures are capitalized and classified as
construction in progress. On completion of development, all
assets included in construction in progress are individually
reclassified to the appropriate category of property, plant and
equipment and depreciated accordingly.
Biological assets
Biological assets are part of the Brazil operating segment and
consist of eucalyptus forests located in the Brazilian state of
Minas Gerais exclusively from renewable plantations and
intended for the production of charcoal to be utilized as fuel and
a source of carbon in the direct reduction process of pig iron
production in some of the Company\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.
Power purchase agreements
Power purchase agreements, which provide for the physical
delivery of renewable energy and which do not comply neither
with the requirements of IFRS 10 for the existence of control or
joint control over a company, IFRS 11 regarding the existence of
joint operation over an asset, IFRS 16 for the recognition of a
lease, nor with the definition of a derivative under IFRS 9 are
accounted for as an executory contract on the basis of the own
use exemption when the relevant conditions are met.
Property, plant and equipment and biological assets are summarized as follows:\u00a0
\u00a0
Land,
buildings\u00a0and
Improvements
Machinery,\u00a0
equipment
and other2
Construction
in progress
Right-of-use
assets
Mining
\u00a0Assets
Total
Cost
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At December 31, 2021
10,121
35,348
4,533
1,750
3,407
55,159
Additions
34
220
3,533
381
33
4,201
Acquisitions through business combinations (note
2.2.4)
193
742
70
37
\u2014
1,042
Foreign exchange differences
(811)
(3,344)
(109)
(124)
(87)
(4,475)
Disposals
(137)
(545)
(4)
\u2014
(18)
(704)
Other movements 1
76
1,712
(2,136)
(41)
105
(284)
At December 31, 2022
9,476
34,133
5,887
2,003
3,440
54,939
Additions
61
291
4,372
258
52
5,034
Acquisitions through business combinations (note
2.2.4)
789
1,057
23
30
\u2014
1,899
Foreign exchange differences
473
1,458
112
68
7
2,118
Disposals
(191)
(850)
(1)
\u2014
(7)
(1,049)
Divestments (note 2.3)
(40)
(2,074)
(550)
\u2014
(661)
(3,325)
Other movements 1
282
1,950
(2,500)
(87)
201
(154)
At December 31, 2023
10,850
35,965
7,343
2,272
3,032
59,462
Accumulated depreciation and impairment
At December 31, 2021
3,643
17,596
999
678
2,168
25,084
Depreciation charge for the year
283
1,893
\u2014
193
124
2,493
Impairment (note 5.3)
146
688
155
10
21
1,020
Disposals
(109)
(502)
(1)
\u2014
(18)
(630)
Foreign exchange differences
(496)
(2,403)
(9)
(59)
(68)
(3,035)
Other movements 1
(19)
(71)
(17)
(29)
(24)
(160)
At December 31, 2022
3,448
17,201
1,127
793
2,203
24,772
Depreciation charge for the year
315
1,875
\u2014
235
127
2,552
Impairment (note 5.3)
16
529
233
\u2014
66
844
Disposals
(187)
(808)
\u2014
\u2014
(7)
(1,002)
Foreign exchange differences
248
977
(2)
12
6
1,241
Divestments (note 2.3)
(26)
(1,521)
(235)
\u2014
(571)
(2,353)
Other movements 1
5
(101)
(40)
(112)
\u2014
(248)
At December 31, 2023
3,819
18,152
1,083
928
1,824
25,806
Carrying amount
At December 31, 2022
6,028
16,932
4,760
1,210
1,237
30,167
At December 31, 2023
7,031
17,813
6,260
1,344
1,208
33,656
1. Other movements predominantly represent transfers from construction in progress to other categories and retirement of fully depreciated assets.\u00a0
2. Machinery, equipment and other includes biological assets of\u00a064 and 47 as of December\u00a031, 2023 and 2022, respectively, and bearer plants of 51 and 37 as of
December\u00a031, 2023 and 2022, respectively.
Capital expenditures relating to decarbonization and renewable
energy projects
In 2023 and 2022, capital expenditures relating to
decarbonization projects amounted to 0.2 billion mainly with
respect to the ArcelorMittal Dofasco (Canada) DRI/EAF project.
The carrying amount of temporarily idle property, plant and
equipment at December\u00a031, 2023 and 2022 was 264 and 380
including 41 and 39 in Brazil, 6 and 6 in NAFTA, 112 and 89 in
the Europe segment and 105 and 246 in the ACIS segment,
respectively.\u00a0
The carrying amount of property, plant and equipment retired
from active use and not classified as held for sale was 22 and nil
at December\u00a031, 2023 and 2022 respectively. Such assets are
carried at their recoverable amount.
Assets pledged as security
See note 9.4 for information about assets pledged as security by
the Company.
Capital commitments
See note 9.4 for information about contractual commitments for
acquisition of property, plant and equipment by the Company.
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-663": { "value": "
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:
\u2022 researching and analyzing historical exploration data;
\u2022 conducting topographical, geological, geochemical and
geophysical studies;
\u2022 carrying out exploratory drilling, trenching and sampling
activities;
\u2022 drilling, trenching and sampling activities to determine
the quantity and grade of the deposit;
\u2022 examining and testing extraction methods and
metallurgical or treatment processes; and
\u2022 detailed economic feasibility evaluations to determine
whether development of the reserves is commercially
justified and to plan methods for mine development.
Exploration and evaluation expenditure is charged to the
consolidated statements of operations as incurred except in the
following circumstances, in which case the expenditure is
capitalized: (i) the exploration and evaluation activity is within an
area of interest which was previously acquired in a business
combination and measured at fair value on acquisition; or (ii)
when management has a high degree of confidence in the
project\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.", "dimensions": { "concept": "ifrs-full:DisclosureOfExplorationAndEvaluationAssetsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-662": { "value": "
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:
\u2022 researching and analyzing historical exploration data;
\u2022 conducting topographical, geological, geochemical and
geophysical studies;
\u2022 carrying out exploratory drilling, trenching and sampling
activities;
\u2022 drilling, trenching and sampling activities to determine
the quantity and grade of the deposit;
\u2022 examining and testing extraction methods and
metallurgical or treatment processes; and
\u2022 detailed economic feasibility evaluations to determine
whether development of the reserves is commercially
justified and to plan methods for mine development.
Exploration and evaluation expenditure is charged to the
consolidated statements of operations as incurred except in the
following circumstances, in which case the expenditure is
capitalized: (i) the exploration and evaluation activity is within an
area of interest which was previously acquired in a business
combination and measured at fair value on acquisition; or (ii)
when management has a high degree of confidence in the
project\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.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExplorationAndEvaluationExpenditures", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-664": { "value": "
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:
\u2022 sinking shafts and underground drifts (often called
mine development);
\u2022 making permanent excavations;
\u2022 developing passageways and rooms or galleries;
\u2022 building roads and tunnels; and
\u2022 advance removal of overburden and waste rock.
Development (or construction) also includes the installation of
infrastructure (e.g., roads, utilities and housing), machinery,
equipment and facilities.
When reserves are determined and development is approved,
expenditures capitalized as exploration and evaluation are
reclassified as construction in progress and are reported as a
component of property, plant and equipment. All subsequent
development expenditures are capitalized and classified as
construction in progress. On completion of development, all
assets included in construction in progress are individually
reclassified to the appropriate category of property, plant and
equipment and depreciated accordingly.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-665": { "value": "
Capital commitments
See note 9.4 for information about contractual commitments for
acquisition of property, plant and equipment by the Company.
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.
9.4\u00a0 \u00a0 Commitments
December 31,
2023
2022
Commitments related to purchases of raw
materials and energy
11,346
11,668
Guarantees, pledges and other collateral
8,888
8,470
Capital expenditure commitments
2,799
2,930
Other commitments
1,374
1,533
Total
24,407
24,601
Commitments related to purchases of raw materials and energy
Purchase commitments consist primarily of major agreements
for procuring iron ore, coking coal, coke and hot metal. The
Company also has a number of agreements for electricity,
industrial and natural gas, scrap and freight. In addition to those
purchase commitments disclosed above, the Company enters
into purchasing contracts as part of its normal operations which
have minimum volume requirements but for which there are no
take-or-pay or penalty clauses included in the contract. The
Company does not believe these contracts have an adverse
effect on its liquidity position.
Commitments related to purchases of raw materials and energy
included commitments given to associates for 1,487 and 1,661
as of December\u00a031, 2023 and 2022, respectively. Purchase
commitments given to associates included 704 and 691 as of
December\u00a031, 2023 and 2022, respectively, related to the gas
supply agreement with Kryvyi Rih Industrial Gas. Purchase
commitments included commitments given to joint ventures for
838 and 988 as of December\u00a031, 2023 and 2022, respectively.
Purchase commitments given to joint ventures included 334 and
424 related to Tameh and 413 and 442 related to Enerfos as of
December\u00a031, 2023 and 2022, respectively.
Guarantees, pledges and other collateral
Guarantees related to financial debt and credit lines given on
behalf of third parties were 155 and 181 as of December\u00a031,
2023 and 2022, respectively. Additionally, guarantees of 12 and
12 were given on behalf of associates and guarantees of 4,992
and 4,383 were given on behalf of joint ventures as of
December\u00a031, 2023 and 2022, respectively.
Guarantees given on behalf of joint ventures included 421 and
354 on behalf of Calvert, 208 and 178 on behalf of Al Jubail and
480 and 341 in relation to outstanding lease liabilities for vessels
operated by Global Chartering as of December\u00a031, 2023 and
2022, respectively. Guarantees given on behalf of joint ventures
also included 3,490 and 3,088 as of December 31, 2023 and
2022 corresponding to ArcelorMittal's 60% guarantee of the debt
under the term loan agreements entered into by the AMNS India
joint venture with various Japanese banks.
As of December\u00a031, 2023, 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 162 and ceded
bank accounts to secure environmental obligations, true sale of
receivables programs and the revolving borrowing base finance
facility in South Africa of 98. Pledges of property, plant and
equipment were 59 and 98 as of December\u00a031, 2023 and 2022,
respectively. Other sureties, first demand guarantees, letters of
credit, pledges and other collateral included 319 and 375 of
commitments given on behalf of associates as of December\u00a031,
2023 and 2022, respectively, and 313 and 598 of commitments
given on behalf of joint ventures as of December\u00a031, 2023 and
2022, 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 507 and 340 at
December 31, 2023 and 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,
2023 and 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 49 and 182 at the
iron ore Serra Azul mine (Brazil) at December 31, 2023 and
2022 in connection with the construction of facilities to produce
4.5 million tonnes per annum of DRI quality pellet feed.
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, 2023 and 2022,
ArcelorMittal Brasil estimated the underlying costs to implement
those investments at 78 and 115, respectively. The non-
compliance with ECA would lead to fines amounting to a
maximum of 21 and 19 as of December 31, 2023 and 2022,
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 2026. As of December
31, 2023 and 2022, commitments related to this project were
348 and 420, 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 131 and 368 as of December\u00a031, 2023 and 2022,
respectively, and mainly related to natural gas and electricity.
Other
On July 6, 2023, the Luxembourg Parliament approved the law
enabling the State of the Grand-Duchy of Luxembourg to
exercise the right (following an agreement signed between
ArcelorMittal, the Fonds d'Urbanisation et d'Am\u00e9nagement du
Plateau de Kirchberg and the State of the Grand-Duchy of
Luxembourg on December 20, 2022) 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
acquisition price is based on construction cost. The exercise
date of the right has been extended to February 29, 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-666": { "value": "5.3\u00a0 \u00a0 Impairment of intangible assets, including goodwill, and
tangible assets
Net i mpairment charges/(reversals) were as follows:
\u00a0
Year ended December 31,
Type of asset
2023
2022
2021
Goodwill
194
\u2014
\u2014
Intangible assets
\u2014
6
\u2014
Tangible assets
844
1,020
(218)
Total
1,038
1,026
(218)
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 2023
impairment test of goodwill did not include the GCGU
corresponding to the Mining segment as goodwill allocated to
this GCGU was fully impaired in 2015. The key assumptions for
the value in use calculations are primarily the discount rates,
growth rates, expected changes to average selling prices,
shipments and direct costs during the period. Assumptions for
average selling prices and shipments are based on historical
experience and expectations of future changes in the market. In
addition, with respect to raw material price assumptions, the
Company applied a range of $70 per tonne to $114 per tonne for
iron ore ($70 per tonne to $110 per tonne in 2022) and $185 per
tonne to $250 per tonne ($170 per tonne to $268 per tonne in
2022) 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 also additional opportunities as customers
deepen their understanding of embedded and lifecycle
emissions of the materials where steel compares favorably.
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 in the Company's future cash flow projections.
ArcelorMittal acknowledges that CGUs and GCGUs applying the
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 the future estimated decarbonization cost for such
operations is reflected through an additional risk premium
embedded in 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.
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. On
April 25, 2023, the EU adopted a revision of the ETS Directive
including a regulation establishing a carbon border adjustment
mechanism (\u201cCBAM\u201d) which entered into force on May 17, 2023.
The ETS and CBAM regulations will impact the carbon
emissions allowances from the second trading period of Phase
IV (2026-2030) onwards as they will be gradually phased out
(2.5% by 2026, 5% by 2027, 10% by 2028, 22.5% by 2029,\u00a0
48.5% by 2030, 61% by 2031, 73.5% by 2032, 86% by 2033
and 100% by 2034). 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 under the ETS
scheme 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. With respect to the EU ETS scheme, the
assumption for carbon emission cost includes also the gradual
phasing out of free emission allowances and the forecast market
price of emission rights, for which the Company considered in its
five-year cash flow projections internal estimates of 85\u20ac/t for
2024, 90\u20ac/t for 2025 and 100\u20ac/t for the period 2026-2028.
The assumptions used in the value in use calculations are
inherently uncertain and require management judgment as
described in note 1.3. 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. 2023 was impacted by a negative price-cost
effect predominantly on account of lower average steel selling
prices and lower steel shipments. The decline in steel spreads
resulted from the pace of the decline in steel prices being
greater than the reduction in the raw material basket and energy
costs. At the end of the year, apparent demand conditions
showed however signs of improvement as the destocking phase
reached maturity.
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 2023 and 2022:
\u00a0
NAFTA
Brazil
Europe
ACIS
GCGU weighted average pre-tax discount rate used in 2023 (in %)
13.0
17.2
11.5
20.8
GCGU weighted average pre-tax discount rate used in 2022 (in %)
13.3
18.7
10.6
18.4
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, 2023 and October 1, 2022. In 2023, in connection
with the sale of ArcelorMittal Temirtau, the Company recognized
a 194 impairment loss relating to a portion of ACIS segment
goodwill allocated to the disposal group in proportion of the total
sale consideration to the recoverable amount of the remaining
ACIS operations. The total value in use calculated for all
GCGUs decreased overall in 2023 as compared to 2022
primarily as a result of higher discount rates in Europe and ACIS
and lower cash flow projections for certain GCGUs.
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,
2023, the Company believes that reasonably possible changes
in key assumptions could cause an additional impairment loss to
be recognized in respect of the ACIS segment.
ACIS produces a combination of flat and long products.
Following the sale of the Company's operations in Kazakhstan,
ACIS operations include facilities in South Africa and Ukraine.
ACIS is significantly sufficient in iron ore. 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 since
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 AMKR and such conditions are expected to
continue throughout 2024. The ACIS value in use model
anticipates an increase in sales volumes in 2024 (5.0\u00a0million
tonnes) as compared to 2023 (3.4\u00a0million tonnes excluding
shipments from the Company's operations in Kazakhstan) with
higher 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.
ACIS
Excess of recoverable amount over carrying amount
149
Increase in pre-tax discount rate (change in basis points)
97
Decrease in average selling price (change in %)
1.3%
Decrease in shipments (change in %)
4.3%
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, 2023 and December 31, 2022, the Company
determined it has 46 cash-generating units.
An impairment loss, related to intangible assets other than
goodwill and tangible assets recognized in prior years is
reversed if, and only if, there has been a change in the
estimates used to determine the asset\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.
Impairment charges and reversals relating to property, plant and
equipment and intangibles (excluding goodwill) were as follows
for the years ended December\u00a031, 2023, 2022 and 2021:
2023
In 2023, ArcelorMittal recognized a 732 impairment charge
related to property, plant and equipment with respect to the sale
on December 7, 2023 of its Kazakhstan operations in the ACIS
segment to Qazaqstan Investment Corporation, a state-
controlled direct investment fund. The impairment loss resulted
from the adjustment of the carrying amount of the disposal
group to the net sales proceeds of 278 (see note 2.3).
On November 28, 2023, AMSA announced that it contemplates
the wind down of its Longs Business subject to a due diligence
and a consultative process involving key customers, suppliers,
organized labour, and other stakeholders. Since making the
announcement, AMSA has been engaging with various
stakeholders, including Government. These stakeholders have
expressed widespread concern regarding the negative
economic impact of the closure. AMSA was requested to
consider what support was needed to change the closure
decision. Discussions are currently still ongoing. The Company
assessed the recoverable amount of its Longs Business in
South Africa based on a value in use calculation and recognized
accordingly a 112 impairment charge of property, plant and
equipment.
Cash Generating Unit
Region
Operating
Segment
Recoverable
Amount (Value
in Use)
Total
Impairment
Recorded
2023 Pre-Tax
Discount Rate
2022 Pre-Tax
Discount Rate
Carrying Amount of
property, plant and
equipment as of
December 31, 2023
Long Products South Africa
South Africa
ACIS
264
112
17.3%
17.5%
86
2022
In 2022, the Company recognized a 1,026 impairment charge
related to property, plant and equipment (1,020) and intangibles
(6) with respect to AMKR (Ukraine) in the ACIS segment as a
result of the ongoing conflict in Russia, which resulted in low
level of production, sales and net income and created significant
uncertainty about the timing and ability of operations to return to
a normal level of activity. Adverse geopolitical conditions, which
resulted in a substantial increase in the discount rate applied by
the Company in its recoverable amount (value in use)
calculation, deteriorated further during the fourth quarter of 2022
following attacks against Ukrainian power infrastructures
causing additional operational issues for AMKR and the
concerns about an intensification of the conflict in connection
with the announcements of delivery of heavy military equipment
by western countries. The Company applied separate discount
rates over the discrete projections period, including a higher
country risk premium for 2023 cash flow projections and a return
to pre-war country risk premium in the course of 2024 and for
the terminal value calculation as value in use is sensitive to a
difference in country risk for different periods.
Cash-Generating Unit
Region
Operating
Segment
Recoverable
Amount
(Value in Use)
Total
Impairment
Recorded
2022 Pre-Tax Discount Rates
2021 Pre-Tax
Discount Rate
Carrying amount of
property, plant and
equipment as of
December 31, 2022
Applied to
2023
projections
Applied to
subsequent
projections
AMKR
Ukraine
ACIS
1,003
1,026
47.1%
20.0%
16.9%
655
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.
Cash-Generating Unit
Region
Operating
Segment
Impairment
Reversed
2021 Pre-Tax
Discount Rate
2020 Pre-Tax
Discount Rate
Carrying amount of property,
plant and equipment as of
December 31, 2021
Europe flat products
Europe
Europe
218
8.5%
8.5%
11,005
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-667": { "value": "
NOTE 6: FINANCING AND FINANCIAL INSTRUMENTS
6.1\u00a0 \u00a0 Financial assets and liabilities
Financial assets and liabilities mainly comprise:
\u2022 gross debt (see note 6.1.2)
\u2022 cash and cash equivalents, restricted cash and reconciliations of cash flows (see note 6.1.3)
\u2022 net debt (see note 6.1.4)
\u2022 derivative financial instruments (see note 6.1.5)
\u2022 other non-derivative financial assets and liabilities (see note 6.1.6)6.1.1 Fair values versus carrying amounts
The estimated fair values of certain financial instruments have
been determined using available market information or other
valuation methodologies that require judgment in interpreting
market data and developing estimates. The following table
summarizes assets and liabilities based on their categories at
December\u00a031, 2023:
\u00a0
December 31, 2023
\u00a0
Carrying
amount in
the
consolidated
statements
of financial
position
Non-
financial
assets and
liabilities
Assets /
Liabilities at
amortized
cost
Fair value
recognized
in profit or
loss
Fair value
recognized
in OCI
Derivatives
ASSETS
Current assets:
Cash and cash equivalents
7,686
\u2014
7,686
\u2014
\u2014
\u2014
Restricted cash
97
\u2014
97
\u2014
\u2014
\u2014
Trade accounts receivable and other
3,661
\u2014
3,491
\u2014
170
\u2014
Inventories
18,759
18,759
\u2014
\u2014
\u2014
\u2014
Prepaid expenses and other current assets
3,037
1,304
1,090
\u2014
\u2014
643
Total current assets
33,240
20,063
12,364
\u2014
170
643
Non-current assets:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Goodwill and intangible assets
5,102
5,102
\u2014
\u2014
\u2014
\u2014
Property, plant and equipment and biological assets
33,656
33,592
\u2014
64
\u2014
\u2014
Investments in associates and joint ventures
10,078
10,078
\u2014
\u2014
\u2014
\u2014
Other investments
513
\u2014
\u2014
\u2014
513
\u2014
Deferred tax assets
9,469
9,469
\u2014
\u2014
\u2014
\u2014
Other assets
1,859
465
1,095
136
\u2014
163
Total non-current assets
60,677
58,706
1,095
200
513
163
Total assets
93,917
78,769
13,459
200
683
806
LIABILITIES AND EQUITY
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Short-term debt and current portion of long-term debt
2,312
\u2014
2,312
\u2014
\u2014
\u2014
Trade accounts payable and other
13,605
\u2014
13,605
\u2014
\u2014
\u2014
Short-term provisions
588
561
27
\u2014
\u2014
\u2014
Accrued expenses and other liabilities
4,967
892
3,715
\u2014
\u2014
360
Income tax liabilities
297
297
\u2014
\u2014
\u2014
\u2014
Total current liabilities
21,769
1,750
19,659
\u2014
\u2014
360
Non-current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Long-term debt, net of current portion
8,369
\u2014
8,369
\u2014
\u2014
\u2014
Deferred tax liabilities
2,432
2,432
\u2014
\u2014
\u2014
\u2014
Deferred employee benefits
2,741
2,741
\u2014
\u2014
\u2014
\u2014
Long-term provisions
1,477
1,477
\u2014
\u2014
\u2014
\u2014
Other long-term obligations
1,061
439
546
\u2014
\u2014
76
Total non-current liabilities
16,080
7,089
8,915
\u2014
\u2014
76
Equity:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Equity attributable to the equity holders of the parent
53,961
53,961
\u2014
\u2014
\u2014
\u2014
Non-controlling interests
2,107
2,107
\u2014
\u2014
\u2014
\u2014
Total equity
56,068
56,068
\u2014
\u2014
\u2014
\u2014
Total liabilities and equity
93,917
64,907
28,574
\u2014
\u2014
436
\u00a0
December 31, 2022
\u00a0
Carrying amount
in the
consolidated
statements of
financial position
Non-financial
assets and
liabilities
Assets /
Liabilities at
amortized
cost
Fair value
recognized in
profit or loss
Fair value
recognized
in OCI
Derivatives
ASSETS
Current assets:
Cash and cash equivalents
9,300
\u2014
9,300
\u2014
\u2014
\u2014
Restricted cash
114
\u2014
114
\u2014
\u2014
\u2014
Trade accounts receivable and other
3,839
\u2014
3,633
\u2014
206
\u2014
Inventories
20,087
20,087
\u2014
\u2014
\u2014
\u2014
Prepaid expenses and other current assets
3,778
1,566
1,475
\u2014
\u2014
737
Total current assets
37,118
21,653
14,522
\u2014
206
737
Non-current assets:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Goodwill and intangible assets
4,903
4,903
\u2014
\u2014
\u2014
\u2014
Property, plant and equipment and biological assets
30,167
30,120
\u2014
47
\u2014
\u2014
Investments in associates and joint ventures
10,765
10,765
\u2014
\u2014
\u2014
\u2014
Other investments
1,119
\u2014
\u2014
\u2014
1,119
\u2014
Deferred tax assets
8,554
8,554
\u2014
\u2014
\u2014
\u2014
Other assets
1,921
259
691
136
\u2014
835
Total non-current assets
57,429
54,601
691
183
1,119
835
Total assets
94,547
76,254
15,213
183
1,325
1,572
LIABILITIES AND EQUITY
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Short-term debt and current portion of long-term debt
2,583
\u2014
2,583
\u2014
\u2014
\u2014
Trade accounts payable and other
13,532
\u2014
13,532
\u2014
\u2014
\u2014
Short-term provisions
1,101
1,078
23
\u2014
\u2014
\u2014
Accrued expenses and other liabilities
4,864
822
3,663
\u2014
\u2014
379
Income tax liabilities
318
318
\u2014
\u2014
\u2014
\u2014
Total current liabilities
22,398
2,218
19,801
\u2014
\u2014
379
Non-current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Long-term debt, net of current portion
9,067
\u2014
9,067
\u2014
\u2014
\u2014
Deferred tax liabilities
2,666
2,666
\u2014
\u2014
\u2014
\u2014
Deferred employee benefits
2,606
2,606
\u2014
\u2014
\u2014
\u2014
Long-term provisions
1,306
1,304
2
\u2014
\u2014
\u2014
Other long-term obligations
914
305
564
\u2014
\u2014
45
Total non-current liabilities
16,559
6,881
9,633
\u2014
\u2014
45
Equity:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Equity attributable to the equity holders of the parent
53,152
53,152
\u2014
\u2014
\u2014
\u2014
Non-controlling interests
2,438
2,438
\u2014
\u2014
\u2014
\u2014
Total equity
55,590
55,590
\u2014
\u2014
\u2014
\u2014
Total liabilities and equity
94,547
64,689
29,434
\u2014
\u2014
424
The Company classifies the bases used to measure certain
assets and liabilities at their fair value. Assets and liabilities
carried or measured at fair value have been classified into three
levels based upon a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
The levels are as follows:
Level 1: Quoted prices in active markets for identical assets or
liabilities that the entity can access at the measurement date;
Level 2: Significant inputs other than within Level 1 that are
observable for the asset or liability, either directly (i.e.: as prices)
or indirectly (i.e.: derived from prices);
Level 3: Inputs for the assets or liabilities that are not based on
observable market data and require management assumptions
or inputs from unobservable markets.
The following tables summarize the bases used to measure
certain financial assets and financial liabilities at their fair value
on recurring basis.
As of December 31, 2023
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Level\u00a01
Level\u00a02
Level\u00a03
Total
Assets at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Investments in equity instruments at FVOCI
315
\u2014
198
513
Trade accounts receivable and other subject to TSR programs*
\u2014
\u2014
170
170
Derivative financial current assets
\u2014
643
\u2014
643
Derivative financial non-current assets
\u2014
163
\u2014
163
Total assets at fair value
315
806
368
1,489
Liabilities at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Derivative financial current liabilities
\u2014
332
28
360
Derivative financial non-current liabilities
\u2014
22
54
76
Total liabilities at fair value
\u2014
354
82
436
*The fair value of TSR program receivables equals carrying amount due to the short time frame between the initial recognition and time of sale.
As of December 31, 2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Level\u00a01
Level\u00a02
Level\u00a03
Total
Assets at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Investments in equity instruments at FVOCI
996
\u2014
123
1,119
Trade accounts receivable and other subject to TSR programs*
\u2014
\u2014
206
206
Derivative financial current assets
\u2014
737
\u2014
737
Derivative financial non-current assets
\u2014
835
\u2014
835
Total assets at fair value
996
1,572
329
2,897
Liabilities at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Derivative financial current liabilities
\u2014
379
\u2014
379
Derivative financial\u00a0non-current liabilities
\u2014
45
\u2014
45
Total liabilities at fair value
\u2014
424
\u2014
424
*The fair value of TSR program receivables equals carrying amount due to the short time frame between the initial recognition and time of sale.
Investments in equity instruments at FVOCI classified as Level 1
refer to listed securities quoted in active markets and include
mainly the investment in Erdemir (see note 2.5).\u00a0 A quoted
market price in an active market provides the most reliable
evidence of fair value and is used without adjustment to
measure fair value whenever available, with limited exceptions.
The total fair value is either the price of the most recent trade at
the time of the market close or the official close price as defined
by the exchange on which the asset is most actively traded on
the last trading day of the period, multiplied by the number of
units held without consideration of transaction costs.
Derivative financial assets and liabilities classified as Level 2
refer to instruments to hedge fluctuations in interest rates,
foreign exchange rates, raw materials (base metals), freight,
energy and emission rights, see note 6.1.5 for further
information.\u00a0
Derivative financial assets and liabilities classified as Level 3 are
described in note 6.1.5.
6.1.2 Gross debt
Gross debt includes bank debt, debenture loans and lease
obligations and is stated at amortized cost.
6.1.2.1 Short-term debt
Short-term debt, including the current portion of long-term debt,
consisted of the following:
December 31,
2023
2022
Short-term bank loans and other
credit facilities including
commercial paper 1
980
1,017
Current portion of long-term debt
1,125
1,338
Lease obligations2
207
228
Total
2,312
2,583
1. The weighted average interest rate on short-term borrowings outstanding was
5.5% and 4.0% as of December\u00a031, 2023 and 2022, respectively.
2. See note 7.
Short-term bank loans and other credit facilities include short-
term loans, overdrafts and commercial paper.
ArcelorMittal has entered into certain short-term committed
bilateral credit facilities renewable on an annual basis. As of
December\u00a031, 2023 , facilities totaling approximately 0.6 billion,
remained fully available.
On July 27, 2022, the Company entered into a 2.2 billion bridge
term facility agreement with a financial institution. The facility
may be applied towards the purchase price for the intended
acquisition of ArcelorMittal Pec\u00e9m, as well as the refinancing of
its existing indebtedness and the payment of related fees, costs
and expenses. The facility was available for 12 months from
signing with two extension options of 6 months each at the
borrower's 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, 2023 and
2022, the outstanding amount was 684 and 796, respectively.
6.1.2.2 Long-term debt
Long-term debt is comprised of the following:
December 31,
2023
2022
Year of maturity
Type of Interest
Interest rate1
Carrying amount at
amortized cost
Corporate
5.4 billion Revolving Credit Facility
2023 - 2025
Floating
\u2014
\u2014
\u20ac500 million Unsecured Notes
2023
Fixed
0.95%
\u2014
391
\u20ac750 million Unsecured Notes
2023
Fixed
1.00%
\u2014
799
\u20ac1.0 billion Unsecured Notes
2024
Fixed
2.25%
585
567
750 Unsecured Notes
2024
Fixed
3.60%
290
289
500 Unsecured Notes
2025
Fixed
6.13%
183
183
\u20ac750 million Unsecured Notes
2025
Fixed
1.75%
826
796
750 Unsecured Notes
2026
Fixed
4.55%
400
399
\u20ac600 million Unsecured Notes
2026
Fixed
4.88%
659
635
1.2 billion Unsecured Notes
2027
Fixed
6.55%
1,195
1,193
500 Unsecured Notes
2029
Fixed
4.25%
496
495
1.0 billion Unsecured Notes
2032
Fixed
6.80%
989
988
1.5 billion Unsecured Bonds
2039
Fixed
7.00%
672
672
1.0 billion Unsecured Notes
2041
Fixed
6.75%
428
428
EIB loan
2025
Fixed
1.16%
81
140
EIB loan
2032
Floating
5.22%
309
299
Schuldschein loans
2025 - 2027
Fixed
2.5% - 3.0%
100
96
Schuldschein loans
2025 - 2027
Floating
5.1% - 5.4%
699
674
Other loans
2023
Fixed
1.8 %
\u2014
18
Other loans
2029 - 2035
Floating
0.7% - 4.2%
223
243
Total Corporate
8,135
9,305
Americas
Other loans
2024 - 2030
Fixed/Floating
0.0% - 9.5%
45
57
Total Americas
45
57
Europe, Asia & Africa
EBRD Facility
2024 - 2026
Floating
7.2% - 7.9%
177
86
Other loans
2023 - 2043
Fixed/Floating
0.0% - 8.0%
198
129
Total Europe, Asia & Africa
375
215
Total
8,555
9,577
Less current portion of long-term debt
(1,125)
(1,338)
Total long-term debt (excluding lease obligations)
7,430
8,239
Long-term lease obligations2
939
828
Total long-term debt, net of current portion
8,369
9,067
1. Rates applicable to balances outstanding at December\u00a031, 2023. For debt that has been redeemed in its entirety during 2023, the interest rates refer to the rates at
repayment date.
2. Net of current portion of 207 and 228 as of December 31, 2023 and 2022, respectively. See note 7.
Corporate
5.5\u00a0billion 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. On December 19, 2023 extension was
completed for 5.4 billion of the 5.5\u00a0billion revolving credit facility,
with 0.1\u00a0billion lapsed at maturity. The Facility contains
restrictive covenants, which among other things, 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. ArcelorMittal's long-
term credit rating was upgraded on August 9, 2021 by Moody's
to 'Baa3' and its outlook was changed to positive by Moody's on
February 19, 2024. On June 16, 2023, Standard & Poor's
upgraded ArcelorMittal's outlook to positive and affirmed a long-
term credit rating of 'BBB-'. 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, 2023, the 5.4 billion
revolving credit facility was fully available. The Company make
drawdowns from and repayments on the 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 17, 2023, at maturity, ArcelorMittal fully repaid the
outstanding \u20ac367 million (395) of its \u20ac500 million Fixed Rate
Notes due 2023.
On May 19, 2023, at maturity, ArcelorMittal fully repaid
\u20ac750\u00a0million (812) Fixed Rate Notes due 2023.
On January 17, 2024, at maturity, ArcelorMittal fully repaid the
outstanding \u20ac529 million (585) of its \u20ac1.0 billion Fixed Rate
Notes due 2024.
The margin applicable to ArcelorMittal\u2019s principal credit facilities
(5.4 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:
Initial value
Nominal amount of
outstanding value
Date of issuance
Repayment date
Interest rate1
Issued at
\u20ac250 million Unsecured Notes
\u20ac132 million
Jul 4, 2019
Jan 17, 2024
2.25%
105.59%
\u20ac750 million Unsecured Notes
\u20ac397 million
Jan 17, 2019
Jan 17, 2024
2.25%
99.72%
750 Unsecured Notes
290
Jul 16, 2019
Jul 16, 2024
3.60%
99.86%
500 Unsecured Notes
184
Jun 1, 2015
Jun 1, 2025
6.13%
100.00%
\u20ac750 million Unsecured Notes
\u20ac750 million
Nov 19, 2019
Nov 19, 2025
1.75%
99.41%
750 Unsecured Notes
401
Mar 11, 2019
Mar 11, 2026
4.55%
99.72%
\u20ac600 million Unsecured Notes
\u20ac600 million
Sep 26, 2022
Sep 28, 2026
4.88%
99.65%
1.2 billion Unsecured Bonds
1.2 Billion
Nov 29, 2022
Nov 29, 2027
6.55%
99.91%
500 Unsecured Notes
500
Jul 16, 2019
Jul 16, 2029
4.25%
99.00%
1.0 billion Unsecured Bonds
1.0 Billion
Nov 29, 2022
Nov 29, 2032
6.80%
99.37%
1.0 billion Unsecured Bonds
457
Oct 8, 2009
Oct 15, 2039
7.00%
95.20%
500 Unsecured Bonds
229
Aug 5, 2010
Oct 15, 2039
7.00%
104.84%
1.0 billion Unsecured Notes
434
Mar 7, 2011
Mar 1, 2041
6.75%
99.18%
1. Rates applicable at December 31, 2023.
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, 2023, \u20ac280
million (309) 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, 2023, \u20ac73\u00a0million (81) 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, 2023,
\u20ac723\u00a0million (799) 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 December 28, 2029.
The outstanding amount in total as of December 31, 2023 was
\u20ac122 million (134).
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. As of December 31, 2023, the loan was
fully repaid.
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, AMKR 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, 2023, 18 was
outstanding under the agreement.
On December 15, 2022, AMKR entered into a 100 loan
agreement with EBRD for working capital purposes. As of
December 31, 2023, 100 was drawn under the agreement.
On November 17, 2023, AMKR entered into a 150 loan
agreement with EBRD for working capital purposes. 59 were
committed and fully drawn as of December 31, 2023. 91 will be
committed by EBRD in 2024 upon AMKR's request.
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 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. On August 30, 2023, the facility
was further amended and restated for an amount of 4.5\u00a0billion
South African rand and with a maturity of September 7, 2026.
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, 2023, 3.0
billion South African rand (162) was drawn.\u00a0
Other loans\u00a0
Other loans mainly relate to loans contracted by ArcelorMittal
subsidiaries with different counterparties.
Hedge of net investments
As of April\u00a01, 2018, the Company designated a portfolio of euro
denominated debt (\u20ac3,627 million and \u20ac4,862 million as of
December\u00a031, 2023 and 2022, respectively) as a hedge of
certain euro denominated investments (\u20ac8,635 million and
\u20ac8,837 million as of December\u00a031, 2023 and 2022, 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, 2023 and 2022, the Company recognized
166 foreign exchange loss and 197 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, 2023 the scheduled maturities of short-term
debt, long-term debt and long-term lease obligations, including
their current portion are as follows:
Year of maturity
Amount
2024
2,312
2025
1,720
2026
1,335
2027
1,749
2028
154
Subsequent years
3,411
Total
10,681
Fair value
The following tables summarize the Company\u2019s bases used to
estimate its debt at fair value. Fair value measurement has been
classified into three levels based upon a fair value hierarchy that
reflects the significance of the inputs used in making the
measurements.
As of December 31, 2023
Carrying amount
Fair Value
Level 1
Level 2
Level 3
Total
Instruments payable bearing interest at fixed rates
8,165
6,969
1,273
\u2014
8,242
Instruments payable bearing interest at variable rates
1,536
\u2014
1,539
\u2014
1,539
Total long-term debt, including current portion
9,701
6,969
2,812
\u2014
9,781
Short term bank loans and other credit facilities including
commercial paper
980
\u2014
988
\u2014
988
As of December 31, 2022
Carrying amount
Fair Value
Level 1
Level 2
Level 3
Total
Instruments payable bearing interest at fixed rates
9,214
7,783
1,180
\u2014
8,963
Instruments payable bearing interest at variable rates
1,419
\u2014
1,350
\u2014
1,350
Total long-term debt, including current portion
10,633
7,783
2,530
\u2014
10,313
Short term bank loans and other credit facilities including
commercial paper
1,017
\u2014
1,017
\u2014
1,017
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:
December 31,
2023
2022
Cash at bank
5,405
4,489
Term deposits
774
828
Money market funds1
1,507
3,983
Total
7,686
9,300
1 Money market funds are highly liquid investments with a maturity of 3 months
or less from the date of acquisition.
Restricted cash represents cash and cash equivalents not
readily available to the Company, mainly related to insurance
deposits, cash accounts in connection with environmental
obligations and true sale of receivables programs, as well as
various other deposits or required balance obligations related to
letters of credit and credit arrangements.
Restricted cash of 97 as of December\u00a031, 2023 and 114 as of
December 31, 2022 included 54 and 52 relating to various
environmental obligations, true sales of receivables programs
and letters of credit issued in ArcelorMittal South Africa. It also
included 13 and 20 in connection with the mandatory convertible
bonds as of December\u00a031, 2023 and December\u00a031, 2022,
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, 2021 (note 6.1.2)
6,488
1,913
Proceeds from long-term debt
3,893
\u2014
Payments of long-term debt
\u2014
\u2014
Amortized cost
2
2
Proceeds from short-term debt
\u2014
434
Payments of short-term debt
\u2014
(1,044)
Current portion of long-term debt
(1,566)
1,566
Payments of principal portion of lease liabilities (note 7) 1
(10)
(175)
Additions to lease liabilities (notes 5.2 and 7)
318
100
Unrealized foreign exchange effects and other movements
(58)
(213)
Balance as of December 31, 2022 (note 6.1.2)
9,067
2,583
Proceeds from long-term debt
134
\u2014
Payments of long-term debt
(16)
\u2014
Amortized cost
8
(3)
Proceeds from short-term debt
\u2014
218
Payments of short-term debt
\u2014
(1,670)
Current portion of long-term debt
(1,332)
1,332
Payments of principal portion of lease liabilities (note 7) 1
(8)
(245)
Additions to lease liabilities (notes 5.2 and 7)
250
38
Unrealized foreign exchange effects and other movements
266
59
Balance as of December 31, 2023 (note 6.1.2)
8,369
2,312
1. Cash payments decreasing the outstanding liability relating to leases are classified under payments of principal portion of lease liabilities and other financing activities in
the Company's consolidated statements of cash flows.
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, 2023 and December\u00a031, 2022:
As of December 31, 2023
Total
EUR
USD
ARS
BRL
INR
Other
Short-term debt and current portion of long-term debt
2,312
1,414
533
\u2014
31
68
266
Long-term debt, net of current portion
8,369
3,312
4,560
\u2014
86
1
410
Cash and cash equivalents and restricted cash
(7,783)
(5,660)
(886)
(461)
(171)
(62)
(543)
Net debt
2,898
(934)
4,207
(461)
(54)
7
133
As of December 31, 2022
Total
EUR
USD
ARS
BRL
INR
Other
Short-term debt and current portion of long-term debt
2,583
2,059
227
\u2014
28
2
267
Long-term debt, net of current portion
9,067
3,777
4,868
\u2014
74
\u2014
348
Cash and cash equivalents, restricted cash and other
restricted funds
(9,414)
(6,514)
(1,494)
(364)
(275)
(85)
(682)
Net debt
2,236
(678)
3,601
(364)
(173)
(83)
(67)
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 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
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:
December 31, 2023
Assets
Liabilities
Notional
Amount
Fair Value
Notional
Amount
Fair Value
Interest rate instruments
Other interest rate instruments
221
\u2014
453
\u2014
Total interest rate instruments
\u2014
\u2014
Foreign exchange rate instruments
Forward purchase contracts
1,198
60
4,114
(82)
Forward sale contracts
2,510
53
825
(11)
Exchange option purchases
619
34
760
(3)
Exchange options sales
920
19
608
(46)
Total foreign exchange rate instruments
166
(142)
Raw materials (base metals), freight, energy, emission rights
Term contracts sales
1,350
373
486
(46)
Term contracts purchases
1,538
267
1,235
(166)
Options sales/purchases
18
\u2014
\u2014
\u2014
Total raw materials (base metals), freight, energy, emission rights
640
(212)
Total
806
(354)
December 31, 2022
Assets
Liabilities
Notional
Amount
Fair Value
Notional
Amount
Fair Value
Foreign exchange rate instruments
Forward purchase contracts
657
58
3,678
(19)
Forward sale contracts
1,478
38
753
(6)
Exchange option purchases
1,462
17
2,536
(16)
Exchange options sales
2,222
41
2,055
(20)
Total foreign exchange rate instruments
154
(61)
Raw materials (base metals), freight, energy, emission rights
Term contracts sales
1,128
263
316
(52)
Term contracts purchases
1,755
1,150
785
(306)
Option sales/purchases
207
5
197
(5)
Total raw materials (base metals), freight, energy, emission rights
1,418
(363)
Total
1,572
(424)
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:
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.
Call option on MCB
ArcelorMittal establishes the fair valuation of the call option on
the 660 mandatory convertible bonds (on March 14, 2023, the
Company through its wholly-owned subsidiary Hera Ermac early
repaid 226,666 out of the 666,666 outstanding unsecured and
unsubordinated bonds mandatorily convertible into preferred
shares of such subsidiary (see note 11.2) through the use of
binomial valuation models based on the estimated values of the
underlying equity spot price of $102 ($127 at December 31,
2022) and volatility of 10% (13% at December 31, 2022).
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 SOFR Term curve 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 2023 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 1027% and 96% increase
and decrease of the fair value of the call option at December 31,
2023, respectively.
Electricity option
ArcelorMittal and an electricity supplier entered into a multi-
buyer power supply contract on French market. Other clients of
this contract are committed to purchase electricity from the
supplier with opt-out rights to be exercised in 2024 for
2025-2029 delivery period and in 2029 for 2030-2034 delivery
period. The Company is committed to acquire up to 51% of the
opt-out volumes.
The fair value of the option is based on the Black-Scholes
formula model. Observable input data used in the valuation
include euro zero coupon yield curve and electricity forward
prices for tenors quoted by the European Energy Exchange
(EEX). Unobservable input data is used to measure fair value to
the extent relevant observable inputs are not available. For
instance, electricity forward prices are extrapolated for tenors
not quoted by EEX and volatility is computed based on historical
settlement prices over the last 3 years. A 10% increase and
decrease in electricity forward prices would result in a 19%
decrease and 26% increase, respectively, of the fair value of the
option at December 31, 2023.
The following table summarizes the reconciliation of the fair
value of the financial instrument classified as Level 3:
\u00a0
Electricity option
Call option on 660
mandatory
convertible bonds
Balance as of December 31, 2021
\u2014
15
Change in fair value
\u2014
(15)
Balance as of December 31, 2022
\u2014
\u2014
Change in fair value
(82)
\u2014
Balance as of December 31, 2023
(82)
\u2014
The fair value movement relating to the Level 3 derivative
instrument is recognized in financing costs-net in the
consolidated statements of operations .
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 reclassified 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, 2023 , 2022 and 2021 are as follows:
Year ended December 31,
2023
2022
2021
Interest expense
(715)
(401)
(357)
Interest income
570
188
79
Change in fair value
adjustment on call option on
mandatory convertible bonds
\u2014
(15)
(44)
Accretion of defined benefit
obligations and other long term
liabilities
(243)
(51)
(164)
Net foreign exchange gain/
(loss)
(48)
191
(155)
Other1
(423)
(246)
(514)
Total
(859)
(334)
(1,155)
1. Other mainly included expenses related to true sale of receivables (\u201cTSR\u201d)
programs and bank fees. In 2023, others included 66 relating to the term
extension of mandatorily convertible bonds (see note 11.2). In 2021, other also
included 163 charges related to an unfavorable court decision in an arbitration
case against Sitrel (see note 9.3), 130 premiums and fees related to the early
redemption of bonds in 2021, and 61 charges related to early redemption of
MCNs (see note 11.2).
6.3\u00a0 \u00a0 Risk management policy
The Company's operations expose it to a variety of financial
risks: interest rate risk, foreign exchange risk, liquidity risk and
risks in fluctuations in prices of raw materials, freight, energy
and 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.
December 31,
2023
2022
Total equity
56,068
55,590
Net debt
2,898
2,236
Gearing
5.2%
4.0%
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, 2023, the long-term debt was comprised of
84% fixed rate debt and 16% 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, 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, 2023, the Company is mainly subject to
foreign exchange exposure relating to the euro, Brazilian real,
Canadian dollar, 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, 2023:
December 31, 2023
Trade
receivables
Trade payables
USD
776
\u00a0
4,989
EUR
928
5,531
BRL
1,111
\u00a0
823
CAD
49
512
GBP
27
\u00a0
104
ZAR
139
382
MXN
39
\u00a0
53
UAH
63
164
PLN
211
697
ARS
51
\u00a0
62
Other
267
288
Total
3,661
\u00a0
13,605
The sensitivity analysis carried out by the Company considers
the effects on its trade receivables and trade payables of a 10%
increase or decrease between the relevant foreign currencies
and the U.S. dollar.
10% increase
10% decrease
Trade
receivables
Trade
payables
Trade
receivables
Trade
payables
EUR
93
\u00a0
553
(93)
\u00a0
(553)
BRL
111
82
(111)
(82)
CAD
5
\u00a0
51
(5)
\u00a0
(51)
GBP
3
10
(3)
(10)
ZAR
14
\u00a0
38
(14)
\u00a0
(38)
MXN
4
5
(4)
(5)
UAH
6
\u00a0
16
(6)
\u00a0
(16)
PLN
21
\u00a0
70
(21)
\u00a0
(70)
ARS
5
\u00a0
6
(5)
\u00a0
(6)
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, 2023, and as such are sensitive to
movements in mainly foreign exchange rates and interest rates.
The cash flows are non-discounted, except for derivative
financial liabilities where the cash flows equal their fair values.
December 31, 2023
Carrying
amount
Contractual
Cash Flow
2024
2025
from 2026 to
2028
After 2028
Non-derivative financial liabilities
Bonds
(6,812)
(9,393)
(1,223)
(1,329)
(2,963)
(3,878)
Loans over 100
(1,345)
(1,942)
(237)
(457)
(462)
(786)
Trade and other payables
(13,605)
(13,605)
(13,605)
\u2014
\u2014
\u2014
Other loans and leases
(2,525)
(2,931)
(1,333)
(339)
(665)
(594)
Total
(24,287)
(27,871)
(16,398)
(2,125)
(4,090)
(5,258)
Derivative financial liabilities
Foreign exchange contracts
(142)
(142)
(139)
(1)
(2)
\u2014
Commodity contracts1
(294)
(294)
(221)
(19)
\u2014
(54)
Total
(436)
(436)
(360)
(20)
(2)
(54)
1. Commodity contracts include base metals, freight, energy and emission rights.
December 31, 2022
Carrying
amount
Contractual
Cash Flow
2023
2024
from 2025
to 2027
After 2027
Non-derivative financial liabilities
Bonds
(7,926)
(10,341)
(1,547)
(1,171)
(3,969)
(3,654)
Loans over 100
(1,234)
(1,364)
(244)
(114)
(827)
(179)
Trade and other payables
(13,532)
(13,554)
(13,554)
\u2014
\u2014
\u2014
Other loans and leases
(2,490)
(3,175)
(1,247)
(314)
(589)
(1,025)
Total
(25,182)
(28,434)
(16,592)
(1,599)
(5,385)
(4,858)
Derivative financial liabilities
Foreign exchange contracts
(61)
(61)
(57)
\u2014
(4)
\u2014
Commodity contracts1
(363)
(363)
(322)
(22)
(19)
\u2014
Total
(424)
(424)
(379)
(22)
(23)
\u2014
1. Commodity contracts include base metals, freight, energy and emission rights.
Cash flow hedges
The following tables present the periods in which the derivatives designated as cash flows hedges are expected to mature:
December 31, 2023
Assets/
(liabilities)
(Outflows)/inflows
Fair value
3 months and
less
3-6 months
6-12 months
2025
After 2025
Foreign exchange contracts
(38)
(3)
(34)
(1)
\u2014
\u2014
Commodities
412
50
70
171
60
61
Emission rights
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
374
47
36
170
60
61
December 31, 2022
Assets/
(liabilities)
(Outflows)/inflows
Fair value
3 months and
less
3-6 months
6-12 months
2024
After 2024
Foreign exchange contracts
4
(2)
(3)
\u2014
9
\u2014
Commodities
1,003
(10)
63
175
419
356
Emission rights
53
1
1
51
\u2014
\u2014
Total
1,060
(11)
61
226
428
356
Associated gains or losses that were recognized in other comprehensive income are reclassified to the consolidated statements of
operations in the same period during which the hedged forecasted cash flow affects the consolidated statements of operations. The
following table presents the periods in which the realized and unrealized gains or losses on derivatives designated as cash flows
hedges recognized in other comprehensive income, net of tax, are expected to impact the consolidated statements of operations:\u00a0
December 31, 2023
Cash flow hedge
reserve1
(Expense)/income
Carrying amount
3 months and
less
3-6 months
6-12 months
2025
After 2025
Foreign exchange contracts
28
5
2
10
11
\u2014
Commodity contracts
633
35
69
169
233
127
Emission rights
900
\u2014
\u2014
\u2014
\u2014
900
Total
1,561
40
71
179
244
1,027
1. The cash flow hedge reserve balance as of December 31, 2023 includes 417 deferred gains for the Company's share of such reserves at its equity method investments,
which are not included in the table above (1,023 as of December 31, 2022).
December\u00a031, 2022
Cash flow hedge\u00a0
reserve1
(Expense)/income
Carrying amount
3 months and
less
3-6 months
6-12 months
2024
After 2024
Foreign exchange contracts
13
\u2014
2
4
7
\u2014
Commodity contracts
1,020
7
37
157
387
432
Emission rights
849
\u2014
\u2014
\u2014
\u2014
849
Total
1,882
7
39
161
394
1,281
1. The cash flow hedge reserve balance as of December 31, 2022 also includes 1,023 deferred gains for the Company's share of such reserves at its equity method
investments, which are not included in the table above (603 as of December 31, 2021).
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.
December 31, 2023
Hedging Instruments
Nominal amount of
the hedging
instrument
Assets
carrying
amount
Liabilities
carrying
amount
Line item in the statement of financial
position where the hedging instrument
is located
Cash flow hedges
Foreign exchange risk - Option/forward/swap
contracts
2,840
12
(50)
Prepaid expenses and other current
assets/Accrued expenses and other
liabilities
Foreign exchange risk - Option/forward/swap
contracts
\u2014
\u2014
\u2014
Other assets/Other long-term
obligations
Price risk - Commodities forwards
1,118
361
(70)
Prepaid expenses and other current
assets/Accrued expenses and other
liabilities
Price risk - Commodities forwards
524
127
(6)
Other assets/Other long-term
obligations
Price risk - Emission rights forwards
\u2014
\u2014
\u2014
Prepaid expenses and other current
assets/Accrued expenses and other
liabilities
Total
500
(126)
Current derivative assets classified as cash flow
hedge
373
Other current derivative assets
270
Total current derivative assets (note 4.5)
643
Non-current derivative assets classified as cash flow
hedge
127
Other non-current derivative assets
36
Total non-current derivative assets (note 4.6)
163
Current derivative liabilities classified as cash flow
hedge
(120)
Other current derivative liabilities
(240)
Total current derivative liabilities (note 4.8)
(360)
Non-current derivative liabilities classified as cash
flow hedge
(6)
Other non-current derivative liabilities
(70)
Total non-current derivative liabilities (note 9.2)
(76)
\u00a0 \u00a0 \u00a0 \u00a0
December 31, 2023
Hedging Instruments
Cash flow
hedge
reserve at
December 31,
2022
Hedging
gains or
losses of the
reporting
period that
were
recognized in
OCI
Gains or
losses
reclassification
adjustment
and hedge
ineffectiveness
Basis
adjustment
Line item in the
statement of
comprehensive
income that
includes the
reclassification
adjustment and
hedge
ineffectiveness
Cash flow
hedge
reserve1 at
December 31,
2023
Cash flow hedges
Foreign exchange risk - Option/Forward contracts
13
16
(17)
16
Sales
28
Price risk - Commodities Option/Forward contracts
1,020
(402)
(10)
25
Sales, Cost of
sales
633
Price risk - Emission rights forwards
849
54
(3)
\u2014
Cost of sales
900
Total
1,882
(332)
(30)
41
1,561
1. The cash flow hedge reserve balance as of December 31, 2023 also includes 417 deferred gains for the Company's share of such reserves at its equity method
investments, which are not disclosed above.
.
December 31, 2022
Hedging Instruments
Nominal amount of
the hedging
instrument
Assets carrying
amount
Liabilities
carrying
amount
Line item in the statement of financial position where
the hedging instrument is located
Cash flow hedges
Foreign exchange risk - Option/
Forward contracts
3,044
21
(26)
Prepaid expenses and other current assets/Accrued
expenses and other liabilities
Foreign exchange risk - Option/
Forward/Swap contracts
300
12
(3)
Other assets/Other long-term obligations
Price risk - Commodities forwards
1,467
490
(261)
Prepaid expenses and other current assets/Accrued
expenses and other liabilities
Price risk - Commodities forwards
1,533
816
(42)
Other assets/Other long-term obligations
Price risk - Emission rights
forwards
488
53
\u2014
Prepaid expenses and other current assets/Accrued
expenses and other liabilities
Total
1,392
(332)
Current derivative assets classified
as cash flow hedge
564
Other current derivative assets
173
Total current derivative assets
(note 4.5)
737
Non-current derivative assets
classified as cash flow hedge
828
Other non-current derivative assets
7
Total non-current derivative assets
(note 4.6)
835
Current derivative liabilities
classified as cash flow hedge
(287)
Other current derivative liabilities
(92)
Total current derivative liabilities
(note 4.8)
(379)
Non-current derivative liabilities
classified as cash flow hedge
(45)
Other non-current derivative
liabilities
\u2014
Total non-current derivative
liabilities (note 9.2)
(45)
December 31, 2022
Hedging Instruments
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
Basis
adjustment
Line item in the
statement of
comprehensive
income that
includes the
reclassification
adjustment and
hedge
ineffectiveness
Cash flow hedge
reserve1 at
December 31,
2022
Cash flow hedges
Foreign exchange risk - Option/
Forward contracts
(1)
146
4
(136)
Sales
13
Price risk - Commodities forwards1
302
951
(153)
(80)
Sales, Cost of
sales
1,020
Price risk - Emission rights forwards
1,786
120
(104)
(953)
Cost of sales
849
Total
2,087
1,217
(253)
(1,169)
1,882
1. The cash flow hedge reserve balance as of December 31, 2022 also includes 1,023 deferred gains for the Company's share of such reserves at its equity method
investments, which are not disclosed above
Net investment hedge
The Company designated a portfolio of euro denominated debt
as a hedge of certain euro denominated investments (see also
note 6.1.2.2.)
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
hedging instrument is categorized as Level 2.
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.
December 31, 20231
Date traded
Date maturity /unwound
Notional
OCI gross
Deferred tax
OCI net of deferred
tax
December, 2014
January, 2016
375
83
(24)
59
May, 2015
March, 2020
500
11
(3)
8
May, 2015
July, 2019
500
(16)
5
(11)
March, 2018
June, 2018
100
8
(2)
6
April, 2019
November, 2019
200
11
(3)
8
Total
97
(27)
70
1. In 2023 and in 2022, the Company did not designate any new CCS as net investment hedge.
December 31, 2023
Hedging Instruments
Nominal
amount of
the hedging
instrument
Assets
carrying
amount
Liabilities
carrying
amount
Line item in the
statement of
financial position
where the
hedging
instrument is
located
Change in
value used for
calculating
hedge
ineffectiveness
for 2021
Line item in the
statement of
comprehensive
income that
includes the
recognized hedge
ineffectiveness
Foreign
currency
translation
reserve
Net investment hedges
Foreign exchange risk -
Cross Currency Swap
\u2014
\u2014
\u2014
N/a
\u2014
N/a
70
Foreign exchange risk -
EUR debt
4,017
\u2014
4,009
Short-term debt
and current
portion of long-
term debt; long-
term debt, net of
current portion
\u2014
N/a
332
Total
4,017
\u2014
4,009
\u2014
402
December 31, 2022
Hedging Instruments
Nominal
amount of
the hedging
instrument
Assets
carrying
amount
Liabilities
carrying
amount
Line item in the
statement of
financial position
where the hedging
instrument is
located
Change in
value used for
calculating
hedge
ineffectiveness
for 2020
Line item in the
statement of
comprehensive
income that includes
the recognized
hedge
ineffectiveness
Foreign
currency
translation
reserve
Net investment hedges
Foreign exchange risk -
Cross Currency Swap
\u2014
\u2014
\u2014
N/a
\u2014
N/a
70
Foreign exchange risk - EUR
debt
5,196
\u2014
(5,186)
Short-term debt
and current portion
of long-term debt;
long-term debt, net
of current portion
\u2014
N/a
456
Total
5,196
\u2014
(5,186)
\u2014
526
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:
December 31,
2023
2022
Base metals
(3)
5
Freight
12
(1)
Energy (oil, gas, electricity)
401
998
Emission rights
18
53
Total
428
1,055
Derivative assets associated with raw materials, energy, freight and emission rights
640
1,418
Derivative liabilities associated with raw materials, energy, freight and emission rights
(212)
(363)
Total
428
1,055
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 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 procurement.
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, 2023 and 2022, the Company had a net
notional position of 164 with a net positive fair value of 18\u00a0and a
net notional position of 488 with a net positive fair value of 53,
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 2023 and 2022.
December 31, 2023
Income
(loss)
Other\u00a0Equity
10% strengthening in U.S. dollar
68
283
10% weakening in U.S. dollar
(134)
(286)
December 31, 2022
(loss)
Income
Other\u00a0Equity
10% strengthening in U.S. dollar
136
141
10% weakening in U.S. dollar
(141)
(153)
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.
December 31, 2023
Floating portion of
net debt1
Interest\u00a0Rate Swaps/
Forward Rate\u00a0Agreements
100 bp increase
53
1
100 bp decrease
(53)
(1)
December 31, 2022
Floating portion of
net debt1
Interest\u00a0Rate Swaps/
Forward
Rate\u00a0Agreements
100 bp increase
70
\u2014
100 bp decrease
(70)
\u2014
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.
December 31, 2023
Income (loss)
Other\u00a0Equity Cash\u00a0Flow
Hedging Reserves
'+10% in prices
Base Metals
(1)
18
Iron Ore
(2)
4
Freight
\u2014
3
Emission rights
(12)
\u2014
Energy
\u2014
71
'-10% in prices
Base Metals
1
(18)
Iron Ore
2
(4)
Freight
\u2014
(3)
Emission rights
12
\u2014
Energy
\u2014
(71)
December 31, 2022
Income (loss)
Other\u00a0Equity Cash\u00a0Flow
Hedging Reserves
'+10% in prices
Base Metals
1
21
Iron Ore
\u2014
5
Freight
1
\u2014
Emission rights
\u2014
29
Energy
1
145
'-10% in prices
Base Metals
(1)
(22)
Iron Ore
\u2014
(5)
Freight
(1)
\u2014
Emission rights
\u2014
(29)
Energy
(1)
(144)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-670": { "value": "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, 2023:
\u00a0
December 31, 2023
\u00a0
Carrying
amount in
the
consolidated
statements
of financial
position
Non-
financial
assets and
liabilities
Assets /
Liabilities at
amortized
cost
Fair value
recognized
in profit or
loss
Fair value
recognized
in OCI
Derivatives
ASSETS
Current assets:
Cash and cash equivalents
7,686
\u2014
7,686
\u2014
\u2014
\u2014
Restricted cash
97
\u2014
97
\u2014
\u2014
\u2014
Trade accounts receivable and other
3,661
\u2014
3,491
\u2014
170
\u2014
Inventories
18,759
18,759
\u2014
\u2014
\u2014
\u2014
Prepaid expenses and other current assets
3,037
1,304
1,090
\u2014
\u2014
643
Total current assets
33,240
20,063
12,364
\u2014
170
643
Non-current assets:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Goodwill and intangible assets
5,102
5,102
\u2014
\u2014
\u2014
\u2014
Property, plant and equipment and biological assets
33,656
33,592
\u2014
64
\u2014
\u2014
Investments in associates and joint ventures
10,078
10,078
\u2014
\u2014
\u2014
\u2014
Other investments
513
\u2014
\u2014
\u2014
513
\u2014
Deferred tax assets
9,469
9,469
\u2014
\u2014
\u2014
\u2014
Other assets
1,859
465
1,095
136
\u2014
163
Total non-current assets
60,677
58,706
1,095
200
513
163
Total assets
93,917
78,769
13,459
200
683
806
LIABILITIES AND EQUITY
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Short-term debt and current portion of long-term debt
2,312
\u2014
2,312
\u2014
\u2014
\u2014
Trade accounts payable and other
13,605
\u2014
13,605
\u2014
\u2014
\u2014
Short-term provisions
588
561
27
\u2014
\u2014
\u2014
Accrued expenses and other liabilities
4,967
892
3,715
\u2014
\u2014
360
Income tax liabilities
297
297
\u2014
\u2014
\u2014
\u2014
Total current liabilities
21,769
1,750
19,659
\u2014
\u2014
360
Non-current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Long-term debt, net of current portion
8,369
\u2014
8,369
\u2014
\u2014
\u2014
Deferred tax liabilities
2,432
2,432
\u2014
\u2014
\u2014
\u2014
Deferred employee benefits
2,741
2,741
\u2014
\u2014
\u2014
\u2014
Long-term provisions
1,477
1,477
\u2014
\u2014
\u2014
\u2014
Other long-term obligations
1,061
439
546
\u2014
\u2014
76
Total non-current liabilities
16,080
7,089
8,915
\u2014
\u2014
76
Equity:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Equity attributable to the equity holders of the parent
53,961
53,961
\u2014
\u2014
\u2014
\u2014
Non-controlling interests
2,107
2,107
\u2014
\u2014
\u2014
\u2014
Total equity
56,068
56,068
\u2014
\u2014
\u2014
\u2014
Total liabilities and equity
93,917
64,907
28,574
\u2014
\u2014
436
\u00a0
December 31, 2022
\u00a0
Carrying amount
in the
consolidated
statements of
financial position
Non-financial
assets and
liabilities
Assets /
Liabilities at
amortized
cost
Fair value
recognized in
profit or loss
Fair value
recognized
in OCI
Derivatives
ASSETS
Current assets:
Cash and cash equivalents
9,300
\u2014
9,300
\u2014
\u2014
\u2014
Restricted cash
114
\u2014
114
\u2014
\u2014
\u2014
Trade accounts receivable and other
3,839
\u2014
3,633
\u2014
206
\u2014
Inventories
20,087
20,087
\u2014
\u2014
\u2014
\u2014
Prepaid expenses and other current assets
3,778
1,566
1,475
\u2014
\u2014
737
Total current assets
37,118
21,653
14,522
\u2014
206
737
Non-current assets:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Goodwill and intangible assets
4,903
4,903
\u2014
\u2014
\u2014
\u2014
Property, plant and equipment and biological assets
30,167
30,120
\u2014
47
\u2014
\u2014
Investments in associates and joint ventures
10,765
10,765
\u2014
\u2014
\u2014
\u2014
Other investments
1,119
\u2014
\u2014
\u2014
1,119
\u2014
Deferred tax assets
8,554
8,554
\u2014
\u2014
\u2014
\u2014
Other assets
1,921
259
691
136
\u2014
835
Total non-current assets
57,429
54,601
691
183
1,119
835
Total assets
94,547
76,254
15,213
183
1,325
1,572
LIABILITIES AND EQUITY
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Short-term debt and current portion of long-term debt
2,583
\u2014
2,583
\u2014
\u2014
\u2014
Trade accounts payable and other
13,532
\u2014
13,532
\u2014
\u2014
\u2014
Short-term provisions
1,101
1,078
23
\u2014
\u2014
\u2014
Accrued expenses and other liabilities
4,864
822
3,663
\u2014
\u2014
379
Income tax liabilities
318
318
\u2014
\u2014
\u2014
\u2014
Total current liabilities
22,398
2,218
19,801
\u2014
\u2014
379
Non-current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Long-term debt, net of current portion
9,067
\u2014
9,067
\u2014
\u2014
\u2014
Deferred tax liabilities
2,666
2,666
\u2014
\u2014
\u2014
\u2014
Deferred employee benefits
2,606
2,606
\u2014
\u2014
\u2014
\u2014
Long-term provisions
1,306
1,304
2
\u2014
\u2014
\u2014
Other long-term obligations
914
305
564
\u2014
\u2014
45
Total non-current liabilities
16,559
6,881
9,633
\u2014
\u2014
45
Equity:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Equity attributable to the equity holders of the parent
53,152
53,152
\u2014
\u2014
\u2014
\u2014
Non-controlling interests
2,438
2,438
\u2014
\u2014
\u2014
\u2014
Total equity
55,590
55,590
\u2014
\u2014
\u2014
\u2014
Total liabilities and equity
94,547
64,689
29,434
\u2014
\u2014
424
The Company classifies the bases used to measure certain
assets and liabilities at their fair value. Assets and liabilities
carried or measured at fair value have been classified into three
levels based upon a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
The levels are as follows:
Level 1: Quoted prices in active markets for identical assets or
liabilities that the entity can access at the measurement date;
Level 2: Significant inputs other than within Level 1 that are
observable for the asset or liability, either directly (i.e.: as prices)
or indirectly (i.e.: derived from prices);
Level 3: Inputs for the assets or liabilities that are not based on
observable market data and require management assumptions
or inputs from unobservable markets.
The following tables summarize the bases used to measure
certain financial assets and financial liabilities at their fair value
on recurring basis.
As of December 31, 2023
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Level\u00a01
Level\u00a02
Level\u00a03
Total
Assets at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Investments in equity instruments at FVOCI
315
\u2014
198
513
Trade accounts receivable and other subject to TSR programs*
\u2014
\u2014
170
170
Derivative financial current assets
\u2014
643
\u2014
643
Derivative financial non-current assets
\u2014
163
\u2014
163
Total assets at fair value
315
806
368
1,489
Liabilities at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Derivative financial current liabilities
\u2014
332
28
360
Derivative financial non-current liabilities
\u2014
22
54
76
Total liabilities at fair value
\u2014
354
82
436
*The fair value of TSR program receivables equals carrying amount due to the short time frame between the initial recognition and time of sale.
As of December 31, 2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Level\u00a01
Level\u00a02
Level\u00a03
Total
Assets at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Investments in equity instruments at FVOCI
996
\u2014
123
1,119
Trade accounts receivable and other subject to TSR programs*
\u2014
\u2014
206
206
Derivative financial current assets
\u2014
737
\u2014
737
Derivative financial non-current assets
\u2014
835
\u2014
835
Total assets at fair value
996
1,572
329
2,897
Liabilities at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Derivative financial current liabilities
\u2014
379
\u2014
379
Derivative financial\u00a0non-current liabilities
\u2014
45
\u2014
45
Total liabilities at fair value
\u2014
424
\u2014
424
*The fair value of TSR program receivables equals carrying amount due to the short time frame between the initial recognition and time of sale.
Investments in equity instruments at FVOCI classified as Level 1
refer to listed securities quoted in active markets and include
mainly the investment in Erdemir (see note 2.5).\u00a0 A quoted
market price in an active market provides the most reliable
evidence of fair value and is used without adjustment to
measure fair value whenever available, with limited exceptions.
The total fair value is either the price of the most recent trade at
the time of the market close or the official close price as defined
by the exchange on which the asset is most actively traded on
the last trading day of the period, multiplied by the number of
units held without consideration of transaction costs.
Derivative financial assets and liabilities classified as Level 2
refer to instruments to hedge fluctuations in interest rates,
foreign exchange rates, raw materials (base metals), freight,
energy and emission rights, see note 6.1.5 for further
information.\u00a0
Derivative financial assets and liabilities classified as Level 3 are
described in note 6.1.5.", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-669": { "value": "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, 2023:
\u00a0
December 31, 2023
\u00a0
Carrying
amount in
the
consolidated
statements
of financial
position
Non-
financial
assets and
liabilities
Assets /
Liabilities at
amortized
cost
Fair value
recognized
in profit or
loss
Fair value
recognized
in OCI
Derivatives
ASSETS
Current assets:
Cash and cash equivalents
7,686
\u2014
7,686
\u2014
\u2014
\u2014
Restricted cash
97
\u2014
97
\u2014
\u2014
\u2014
Trade accounts receivable and other
3,661
\u2014
3,491
\u2014
170
\u2014
Inventories
18,759
18,759
\u2014
\u2014
\u2014
\u2014
Prepaid expenses and other current assets
3,037
1,304
1,090
\u2014
\u2014
643
Total current assets
33,240
20,063
12,364
\u2014
170
643
Non-current assets:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Goodwill and intangible assets
5,102
5,102
\u2014
\u2014
\u2014
\u2014
Property, plant and equipment and biological assets
33,656
33,592
\u2014
64
\u2014
\u2014
Investments in associates and joint ventures
10,078
10,078
\u2014
\u2014
\u2014
\u2014
Other investments
513
\u2014
\u2014
\u2014
513
\u2014
Deferred tax assets
9,469
9,469
\u2014
\u2014
\u2014
\u2014
Other assets
1,859
465
1,095
136
\u2014
163
Total non-current assets
60,677
58,706
1,095
200
513
163
Total assets
93,917
78,769
13,459
200
683
806
LIABILITIES AND EQUITY
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Short-term debt and current portion of long-term debt
2,312
\u2014
2,312
\u2014
\u2014
\u2014
Trade accounts payable and other
13,605
\u2014
13,605
\u2014
\u2014
\u2014
Short-term provisions
588
561
27
\u2014
\u2014
\u2014
Accrued expenses and other liabilities
4,967
892
3,715
\u2014
\u2014
360
Income tax liabilities
297
297
\u2014
\u2014
\u2014
\u2014
Total current liabilities
21,769
1,750
19,659
\u2014
\u2014
360
Non-current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Long-term debt, net of current portion
8,369
\u2014
8,369
\u2014
\u2014
\u2014
Deferred tax liabilities
2,432
2,432
\u2014
\u2014
\u2014
\u2014
Deferred employee benefits
2,741
2,741
\u2014
\u2014
\u2014
\u2014
Long-term provisions
1,477
1,477
\u2014
\u2014
\u2014
\u2014
Other long-term obligations
1,061
439
546
\u2014
\u2014
76
Total non-current liabilities
16,080
7,089
8,915
\u2014
\u2014
76
Equity:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Equity attributable to the equity holders of the parent
53,961
53,961
\u2014
\u2014
\u2014
\u2014
Non-controlling interests
2,107
2,107
\u2014
\u2014
\u2014
\u2014
Total equity
56,068
56,068
\u2014
\u2014
\u2014
\u2014
Total liabilities and equity
93,917
64,907
28,574
\u2014
\u2014
436
\u00a0
December 31, 2022
\u00a0
Carrying amount
in the
consolidated
statements of
financial position
Non-financial
assets and
liabilities
Assets /
Liabilities at
amortized
cost
Fair value
recognized in
profit or loss
Fair value
recognized
in OCI
Derivatives
ASSETS
Current assets:
Cash and cash equivalents
9,300
\u2014
9,300
\u2014
\u2014
\u2014
Restricted cash
114
\u2014
114
\u2014
\u2014
\u2014
Trade accounts receivable and other
3,839
\u2014
3,633
\u2014
206
\u2014
Inventories
20,087
20,087
\u2014
\u2014
\u2014
\u2014
Prepaid expenses and other current assets
3,778
1,566
1,475
\u2014
\u2014
737
Total current assets
37,118
21,653
14,522
\u2014
206
737
Non-current assets:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Goodwill and intangible assets
4,903
4,903
\u2014
\u2014
\u2014
\u2014
Property, plant and equipment and biological assets
30,167
30,120
\u2014
47
\u2014
\u2014
Investments in associates and joint ventures
10,765
10,765
\u2014
\u2014
\u2014
\u2014
Other investments
1,119
\u2014
\u2014
\u2014
1,119
\u2014
Deferred tax assets
8,554
8,554
\u2014
\u2014
\u2014
\u2014
Other assets
1,921
259
691
136
\u2014
835
Total non-current assets
57,429
54,601
691
183
1,119
835
Total assets
94,547
76,254
15,213
183
1,325
1,572
LIABILITIES AND EQUITY
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Short-term debt and current portion of long-term debt
2,583
\u2014
2,583
\u2014
\u2014
\u2014
Trade accounts payable and other
13,532
\u2014
13,532
\u2014
\u2014
\u2014
Short-term provisions
1,101
1,078
23
\u2014
\u2014
\u2014
Accrued expenses and other liabilities
4,864
822
3,663
\u2014
\u2014
379
Income tax liabilities
318
318
\u2014
\u2014
\u2014
\u2014
Total current liabilities
22,398
2,218
19,801
\u2014
\u2014
379
Non-current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Long-term debt, net of current portion
9,067
\u2014
9,067
\u2014
\u2014
\u2014
Deferred tax liabilities
2,666
2,666
\u2014
\u2014
\u2014
\u2014
Deferred employee benefits
2,606
2,606
\u2014
\u2014
\u2014
\u2014
Long-term provisions
1,306
1,304
2
\u2014
\u2014
\u2014
Other long-term obligations
914
305
564
\u2014
\u2014
45
Total non-current liabilities
16,559
6,881
9,633
\u2014
\u2014
45
Equity:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Equity attributable to the equity holders of the parent
53,152
53,152
\u2014
\u2014
\u2014
\u2014
Non-controlling interests
2,438
2,438
\u2014
\u2014
\u2014
\u2014
Total equity
55,590
55,590
\u2014
\u2014
\u2014
\u2014
Total liabilities and equity
94,547
64,689
29,434
\u2014
\u2014
424
The Company classifies the bases used to measure certain
assets and liabilities at their fair value. Assets and liabilities
carried or measured at fair value have been classified into three
levels based upon a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
The levels are as follows:
Level 1: Quoted prices in active markets for identical assets or
liabilities that the entity can access at the measurement date;
Level 2: Significant inputs other than within Level 1 that are
observable for the asset or liability, either directly (i.e.: as prices)
or indirectly (i.e.: derived from prices);
Level 3: Inputs for the assets or liabilities that are not based on
observable market data and require management assumptions
or inputs from unobservable markets.
The following tables summarize the bases used to measure
certain financial assets and financial liabilities at their fair value
on recurring basis.
As of December 31, 2023
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Level\u00a01
Level\u00a02
Level\u00a03
Total
Assets at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Investments in equity instruments at FVOCI
315
\u2014
198
513
Trade accounts receivable and other subject to TSR programs*
\u2014
\u2014
170
170
Derivative financial current assets
\u2014
643
\u2014
643
Derivative financial non-current assets
\u2014
163
\u2014
163
Total assets at fair value
315
806
368
1,489
Liabilities at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Derivative financial current liabilities
\u2014
332
28
360
Derivative financial non-current liabilities
\u2014
22
54
76
Total liabilities at fair value
\u2014
354
82
436
*The fair value of TSR program receivables equals carrying amount due to the short time frame between the initial recognition and time of sale.
As of December 31, 2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Level\u00a01
Level\u00a02
Level\u00a03
Total
Assets at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Investments in equity instruments at FVOCI
996
\u2014
123
1,119
Trade accounts receivable and other subject to TSR programs*
\u2014
\u2014
206
206
Derivative financial current assets
\u2014
737
\u2014
737
Derivative financial non-current assets
\u2014
835
\u2014
835
Total assets at fair value
996
1,572
329
2,897
Liabilities at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Derivative financial current liabilities
\u2014
379
\u2014
379
Derivative financial\u00a0non-current liabilities
\u2014
45
\u2014
45
Total liabilities at fair value
\u2014
424
\u2014
424
*The fair value of TSR program receivables equals carrying amount due to the short time frame between the initial recognition and time of sale.
Investments in equity instruments at FVOCI classified as Level 1
refer to listed securities quoted in active markets and include
mainly the investment in Erdemir (see note 2.5).\u00a0 A quoted
market price in an active market provides the most reliable
evidence of fair value and is used without adjustment to
measure fair value whenever available, with limited exceptions.
The total fair value is either the price of the most recent trade at
the time of the market close or the official close price as defined
by the exchange on which the asset is most actively traded on
the last trading day of the period, multiplied by the number of
units held without consideration of transaction costs.
Derivative financial assets and liabilities classified as Level 2
refer to instruments to hedge fluctuations in interest rates,
foreign exchange rates, raw materials (base metals), freight,
energy and emission rights, see note 6.1.5 for further
information.\u00a0
Derivative financial assets and liabilities classified as Level 3 are
described in note 6.1.5.", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-668": { "value": "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, 2023:
\u00a0
December 31, 2023
\u00a0
Carrying
amount in
the
consolidated
statements
of financial
position
Non-
financial
assets and
liabilities
Assets /
Liabilities at
amortized
cost
Fair value
recognized
in profit or
loss
Fair value
recognized
in OCI
Derivatives
ASSETS
Current assets:
Cash and cash equivalents
7,686
\u2014
7,686
\u2014
\u2014
\u2014
Restricted cash
97
\u2014
97
\u2014
\u2014
\u2014
Trade accounts receivable and other
3,661
\u2014
3,491
\u2014
170
\u2014
Inventories
18,759
18,759
\u2014
\u2014
\u2014
\u2014
Prepaid expenses and other current assets
3,037
1,304
1,090
\u2014
\u2014
643
Total current assets
33,240
20,063
12,364
\u2014
170
643
Non-current assets:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Goodwill and intangible assets
5,102
5,102
\u2014
\u2014
\u2014
\u2014
Property, plant and equipment and biological assets
33,656
33,592
\u2014
64
\u2014
\u2014
Investments in associates and joint ventures
10,078
10,078
\u2014
\u2014
\u2014
\u2014
Other investments
513
\u2014
\u2014
\u2014
513
\u2014
Deferred tax assets
9,469
9,469
\u2014
\u2014
\u2014
\u2014
Other assets
1,859
465
1,095
136
\u2014
163
Total non-current assets
60,677
58,706
1,095
200
513
163
Total assets
93,917
78,769
13,459
200
683
806
LIABILITIES AND EQUITY
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Short-term debt and current portion of long-term debt
2,312
\u2014
2,312
\u2014
\u2014
\u2014
Trade accounts payable and other
13,605
\u2014
13,605
\u2014
\u2014
\u2014
Short-term provisions
588
561
27
\u2014
\u2014
\u2014
Accrued expenses and other liabilities
4,967
892
3,715
\u2014
\u2014
360
Income tax liabilities
297
297
\u2014
\u2014
\u2014
\u2014
Total current liabilities
21,769
1,750
19,659
\u2014
\u2014
360
Non-current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Long-term debt, net of current portion
8,369
\u2014
8,369
\u2014
\u2014
\u2014
Deferred tax liabilities
2,432
2,432
\u2014
\u2014
\u2014
\u2014
Deferred employee benefits
2,741
2,741
\u2014
\u2014
\u2014
\u2014
Long-term provisions
1,477
1,477
\u2014
\u2014
\u2014
\u2014
Other long-term obligations
1,061
439
546
\u2014
\u2014
76
Total non-current liabilities
16,080
7,089
8,915
\u2014
\u2014
76
Equity:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Equity attributable to the equity holders of the parent
53,961
53,961
\u2014
\u2014
\u2014
\u2014
Non-controlling interests
2,107
2,107
\u2014
\u2014
\u2014
\u2014
Total equity
56,068
56,068
\u2014
\u2014
\u2014
\u2014
Total liabilities and equity
93,917
64,907
28,574
\u2014
\u2014
436
\u00a0
December 31, 2022
\u00a0
Carrying amount
in the
consolidated
statements of
financial position
Non-financial
assets and
liabilities
Assets /
Liabilities at
amortized
cost
Fair value
recognized in
profit or loss
Fair value
recognized
in OCI
Derivatives
ASSETS
Current assets:
Cash and cash equivalents
9,300
\u2014
9,300
\u2014
\u2014
\u2014
Restricted cash
114
\u2014
114
\u2014
\u2014
\u2014
Trade accounts receivable and other
3,839
\u2014
3,633
\u2014
206
\u2014
Inventories
20,087
20,087
\u2014
\u2014
\u2014
\u2014
Prepaid expenses and other current assets
3,778
1,566
1,475
\u2014
\u2014
737
Total current assets
37,118
21,653
14,522
\u2014
206
737
Non-current assets:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Goodwill and intangible assets
4,903
4,903
\u2014
\u2014
\u2014
\u2014
Property, plant and equipment and biological assets
30,167
30,120
\u2014
47
\u2014
\u2014
Investments in associates and joint ventures
10,765
10,765
\u2014
\u2014
\u2014
\u2014
Other investments
1,119
\u2014
\u2014
\u2014
1,119
\u2014
Deferred tax assets
8,554
8,554
\u2014
\u2014
\u2014
\u2014
Other assets
1,921
259
691
136
\u2014
835
Total non-current assets
57,429
54,601
691
183
1,119
835
Total assets
94,547
76,254
15,213
183
1,325
1,572
LIABILITIES AND EQUITY
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Short-term debt and current portion of long-term debt
2,583
\u2014
2,583
\u2014
\u2014
\u2014
Trade accounts payable and other
13,532
\u2014
13,532
\u2014
\u2014
\u2014
Short-term provisions
1,101
1,078
23
\u2014
\u2014
\u2014
Accrued expenses and other liabilities
4,864
822
3,663
\u2014
\u2014
379
Income tax liabilities
318
318
\u2014
\u2014
\u2014
\u2014
Total current liabilities
22,398
2,218
19,801
\u2014
\u2014
379
Non-current liabilities:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Long-term debt, net of current portion
9,067
\u2014
9,067
\u2014
\u2014
\u2014
Deferred tax liabilities
2,666
2,666
\u2014
\u2014
\u2014
\u2014
Deferred employee benefits
2,606
2,606
\u2014
\u2014
\u2014
\u2014
Long-term provisions
1,306
1,304
2
\u2014
\u2014
\u2014
Other long-term obligations
914
305
564
\u2014
\u2014
45
Total non-current liabilities
16,559
6,881
9,633
\u2014
\u2014
45
Equity:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Equity attributable to the equity holders of the parent
53,152
53,152
\u2014
\u2014
\u2014
\u2014
Non-controlling interests
2,438
2,438
\u2014
\u2014
\u2014
\u2014
Total equity
55,590
55,590
\u2014
\u2014
\u2014
\u2014
Total liabilities and equity
94,547
64,689
29,434
\u2014
\u2014
424
The Company classifies the bases used to measure certain
assets and liabilities at their fair value. Assets and liabilities
carried or measured at fair value have been classified into three
levels based upon a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
The levels are as follows:
Level 1: Quoted prices in active markets for identical assets or
liabilities that the entity can access at the measurement date;
Level 2: Significant inputs other than within Level 1 that are
observable for the asset or liability, either directly (i.e.: as prices)
or indirectly (i.e.: derived from prices);
Level 3: Inputs for the assets or liabilities that are not based on
observable market data and require management assumptions
or inputs from unobservable markets.
The following tables summarize the bases used to measure
certain financial assets and financial liabilities at their fair value
on recurring basis.
As of December 31, 2023
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Level\u00a01
Level\u00a02
Level\u00a03
Total
Assets at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Investments in equity instruments at FVOCI
315
\u2014
198
513
Trade accounts receivable and other subject to TSR programs*
\u2014
\u2014
170
170
Derivative financial current assets
\u2014
643
\u2014
643
Derivative financial non-current assets
\u2014
163
\u2014
163
Total assets at fair value
315
806
368
1,489
Liabilities at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Derivative financial current liabilities
\u2014
332
28
360
Derivative financial non-current liabilities
\u2014
22
54
76
Total liabilities at fair value
\u2014
354
82
436
*The fair value of TSR program receivables equals carrying amount due to the short time frame between the initial recognition and time of sale.
As of December 31, 2022
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Level\u00a01
Level\u00a02
Level\u00a03
Total
Assets at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Investments in equity instruments at FVOCI
996
\u2014
123
1,119
Trade accounts receivable and other subject to TSR programs*
\u2014
\u2014
206
206
Derivative financial current assets
\u2014
737
\u2014
737
Derivative financial non-current assets
\u2014
835
\u2014
835
Total assets at fair value
996
1,572
329
2,897
Liabilities at fair value:
\u00a0
\u00a0
\u00a0
\u00a0
Derivative financial current liabilities
\u2014
379
\u2014
379
Derivative financial\u00a0non-current liabilities
\u2014
45
\u2014
45
Total liabilities at fair value
\u2014
424
\u2014
424
*The fair value of TSR program receivables equals carrying amount due to the short time frame between the initial recognition and time of sale.
Investments in equity instruments at FVOCI classified as Level 1
refer to listed securities quoted in active markets and include
mainly the investment in Erdemir (see note 2.5).\u00a0 A quoted
market price in an active market provides the most reliable
evidence of fair value and is used without adjustment to
measure fair value whenever available, with limited exceptions.
The total fair value is either the price of the most recent trade at
the time of the market close or the official close price as defined
by the exchange on which the asset is most actively traded on
the last trading day of the period, multiplied by the number of
units held without consideration of transaction costs.
Derivative financial assets and liabilities classified as Level 2
refer to instruments to hedge fluctuations in interest rates,
foreign exchange rates, raw materials (base metals), freight,
energy and emission rights, see note 6.1.5 for further
information.\u00a0
Derivative financial assets and liabilities classified as Level 3 are
described in note 6.1.5.
6.1.2 Gross debt
Gross debt includes bank debt, debenture loans and lease
obligations and is stated at amortized cost.
6.1.2.1 Short-term debt
Short-term debt, including the current portion of long-term debt,
consisted of the following:
December 31,
2023
2022
Short-term bank loans and other
credit facilities including
commercial paper 1
980
1,017
Current portion of long-term debt
1,125
1,338
Lease obligations2
207
228
Total
2,312
2,583
1. The weighted average interest rate on short-term borrowings outstanding was
5.5% and 4.0% as of December\u00a031, 2023 and 2022, respectively.
2. See note 7.
Short-term bank loans and other credit facilities include short-
term loans, overdrafts and commercial paper.
ArcelorMittal has entered into certain short-term committed
bilateral credit facilities renewable on an annual basis. As of
December\u00a031, 2023 , facilities totaling approximately 0.6 billion,
remained fully available.
On July 27, 2022, the Company entered into a 2.2 billion bridge
term facility agreement with a financial institution. The facility
may be applied towards the purchase price for the intended
acquisition of ArcelorMittal Pec\u00e9m, as well as the refinancing of
its existing indebtedness and the payment of related fees, costs
and expenses. The facility was available for 12 months from
signing with two extension options of 6 months each at the
borrower's 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, 2023 and
2022, the outstanding amount was 684 and 796, respectively.
6.1.2.2 Long-term debt
Long-term debt is comprised of the following:
December 31,
2023
2022
Year of maturity
Type of Interest
Interest rate1
Carrying amount at
amortized cost
Corporate
5.4 billion Revolving Credit Facility
2023 - 2025
Floating
\u2014
\u2014
\u20ac500 million Unsecured Notes
2023
Fixed
0.95%
\u2014
391
\u20ac750 million Unsecured Notes
2023
Fixed
1.00%
\u2014
799
\u20ac1.0 billion Unsecured Notes
2024
Fixed
2.25%
585
567
750 Unsecured Notes
2024
Fixed
3.60%
290
289
500 Unsecured Notes
2025
Fixed
6.13%
183
183
\u20ac750 million Unsecured Notes
2025
Fixed
1.75%
826
796
750 Unsecured Notes
2026
Fixed
4.55%
400
399
\u20ac600 million Unsecured Notes
2026
Fixed
4.88%
659
635
1.2 billion Unsecured Notes
2027
Fixed
6.55%
1,195
1,193
500 Unsecured Notes
2029
Fixed
4.25%
496
495
1.0 billion Unsecured Notes
2032
Fixed
6.80%
989
988
1.5 billion Unsecured Bonds
2039
Fixed
7.00%
672
672
1.0 billion Unsecured Notes
2041
Fixed
6.75%
428
428
EIB loan
2025
Fixed
1.16%
81
140
EIB loan
2032
Floating
5.22%
309
299
Schuldschein loans
2025 - 2027
Fixed
2.5% - 3.0%
100
96
Schuldschein loans
2025 - 2027
Floating
5.1% - 5.4%
699
674
Other loans
2023
Fixed
1.8 %
\u2014
18
Other loans
2029 - 2035
Floating
0.7% - 4.2%
223
243
Total Corporate
8,135
9,305
Americas
Other loans
2024 - 2030
Fixed/Floating
0.0% - 9.5%
45
57
Total Americas
45
57
Europe, Asia & Africa
EBRD Facility
2024 - 2026
Floating
7.2% - 7.9%
177
86
Other loans
2023 - 2043
Fixed/Floating
0.0% - 8.0%
198
129
Total Europe, Asia & Africa
375
215
Total
8,555
9,577
Less current portion of long-term debt
(1,125)
(1,338)
Total long-term debt (excluding lease obligations)
7,430
8,239
Long-term lease obligations2
939
828
Total long-term debt, net of current portion
8,369
9,067
1. Rates applicable to balances outstanding at December\u00a031, 2023. For debt that has been redeemed in its entirety during 2023, the interest rates refer to the rates at
repayment date.
2. Net of current portion of 207 and 228 as of December 31, 2023 and 2022, respectively. See note 7.
Corporate
5.5\u00a0billion 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. On December 19, 2023 extension was
completed for 5.4 billion of the 5.5\u00a0billion revolving credit facility,
with 0.1\u00a0billion lapsed at maturity. The Facility contains
restrictive covenants, which among other things, 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. ArcelorMittal's long-
term credit rating was upgraded on August 9, 2021 by Moody's
to 'Baa3' and its outlook was changed to positive by Moody's on
February 19, 2024. On June 16, 2023, Standard & Poor's
upgraded ArcelorMittal's outlook to positive and affirmed a long-
term credit rating of 'BBB-'. 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, 2023, the 5.4 billion
revolving credit facility was fully available. The Company make
drawdowns from and repayments on the 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 17, 2023, at maturity, ArcelorMittal fully repaid the
outstanding \u20ac367 million (395) of its \u20ac500 million Fixed Rate
Notes due 2023.
On May 19, 2023, at maturity, ArcelorMittal fully repaid
\u20ac750\u00a0million (812) Fixed Rate Notes due 2023.
On January 17, 2024, at maturity, ArcelorMittal fully repaid the
outstanding \u20ac529 million (585) of its \u20ac1.0 billion Fixed Rate
Notes due 2024.
The margin applicable to ArcelorMittal\u2019s principal credit facilities
(5.4 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:
Initial value
Nominal amount of
outstanding value
Date of issuance
Repayment date
Interest rate1
Issued at
\u20ac250 million Unsecured Notes
\u20ac132 million
Jul 4, 2019
Jan 17, 2024
2.25%
105.59%
\u20ac750 million Unsecured Notes
\u20ac397 million
Jan 17, 2019
Jan 17, 2024
2.25%
99.72%
750 Unsecured Notes
290
Jul 16, 2019
Jul 16, 2024
3.60%
99.86%
500 Unsecured Notes
184
Jun 1, 2015
Jun 1, 2025
6.13%
100.00%
\u20ac750 million Unsecured Notes
\u20ac750 million
Nov 19, 2019
Nov 19, 2025
1.75%
99.41%
750 Unsecured Notes
401
Mar 11, 2019
Mar 11, 2026
4.55%
99.72%
\u20ac600 million Unsecured Notes
\u20ac600 million
Sep 26, 2022
Sep 28, 2026
4.88%
99.65%
1.2 billion Unsecured Bonds
1.2 Billion
Nov 29, 2022
Nov 29, 2027
6.55%
99.91%
500 Unsecured Notes
500
Jul 16, 2019
Jul 16, 2029
4.25%
99.00%
1.0 billion Unsecured Bonds
1.0 Billion
Nov 29, 2022
Nov 29, 2032
6.80%
99.37%
1.0 billion Unsecured Bonds
457
Oct 8, 2009
Oct 15, 2039
7.00%
95.20%
500 Unsecured Bonds
229
Aug 5, 2010
Oct 15, 2039
7.00%
104.84%
1.0 billion Unsecured Notes
434
Mar 7, 2011
Mar 1, 2041
6.75%
99.18%
1. Rates applicable at December 31, 2023.
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, 2023, \u20ac280
million (309) 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, 2023, \u20ac73\u00a0million (81) 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, 2023,
\u20ac723\u00a0million (799) 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 December 28, 2029.
The outstanding amount in total as of December 31, 2023 was
\u20ac122 million (134).
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. As of December 31, 2023, the loan was
fully repaid.
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, AMKR 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, 2023, 18 was
outstanding under the agreement.
On December 15, 2022, AMKR entered into a 100 loan
agreement with EBRD for working capital purposes. As of
December 31, 2023, 100 was drawn under the agreement.
On November 17, 2023, AMKR entered into a 150 loan
agreement with EBRD for working capital purposes. 59 were
committed and fully drawn as of December 31, 2023. 91 will be
committed by EBRD in 2024 upon AMKR's request.
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 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. On August 30, 2023, the facility
was further amended and restated for an amount of 4.5\u00a0billion
South African rand and with a maturity of September 7, 2026.
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, 2023, 3.0
billion South African rand (162) was drawn.\u00a0
Other loans\u00a0
Other loans mainly relate to loans contracted by ArcelorMittal
subsidiaries with different counterparties.
Hedge of net investments
As of April\u00a01, 2018, the Company designated a portfolio of euro
denominated debt (\u20ac3,627 million and \u20ac4,862 million as of
December\u00a031, 2023 and 2022, respectively) as a hedge of
certain euro denominated investments (\u20ac8,635 million and
\u20ac8,837 million as of December\u00a031, 2023 and 2022, 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, 2023 and 2022, the Company recognized
166 foreign exchange loss and 197 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, 2023 the scheduled maturities of short-term
debt, long-term debt and long-term lease obligations, including
their current portion are as follows:
Year of maturity
Amount
2024
2,312
2025
1,720
2026
1,335
2027
1,749
2028
154
Subsequent years
3,411
Total
10,681
Fair value
The following tables summarize the Company\u2019s bases used to
estimate its debt at fair value. Fair value measurement has been
classified into three levels based upon a fair value hierarchy that
reflects the significance of the inputs used in making the
measurements.
As of December 31, 2023
Carrying amount
Fair Value
Level 1
Level 2
Level 3
Total
Instruments payable bearing interest at fixed rates
8,165
6,969
1,273
\u2014
8,242
Instruments payable bearing interest at variable rates
1,536
\u2014
1,539
\u2014
1,539
Total long-term debt, including current portion
9,701
6,969
2,812
\u2014
9,781
Short term bank loans and other credit facilities including
commercial paper
980
\u2014
988
\u2014
988
As of December 31, 2022
Carrying amount
Fair Value
Level 1
Level 2
Level 3
Total
Instruments payable bearing interest at fixed rates
9,214
7,783
1,180
\u2014
8,963
Instruments payable bearing interest at variable rates
1,419
\u2014
1,350
\u2014
1,350
Total long-term debt, including current portion
10,633
7,783
2,530
\u2014
10,313
Short term bank loans and other credit facilities including
commercial paper
1,017
\u2014
1,017
\u2014
1,017
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:
December 31,
2023
2022
Cash at bank
5,405
4,489
Term deposits
774
828
Money market funds1
1,507
3,983
Total
7,686
9,300
1 Money market funds are highly liquid investments with a maturity of 3 months
or less from the date of acquisition.
Restricted cash represents cash and cash equivalents not
readily available to the Company, mainly related to insurance
deposits, cash accounts in connection with environmental
obligations and true sale of receivables programs, as well as
various other deposits or required balance obligations related to
letters of credit and credit arrangements.
Restricted cash of 97 as of December\u00a031, 2023 and 114 as of
December 31, 2022 included 54 and 52 relating to various
environmental obligations, true sales of receivables programs
and letters of credit issued in ArcelorMittal South Africa. It also
included 13 and 20 in connection with the mandatory convertible
bonds as of December\u00a031, 2023 and December\u00a031, 2022,
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, 2021 (note 6.1.2)
6,488
1,913
Proceeds from long-term debt
3,893
\u2014
Payments of long-term debt
\u2014
\u2014
Amortized cost
2
2
Proceeds from short-term debt
\u2014
434
Payments of short-term debt
\u2014
(1,044)
Current portion of long-term debt
(1,566)
1,566
Payments of principal portion of lease liabilities (note 7) 1
(10)
(175)
Additions to lease liabilities (notes 5.2 and 7)
318
100
Unrealized foreign exchange effects and other movements
(58)
(213)
Balance as of December 31, 2022 (note 6.1.2)
9,067
2,583
Proceeds from long-term debt
134
\u2014
Payments of long-term debt
(16)
\u2014
Amortized cost
8
(3)
Proceeds from short-term debt
\u2014
218
Payments of short-term debt
\u2014
(1,670)
Current portion of long-term debt
(1,332)
1,332
Payments of principal portion of lease liabilities (note 7) 1
(8)
(245)
Additions to lease liabilities (notes 5.2 and 7)
250
38
Unrealized foreign exchange effects and other movements
266
59
Balance as of December 31, 2023 (note 6.1.2)
8,369
2,312
1. Cash payments decreasing the outstanding liability relating to leases are classified under payments of principal portion of lease liabilities and other financing activities in
the Company's consolidated statements of cash flows.
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, 2023 and December\u00a031, 2022:
As of December 31, 2023
Total
EUR
USD
ARS
BRL
INR
Other
Short-term debt and current portion of long-term debt
2,312
1,414
533
\u2014
31
68
266
Long-term debt, net of current portion
8,369
3,312
4,560
\u2014
86
1
410
Cash and cash equivalents and restricted cash
(7,783)
(5,660)
(886)
(461)
(171)
(62)
(543)
Net debt
2,898
(934)
4,207
(461)
(54)
7
133
As of December 31, 2022
Total
EUR
USD
ARS
BRL
INR
Other
Short-term debt and current portion of long-term debt
2,583
2,059
227
\u2014
28
2
267
Long-term debt, net of current portion
9,067
3,777
4,868
\u2014
74
\u2014
348
Cash and cash equivalents, restricted cash and other
restricted funds
(9,414)
(6,514)
(1,494)
(364)
(275)
(85)
(682)
Net debt
2,236
(678)
3,601
(364)
(173)
(83)
(67)
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 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
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:
December 31, 2023
Assets
Liabilities
Notional
Amount
Fair Value
Notional
Amount
Fair Value
Interest rate instruments
Other interest rate instruments
221
\u2014
453
\u2014
Total interest rate instruments
\u2014
\u2014
Foreign exchange rate instruments
Forward purchase contracts
1,198
60
4,114
(82)
Forward sale contracts
2,510
53
825
(11)
Exchange option purchases
619
34
760
(3)
Exchange options sales
920
19
608
(46)
Total foreign exchange rate instruments
166
(142)
Raw materials (base metals), freight, energy, emission rights
Term contracts sales
1,350
373
486
(46)
Term contracts purchases
1,538
267
1,235
(166)
Options sales/purchases
18
\u2014
\u2014
\u2014
Total raw materials (base metals), freight, energy, emission rights
640
(212)
Total
806
(354)
December 31, 2022
Assets
Liabilities
Notional
Amount
Fair Value
Notional
Amount
Fair Value
Foreign exchange rate instruments
Forward purchase contracts
657
58
3,678
(19)
Forward sale contracts
1,478
38
753
(6)
Exchange option purchases
1,462
17
2,536
(16)
Exchange options sales
2,222
41
2,055
(20)
Total foreign exchange rate instruments
154
(61)
Raw materials (base metals), freight, energy, emission rights
Term contracts sales
1,128
263
316
(52)
Term contracts purchases
1,755
1,150
785
(306)
Option sales/purchases
207
5
197
(5)
Total raw materials (base metals), freight, energy, emission rights
1,418
(363)
Total
1,572
(424)
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:
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.
Call option on MCB
ArcelorMittal establishes the fair valuation of the call option on
the 660 mandatory convertible bonds (on March 14, 2023, the
Company through its wholly-owned subsidiary Hera Ermac early
repaid 226,666 out of the 666,666 outstanding unsecured and
unsubordinated bonds mandatorily convertible into preferred
shares of such subsidiary (see note 11.2) through the use of
binomial valuation models based on the estimated values of the
underlying equity spot price of $102 ($127 at December 31,
2022) and volatility of 10% (13% at December 31, 2022).
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 SOFR Term curve 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 2023 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 1027% and 96% increase
and decrease of the fair value of the call option at December 31,
2023, respectively.
Electricity option
ArcelorMittal and an electricity supplier entered into a multi-
buyer power supply contract on French market. Other clients of
this contract are committed to purchase electricity from the
supplier with opt-out rights to be exercised in 2024 for
2025-2029 delivery period and in 2029 for 2030-2034 delivery
period. The Company is committed to acquire up to 51% of the
opt-out volumes.
The fair value of the option is based on the Black-Scholes
formula model. Observable input data used in the valuation
include euro zero coupon yield curve and electricity forward
prices for tenors quoted by the European Energy Exchange
(EEX). Unobservable input data is used to measure fair value to
the extent relevant observable inputs are not available. For
instance, electricity forward prices are extrapolated for tenors
not quoted by EEX and volatility is computed based on historical
settlement prices over the last 3 years. A 10% increase and
decrease in electricity forward prices would result in a 19%
decrease and 26% increase, respectively, of the fair value of the
option at December 31, 2023.
The following table summarizes the reconciliation of the fair
value of the financial instrument classified as Level 3:
\u00a0
Electricity option
Call option on 660
mandatory
convertible bonds
Balance as of December 31, 2021
\u2014
15
Change in fair value
\u2014
(15)
Balance as of December 31, 2022
\u2014
\u2014
Change in fair value
(82)
\u2014
Balance as of December 31, 2023
(82)
\u2014
The fair value movement relating to the Level 3 derivative
instrument is recognized in financing costs-net in the
consolidated statements of operations .
6.2\u00a0 \u00a0 Financing costs - net\u00a0
Financing costs - net recognized in the years ended
December\u00a031, 2023 , 2022 and 2021 are as follows:
Year ended December 31,
2023
2022
2021
Interest expense
(715)
(401)
(357)
Interest income
570
188
79
Change in fair value
adjustment on call option on
mandatory convertible bonds
\u2014
(15)
(44)
Accretion of defined benefit
obligations and other long term
liabilities
(243)
(51)
(164)
Net foreign exchange gain/
(loss)
(48)
191
(155)
Other1
(423)
(246)
(514)
Total
(859)
(334)
(1,155)
1. Other mainly included expenses related to true sale of receivables (\u201cTSR\u201d)
programs and bank fees. In 2023, others included 66 relating to the term
extension of mandatorily convertible bonds (see note 11.2). In 2021, other also
included 163 charges related to an unfavorable court decision in an arbitration
case against Sitrel (see note 9.3), 130 premiums and fees related to the early
redemption of bonds in 2021, and 61 charges related to early redemption of
MCNs (see note 11.2).
6.3\u00a0 \u00a0 Risk management policy
The Company's operations expose it to a variety of financial
risks: interest rate risk, foreign exchange risk, liquidity risk and
risks in fluctuations in prices of raw materials, freight, energy
and 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.
December 31,
2023
2022
Total equity
56,068
55,590
Net debt
2,898
2,236
Gearing
5.2%
4.0%
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, 2023, the long-term debt was comprised of
84% fixed rate debt and 16% 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, 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, 2023, the Company is mainly subject to
foreign exchange exposure relating to the euro, Brazilian real,
Canadian dollar, 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, 2023:
December 31, 2023
Trade
receivables
Trade payables
USD
776
\u00a0
4,989
EUR
928
5,531
BRL
1,111
\u00a0
823
CAD
49
512
GBP
27
\u00a0
104
ZAR
139
382
MXN
39
\u00a0
53
UAH
63
164
PLN
211
697
ARS
51
\u00a0
62
Other
267
288
Total
3,661
\u00a0
13,605
The sensitivity analysis carried out by the Company considers
the effects on its trade receivables and trade payables of a 10%
increase or decrease between the relevant foreign currencies
and the U.S. dollar.
10% increase
10% decrease
Trade
receivables
Trade
payables
Trade
receivables
Trade
payables
EUR
93
\u00a0
553
(93)
\u00a0
(553)
BRL
111
82
(111)
(82)
CAD
5
\u00a0
51
(5)
\u00a0
(51)
GBP
3
10
(3)
(10)
ZAR
14
\u00a0
38
(14)
\u00a0
(38)
MXN
4
5
(4)
(5)
UAH
6
\u00a0
16
(6)
\u00a0
(16)
PLN
21
\u00a0
70
(21)
\u00a0
(70)
ARS
5
\u00a0
6
(5)
\u00a0
(6)
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, 2023, and as such are sensitive to
movements in mainly foreign exchange rates and interest rates.
The cash flows are non-discounted, except for derivative
financial liabilities where the cash flows equal their fair values.
December 31, 2023
Carrying
amount
Contractual
Cash Flow
2024
2025
from 2026 to
2028
After 2028
Non-derivative financial liabilities
Bonds
(6,812)
(9,393)
(1,223)
(1,329)
(2,963)
(3,878)
Loans over 100
(1,345)
(1,942)
(237)
(457)
(462)
(786)
Trade and other payables
(13,605)
(13,605)
(13,605)
\u2014
\u2014
\u2014
Other loans and leases
(2,525)
(2,931)
(1,333)
(339)
(665)
(594)
Total
(24,287)
(27,871)
(16,398)
(2,125)
(4,090)
(5,258)
Derivative financial liabilities
Foreign exchange contracts
(142)
(142)
(139)
(1)
(2)
\u2014
Commodity contracts1
(294)
(294)
(221)
(19)
\u2014
(54)
Total
(436)
(436)
(360)
(20)
(2)
(54)
1. Commodity contracts include base metals, freight, energy and emission rights.
December 31, 2022
Carrying
amount
Contractual
Cash Flow
2023
2024
from 2025
to 2027
After 2027
Non-derivative financial liabilities
Bonds
(7,926)
(10,341)
(1,547)
(1,171)
(3,969)
(3,654)
Loans over 100
(1,234)
(1,364)
(244)
(114)
(827)
(179)
Trade and other payables
(13,532)
(13,554)
(13,554)
\u2014
\u2014
\u2014
Other loans and leases
(2,490)
(3,175)
(1,247)
(314)
(589)
(1,025)
Total
(25,182)
(28,434)
(16,592)
(1,599)
(5,385)
(4,858)
Derivative financial liabilities
Foreign exchange contracts
(61)
(61)
(57)
\u2014
(4)
\u2014
Commodity contracts1
(363)
(363)
(322)
(22)
(19)
\u2014
Total
(424)
(424)
(379)
(22)
(23)
\u2014
1. Commodity contracts include base metals, freight, energy and emission rights.
Cash flow hedges
The following tables present the periods in which the derivatives designated as cash flows hedges are expected to mature:
December 31, 2023
Assets/
(liabilities)
(Outflows)/inflows
Fair value
3 months and
less
3-6 months
6-12 months
2025
After 2025
Foreign exchange contracts
(38)
(3)
(34)
(1)
\u2014
\u2014
Commodities
412
50
70
171
60
61
Emission rights
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
374
47
36
170
60
61
December 31, 2022
Assets/
(liabilities)
(Outflows)/inflows
Fair value
3 months and
less
3-6 months
6-12 months
2024
After 2024
Foreign exchange contracts
4
(2)
(3)
\u2014
9
\u2014
Commodities
1,003
(10)
63
175
419
356
Emission rights
53
1
1
51
\u2014
\u2014
Total
1,060
(11)
61
226
428
356
Associated gains or losses that were recognized in other comprehensive income are reclassified to the consolidated statements of
operations in the same period during which the hedged forecasted cash flow affects the consolidated statements of operations. The
following table presents the periods in which the realized and unrealized gains or losses on derivatives designated as cash flows
hedges recognized in other comprehensive income, net of tax, are expected to impact the consolidated statements of operations:\u00a0
December 31, 2023
Cash flow hedge
reserve1
(Expense)/income
Carrying amount
3 months and
less
3-6 months
6-12 months
2025
After 2025
Foreign exchange contracts
28
5
2
10
11
\u2014
Commodity contracts
633
35
69
169
233
127
Emission rights
900
\u2014
\u2014
\u2014
\u2014
900
Total
1,561
40
71
179
244
1,027
1. The cash flow hedge reserve balance as of December 31, 2023 includes 417 deferred gains for the Company's share of such reserves at its equity method investments,
which are not included in the table above (1,023 as of December 31, 2022).
December\u00a031, 2022
Cash flow hedge\u00a0
reserve1
(Expense)/income
Carrying amount
3 months and
less
3-6 months
6-12 months
2024
After 2024
Foreign exchange contracts
13
\u2014
2
4
7
\u2014
Commodity contracts
1,020
7
37
157
387
432
Emission rights
849
\u2014
\u2014
\u2014
\u2014
849
Total
1,882
7
39
161
394
1,281
1. The cash flow hedge reserve balance as of December 31, 2022 also includes 1,023 deferred gains for the Company's share of such reserves at its equity method
investments, which are not included in the table above (603 as of December 31, 2021).
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.
December 31, 2023
Hedging Instruments
Nominal amount of
the hedging
instrument
Assets
carrying
amount
Liabilities
carrying
amount
Line item in the statement of financial
position where the hedging instrument
is located
Cash flow hedges
Foreign exchange risk - Option/forward/swap
contracts
2,840
12
(50)
Prepaid expenses and other current
assets/Accrued expenses and other
liabilities
Foreign exchange risk - Option/forward/swap
contracts
\u2014
\u2014
\u2014
Other assets/Other long-term
obligations
Price risk - Commodities forwards
1,118
361
(70)
Prepaid expenses and other current
assets/Accrued expenses and other
liabilities
Price risk - Commodities forwards
524
127
(6)
Other assets/Other long-term
obligations
Price risk - Emission rights forwards
\u2014
\u2014
\u2014
Prepaid expenses and other current
assets/Accrued expenses and other
liabilities
Total
500
(126)
Current derivative assets classified as cash flow
hedge
373
Other current derivative assets
270
Total current derivative assets (note 4.5)
643
Non-current derivative assets classified as cash flow
hedge
127
Other non-current derivative assets
36
Total non-current derivative assets (note 4.6)
163
Current derivative liabilities classified as cash flow
hedge
(120)
Other current derivative liabilities
(240)
Total current derivative liabilities (note 4.8)
(360)
Non-current derivative liabilities classified as cash
flow hedge
(6)
Other non-current derivative liabilities
(70)
Total non-current derivative liabilities (note 9.2)
(76)
\u00a0 \u00a0 \u00a0 \u00a0
December 31, 2023
Hedging Instruments
Cash flow
hedge
reserve at
December 31,
2022
Hedging
gains or
losses of the
reporting
period that
were
recognized in
OCI
Gains or
losses
reclassification
adjustment
and hedge
ineffectiveness
Basis
adjustment
Line item in the
statement of
comprehensive
income that
includes the
reclassification
adjustment and
hedge
ineffectiveness
Cash flow
hedge
reserve1 at
December 31,
2023
Cash flow hedges
Foreign exchange risk - Option/Forward contracts
13
16
(17)
16
Sales
28
Price risk - Commodities Option/Forward contracts
1,020
(402)
(10)
25
Sales, Cost of
sales
633
Price risk - Emission rights forwards
849
54
(3)
\u2014
Cost of sales
900
Total
1,882
(332)
(30)
41
1,561
1. The cash flow hedge reserve balance as of December 31, 2023 also includes 417 deferred gains for the Company's share of such reserves at its equity method
investments, which are not disclosed above.
.
December 31, 2022
Hedging Instruments
Nominal amount of
the hedging
instrument
Assets carrying
amount
Liabilities
carrying
amount
Line item in the statement of financial position where
the hedging instrument is located
Cash flow hedges
Foreign exchange risk - Option/
Forward contracts
3,044
21
(26)
Prepaid expenses and other current assets/Accrued
expenses and other liabilities
Foreign exchange risk - Option/
Forward/Swap contracts
300
12
(3)
Other assets/Other long-term obligations
Price risk - Commodities forwards
1,467
490
(261)
Prepaid expenses and other current assets/Accrued
expenses and other liabilities
Price risk - Commodities forwards
1,533
816
(42)
Other assets/Other long-term obligations
Price risk - Emission rights
forwards
488
53
\u2014
Prepaid expenses and other current assets/Accrued
expenses and other liabilities
Total
1,392
(332)
Current derivative assets classified
as cash flow hedge
564
Other current derivative assets
173
Total current derivative assets
(note 4.5)
737
Non-current derivative assets
classified as cash flow hedge
828
Other non-current derivative assets
7
Total non-current derivative assets
(note 4.6)
835
Current derivative liabilities
classified as cash flow hedge
(287)
Other current derivative liabilities
(92)
Total current derivative liabilities
(note 4.8)
(379)
Non-current derivative liabilities
classified as cash flow hedge
(45)
Other non-current derivative
liabilities
\u2014
Total non-current derivative
liabilities (note 9.2)
(45)
December 31, 2022
Hedging Instruments
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
Basis
adjustment
Line item in the
statement of
comprehensive
income that
includes the
reclassification
adjustment and
hedge
ineffectiveness
Cash flow hedge
reserve1 at
December 31,
2022
Cash flow hedges
Foreign exchange risk - Option/
Forward contracts
(1)
146
4
(136)
Sales
13
Price risk - Commodities forwards1
302
951
(153)
(80)
Sales, Cost of
sales
1,020
Price risk - Emission rights forwards
1,786
120
(104)
(953)
Cost of sales
849
Total
2,087
1,217
(253)
(1,169)
1,882
1. The cash flow hedge reserve balance as of December 31, 2022 also includes 1,023 deferred gains for the Company's share of such reserves at its equity method
investments, which are not disclosed above
Net investment hedge
The Company designated a portfolio of euro denominated debt
as a hedge of certain euro denominated investments (see also
note 6.1.2.2.)
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
hedging instrument is categorized as Level 2.
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.
December 31, 20231
Date traded
Date maturity /unwound
Notional
OCI gross
Deferred tax
OCI net of deferred
tax
December, 2014
January, 2016
375
83
(24)
59
May, 2015
March, 2020
500
11
(3)
8
May, 2015
July, 2019
500
(16)
5
(11)
March, 2018
June, 2018
100
8
(2)
6
April, 2019
November, 2019
200
11
(3)
8
Total
97
(27)
70
1. In 2023 and in 2022, the Company did not designate any new CCS as net investment hedge.
December 31, 2023
Hedging Instruments
Nominal
amount of
the hedging
instrument
Assets
carrying
amount
Liabilities
carrying
amount
Line item in the
statement of
financial position
where the
hedging
instrument is
located
Change in
value used for
calculating
hedge
ineffectiveness
for 2021
Line item in the
statement of
comprehensive
income that
includes the
recognized hedge
ineffectiveness
Foreign
currency
translation
reserve
Net investment hedges
Foreign exchange risk -
Cross Currency Swap
\u2014
\u2014
\u2014
N/a
\u2014
N/a
70
Foreign exchange risk -
EUR debt
4,017
\u2014
4,009
Short-term debt
and current
portion of long-
term debt; long-
term debt, net of
current portion
\u2014
N/a
332
Total
4,017
\u2014
4,009
\u2014
402
December 31, 2022
Hedging Instruments
Nominal
amount of
the hedging
instrument
Assets
carrying
amount
Liabilities
carrying
amount
Line item in the
statement of
financial position
where the hedging
instrument is
located
Change in
value used for
calculating
hedge
ineffectiveness
for 2020
Line item in the
statement of
comprehensive
income that includes
the recognized
hedge
ineffectiveness
Foreign
currency
translation
reserve
Net investment hedges
Foreign exchange risk -
Cross Currency Swap
\u2014
\u2014
\u2014
N/a
\u2014
N/a
70
Foreign exchange risk - EUR
debt
5,196
\u2014
(5,186)
Short-term debt
and current portion
of long-term debt;
long-term debt, net
of current portion
\u2014
N/a
456
Total
5,196
\u2014
(5,186)
\u2014
526
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:
December 31,
2023
2022
Base metals
(3)
5
Freight
12
(1)
Energy (oil, gas, electricity)
401
998
Emission rights
18
53
Total
428
1,055
Derivative assets associated with raw materials, energy, freight and emission rights
640
1,418
Derivative liabilities associated with raw materials, energy, freight and emission rights
(212)
(363)
Total
428
1,055
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 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 procurement.
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, 2023 and 2022, the Company had a net
notional position of 164 with a net positive fair value of 18\u00a0and a
net notional position of 488 with a net positive fair value of 53,
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 2023 and 2022.
December 31, 2023
Income
(loss)
Other\u00a0Equity
10% strengthening in U.S. dollar
68
283
10% weakening in U.S. dollar
(134)
(286)
December 31, 2022
(loss)
Income
Other\u00a0Equity
10% strengthening in U.S. dollar
136
141
10% weakening in U.S. dollar
(141)
(153)
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.
December 31, 2023
Floating portion of
net debt1
Interest\u00a0Rate Swaps/
Forward Rate\u00a0Agreements
100 bp increase
53
1
100 bp decrease
(53)
(1)
December 31, 2022
Floating portion of
net debt1
Interest\u00a0Rate Swaps/
Forward
Rate\u00a0Agreements
100 bp increase
70
\u2014
100 bp decrease
(70)
\u2014
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.
December 31, 2023
Income (loss)
Other\u00a0Equity Cash\u00a0Flow
Hedging Reserves
'+10% in prices
Base Metals
(1)
18
Iron Ore
(2)
4
Freight
\u2014
3
Emission rights
(12)
\u2014
Energy
\u2014
71
'-10% in prices
Base Metals
1
(18)
Iron Ore
2
(4)
Freight
\u2014
(3)
Emission rights
12
\u2014
Energy
\u2014
(71)
December 31, 2022
Income (loss)
Other\u00a0Equity Cash\u00a0Flow
Hedging Reserves
'+10% in prices
Base Metals
1
21
Iron Ore
\u2014
5
Freight
1
\u2014
Emission rights
\u2014
29
Energy
1
145
'-10% in prices
Base Metals
(1)
(22)
Iron Ore
\u2014
(5)
Freight
(1)
\u2014
Emission rights
\u2014
(29)
Energy
(1)
(144)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-671": { "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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-675": { "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:
December 31,
2023
2022
Short-term bank loans and other
credit facilities including
commercial paper 1
980
1,017
Current portion of long-term debt
1,125
1,338
Lease obligations2
207
228
Total
2,312
2,583
1. The weighted average interest rate on short-term borrowings outstanding was
5.5% and 4.0% as of December\u00a031, 2023 and 2022, respectively.
2. See note 7.
Short-term bank loans and other credit facilities include short-
term loans, overdrafts and commercial paper.
ArcelorMittal has entered into certain short-term committed
bilateral credit facilities renewable on an annual basis. As of
December\u00a031, 2023 , facilities totaling approximately 0.6 billion,
remained fully available.
On July 27, 2022, the Company entered into a 2.2 billion bridge
term facility agreement with a financial institution. The facility
may be applied towards the purchase price for the intended
acquisition of ArcelorMittal Pec\u00e9m, as well as the refinancing of
its existing indebtedness and the payment of related fees, costs
and expenses. The facility was available for 12 months from
signing with two extension options of 6 months each at the
borrower's 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, 2023 and
2022, the outstanding amount was 684 and 796, respectively.
6.1.2.2 Long-term debt
Long-term debt is comprised of the following:
December 31,
2023
2022
Year of maturity
Type of Interest
Interest rate1
Carrying amount at
amortized cost
Corporate
5.4 billion Revolving Credit Facility
2023 - 2025
Floating
\u2014
\u2014
\u20ac500 million Unsecured Notes
2023
Fixed
0.95%
\u2014
391
\u20ac750 million Unsecured Notes
2023
Fixed
1.00%
\u2014
799
\u20ac1.0 billion Unsecured Notes
2024
Fixed
2.25%
585
567
750 Unsecured Notes
2024
Fixed
3.60%
290
289
500 Unsecured Notes
2025
Fixed
6.13%
183
183
\u20ac750 million Unsecured Notes
2025
Fixed
1.75%
826
796
750 Unsecured Notes
2026
Fixed
4.55%
400
399
\u20ac600 million Unsecured Notes
2026
Fixed
4.88%
659
635
1.2 billion Unsecured Notes
2027
Fixed
6.55%
1,195
1,193
500 Unsecured Notes
2029
Fixed
4.25%
496
495
1.0 billion Unsecured Notes
2032
Fixed
6.80%
989
988
1.5 billion Unsecured Bonds
2039
Fixed
7.00%
672
672
1.0 billion Unsecured Notes
2041
Fixed
6.75%
428
428
EIB loan
2025
Fixed
1.16%
81
140
EIB loan
2032
Floating
5.22%
309
299
Schuldschein loans
2025 - 2027
Fixed
2.5% - 3.0%
100
96
Schuldschein loans
2025 - 2027
Floating
5.1% - 5.4%
699
674
Other loans
2023
Fixed
1.8 %
\u2014
18
Other loans
2029 - 2035
Floating
0.7% - 4.2%
223
243
Total Corporate
8,135
9,305
Americas
Other loans
2024 - 2030
Fixed/Floating
0.0% - 9.5%
45
57
Total Americas
45
57
Europe, Asia & Africa
EBRD Facility
2024 - 2026
Floating
7.2% - 7.9%
177
86
Other loans
2023 - 2043
Fixed/Floating
0.0% - 8.0%
198
129
Total Europe, Asia & Africa
375
215
Total
8,555
9,577
Less current portion of long-term debt
(1,125)
(1,338)
Total long-term debt (excluding lease obligations)
7,430
8,239
Long-term lease obligations2
939
828
Total long-term debt, net of current portion
8,369
9,067
1. Rates applicable to balances outstanding at December\u00a031, 2023. For debt that has been redeemed in its entirety during 2023, the interest rates refer to the rates at
repayment date.
2. Net of current portion of 207 and 228 as of December 31, 2023 and 2022, respectively. See note 7.
Corporate
5.5\u00a0billion 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. On December 19, 2023 extension was
completed for 5.4 billion of the 5.5\u00a0billion revolving credit facility,
with 0.1\u00a0billion lapsed at maturity. The Facility contains
restrictive covenants, which among other things, 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. ArcelorMittal's long-
term credit rating was upgraded on August 9, 2021 by Moody's
to 'Baa3' and its outlook was changed to positive by Moody's on
February 19, 2024. On June 16, 2023, Standard & Poor's
upgraded ArcelorMittal's outlook to positive and affirmed a long-
term credit rating of 'BBB-'. 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, 2023, the 5.4 billion
revolving credit facility was fully available. The Company make
drawdowns from and repayments on the 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 17, 2023, at maturity, ArcelorMittal fully repaid the
outstanding \u20ac367 million (395) of its \u20ac500 million Fixed Rate
Notes due 2023.
On May 19, 2023, at maturity, ArcelorMittal fully repaid
\u20ac750\u00a0million (812) Fixed Rate Notes due 2023.
On January 17, 2024, at maturity, ArcelorMittal fully repaid the
outstanding \u20ac529 million (585) of its \u20ac1.0 billion Fixed Rate
Notes due 2024.
The margin applicable to ArcelorMittal\u2019s principal credit facilities
(5.4 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:
Initial value
Nominal amount of
outstanding value
Date of issuance
Repayment date
Interest rate1
Issued at
\u20ac250 million Unsecured Notes
\u20ac132 million
Jul 4, 2019
Jan 17, 2024
2.25%
105.59%
\u20ac750 million Unsecured Notes
\u20ac397 million
Jan 17, 2019
Jan 17, 2024
2.25%
99.72%
750 Unsecured Notes
290
Jul 16, 2019
Jul 16, 2024
3.60%
99.86%
500 Unsecured Notes
184
Jun 1, 2015
Jun 1, 2025
6.13%
100.00%
\u20ac750 million Unsecured Notes
\u20ac750 million
Nov 19, 2019
Nov 19, 2025
1.75%
99.41%
750 Unsecured Notes
401
Mar 11, 2019
Mar 11, 2026
4.55%
99.72%
\u20ac600 million Unsecured Notes
\u20ac600 million
Sep 26, 2022
Sep 28, 2026
4.88%
99.65%
1.2 billion Unsecured Bonds
1.2 Billion
Nov 29, 2022
Nov 29, 2027
6.55%
99.91%
500 Unsecured Notes
500
Jul 16, 2019
Jul 16, 2029
4.25%
99.00%
1.0 billion Unsecured Bonds
1.0 Billion
Nov 29, 2022
Nov 29, 2032
6.80%
99.37%
1.0 billion Unsecured Bonds
457
Oct 8, 2009
Oct 15, 2039
7.00%
95.20%
500 Unsecured Bonds
229
Aug 5, 2010
Oct 15, 2039
7.00%
104.84%
1.0 billion Unsecured Notes
434
Mar 7, 2011
Mar 1, 2041
6.75%
99.18%
1. Rates applicable at December 31, 2023.
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, 2023, \u20ac280
million (309) 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, 2023, \u20ac73\u00a0million (81) 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, 2023,
\u20ac723\u00a0million (799) 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 December 28, 2029.
The outstanding amount in total as of December 31, 2023 was
\u20ac122 million (134).
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. As of December 31, 2023, the loan was
fully repaid.
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, AMKR 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, 2023, 18 was
outstanding under the agreement.
On December 15, 2022, AMKR entered into a 100 loan
agreement with EBRD for working capital purposes. As of
December 31, 2023, 100 was drawn under the agreement.
On November 17, 2023, AMKR entered into a 150 loan
agreement with EBRD for working capital purposes. 59 were
committed and fully drawn as of December 31, 2023. 91 will be
committed by EBRD in 2024 upon AMKR's request.
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 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. On August 30, 2023, the facility
was further amended and restated for an amount of 4.5\u00a0billion
South African rand and with a maturity of September 7, 2026.
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, 2023, 3.0
billion South African rand (162) was drawn.\u00a0
Other loans\u00a0
Other loans mainly relate to loans contracted by ArcelorMittal
subsidiaries with different counterparties.
Hedge of net investments
As of April\u00a01, 2018, the Company designated a portfolio of euro
denominated debt (\u20ac3,627 million and \u20ac4,862 million as of
December\u00a031, 2023 and 2022, respectively) as a hedge of
certain euro denominated investments (\u20ac8,635 million and
\u20ac8,837 million as of December\u00a031, 2023 and 2022, 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, 2023 and 2022, the Company recognized
166 foreign exchange loss and 197 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, 2023 the scheduled maturities of short-term
debt, long-term debt and long-term lease obligations, including
their current portion are as follows:
Year of maturity
Amount
2024
2,312
2025
1,720
2026
1,335
2027
1,749
2028
154
Subsequent years
3,411
Total
10,681
Fair value
The following tables summarize the Company\u2019s bases used to
estimate its debt at fair value. Fair value measurement has been
classified into three levels based upon a fair value hierarchy that
reflects the significance of the inputs used in making the
measurements.
As of December 31, 2023
Carrying amount
Fair Value
Level 1
Level 2
Level 3
Total
Instruments payable bearing interest at fixed rates
8,165
6,969
1,273
\u2014
8,242
Instruments payable bearing interest at variable rates
1,536
\u2014
1,539
\u2014
1,539
Total long-term debt, including current portion
9,701
6,969
2,812
\u2014
9,781
Short term bank loans and other credit facilities including
commercial paper
980
\u2014
988
\u2014
988
As of December 31, 2022
Carrying amount
Fair Value
Level 1
Level 2
Level 3
Total
Instruments payable bearing interest at fixed rates
9,214
7,783
1,180
\u2014
8,963
Instruments payable bearing interest at variable rates
1,419
\u2014
1,350
\u2014
1,350
Total long-term debt, including current portion
10,633
7,783
2,530
\u2014
10,313
Short term bank loans and other credit facilities including
commercial paper
1,017
\u2014
1,017
\u2014
1,017
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.
On March 14, 2023, the Company, through its wholly-owned
subsidiary Hera Ermac, early repaid 226,666 out of the 666,666
outstanding unsecured and unsubordinated bonds mandatorily
convertible into preferred shares of such subsidiary (\"MCBs\") for
a total cash consideration of 340. The bonds were placed
privately with a Luxembourg affiliate of Cr\u00e9dit Agricole. The
Company determined that the MCBs are a hybrid instrument
including an equity component recognized as non-controlling
interests and a liability component. Following the early partial
repayment, the Company allocated the cash consideration to
the liability component (25) and equity component (315) of the
instrument, which resulted in 291 decrease in non-controlling
interests and 24 decrease in retained earnings consistent with
the original allocation using the net present value of the future
interest payments at the date of early redemption.
On December 21, 2023, the Company signed an agreement for
an extension of the conversion date of the mandatory
convertible bonds to January 30, 2026. 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 547 and other liabilities for 113. The
derecognition of the previous instrument and the recognition at
fair value of the new instrument resulted in 66 expense included
in financing costs-net in the consolidated statement of
operations and 32 decrease in non-controlling interests.
Mandatorily convertible subordinated notes
On May 18, 2020, the Company completed an offering of\u00a0
mandatorily convertible subordinated notes (\u201cMCNs\u201d) for 1,250.
The MCNs had a three-year maturity, were issued at 100% of
the principal amount and were 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.
The Significant Shareholder participated in the offerings by
contributing an amount of 100 for the MCNs.
The Company determined that the MCNs were a hybrid
instrument including an equity component and a debt
component.
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.
On May 19, 2023, upon mandatory conversion of the
24,290,025 outstanding mandatorily convertible subordinated
notes (\"MCNs\") due May 18, 2023, ArcelorMittal delivered a
total of 57,057,991 treasury shares (of which 9,396,120 to the
Significant Shareholder) with a carrying amount of 1,534. The
Company determined that the MCNs are a hybrid instrument
including an equity component and a debt component. Following
the mandatory conversion, it derecognized the 509 equity
component presented separately in the statements of changes
in equity and recognized a 1,025 (794 net of tax) decrease in
additional paid-in capital.
", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-674": { "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:
December 31,
2023
2022
Short-term bank loans and other
credit facilities including
commercial paper 1
980
1,017
Current portion of long-term debt
1,125
1,338
Lease obligations2
207
228
Total
2,312
2,583
1. The weighted average interest rate on short-term borrowings outstanding was
5.5% and 4.0% as of December\u00a031, 2023 and 2022, respectively.
2. See note 7.
Short-term bank loans and other credit facilities include short-
term loans, overdrafts and commercial paper.
ArcelorMittal has entered into certain short-term committed
bilateral credit facilities renewable on an annual basis. As of
December\u00a031, 2023 , facilities totaling approximately 0.6 billion,
remained fully available.
On July 27, 2022, the Company entered into a 2.2 billion bridge
term facility agreement with a financial institution. The facility
may be applied towards the purchase price for the intended
acquisition of ArcelorMittal Pec\u00e9m, as well as the refinancing of
its existing indebtedness and the payment of related fees, costs
and expenses. The facility was available for 12 months from
signing with two extension options of 6 months each at the
borrower's 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, 2023 and
2022, the outstanding amount was 684 and 796, respectively.
6.1.2.2 Long-term debt
Long-term debt is comprised of the following:
December 31,
2023
2022
Year of maturity
Type of Interest
Interest rate1
Carrying amount at
amortized cost
Corporate
5.4 billion Revolving Credit Facility
2023 - 2025
Floating
\u2014
\u2014
\u20ac500 million Unsecured Notes
2023
Fixed
0.95%
\u2014
391
\u20ac750 million Unsecured Notes
2023
Fixed
1.00%
\u2014
799
\u20ac1.0 billion Unsecured Notes
2024
Fixed
2.25%
585
567
750 Unsecured Notes
2024
Fixed
3.60%
290
289
500 Unsecured Notes
2025
Fixed
6.13%
183
183
\u20ac750 million Unsecured Notes
2025
Fixed
1.75%
826
796
750 Unsecured Notes
2026
Fixed
4.55%
400
399
\u20ac600 million Unsecured Notes
2026
Fixed
4.88%
659
635
1.2 billion Unsecured Notes
2027
Fixed
6.55%
1,195
1,193
500 Unsecured Notes
2029
Fixed
4.25%
496
495
1.0 billion Unsecured Notes
2032
Fixed
6.80%
989
988
1.5 billion Unsecured Bonds
2039
Fixed
7.00%
672
672
1.0 billion Unsecured Notes
2041
Fixed
6.75%
428
428
EIB loan
2025
Fixed
1.16%
81
140
EIB loan
2032
Floating
5.22%
309
299
Schuldschein loans
2025 - 2027
Fixed
2.5% - 3.0%
100
96
Schuldschein loans
2025 - 2027
Floating
5.1% - 5.4%
699
674
Other loans
2023
Fixed
1.8 %
\u2014
18
Other loans
2029 - 2035
Floating
0.7% - 4.2%
223
243
Total Corporate
8,135
9,305
Americas
Other loans
2024 - 2030
Fixed/Floating
0.0% - 9.5%
45
57
Total Americas
45
57
Europe, Asia & Africa
EBRD Facility
2024 - 2026
Floating
7.2% - 7.9%
177
86
Other loans
2023 - 2043
Fixed/Floating
0.0% - 8.0%
198
129
Total Europe, Asia & Africa
375
215
Total
8,555
9,577
Less current portion of long-term debt
(1,125)
(1,338)
Total long-term debt (excluding lease obligations)
7,430
8,239
Long-term lease obligations2
939
828
Total long-term debt, net of current portion
8,369
9,067
1. Rates applicable to balances outstanding at December\u00a031, 2023. For debt that has been redeemed in its entirety during 2023, the interest rates refer to the rates at
repayment date.
2. Net of current portion of 207 and 228 as of December 31, 2023 and 2022, respectively. See note 7.
Corporate
5.5\u00a0billion 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. On December 19, 2023 extension was
completed for 5.4 billion of the 5.5\u00a0billion revolving credit facility,
with 0.1\u00a0billion lapsed at maturity. The Facility contains
restrictive covenants, which among other things, 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. ArcelorMittal's long-
term credit rating was upgraded on August 9, 2021 by Moody's
to 'Baa3' and its outlook was changed to positive by Moody's on
February 19, 2024. On June 16, 2023, Standard & Poor's
upgraded ArcelorMittal's outlook to positive and affirmed a long-
term credit rating of 'BBB-'. 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, 2023, the 5.4 billion
revolving credit facility was fully available. The Company make
drawdowns from and repayments on the 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 17, 2023, at maturity, ArcelorMittal fully repaid the
outstanding \u20ac367 million (395) of its \u20ac500 million Fixed Rate
Notes due 2023.
On May 19, 2023, at maturity, ArcelorMittal fully repaid
\u20ac750\u00a0million (812) Fixed Rate Notes due 2023.
On January 17, 2024, at maturity, ArcelorMittal fully repaid the
outstanding \u20ac529 million (585) of its \u20ac1.0 billion Fixed Rate
Notes due 2024.
The margin applicable to ArcelorMittal\u2019s principal credit facilities
(5.4 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:
Initial value
Nominal amount of
outstanding value
Date of issuance
Repayment date
Interest rate1
Issued at
\u20ac250 million Unsecured Notes
\u20ac132 million
Jul 4, 2019
Jan 17, 2024
2.25%
105.59%
\u20ac750 million Unsecured Notes
\u20ac397 million
Jan 17, 2019
Jan 17, 2024
2.25%
99.72%
750 Unsecured Notes
290
Jul 16, 2019
Jul 16, 2024
3.60%
99.86%
500 Unsecured Notes
184
Jun 1, 2015
Jun 1, 2025
6.13%
100.00%
\u20ac750 million Unsecured Notes
\u20ac750 million
Nov 19, 2019
Nov 19, 2025
1.75%
99.41%
750 Unsecured Notes
401
Mar 11, 2019
Mar 11, 2026
4.55%
99.72%
\u20ac600 million Unsecured Notes
\u20ac600 million
Sep 26, 2022
Sep 28, 2026
4.88%
99.65%
1.2 billion Unsecured Bonds
1.2 Billion
Nov 29, 2022
Nov 29, 2027
6.55%
99.91%
500 Unsecured Notes
500
Jul 16, 2019
Jul 16, 2029
4.25%
99.00%
1.0 billion Unsecured Bonds
1.0 Billion
Nov 29, 2022
Nov 29, 2032
6.80%
99.37%
1.0 billion Unsecured Bonds
457
Oct 8, 2009
Oct 15, 2039
7.00%
95.20%
500 Unsecured Bonds
229
Aug 5, 2010
Oct 15, 2039
7.00%
104.84%
1.0 billion Unsecured Notes
434
Mar 7, 2011
Mar 1, 2041
6.75%
99.18%
1. Rates applicable at December 31, 2023.
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, 2023, \u20ac280
million (309) 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, 2023, \u20ac73\u00a0million (81) 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, 2023,
\u20ac723\u00a0million (799) 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 December 28, 2029.
The outstanding amount in total as of December 31, 2023 was
\u20ac122 million (134).
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. As of December 31, 2023, the loan was
fully repaid.
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, AMKR 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, 2023, 18 was
outstanding under the agreement.
On December 15, 2022, AMKR entered into a 100 loan
agreement with EBRD for working capital purposes. As of
December 31, 2023, 100 was drawn under the agreement.
On November 17, 2023, AMKR entered into a 150 loan
agreement with EBRD for working capital purposes. 59 were
committed and fully drawn as of December 31, 2023. 91 will be
committed by EBRD in 2024 upon AMKR's request.
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 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. On August 30, 2023, the facility
was further amended and restated for an amount of 4.5\u00a0billion
South African rand and with a maturity of September 7, 2026.
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, 2023, 3.0
billion South African rand (162) was drawn.\u00a0
Other loans\u00a0
Other loans mainly relate to loans contracted by ArcelorMittal
subsidiaries with different counterparties.
Hedge of net investments
As of April\u00a01, 2018, the Company designated a portfolio of euro
denominated debt (\u20ac3,627 million and \u20ac4,862 million as of
December\u00a031, 2023 and 2022, respectively) as a hedge of
certain euro denominated investments (\u20ac8,635 million and
\u20ac8,837 million as of December\u00a031, 2023 and 2022, 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, 2023 and 2022, the Company recognized
166 foreign exchange loss and 197 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, 2023 the scheduled maturities of short-term
debt, long-term debt and long-term lease obligations, including
their current portion are as follows:
Year of maturity
Amount
2024
2,312
2025
1,720
2026
1,335
2027
1,749
2028
154
Subsequent years
3,411
Total
10,681
Fair value
The following tables summarize the Company\u2019s bases used to
estimate its debt at fair value. Fair value measurement has been
classified into three levels based upon a fair value hierarchy that
reflects the significance of the inputs used in making the
measurements.
As of December 31, 2023
Carrying amount
Fair Value
Level 1
Level 2
Level 3
Total
Instruments payable bearing interest at fixed rates
8,165
6,969
1,273
\u2014
8,242
Instruments payable bearing interest at variable rates
1,536
\u2014
1,539
\u2014
1,539
Total long-term debt, including current portion
9,701
6,969
2,812
\u2014
9,781
Short term bank loans and other credit facilities including
commercial paper
980
\u2014
988
\u2014
988
As of December 31, 2022
Carrying amount
Fair Value
Level 1
Level 2
Level 3
Total
Instruments payable bearing interest at fixed rates
9,214
7,783
1,180
\u2014
8,963
Instruments payable bearing interest at variable rates
1,419
\u2014
1,350
\u2014
1,350
Total long-term debt, including current portion
10,633
7,783
2,530
\u2014
10,313
Short term bank loans and other credit facilities including
commercial paper
1,017
\u2014
1,017
\u2014
1,017
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, 2023 and December\u00a031, 2022:
As of December 31, 2023
Total
EUR
USD
ARS
BRL
INR
Other
Short-term debt and current portion of long-term debt
2,312
1,414
533
\u2014
31
68
266
Long-term debt, net of current portion
8,369
3,312
4,560
\u2014
86
1
410
Cash and cash equivalents and restricted cash
(7,783)
(5,660)
(886)
(461)
(171)
(62)
(543)
Net debt
2,898
(934)
4,207
(461)
(54)
7
133
As of December 31, 2022
Total
EUR
USD
ARS
BRL
INR
Other
Short-term debt and current portion of long-term debt
2,583
2,059
227
\u2014
28
2
267
Long-term debt, net of current portion
9,067
3,777
4,868
\u2014
74
\u2014
348
Cash and cash equivalents, restricted cash and other
restricted funds
(9,414)
(6,514)
(1,494)
(364)
(275)
(85)
(682)
Net debt
2,236
(678)
3,601
(364)
(173)
(83)
(67)
", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-672": { "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:
December 31,
2023
2022
Short-term bank loans and other
credit facilities including
commercial paper 1
980
1,017
Current portion of long-term debt
1,125
1,338
Lease obligations2
207
228
Total
2,312
2,583
1. The weighted average interest rate on short-term borrowings outstanding was
5.5% and 4.0% as of December\u00a031, 2023 and 2022, respectively.
2. See note 7.
Short-term bank loans and other credit facilities include short-
term loans, overdrafts and commercial paper.
ArcelorMittal has entered into certain short-term committed
bilateral credit facilities renewable on an annual basis. As of
December\u00a031, 2023 , facilities totaling approximately 0.6 billion,
remained fully available.
On July 27, 2022, the Company entered into a 2.2 billion bridge
term facility agreement with a financial institution. The facility
may be applied towards the purchase price for the intended
acquisition of ArcelorMittal Pec\u00e9m, as well as the refinancing of
its existing indebtedness and the payment of related fees, costs
and expenses. The facility was available for 12 months from
signing with two extension options of 6 months each at the
borrower's 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, 2023 and
2022, the outstanding amount was 684 and 796, respectively.
6.1.2.2 Long-term debt
Long-term debt is comprised of the following:
December 31,
2023
2022
Year of maturity
Type of Interest
Interest rate1
Carrying amount at
amortized cost
Corporate
5.4 billion Revolving Credit Facility
2023 - 2025
Floating
\u2014
\u2014
\u20ac500 million Unsecured Notes
2023
Fixed
0.95%
\u2014
391
\u20ac750 million Unsecured Notes
2023
Fixed
1.00%
\u2014
799
\u20ac1.0 billion Unsecured Notes
2024
Fixed
2.25%
585
567
750 Unsecured Notes
2024
Fixed
3.60%
290
289
500 Unsecured Notes
2025
Fixed
6.13%
183
183
\u20ac750 million Unsecured Notes
2025
Fixed
1.75%
826
796
750 Unsecured Notes
2026
Fixed
4.55%
400
399
\u20ac600 million Unsecured Notes
2026
Fixed
4.88%
659
635
1.2 billion Unsecured Notes
2027
Fixed
6.55%
1,195
1,193
500 Unsecured Notes
2029
Fixed
4.25%
496
495
1.0 billion Unsecured Notes
2032
Fixed
6.80%
989
988
1.5 billion Unsecured Bonds
2039
Fixed
7.00%
672
672
1.0 billion Unsecured Notes
2041
Fixed
6.75%
428
428
EIB loan
2025
Fixed
1.16%
81
140
EIB loan
2032
Floating
5.22%
309
299
Schuldschein loans
2025 - 2027
Fixed
2.5% - 3.0%
100
96
Schuldschein loans
2025 - 2027
Floating
5.1% - 5.4%
699
674
Other loans
2023
Fixed
1.8 %
\u2014
18
Other loans
2029 - 2035
Floating
0.7% - 4.2%
223
243
Total Corporate
8,135
9,305
Americas
Other loans
2024 - 2030
Fixed/Floating
0.0% - 9.5%
45
57
Total Americas
45
57
Europe, Asia & Africa
EBRD Facility
2024 - 2026
Floating
7.2% - 7.9%
177
86
Other loans
2023 - 2043
Fixed/Floating
0.0% - 8.0%
198
129
Total Europe, Asia & Africa
375
215
Total
8,555
9,577
Less current portion of long-term debt
(1,125)
(1,338)
Total long-term debt (excluding lease obligations)
7,430
8,239
Long-term lease obligations2
939
828
Total long-term debt, net of current portion
8,369
9,067
1. Rates applicable to balances outstanding at December\u00a031, 2023. For debt that has been redeemed in its entirety during 2023, the interest rates refer to the rates at
repayment date.
2. Net of current portion of 207 and 228 as of December 31, 2023 and 2022, respectively. See note 7.
Corporate
5.5\u00a0billion 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. On December 19, 2023 extension was
completed for 5.4 billion of the 5.5\u00a0billion revolving credit facility,
with 0.1\u00a0billion lapsed at maturity. The Facility contains
restrictive covenants, which among other things, 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. ArcelorMittal's long-
term credit rating was upgraded on August 9, 2021 by Moody's
to 'Baa3' and its outlook was changed to positive by Moody's on
February 19, 2024. On June 16, 2023, Standard & Poor's
upgraded ArcelorMittal's outlook to positive and affirmed a long-
term credit rating of 'BBB-'. 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, 2023, the 5.4 billion
revolving credit facility was fully available. The Company make
drawdowns from and repayments on the 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 17, 2023, at maturity, ArcelorMittal fully repaid the
outstanding \u20ac367 million (395) of its \u20ac500 million Fixed Rate
Notes due 2023.
On May 19, 2023, at maturity, ArcelorMittal fully repaid
\u20ac750\u00a0million (812) Fixed Rate Notes due 2023.
On January 17, 2024, at maturity, ArcelorMittal fully repaid the
outstanding \u20ac529 million (585) of its \u20ac1.0 billion Fixed Rate
Notes due 2024.
The margin applicable to ArcelorMittal\u2019s principal credit facilities
(5.4 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:
Initial value
Nominal amount of
outstanding value
Date of issuance
Repayment date
Interest rate1
Issued at
\u20ac250 million Unsecured Notes
\u20ac132 million
Jul 4, 2019
Jan 17, 2024
2.25%
105.59%
\u20ac750 million Unsecured Notes
\u20ac397 million
Jan 17, 2019
Jan 17, 2024
2.25%
99.72%
750 Unsecured Notes
290
Jul 16, 2019
Jul 16, 2024
3.60%
99.86%
500 Unsecured Notes
184
Jun 1, 2015
Jun 1, 2025
6.13%
100.00%
\u20ac750 million Unsecured Notes
\u20ac750 million
Nov 19, 2019
Nov 19, 2025
1.75%
99.41%
750 Unsecured Notes
401
Mar 11, 2019
Mar 11, 2026
4.55%
99.72%
\u20ac600 million Unsecured Notes
\u20ac600 million
Sep 26, 2022
Sep 28, 2026
4.88%
99.65%
1.2 billion Unsecured Bonds
1.2 Billion
Nov 29, 2022
Nov 29, 2027
6.55%
99.91%
500 Unsecured Notes
500
Jul 16, 2019
Jul 16, 2029
4.25%
99.00%
1.0 billion Unsecured Bonds
1.0 Billion
Nov 29, 2022
Nov 29, 2032
6.80%
99.37%
1.0 billion Unsecured Bonds
457
Oct 8, 2009
Oct 15, 2039
7.00%
95.20%
500 Unsecured Bonds
229
Aug 5, 2010
Oct 15, 2039
7.00%
104.84%
1.0 billion Unsecured Notes
434
Mar 7, 2011
Mar 1, 2041
6.75%
99.18%
1. Rates applicable at December 31, 2023.
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, 2023, \u20ac280
million (309) 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, 2023, \u20ac73\u00a0million (81) 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, 2023,
\u20ac723\u00a0million (799) 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 December 28, 2029.
The outstanding amount in total as of December 31, 2023 was
\u20ac122 million (134).
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. As of December 31, 2023, the loan was
fully repaid.
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, AMKR 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, 2023, 18 was
outstanding under the agreement.
On December 15, 2022, AMKR entered into a 100 loan
agreement with EBRD for working capital purposes. As of
December 31, 2023, 100 was drawn under the agreement.
On November 17, 2023, AMKR entered into a 150 loan
agreement with EBRD for working capital purposes. 59 were
committed and fully drawn as of December 31, 2023. 91 will be
committed by EBRD in 2024 upon AMKR's request.
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 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. On August 30, 2023, the facility
was further amended and restated for an amount of 4.5\u00a0billion
South African rand and with a maturity of September 7, 2026.
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, 2023, 3.0
billion South African rand (162) was drawn.\u00a0
Other loans\u00a0
Other loans mainly relate to loans contracted by ArcelorMittal
subsidiaries with different counterparties.
Hedge of net investments
As of April\u00a01, 2018, the Company designated a portfolio of euro
denominated debt (\u20ac3,627 million and \u20ac4,862 million as of
December\u00a031, 2023 and 2022, respectively) as a hedge of
certain euro denominated investments (\u20ac8,635 million and
\u20ac8,837 million as of December\u00a031, 2023 and 2022, 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, 2023 and 2022, the Company recognized
166 foreign exchange loss and 197 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, 2023 the scheduled maturities of short-term
debt, long-term debt and long-term lease obligations, including
their current portion are as follows:
Year of maturity
Amount
2024
2,312
2025
1,720
2026
1,335
2027
1,749
2028
154
Subsequent years
3,411
Total
10,681
Fair value
The following tables summarize the Company\u2019s bases used to
estimate its debt at fair value. Fair value measurement has been
classified into three levels based upon a fair value hierarchy that
reflects the significance of the inputs used in making the
measurements.
As of December 31, 2023
Carrying amount
Fair Value
Level 1
Level 2
Level 3
Total
Instruments payable bearing interest at fixed rates
8,165
6,969
1,273
\u2014
8,242
Instruments payable bearing interest at variable rates
1,536
\u2014
1,539
\u2014
1,539
Total long-term debt, including current portion
9,701
6,969
2,812
\u2014
9,781
Short term bank loans and other credit facilities including
commercial paper
980
\u2014
988
\u2014
988
As of December 31, 2022
Carrying amount
Fair Value
Level 1
Level 2
Level 3
Total
Instruments payable bearing interest at fixed rates
9,214
7,783
1,180
\u2014
8,963
Instruments payable bearing interest at variable rates
1,419
\u2014
1,350
\u2014
1,350
Total long-term debt, including current portion
10,633
7,783
2,530
\u2014
10,313
Short term bank loans and other credit facilities including
commercial paper
1,017
\u2014
1,017
\u2014
1,017
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.
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, 2021 (note 6.1.2)
6,488
1,913
Proceeds from long-term debt
3,893
\u2014
Payments of long-term debt
\u2014
\u2014
Amortized cost
2
2
Proceeds from short-term debt
\u2014
434
Payments of short-term debt
\u2014
(1,044)
Current portion of long-term debt
(1,566)
1,566
Payments of principal portion of lease liabilities (note 7) 1
(10)
(175)
Additions to lease liabilities (notes 5.2 and 7)
318
100
Unrealized foreign exchange effects and other movements
(58)
(213)
Balance as of December 31, 2022 (note 6.1.2)
9,067
2,583
Proceeds from long-term debt
134
\u2014
Payments of long-term debt
(16)
\u2014
Amortized cost
8
(3)
Proceeds from short-term debt
\u2014
218
Payments of short-term debt
\u2014
(1,670)
Current portion of long-term debt
(1,332)
1,332
Payments of principal portion of lease liabilities (note 7) 1
(8)
(245)
Additions to lease liabilities (notes 5.2 and 7)
250
38
Unrealized foreign exchange effects and other movements
266
59
Balance as of December 31, 2023 (note 6.1.2)
8,369
2,312
1. Cash payments decreasing the outstanding liability relating to leases are classified under payments of principal portion of lease liabilities and other financing activities in
the Company's consolidated statements of cash flows.
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, 2023 and December\u00a031, 2022:
As of December 31, 2023
Total
EUR
USD
ARS
BRL
INR
Other
Short-term debt and current portion of long-term debt
2,312
1,414
533
\u2014
31
68
266
Long-term debt, net of current portion
8,369
3,312
4,560
\u2014
86
1
410
Cash and cash equivalents and restricted cash
(7,783)
(5,660)
(886)
(461)
(171)
(62)
(543)
Net debt
2,898
(934)
4,207
(461)
(54)
7
133
As of December 31, 2022
Total
EUR
USD
ARS
BRL
INR
Other
Short-term debt and current portion of long-term debt
2,583
2,059
227
\u2014
28
2
267
Long-term debt, net of current portion
9,067
3,777
4,868
\u2014
74
\u2014
348
Cash and cash equivalents, restricted cash and other
restricted funds
(9,414)
(6,514)
(1,494)
(364)
(275)
(85)
(682)
Net debt
2,236
(678)
3,601
(364)
(173)
(83)
(67)
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-673": { "value": "
6.1.2 Gross debt
Gross debt includes bank debt, debenture loans and lease
obligations and is stated at amortized cost.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-678": { "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:
December 31,
2023
2022
Cash at bank
5,405
4,489
Term deposits
774
828
Money market funds1
1,507
3,983
Total
7,686
9,300
1 Money market funds are highly liquid investments with a maturity of 3 months
or less from the date of acquisition.
Restricted cash represents cash and cash equivalents not
readily available to the Company, mainly related to insurance
deposits, cash accounts in connection with environmental
obligations and true sale of receivables programs, as well as
various other deposits or required balance obligations related to
letters of credit and credit arrangements.
Restricted cash of 97 as of December\u00a031, 2023 and 114 as of
December 31, 2022 included 54 and 52 relating to various
environmental obligations, true sales of receivables programs
and letters of credit issued in ArcelorMittal South Africa. It also
included 13 and 20 in connection with the mandatory convertible
bonds as of December\u00a031, 2023 and December\u00a031, 2022,
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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-677": { "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:
December 31,
2023
2022
Cash at bank
5,405
4,489
Term deposits
774
828
Money market funds1
1,507
3,983
Total
7,686
9,300
1 Money market funds are highly liquid investments with a maturity of 3 months
or less from the date of acquisition.
Restricted cash represents cash and cash equivalents not
readily available to the Company, mainly related to insurance
deposits, cash accounts in connection with environmental
obligations and true sale of receivables programs, as well as
various other deposits or required balance obligations related to
letters of credit and credit arrangements.
Restricted cash of 97 as of December\u00a031, 2023 and 114 as of
December 31, 2022 included 54 and 52 relating to various
environmental obligations, true sales of receivables programs
and letters of credit issued in ArcelorMittal South Africa. It also
included 13 and 20 in connection with the mandatory convertible
bonds as of December\u00a031, 2023 and December\u00a031, 2022,
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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-676": { "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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-679": { "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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-680": { "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, 2021 (note 6.1.2)
6,488
1,913
Proceeds from long-term debt
3,893
\u2014
Payments of long-term debt
\u2014
\u2014
Amortized cost
2
2
Proceeds from short-term debt
\u2014
434
Payments of short-term debt
\u2014
(1,044)
Current portion of long-term debt
(1,566)
1,566
Payments of principal portion of lease liabilities (note 7) 1
(10)
(175)
Additions to lease liabilities (notes 5.2 and 7)
318
100
Unrealized foreign exchange effects and other movements
(58)
(213)
Balance as of December 31, 2022 (note 6.1.2)
9,067
2,583
Proceeds from long-term debt
134
\u2014
Payments of long-term debt
(16)
\u2014
Amortized cost
8
(3)
Proceeds from short-term debt
\u2014
218
Payments of short-term debt
\u2014
(1,670)
Current portion of long-term debt
(1,332)
1,332
Payments of principal portion of lease liabilities (note 7) 1
(8)
(245)
Additions to lease liabilities (notes 5.2 and 7)
250
38
Unrealized foreign exchange effects and other movements
266
59
Balance as of December 31, 2023 (note 6.1.2)
8,369
2,312
1. Cash payments decreasing the outstanding liability relating to leases are classified under payments of principal portion of lease liabilities and other financing activities in
the Company's consolidated statements of cash flows.", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-682": { "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 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
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:
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.
Call option on MCB
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-681": { "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 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
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:
December 31, 2023
Assets
Liabilities
Notional
Amount
Fair Value
Notional
Amount
Fair Value
Interest rate instruments
Other interest rate instruments
221
\u2014
453
\u2014
Total interest rate instruments
\u2014
\u2014
Foreign exchange rate instruments
Forward purchase contracts
1,198
60
4,114
(82)
Forward sale contracts
2,510
53
825
(11)
Exchange option purchases
619
34
760
(3)
Exchange options sales
920
19
608
(46)
Total foreign exchange rate instruments
166
(142)
Raw materials (base metals), freight, energy, emission rights
Term contracts sales
1,350
373
486
(46)
Term contracts purchases
1,538
267
1,235
(166)
Options sales/purchases
18
\u2014
\u2014
\u2014
Total raw materials (base metals), freight, energy, emission rights
640
(212)
Total
806
(354)
December 31, 2022
Assets
Liabilities
Notional
Amount
Fair Value
Notional
Amount
Fair Value
Foreign exchange rate instruments
Forward purchase contracts
657
58
3,678
(19)
Forward sale contracts
1,478
38
753
(6)
Exchange option purchases
1,462
17
2,536
(16)
Exchange options sales
2,222
41
2,055
(20)
Total foreign exchange rate instruments
154
(61)
Raw materials (base metals), freight, energy, emission rights
Term contracts sales
1,128
263
316
(52)
Term contracts purchases
1,755
1,150
785
(306)
Option sales/purchases
207
5
197
(5)
Total raw materials (base metals), freight, energy, emission rights
1,418
(363)
Total
1,572
(424)
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:
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.
Call option on MCB
ArcelorMittal establishes the fair valuation of the call option on
the 660 mandatory convertible bonds (on March 14, 2023, the
Company through its wholly-owned subsidiary Hera Ermac early
repaid 226,666 out of the 666,666 outstanding unsecured and
unsubordinated bonds mandatorily convertible into preferred
shares of such subsidiary (see note 11.2) through the use of
binomial valuation models based on the estimated values of the
underlying equity spot price of $102 ($127 at December 31,
2022) and volatility of 10% (13% at December 31, 2022).
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 SOFR Term curve 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 2023 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 1027% and 96% increase
and decrease of the fair value of the call option at December 31,
2023, respectively.
Electricity option
ArcelorMittal and an electricity supplier entered into a multi-
buyer power supply contract on French market. Other clients of
this contract are committed to purchase electricity from the
supplier with opt-out rights to be exercised in 2024 for
2025-2029 delivery period and in 2029 for 2030-2034 delivery
period. The Company is committed to acquire up to 51% of the
opt-out volumes.
The fair value of the option is based on the Black-Scholes
formula model. Observable input data used in the valuation
include euro zero coupon yield curve and electricity forward
prices for tenors quoted by the European Energy Exchange
(EEX). Unobservable input data is used to measure fair value to
the extent relevant observable inputs are not available. For
instance, electricity forward prices are extrapolated for tenors
not quoted by EEX and volatility is computed based on historical
settlement prices over the last 3 years. A 10% increase and
decrease in electricity forward prices would result in a 19%
decrease and 26% increase, respectively, of the fair value of the
option at December 31, 2023.
The following table summarizes the reconciliation of the fair
value of the financial instrument classified as Level 3:
\u00a0
Electricity option
Call option on 660
mandatory
convertible bonds
Balance as of December 31, 2021
\u2014
15
Change in fair value
\u2014
(15)
Balance as of December 31, 2022
\u2014
\u2014
Change in fair value
(82)
\u2014
Balance as of December 31, 2023
(82)
\u2014
The fair value movement relating to the Level 3 derivative
instrument is recognized in financing costs-net in the
consolidated statements of operations .
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.
On March 14, 2023, the Company, through its wholly-owned
subsidiary Hera Ermac, early repaid 226,666 out of the 666,666
outstanding unsecured and unsubordinated bonds mandatorily
convertible into preferred shares of such subsidiary (\"MCBs\") for
a total cash consideration of 340. The bonds were placed
privately with a Luxembourg affiliate of Cr\u00e9dit Agricole. The
Company determined that the MCBs are a hybrid instrument
including an equity component recognized as non-controlling
interests and a liability component. Following the early partial
repayment, the Company allocated the cash consideration to
the liability component (25) and equity component (315) of the
instrument, which resulted in 291 decrease in non-controlling
interests and 24 decrease in retained earnings consistent with
the original allocation using the net present value of the future
interest payments at the date of early redemption.
On December 21, 2023, the Company signed an agreement for
an extension of the conversion date of the mandatory
convertible bonds to January 30, 2026. 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 547 and other liabilities for 113. The
derecognition of the previous instrument and the recognition at
fair value of the new instrument resulted in 66 expense included
in financing costs-net in the consolidated statement of
operations and 32 decrease in non-controlling interests.
Mandatorily convertible subordinated notes
On May 18, 2020, the Company completed an offering of\u00a0
mandatorily convertible subordinated notes (\u201cMCNs\u201d) for 1,250.
The MCNs had a three-year maturity, were issued at 100% of
the principal amount and were 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.
The Significant Shareholder participated in the offerings by
contributing an amount of 100 for the MCNs.
The Company determined that the MCNs were a hybrid
instrument including an equity component and a debt
component.
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.
On May 19, 2023, upon mandatory conversion of the
24,290,025 outstanding mandatorily convertible subordinated
notes (\"MCNs\") due May 18, 2023, ArcelorMittal delivered a
total of 57,057,991 treasury shares (of which 9,396,120 to the
Significant Shareholder) with a carrying amount of 1,534. The
Company determined that the MCNs are a hybrid instrument
including an equity component and a debt component. Following
the mandatory conversion, it derecognized the 509 equity
component presented separately in the statements of changes
in equity and recognized a 1,025 (794 net of tax) decrease in
additional paid-in capital.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-683": { "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 reclassified 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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-686": { "value": "
6.2\u00a0 \u00a0 Financing costs - net\u00a0
Financing costs - net recognized in the years ended
December\u00a031, 2023 , 2022 and 2021 are as follows:
Year ended December 31,
2023
2022
2021
Interest expense
(715)
(401)
(357)
Interest income
570
188
79
Change in fair value
adjustment on call option on
mandatory convertible bonds
\u2014
(15)
(44)
Accretion of defined benefit
obligations and other long term
liabilities
(243)
(51)
(164)
Net foreign exchange gain/
(loss)
(48)
191
(155)
Other1
(423)
(246)
(514)
Total
(859)
(334)
(1,155)
1. Other mainly included expenses related to true sale of receivables (\u201cTSR\u201d)
programs and bank fees. In 2023, others included 66 relating to the term
extension of mandatorily convertible bonds (see note 11.2). In 2021, other also
included 163 charges related to an unfavorable court decision in an arbitration
case against Sitrel (see note 9.3), 130 premiums and fees related to the early
redemption of bonds in 2021, and 61 charges related to early redemption of
MCNs (see note 11.2).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-685": { "value": "
6.2\u00a0 \u00a0 Financing costs - net\u00a0
Financing costs - net recognized in the years ended
December\u00a031, 2023 , 2022 and 2021 are as follows:
Year ended December 31,
2023
2022
2021
Interest expense
(715)
(401)
(357)
Interest income
570
188
79
Change in fair value
adjustment on call option on
mandatory convertible bonds
\u2014
(15)
(44)
Accretion of defined benefit
obligations and other long term
liabilities
(243)
(51)
(164)
Net foreign exchange gain/
(loss)
(48)
191
(155)
Other1
(423)
(246)
(514)
Total
(859)
(334)
(1,155)
1. Other mainly included expenses related to true sale of receivables (\u201cTSR\u201d)
programs and bank fees. In 2023, others included 66 relating to the term
extension of mandatorily convertible bonds (see note 11.2). In 2021, other also
included 163 charges related to an unfavorable court decision in an arbitration
case against Sitrel (see note 9.3), 130 premiums and fees related to the early
redemption of bonds in 2021, and 61 charges related to early redemption of
MCNs (see note 11.2).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-684": { "value": "
6.2\u00a0 \u00a0 Financing costs - net\u00a0
Financing costs - net recognized in the years ended
December\u00a031, 2023 , 2022 and 2021 are as follows:
Year ended December 31,
2023
2022
2021
Interest expense
(715)
(401)
(357)
Interest income
570
188
79
Change in fair value
adjustment on call option on
mandatory convertible bonds
\u2014
(15)
(44)
Accretion of defined benefit
obligations and other long term
liabilities
(243)
(51)
(164)
Net foreign exchange gain/
(loss)
(48)
191
(155)
Other1
(423)
(246)
(514)
Total
(859)
(334)
(1,155)
1. Other mainly included expenses related to true sale of receivables (\u201cTSR\u201d)
programs and bank fees. In 2023, others included 66 relating to the term
extension of mandatorily convertible bonds (see note 11.2). In 2021, other also
included 163 charges related to an unfavorable court decision in an arbitration
case against Sitrel (see note 9.3), 130 premiums and fees related to the early
redemption of bonds in 2021, and 61 charges related to early redemption of
MCNs (see note 11.2).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-687": { "value": "
6.3\u00a0 \u00a0 Risk management policy
The Company's operations expose it to a variety of financial
risks: interest rate risk, foreign exchange risk, liquidity risk and
risks in fluctuations in prices of raw materials, freight, energy
and 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.
December 31,
2023
2022
Total equity
56,068
55,590
Net debt
2,898
2,236
Gearing
5.2%
4.0%
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, 2023, the long-term debt was comprised of
84% fixed rate debt and 16% 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, 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, 2023, the Company is mainly subject to
foreign exchange exposure relating to the euro, Brazilian real,
Canadian dollar, 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, 2023:
December 31, 2023
Trade
receivables
Trade payables
USD
776
\u00a0
4,989
EUR
928
5,531
BRL
1,111
\u00a0
823
CAD
49
512
GBP
27
\u00a0
104
ZAR
139
382
MXN
39
\u00a0
53
UAH
63
164
PLN
211
697
ARS
51
\u00a0
62
Other
267
288
Total
3,661
\u00a0
13,605
The sensitivity analysis carried out by the Company considers
the effects on its trade receivables and trade payables of a 10%
increase or decrease between the relevant foreign currencies
and the U.S. dollar.
10% increase
10% decrease
Trade
receivables
Trade
payables
Trade
receivables
Trade
payables
EUR
93
\u00a0
553
(93)
\u00a0
(553)
BRL
111
82
(111)
(82)
CAD
5
\u00a0
51
(5)
\u00a0
(51)
GBP
3
10
(3)
(10)
ZAR
14
\u00a0
38
(14)
\u00a0
(38)
MXN
4
5
(4)
(5)
UAH
6
\u00a0
16
(6)
\u00a0
(16)
PLN
21
\u00a0
70
(21)
\u00a0
(70)
ARS
5
\u00a0
6
(5)
\u00a0
(6)
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, 2023, and as such are sensitive to
movements in mainly foreign exchange rates and interest rates.
The cash flows are non-discounted, except for derivative
financial liabilities where the cash flows equal their fair values.
December 31, 2023
Carrying
amount
Contractual
Cash Flow
2024
2025
from 2026 to
2028
After 2028
Non-derivative financial liabilities
Bonds
(6,812)
(9,393)
(1,223)
(1,329)
(2,963)
(3,878)
Loans over 100
(1,345)
(1,942)
(237)
(457)
(462)
(786)
Trade and other payables
(13,605)
(13,605)
(13,605)
\u2014
\u2014
\u2014
Other loans and leases
(2,525)
(2,931)
(1,333)
(339)
(665)
(594)
Total
(24,287)
(27,871)
(16,398)
(2,125)
(4,090)
(5,258)
Derivative financial liabilities
Foreign exchange contracts
(142)
(142)
(139)
(1)
(2)
\u2014
Commodity contracts1
(294)
(294)
(221)
(19)
\u2014
(54)
Total
(436)
(436)
(360)
(20)
(2)
(54)
1. Commodity contracts include base metals, freight, energy and emission rights.
December 31, 2022
Carrying
amount
Contractual
Cash Flow
2023
2024
from 2025
to 2027
After 2027
Non-derivative financial liabilities
Bonds
(7,926)
(10,341)
(1,547)
(1,171)
(3,969)
(3,654)
Loans over 100
(1,234)
(1,364)
(244)
(114)
(827)
(179)
Trade and other payables
(13,532)
(13,554)
(13,554)
\u2014
\u2014
\u2014
Other loans and leases
(2,490)
(3,175)
(1,247)
(314)
(589)
(1,025)
Total
(25,182)
(28,434)
(16,592)
(1,599)
(5,385)
(4,858)
Derivative financial liabilities
Foreign exchange contracts
(61)
(61)
(57)
\u2014
(4)
\u2014
Commodity contracts1
(363)
(363)
(322)
(22)
(19)
\u2014
Total
(424)
(424)
(379)
(22)
(23)
\u2014
1. Commodity contracts include base metals, freight, energy and emission rights.
Cash flow hedges
The following tables present the periods in which the derivatives designated as cash flows hedges are expected to mature:
December 31, 2023
Assets/
(liabilities)
(Outflows)/inflows
Fair value
3 months and
less
3-6 months
6-12 months
2025
After 2025
Foreign exchange contracts
(38)
(3)
(34)
(1)
\u2014
\u2014
Commodities
412
50
70
171
60
61
Emission rights
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
374
47
36
170
60
61
December 31, 2022
Assets/
(liabilities)
(Outflows)/inflows
Fair value
3 months and
less
3-6 months
6-12 months
2024
After 2024
Foreign exchange contracts
4
(2)
(3)
\u2014
9
\u2014
Commodities
1,003
(10)
63
175
419
356
Emission rights
53
1
1
51
\u2014
\u2014
Total
1,060
(11)
61
226
428
356
Associated gains or losses that were recognized in other comprehensive income are reclassified to the consolidated statements of
operations in the same period during which the hedged forecasted cash flow affects the consolidated statements of operations. The
following table presents the periods in which the realized and unrealized gains or losses on derivatives designated as cash flows
hedges recognized in other comprehensive income, net of tax, are expected to impact the consolidated statements of operations:\u00a0
December 31, 2023
Cash flow hedge
reserve1
(Expense)/income
Carrying amount
3 months and
less
3-6 months
6-12 months
2025
After 2025
Foreign exchange contracts
28
5
2
10
11
\u2014
Commodity contracts
633
35
69
169
233
127
Emission rights
900
\u2014
\u2014
\u2014
\u2014
900
Total
1,561
40
71
179
244
1,027
1. The cash flow hedge reserve balance as of December 31, 2023 includes 417 deferred gains for the Company's share of such reserves at its equity method investments,
which are not included in the table above (1,023 as of December 31, 2022).
December\u00a031, 2022
Cash flow hedge\u00a0
reserve1
(Expense)/income
Carrying amount
3 months and
less
3-6 months
6-12 months
2024
After 2024
Foreign exchange contracts
13
\u2014
2
4
7
\u2014
Commodity contracts
1,020
7
37
157
387
432
Emission rights
849
\u2014
\u2014
\u2014
\u2014
849
Total
1,882
7
39
161
394
1,281
1. The cash flow hedge reserve balance as of December 31, 2022 also includes 1,023 deferred gains for the Company's share of such reserves at its equity method
investments, which are not included in the table above (603 as of December 31, 2021).
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.
December 31, 2023
Hedging Instruments
Nominal amount of
the hedging
instrument
Assets
carrying
amount
Liabilities
carrying
amount
Line item in the statement of financial
position where the hedging instrument
is located
Cash flow hedges
Foreign exchange risk - Option/forward/swap
contracts
2,840
12
(50)
Prepaid expenses and other current
assets/Accrued expenses and other
liabilities
Foreign exchange risk - Option/forward/swap
contracts
\u2014
\u2014
\u2014
Other assets/Other long-term
obligations
Price risk - Commodities forwards
1,118
361
(70)
Prepaid expenses and other current
assets/Accrued expenses and other
liabilities
Price risk - Commodities forwards
524
127
(6)
Other assets/Other long-term
obligations
Price risk - Emission rights forwards
\u2014
\u2014
\u2014
Prepaid expenses and other current
assets/Accrued expenses and other
liabilities
Total
500
(126)
Current derivative assets classified as cash flow
hedge
373
Other current derivative assets
270
Total current derivative assets (note 4.5)
643
Non-current derivative assets classified as cash flow
hedge
127
Other non-current derivative assets
36
Total non-current derivative assets (note 4.6)
163
Current derivative liabilities classified as cash flow
hedge
(120)
Other current derivative liabilities
(240)
Total current derivative liabilities (note 4.8)
(360)
Non-current derivative liabilities classified as cash
flow hedge
(6)
Other non-current derivative liabilities
(70)
Total non-current derivative liabilities (note 9.2)
(76)
\u00a0 \u00a0 \u00a0 \u00a0
December 31, 2023
Hedging Instruments
Cash flow
hedge
reserve at
December 31,
2022
Hedging
gains or
losses of the
reporting
period that
were
recognized in
OCI
Gains or
losses
reclassification
adjustment
and hedge
ineffectiveness
Basis
adjustment
Line item in the
statement of
comprehensive
income that
includes the
reclassification
adjustment and
hedge
ineffectiveness
Cash flow
hedge
reserve1 at
December 31,
2023
Cash flow hedges
Foreign exchange risk - Option/Forward contracts
13
16
(17)
16
Sales
28
Price risk - Commodities Option/Forward contracts
1,020
(402)
(10)
25
Sales, Cost of
sales
633
Price risk - Emission rights forwards
849
54
(3)
\u2014
Cost of sales
900
Total
1,882
(332)
(30)
41
1,561
1. The cash flow hedge reserve balance as of December 31, 2023 also includes 417 deferred gains for the Company's share of such reserves at its equity method
investments, which are not disclosed above.
.
December 31, 2022
Hedging Instruments
Nominal amount of
the hedging
instrument
Assets carrying
amount
Liabilities
carrying
amount
Line item in the statement of financial position where
the hedging instrument is located
Cash flow hedges
Foreign exchange risk - Option/
Forward contracts
3,044
21
(26)
Prepaid expenses and other current assets/Accrued
expenses and other liabilities
Foreign exchange risk - Option/
Forward/Swap contracts
300
12
(3)
Other assets/Other long-term obligations
Price risk - Commodities forwards
1,467
490
(261)
Prepaid expenses and other current assets/Accrued
expenses and other liabilities
Price risk - Commodities forwards
1,533
816
(42)
Other assets/Other long-term obligations
Price risk - Emission rights
forwards
488
53
\u2014
Prepaid expenses and other current assets/Accrued
expenses and other liabilities
Total
1,392
(332)
Current derivative assets classified
as cash flow hedge
564
Other current derivative assets
173
Total current derivative assets
(note 4.5)
737
Non-current derivative assets
classified as cash flow hedge
828
Other non-current derivative assets
7
Total non-current derivative assets
(note 4.6)
835
Current derivative liabilities
classified as cash flow hedge
(287)
Other current derivative liabilities
(92)
Total current derivative liabilities
(note 4.8)
(379)
Non-current derivative liabilities
classified as cash flow hedge
(45)
Other non-current derivative
liabilities
\u2014
Total non-current derivative
liabilities (note 9.2)
(45)
December 31, 2022
Hedging Instruments
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
Basis
adjustment
Line item in the
statement of
comprehensive
income that
includes the
reclassification
adjustment and
hedge
ineffectiveness
Cash flow hedge
reserve1 at
December 31,
2022
Cash flow hedges
Foreign exchange risk - Option/
Forward contracts
(1)
146
4
(136)
Sales
13
Price risk - Commodities forwards1
302
951
(153)
(80)
Sales, Cost of
sales
1,020
Price risk - Emission rights forwards
1,786
120
(104)
(953)
Cost of sales
849
Total
2,087
1,217
(253)
(1,169)
1,882
1. The cash flow hedge reserve balance as of December 31, 2022 also includes 1,023 deferred gains for the Company's share of such reserves at its equity method
investments, which are not disclosed above
Net investment hedge
The Company designated a portfolio of euro denominated debt
as a hedge of certain euro denominated investments (see also
note 6.1.2.2.)
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
hedging instrument is categorized as Level 2.
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.
December 31, 20231
Date traded
Date maturity /unwound
Notional
OCI gross
Deferred tax
OCI net of deferred
tax
December, 2014
January, 2016
375
83
(24)
59
May, 2015
March, 2020
500
11
(3)
8
May, 2015
July, 2019
500
(16)
5
(11)
March, 2018
June, 2018
100
8
(2)
6
April, 2019
November, 2019
200
11
(3)
8
Total
97
(27)
70
1. In 2023 and in 2022, the Company did not designate any new CCS as net investment hedge.
December 31, 2023
Hedging Instruments
Nominal
amount of
the hedging
instrument
Assets
carrying
amount
Liabilities
carrying
amount
Line item in the
statement of
financial position
where the
hedging
instrument is
located
Change in
value used for
calculating
hedge
ineffectiveness
for 2021
Line item in the
statement of
comprehensive
income that
includes the
recognized hedge
ineffectiveness
Foreign
currency
translation
reserve
Net investment hedges
Foreign exchange risk -
Cross Currency Swap
\u2014
\u2014
\u2014
N/a
\u2014
N/a
70
Foreign exchange risk -
EUR debt
4,017
\u2014
4,009
Short-term debt
and current
portion of long-
term debt; long-
term debt, net of
current portion
\u2014
N/a
332
Total
4,017
\u2014
4,009
\u2014
402
December 31, 2022
Hedging Instruments
Nominal
amount of
the hedging
instrument
Assets
carrying
amount
Liabilities
carrying
amount
Line item in the
statement of
financial position
where the hedging
instrument is
located
Change in
value used for
calculating
hedge
ineffectiveness
for 2020
Line item in the
statement of
comprehensive
income that includes
the recognized
hedge
ineffectiveness
Foreign
currency
translation
reserve
Net investment hedges
Foreign exchange risk -
Cross Currency Swap
\u2014
\u2014
\u2014
N/a
\u2014
N/a
70
Foreign exchange risk - EUR
debt
5,196
\u2014
(5,186)
Short-term debt
and current portion
of long-term debt;
long-term debt, net
of current portion
\u2014
N/a
456
Total
5,196
\u2014
(5,186)
\u2014
526
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:
December 31,
2023
2022
Base metals
(3)
5
Freight
12
(1)
Energy (oil, gas, electricity)
401
998
Emission rights
18
53
Total
428
1,055
Derivative assets associated with raw materials, energy, freight and emission rights
640
1,418
Derivative liabilities associated with raw materials, energy, freight and emission rights
(212)
(363)
Total
428
1,055
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 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 procurement.
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, 2023 and 2022, the Company had a net
notional position of 164 with a net positive fair value of 18\u00a0and a
net notional position of 488 with a net positive fair value of 53,
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 2023 and 2022.
December 31, 2023
Income
(loss)
Other\u00a0Equity
10% strengthening in U.S. dollar
68
283
10% weakening in U.S. dollar
(134)
(286)
December 31, 2022
(loss)
Income
Other\u00a0Equity
10% strengthening in U.S. dollar
136
141
10% weakening in U.S. dollar
(141)
(153)
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.
December 31, 2023
Floating portion of
net debt1
Interest\u00a0Rate Swaps/
Forward Rate\u00a0Agreements
100 bp increase
53
1
100 bp decrease
(53)
(1)
December 31, 2022
Floating portion of
net debt1
Interest\u00a0Rate Swaps/
Forward
Rate\u00a0Agreements
100 bp increase
70
\u2014
100 bp decrease
(70)
\u2014
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.
December 31, 2023
Income (loss)
Other\u00a0Equity Cash\u00a0Flow
Hedging Reserves
'+10% in prices
Base Metals
(1)
18
Iron Ore
(2)
4
Freight
\u2014
3
Emission rights
(12)
\u2014
Energy
\u2014
71
'-10% in prices
Base Metals
1
(18)
Iron Ore
2
(4)
Freight
\u2014
(3)
Emission rights
12
\u2014
Energy
\u2014
(71)
December 31, 2022
Income (loss)
Other\u00a0Equity Cash\u00a0Flow
Hedging Reserves
'+10% in prices
Base Metals
1
21
Iron Ore
\u2014
5
Freight
1
\u2014
Emission rights
\u2014
29
Energy
1
145
'-10% in prices
Base Metals
(1)
(22)
Iron Ore
\u2014
(5)
Freight
(1)
\u2014
Emission rights
\u2014
(29)
Energy
(1)
(144)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-688": { "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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-689": { "value": "
Foreign currency sensitivity analysis
As of\u00a0 December\u00a031, 2023, the Company is mainly subject to
foreign exchange exposure relating to the euro, Brazilian real,
Canadian dollar, 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, 2023:
December 31, 2023
Trade
receivables
Trade payables
USD
776
\u00a0
4,989
EUR
928
5,531
BRL
1,111
\u00a0
823
CAD
49
512
GBP
27
\u00a0
104
ZAR
139
382
MXN
39
\u00a0
53
UAH
63
164
PLN
211
697
ARS
51
\u00a0
62
Other
267
288
Total
3,661
\u00a0
13,605
The sensitivity analysis carried out by the Company considers
the effects on its trade receivables and trade payables of a 10%
increase or decrease between the relevant foreign currencies
and the U.S. dollar.
10% increase
10% decrease
Trade
receivables
Trade
payables
Trade
receivables
Trade
payables
EUR
93
\u00a0
553
(93)
\u00a0
(553)
BRL
111
82
(111)
(82)
CAD
5
\u00a0
51
(5)
\u00a0
(51)
GBP
3
10
(3)
(10)
ZAR
14
\u00a0
38
(14)
\u00a0
(38)
MXN
4
5
(4)
(5)
UAH
6
\u00a0
16
(6)
\u00a0
(16)
PLN
21
\u00a0
70
(21)
\u00a0
(70)
ARS
5
\u00a0
6
(5)
\u00a0
(6)
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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-690": { "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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-691": { "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, 2023, and as such are sensitive to
movements in mainly foreign exchange rates and interest rates.
The cash flows are non-discounted, except for derivative
financial liabilities where the cash flows equal their fair values.
December 31, 2023
Carrying
amount
Contractual
Cash Flow
2024
2025
from 2026 to
2028
After 2028
Non-derivative financial liabilities
Bonds
(6,812)
(9,393)
(1,223)
(1,329)
(2,963)
(3,878)
Loans over 100
(1,345)
(1,942)
(237)
(457)
(462)
(786)
Trade and other payables
(13,605)
(13,605)
(13,605)
\u2014
\u2014
\u2014
Other loans and leases
(2,525)
(2,931)
(1,333)
(339)
(665)
(594)
Total
(24,287)
(27,871)
(16,398)
(2,125)
(4,090)
(5,258)
Derivative financial liabilities
Foreign exchange contracts
(142)
(142)
(139)
(1)
(2)
\u2014
Commodity contracts1
(294)
(294)
(221)
(19)
\u2014
(54)
Total
(436)
(436)
(360)
(20)
(2)
(54)
1. Commodity contracts include base metals, freight, energy and emission rights.
December 31, 2022
Carrying
amount
Contractual
Cash Flow
2023
2024
from 2025
to 2027
After 2027
Non-derivative financial liabilities
Bonds
(7,926)
(10,341)
(1,547)
(1,171)
(3,969)
(3,654)
Loans over 100
(1,234)
(1,364)
(244)
(114)
(827)
(179)
Trade and other payables
(13,532)
(13,554)
(13,554)
\u2014
\u2014
\u2014
Other loans and leases
(2,490)
(3,175)
(1,247)
(314)
(589)
(1,025)
Total
(25,182)
(28,434)
(16,592)
(1,599)
(5,385)
(4,858)
Derivative financial liabilities
Foreign exchange contracts
(61)
(61)
(57)
\u2014
(4)
\u2014
Commodity contracts1
(363)
(363)
(322)
(22)
(19)
\u2014
Total
(424)
(424)
(379)
(22)
(23)
\u2014
1. Commodity contracts include base metals, freight, energy and emission rights.", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-692": { "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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-693": { "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
As at December
31, 2023
As at December
31, 2022
Lease liabilities
1,146
1,056
Right of-use assets:
\u00a0 \u00a0 Land, buildings and improvements
944
854
\u00a0 \u00a0 Machinery, equipment and others
400
356
Total right-of-use assets
1,344
1,210
Year ended
December 31,
2023
Year ended
December 31,
2022
Depreciation and impairment charges:
Land, buildings and improvements
154
133
Machinery, equipment and others
81
70
Total depreciation and impairment charges
235
203
Other lease related expenses:
Interest expense on lease liabilities
55
34
Expenses of short-term leases
93
96
Expenses of leases of low-value assets
81
71
Expenses related to variable lease payments not included in the measurement of lease liabilities
68
87
Additions to right-of-use assets
288
418
Lease payments recorded as reduction of lease liabilities and cash outflow from financing activities
253
185
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, 2023 and December 31, 2022, is as follows:\u00a0
December 31, 2023
1 year or less
2-3 years
4-5 years
Greater than 5 years
TOTAL
Lease liabilities (undiscounted)
278
340
217
1,251
2,086
December 31, 2022
1 year or less
2-3 years
4-5 years
Greater than 5 years
TOTAL
Lease liabilities (undiscounted)
270
297
183
1,028
1,778
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, 2023 and December 31, 2022, is as
follows:
December 31, 2023
1 year or less
2-3 years
4-5 years
Greater than 5 years
TOTAL
Potential variable lease
payments
70
111
72
61
314
December 31, 2022
1 year or less
2-3 years
4-5 years
Greater than 5 years
TOTAL
Potential variable lease
payments
76
124
85
83
368
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, 2023 and December 31, 2022. 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:
December 31, 2023
1 year or less
2-3 years
4-5 years
Greater than 5 years
TOTAL
Potential extension options
1
1
\u2014
\u2014
2
Potential termination options
\u2014
(1)
\u2014
(1)
(2)
Potential residual value guarantees
9
9
6
\u2014
24
December 31, 2022
1 year or less
2-3 years
4-5 years
Greater than 5 years
TOTAL
Potential extension options
1
2
1
\u2014
4
Potential termination options
\u2014
(1)
\u2014
(1)
(2)
Potential residual value guarantees
1
2
2
1
6
Undiscounted amounts related to lease contracts not yet commenced and therefore not included in the recognized lease liabilities as of
December 31, 2023 and December 31, 2022, to which the Company is committed are described below:
December 31, 2023
1 year or less
2-3 years
4-5 years
Greater than 5 years
TOTAL
Leases not yet commenced
4
10
10
69
93
December 31, 2022
1 year or less
2-3 years
4-5 years
Greater than 5 years
TOTAL
Leases not yet commenced
2
8
9
66
85
There were neither income from subleasing right-of-use assets
nor gains or losses from sales and leaseback for the years
ended December 31, 20223 and December 31, 2022.
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-694": { "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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-695": { "value": "
NOTE 8: PERSONNEL EXPENSES AND DEFERRED
EMPLOYEE BENEFITS
8.1\u00a0 \u00a0 Employees and key management personnel
As of December\u00a031, 2023, 2022 and 2021, ArcelorMittal had
approximately 127,000, 154,000 and 158,000 employees,
respectively, and the total annual compensation of
ArcelorMittal\u2019s employees in 2023, 2022 and 2021 was as
follows:
\u00a0
Year ended December 31,
Employee Information
2023
2022
2021
Wages and salaries
6,868
6,463
6,707
Defined benefits cost (see
note 8.2)
148
153
117
Other staff expenses
1,318
1,300
1,166
Total
8,334
7,916
7,990
The total annual compensation of ArcelorMittal\u2019s key
management personnel, including its Board of Directors,
expensed in 2023, 2022 and 2021 was as follows:
\u00a0
Year ended December 31,
\u00a0
2023
2022
2021
Base salary and directors fees
11
11
10
Short-term performance-
related bonus
9
16
12
Post-employment benefits
1
1
2
Share-based payments
9
7
7
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, 2023, 2022 and 2021, 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, 2023, 2022 and 2021, 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 assets resulting from this calculation are
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 net financing costs 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 based on
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.
\u2022 Discount 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.
\u2022 Rate 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.
\u2022 Healthcare 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.
\u2022 Mortality 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:
\u00a0
December 31,
\u00a0
2023
2022
Pension plan benefits
1,594
1,543
Other post-employment benefits and other
long-term employee benefits (\"OPEB\")
967
861
Termination benefits
134
150
Defined benefit liabilities
2,695
2,554
Provisions for social plans (non-current)
46
52
Total
2,741
2,606
This note, including the table above, discloses the following
benefit categories:\u00a0
\u2022 pension plan benefits are pension plans and lump sum
benefits that are classified under post-employment
benefits as required by IAS 19 which are not
mandatory by law;
\u2022 other post-employment and other long-term employee
benefits, also referred to as, OPEB which includes all
other post-employment benefits as defined in IAS 19
(e.g. lump sum benefits which are mandatory by law,
medical insurance and life insurance) together with all
other long-term employee benefits as defined in IAS
19;
\u2022 termination benefits, which relate to provisions for long
term termination benefits as defined in IAS 19 (e.g.
early retirement benefits); and
\u2022 provisions for social plans (non-current) which relate to
provisions for social plans in restructuring provisions as
required by IAS 37.
The provisions for termination benefits relate to European
countries (Belgium, Spain and Germany).
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.
In 2023, ArcelorMittal Dofasco entered into a buy-in transaction
for a portion of its fully funded pension plans representing 352
obligations.
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
In 2023, AMMC entered into a buy-in transaction for a portion of
its fully funded pension plans representing obligations of 100.
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 on
August 1, 2020 with its Contrecoeur-West union group. Its
defined benefit plan was closed to new hires and a new defined
contribution type arrangement was established for new hires. A
six-year labor agreement was renewed on February 1, 2022 and
it covers Contrecoeur East and Longueuil facilities; its defined
benefit pension plan is offered for all employees including new
hires.
In 2020 and 2022, ArcelorMittal Long Products Canada entered
into buy-in transactions for a portion of its fully funded pension
plans representing 278 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
2024, 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 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, 2023
Total
Canada
Brazil
Europe
Other
Change in benefit obligation
Benefit obligation at beginning of the period
4,932
2,375
431
1,849
277
Current service cost
74
14
\u2014
48
12
Interest cost on DBO
267
120
43
69
35
Past service cost - Plan amendments
9
\u2014
\u2014
3
6
Past service cost - Curtailments
(6)
\u2014
\u2014
(6)
\u2014
Plan participants\u2019 contribution
1
\u2014
\u2014
1
\u2014
Actuarial (gain) loss
272
130
38
88
16
Demographic assumptions
15
4
\u2014
10
1
Financial assumptions
246
123
33
86
4
Experience adjustment
11
3
5
(8)
11
Benefits paid
(382)
(193)
(40)
(121)
(28)
Divestment (see note 2.3)
(50)
\u2014
\u2014
\u2014
(50)
Foreign currency exchange rate differences and other movements
167
52
35
56
24
Benefit obligation at end of the period
5,284
2,498
507
1,987
292
Change in plan assets
Fair value of plan assets at beginning of the period
3,466
2,400
391
647
28
Interest income on plan assets
183
118
39
25
1
Return on plan assets less than discount rate
221
118
26
75
2
Employer contribution
89
19
4
66
\u2014
Plan participants\u2019 contribution
1
\u2014
\u2014
1
\u2014
Benefits paid
(297)
(192)
(40)
(64)
(1)
Foreign currency exchange rate differences and other movements
108
54
31
23
\u2014
Fair value of plan assets at end of the period
3,771
2,517
451
773
30
Present value of the wholly or partly funded obligation
(4,198)
(2,487)
(507)
(1,173)
(31)
Fair value of plan assets
3,771
2,517
451
773
30
Net present value of the wholly or partly funded obligation
(427)
30
(56)
(400)
(1)
Present value of the unfunded obligation
(1,086)
(11)
\u2014
(814)
(261)
Prepaid due to unrecoverable surpluses
(35)
(28)
(4)
(3)
\u2014
Net amount recognized
(1,548)
(9)
(60)
(1,217)
(262)
Net assets related to funded obligations
46
42
\u2014
4
\u2014
Recognized liabilities
(1,594)
(51)
(60)
(1,221)
(262)
Change in unrecoverable surplus
Unrecoverable surplus at beginning of the period
(33)
(27)
(3)
(3)
\u2014
Interest cost on unrecoverable surplus
(2)
(2)
\u2014
\u2014
\u2014
Change in unrecoverable surplus in excess of interest
1
1
\u2014
\u2014
\u2014
Exchange rates changes
(1)
\u2014
(1)
\u2014
\u2014
Unrecoverable surplus at end of the period
(35)
(28)
(4)
(3)
\u2014
Year ended December 31, 2022
Total
Canada
Brazil
Europe
Other
Change in benefit obligation
Benefit obligation at beginning of the period
6,739
3,306
398
2,751
284
Current service cost
99
24
\u2014
63
12
Interest cost on DBO
183
95
39
26
23
Past service cost - Plan amendments
5
9
\u2014
(4)
\u2014
Past service cost - Curtailments
(26)
\u2014
\u2014
(26)
\u2014
Plan participants\u2019 contribution
1
\u2014
\u2014
1
\u2014
Actuarial (gain) loss
(1,287)
(647)
\u2014
(645)
5
Demographic assumptions
42
\u2014
\u2014
(1)
43
Financial assumptions
(1,452)
(678)
(31)
(699)
(44)
Experience adjustment
123
31
31
55
6
Benefits paid
(388)
(208)
(36)
(117)
(27)
Foreign currency exchange rate differences and other movements
(394)
(204)
30
(200)
(20)
Benefit obligation at end of the period
4,932
2,375
431
1,849
277
Change in plan assets
Fair value of plan assets at beginning of the period
4,496
3,163
376
918
39
Interest income on plan assets
130
87
34
8
1
Return on plan assets less than discount rate
(705)
(473)
(9)
(213)
(10)
Employer contribution
65
22
\u2014
43
\u2014
Plan participants\u2019 contribution
1
\u2014
\u2014
1
\u2014
Benefits paid
(296)
(206)
(36)
(52)
(2)
Foreign currency exchange rate differences and other movements
(225)
(193)
26
(58)
\u2014
Fair value of plan assets at end of the period
3,466
2,400
391
647
28
Present value of the wholly or partly funded obligation
(3,895)
(2,364)
(431)
(1,072)
(28)
Fair value of plan assets
3,466
2,400
391
647
28
Net present value of the wholly or partly funded obligation
(429)
36
(40)
(425)
\u2014
Present value of the unfunded obligation
(1,037)
(11)
\u2014
(777)
(249)
Prepaid due to unrecoverable surpluses
(33)
(27)
(3)
(3)
\u2014
Net amount recognized
(1,499)
(2)
(43)
(1,205)
(249)
Net assets related to funded obligations
44
39
\u2014
4
1
Recognized liabilities
(1,543)
(41)
(43)
(1,209)
(250)
Change in unrecoverable surplus
Unrecoverable surplus at beginning of the period
(33)
(28)
(2)
(3)
\u2014
Interest cost on unrecoverable surplus
(1)
(1)
\u2014
\u2014
\u2014
Change in unrecoverable surplus in excess of interest
(1)
\u2014
(1)
\u2014
\u2014
Exchange rates changes
2
2
\u2014
\u2014
\u2014
Unrecoverable surplus at end of the period
(33)
(27)
(3)
(3)
\u2014
The following tables detail the components of net periodic pension cost:
\u00a0
Year ended December 31, 2023
Net periodic pension cost (income)
Total
Canada
Brazil
Europe
Others
Current service cost
74
14
\u2014
48
12
Past service cost - Plan amendments
9
\u2014
\u2014
3
6
Past service cost - Curtailments
(6)
\u2014
\u2014
(6)
\u2014
Net interest cost (income) on net DB liability (asset)
82
\u2014
4
44
34
Total
159
14
4
89
52
\u00a0
Year ended December 31, 2022
Net periodic pension cost (income)
Total
Canada
Brazil
Europe
Others
Current service cost
99
24
\u2014
63
12
Past service cost - Plan amendments
5
9
\u2014
(4)
\u2014
Past service cost - Curtailments
(26)
\u2014
\u2014
(26)
\u2014
Net interest cost/(income) on net DB liability (asset)
52
7
5
18
22
Total
130
40
5
51
34
\u00a0
Year ended December 31, 2021
Net periodic pension cost (income)
Total
Canada
Brazil
Europe
Others
Current service cost
105
29
\u2014
69
7
Past service cost - Plan amendments
31
28
\u2014
3
\u2014
Net interest cost (income) on net DB liability (asset)
55
14
7
12
22
Total
191
71
7
84
29
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, 2023
Total
Canada
Europe
Others
Change in benefit obligation
Benefit obligation at beginning of the period
866
455
314
97
Current service cost
27
7
17
3
Interest cost on DBO
46
24
14
8
Past service cost - Plan amendments
6
\u2014
(2)
8
Actuarial (gain) loss
64
41
30
(7)
Demographic assumptions
18
18
\u2014
\u2014
Financial assumptions
44
26
19
(1)
Experience adjustment
2
(3)
11
(6)
Benefits paid
(75)
(29)
(35)
(11)
Foreign currency exchange rate differences and other movements
37
10
17
10
Benefit obligation at end of the period
971
508
355
108
Change in plan assets
Fair value of plan assets at beginning of the period
5
\u2014
5
\u2014
Benefits paid
(1)
\u2014
(1)
\u2014
Fair value of plan assets at end of the period
4
\u2014
4
\u2014
Present value of the wholly or partly funded obligation
(19)
\u2014
(19)
\u2014
Fair value of plan assets
4
\u2014
4
\u2014
Net present value of the wholly or partly funded obligation
(15)
\u2014
(15)
\u2014
Present value of the unfunded obligation
(952)
(508)
(336)
(108)
Net amount recognized
(967)
(508)
(351)
(108)
Year ended December 31, 2022
Total
Canada
Europe
Others
Change in benefit obligation
Benefit obligation at beginning of the period
1,190
661
423
106
Current service cost
37
11
21
5
Interest cost on DBO
30
19
5
6
Actuarial (gain) loss
(250)
(163)
(71)
(16)
Demographic assumptions
1
\u2014
\u2014
1
Financial assumptions
(251)
(155)
(84)
(12)
Experience adjustment
\u2014
(8)
13
(5)
Benefits paid
(71)
(32)
(32)
(7)
Foreign currency exchange rate differences and other movements
(70)
(41)
(32)
3
Benefit obligation at end of the period
866
455
314
97
Change in plan assets
Fair value of plan assets at beginning of the period
6
\u2014
6
\u2014
Return on plan assets less than discount rate
(1)
\u2014
(1)
\u2014
Fair value of plan assets at end of the period
5
\u2014
5
\u2014
Present value of the wholly or partly funded obligation
(20)
\u2014
(20)
\u2014
Fair value of plan assets
5
\u2014
5
\u2014
Net present value of the wholly or partly funded obligation
(15)
\u2014
(15)
\u2014
Present value of the unfunded obligation
(846)
(455)
(294)
(97)
Net amount recognized
(861)
(455)
(309)
(97)
The following tables detail the components of net periodic other post-employment cost:
\u00a0
Year ended December 31, 2023
Components of net periodic OPEB cost (income)
Total
Canada
Europe
Others
Current service cost
27
7
17
3
Past service cost - Plan amendments
6
\u2014
(2)
8
Net interest cost (income) on net DB liability (asset)
46
24
14
8
Actuarial gain recognized during the year
11
\u2014
11
\u2014
Total
90
31
40
19
\u00a0
Year ended December 31, 2022
Components of net periodic OPEB cost (income)
Total
Canada
Europe
Others
Current service cost
37
11
21
5
Net interest cost (income) on net DB liability (asset)
29
19
4
6
Actuarial gain recognized during the year
(20)
\u2014
(20)
\u2014
Total
46
30
5
11
\u00a0
Year ended December 31, 2021
Components of net periodic OPEB cost (income)
Total
Canada
Europe
Others
Current service cost
9
(1)
7
3
Past service cost - Plan amendments
(57)
1
(58)
\u2014
Past service cost - Curtailments
(7)
\u2014
(7)
\u2014
Net interest cost (income) on net DB liability (asset)
25
18
2
5
Actuarial losses recognized during the year
(14)
(1)
(13)
\u2014
Total
(44)
17
(69)
8
The following tables detail where the expense is recognized in the consolidated statements of operations:
\u00a0
Year ended December 31,
\u00a0
2023
2022
2021
Net periodic pension cost
159
130
191
Net periodic OPEB cost
90
46
(44)
Total
249
176
147
Cost of sales
100
115
72
Selling, general and administrative expenses
14
\u2014
9
Financing costs - net
135
61
66
Total
249
176
147
Plan Assets
The weighted-average asset allocations for the funded defined benefit plans by asset category were as follows:
\u00a0
December 31, 2023
Canada
Brazil
Europe
Equity Securities
27%
2%
8%
- Asset classes that have a quoted market price in an active market
20%
\u2014
8%
- Asset classes that do not have a quoted market price in an active market
7%
2%
\u2014
Fixed Income Securities (including cash)
33%
67%
58%
- Asset classes that have a quoted market price in an active market
24%
67%
58%
- Asset classes that do not have a quoted market price in an active market
9%
\u2014
\u2014
Real Estate
9%
1%
\u2014
- Asset classes that have a quoted market price in an active market
\u2014
\u2014
\u2014
- Asset classes that do not have a quoted market price in an active market
9%
1%
\u2014
Other
31%
30%
34%
- Asset classes that have a quoted market price in an active market
\u2014
30%
7%
- Asset classes that do not have a quoted market price in an active market
31%
\u2014
27%
'
1
Total
100%
100%
100%
\u00a0
December 31, 2022
Canada
Brazil
Europe
Equity Securities
36%
6%
1%
- Asset classes that have a quoted market price in an active market
27%
4%
1%
- Asset classes that do not have a quoted market price in an active market
9%
2%
\u2014
Fixed Income Securities (including cash)
43%
77%
69%
- Asset classes that have a quoted market price in an active market
42%
77%
55%
- Asset classes that do not have a quoted market price in an active market
1%
\u2014
14%
Real Estate
10%
1%
\u2014
- Asset classes that have a quoted market price in an active market
\u2014
\u2014
\u2014
- Asset classes that do not have a quoted market price in an active market
10%
1%
\u2014
Other
11%
16%
30%
- Asset classes that have a quoted market price in an active market
\u2014
16%
7%
- Asset classes that do not have a quoted market price in an active market
11%
\u2014
23%
'
1
Total
100%
100%
100%
1. The percentage consists primarily of assets from insurance contracts in Belgium and Canada.
These assets do not include direct investments in ArcelorMittal stock or ArcelorMittal bonds. They may include ArcelorMittal shares or
bonds held by mutual fund investments. The invested assets produced a 404 actual return and a 576 loss in 2023 and 2022,
respectively.
The Finance and Retirement Committees of the Boards of Directors for the respective operating subsidiaries have general supervisory
authority over the respective trust funds. These committees usually establish, monitor and review asset allocation targets for the
respective funds. Asset managers are permitted some flexibility to vary the asset allocation from the long-term investment strategy
within agreed upon control ranges. The established targets observed as of December 31, 2023 are as described below:
December 31, 2023
\u00a0
Canada
Brazil
Europe
Equity Securities
27%
2%
16%
Fixed Income Securities (including cash)
34%
67%
62%
Real Estate
8%
1%
\u2014
Other'1
31%
30%
22%
Total
100%
100%
100%
1. The percentage consists primarily of assets from insurance contracts in Belgium and Canada.
Assumptions used to determine benefit obligations at December 31,
\u00a0
Pension Plans \u00a0
Other\u00a0Post-employment\u00a0Benefits \u00a0
\u00a0
2023
2022
2021
2023
2022
2021
Discount rate
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
Range
3.30% - 18.00%
3.75% - 24.00%
1.00% - 11.00%
3.30% - 10.15%
3.50% - 9.30%
1.00% - 7.95%
Weighted average
5.02%
5.44%
2.75%
4.68%
5.10%
2.65%
Rate of compensation increase
\u00a0
\u00a0
\u00a0
Range
2.00% - 11.00%
2.00% - 15.00%
2.00% - 10.00%
2.00% - 4.80%
2.00% - 4.80%
2.00% - 4.80%
Weighted average
2.93%
3.01%
2.87%
3.26%
3.29%
3.14%
\u00a0
Other\u00a0Post-employment\u00a0Benefits
\u00a0
2023
2022
2021
Healthcare cost trend rate assumed
\u00a0
\u00a0
\u00a0
Range
2.20% - 6.59%
2.00% - 4.50%
1.30% - 4.50%
Weighted average
4.06%
3.97%
3.95%
Cash contributions and maturity profile of the plans
In 2024, the Company expects its cash contributions to amount
to 166 for pension plans, 66 for other post-employment benefits
plans and 117 for defined contribution plans. In 2023 and 2022,
cash contributions to defined contributions plans were 146 and
141, respectively.
At December\u00a031, 2023, the weighted average duration of
liabilities related to pension and other post-employment benefits
plans were 10 years and 11 years, respectively. At December
31, 2022,\u00a0 the weighted average duration of liabilities related to
pension and other post-employment benefits plans were 12
years and 12 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, 2023, the defined benefit obligation for pension plans was 5,284):
Effect on 2024 Pre-Tax Pension Expense
(sum of service cost and interest cost)
Effect on December 31, 2023 DBO
Change in assumption
\u00a0
\u00a0
100 basis points decrease in discount rate
(15)
578
100 basis points increase in discount rate
12
(475)
100 basis points decrease in rate of compensation
(13)
(123)
100 basis points increase in rate of compensation
13
127
1 year increase of the expected life of the beneficiaries
6
115
The following table illustrates the sensitivity to a change of the significant actuarial assumptions related to ArcelorMittal\u2019s OPEB plans
(as of December\u00a031, 2023 the defined benefit obligation for post-employment benefit plans was 971):
Effect on 2024 Pre-Tax OPEB Expense
(sum of service cost and interest cost)
Effect on December 31, 2023 DBO
Change in assumption
\u00a0
\u00a0
100 basis points decrease in discount rate
\u2014
117
100 basis points increase in discount rate
\u2014
(96)
100 basis points decrease in healthcare cost trend rate
(4)
(51)
100 basis points increase in healthcare cost trend rate
5
63
1 year increase of the expected life of the beneficiaries
\u2014
17
The above sensitivities reflect the effect of changing one
assumption at a time. Actual economic factors and conditions
often affect multiple assumptions simultaneously, and the effects
of changes in key assumptions are not necessarily linear.
8.3\u00a0 \u00a0 Share-based payments
ArcelorMittal issues equity-settled share-based payments to
certain employees which are 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. 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 employees of the Company
(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 over a three-year period from the date of
the PSU grant such as return on capital employed (\"ROCE\"),
total shareholders return (\"TSR\"), earnings per share (\"EPS\")
and gap to competition (until 2022). Since 2021, performance
criteria also include a set of three weighted environmental,
social and governance (\"ESG\") indicators representing 30% and
20% award vesting for the Executive Office and Executive
Officers, respectively, including health & safety, climate action
and diversity & inclusion (\"D&I\"). For health & safety (10%
award vesting for both Executive Office and Executive Officers),
the target is to halve the fatality frequency rate versus a defined
baseline (the baseline is the adjusted average frequency rate
over 5 years before the grant). For D&I (10% and 5% award
vesting for Executive Office and Executive Officers,
respectively), the target is to reduce by 40% the gap between
the Company's 2030 target of having 25% women in
management and 2020 baseline. For climate (10% and 5%
award vesting for Executive Office and Executive Officers,
respectively), the CO2 emission target has been set to be
reached by the end of the vesting period. 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 3 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, 2022
and 2023 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,
May 4, 2022 and May 2, 2023 respectively, at a maximum of
4,250,000 shares, 3,500,000 shares, 3,500,000 shares and
3,500,000 shares, respectively.
Conditions of the 2023 grant were as follows:
Executive Office
Executive Officers
2023
Grant
l
PSUs with a three year performance period
l
PSUs with a three year performance period
l
Value at grant 120% of base salary for the Executive
Chairman and the CEO
l
Vesting conditions:
l
Vesting conditions:
Target
Stretch
Threshold
Target
Stretch
TSR\u00a0 vs. peer group (50%) /
EPS vs. peer group (20%)
100% vs.
weighted
average
\u2265120% vs.
weighted
average
TSR vs. peer group
(40%)
\u2014
100%
weighted
average
\u2265120%
weighted
average
Vesting percentage
100%
150%
Vesting percentage
\u2014
100%
150%
ROCE (40%)
2/3 of
Target
100% of
target
4/3 of
target
ESG (30%): H&S 10%,
Climate action 10% and D&I
10%
100% of
target
120% of
target
Vesting percentage
50%
100%
150%
ESG (20%): H&S 10%,
Climate action 5% and
D&I 5%
\u2014
100% of
target
120% of
target
Vesting percentage
100%
150%
Vesting percentage
\u2014
100%
150%
l
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 2023 grant, the summary of outstanding plans as
of December 31, 2023 is as follows:
Executive Office
Executive Officers
2020
Grant
l
PSUs with a three year performance period
l
PSUs with a three year performance period
l
Value at grant 100% of base salary for the Executive Chairman and
the CEO
l
Vesting conditions:
l
Vesting conditions:
Threshold
Target
Threshold
Target
TSR/EPS vs. peer group
100% median
\u2265120% median
TSR/EPS vs. peer group
100% median
\u2265120% median
Vesting percentage
50%
100%
TSR vs. S&P 500
Performance
equal to Index
\u2265Performance
equal to Index +
2% p.a.
outperformance
Gap to competition (where
applicable)
100% target
100% vesting
Vesting percentage
50%
100%
Vesting percentage
0%
100%
l
RSUs with a three year vesting\u00a0 period
l
RSUs with a one year vesting period
Executive Office
Executive Officers
2021
Grant
l
PSUs with a three year performance period
l
PSUs with a three year performance period
l
Value at grant 100% of base salary for the Executive Chairman and
the CEO
l
Vesting conditions:
l
Vesting conditions:
Threshold
Target
Target
Stretch
TSR\u00a0 vs. peer group (50%) / EPS
vs. peer group (20% )
100% median
\u2265120% median
TSR vs. peer group (40%)
100%
weighted
average
\u2265120%
weighted
average
Vesting percentage
50%
100%
Vesting percentage
100%
150%
Gap to competition (40%)
100% of target
120% of target
ESG (30% )
100% of target
Vesting percentage
100%
150%
ESG (20% )
100% of target
120% of target
Vesting percentage
100%
100%
150%
l
RSUs with a three year vesting\u00a0 period
l
RSUs with a two year vesting period
Executive Office
Executive Officers
2022
Grant
l
PSUs with a three year performance period
l
PSUs with a three year performance period
l
Value at grant 120% of base salary for the Executive Chairman and
the CEO
l
Vesting conditions:
l
Vesting conditions
Threshold
Target
Target
Stretch
TSR\u00a0 vs. peer group (50%) / EPS
vs. peer group (20% )
100% vs.
weighted
average
\u2265120% vs.
weighted
average
TSR vs. peer group (40%)
100%
weighted
average
\u2265120%
weighted
average
Vesting percentage
100%
150%
Vesting percentage
100%
150%
Gap to competition (40%)
100% of target
120% of target
ESG (30% ): H&S 10%, Climate
action 10% and D&I 10%
100% of target
120% of target
Vesting percentage
100%
150%
ESG (20% ): H&S 10%,
Climate action 5% and D&I
5%
100% of target
120% of target
Vesting percentage
100%
150%
Vesting percentage
100%
150%
l
RSUs with a three year vesting period
The following table summarizes the Company\u2019s share unit plans outstanding as of December\u00a031, 2023:
At Grant date
Number of shares issued as of
December 31, 2023
Grant date
Type of plan
Number\u00a0of
shares
Number of
beneficiaries
Maturity
Fair value
per share
Shares
outstanding
Shares
forfeited
Shares
vested
December 8, 2023
RSU
1,269,300
958
December 8, 2026
25.58
1,269,300
\u2014
\u2014
December 8, 2023
PSU
985,700
256
January 1, 2027
22.06
985,700
\u2014
\u2014
December 8, 2023
Executive Office
141,973
2
January 1, 2027
20.49
141,973
\u2014
\u2014
December 13, 2022
RSU
866,000
802
December 13, 2025
27.61
831,600
32,934
1,466
December 13, 2022
PSU
644,800
242
January 1, 2026
23.64
636,300
8,500
\u2014
December 13, 2022
Executive Office
141,564
2
January 1, 2026
22.47
141,564
\u2014
\u2014
December 16, 2021
RSU
729,250
658
December 16, 2024
32.66
656,900
63,659
8,691
December 16, 2021
PSU
575,400
244
January 1, 2025
28.29
529,150
46,250
\u2014
December 16, 2021
Executive Office
109,143
2
January 1, 2025
27.20
109,143
\u2014
\u2014
December 14, 2020
PSU
714,250
235
January 1, 2024
19.74
602,050
112,200
\u2014
December 14, 2020
Executive Office
148,422
2
January 1, 2024
18.19
148,422
\u2014
\u2014
Total
6,325,802
$18.19 \u2013
$ 32.66
6,052,102
263,543
10,157
The compensation expense recognized for PSUs and RSUs
was 39, 38 and 35 for the years ended December\u00a031, 2023,
2022 and 2021.
Share unit plan activity is summarized below as of and for each
year ended December 31, 2023, 2022 and 2021:
RSUs
PSUs and Executive
Office
Number of
shares
Fair
value
per
share
Number of
shares
Fair
value
per
share
Outstanding, December 31,
2020
1,391,284
21.15
7,150,167
17.18
Granted
1,079,250
32.62
684,543
28.12
Exited
(315,699)
21.20
(613,385)
14.04
Forfeited
(59,885)
23.47
(2,915,514)
15.37
Outstanding, December 31,
2021
2,094,950
26.99
4,305,811
20.58
Granted
866,000
27.61
786,364
23.43
Exited
(17,294)
26.21
(673,661)
20.84
Forfeited
(106,506)
26.36
(725,018)
19.54
Outstanding, December 31,
2022
2,837,150
27.20
3,693,496
21.35
Granted
1,269,300
25.58
1,127,673
21.86
Exited
(1,232,074)
24.05
(1,434,251)
18.16
Forfeited
(116,576)
26.90
(92,616)
22.21
Outstanding, December 31,
2023
2,757,800
27.88
3,294,302
22.89
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-696": { "value": "8.1\u00a0 \u00a0 Employees and key management personnel
As of December\u00a031, 2023, 2022 and 2021, ArcelorMittal had
approximately 127,000, 154,000 and 158,000 employees,
respectively, and the total annual compensation of
ArcelorMittal\u2019s employees in 2023, 2022 and 2021 was as
follows:
\u00a0
Year ended December 31,
Employee Information
2023
2022
2021
Wages and salaries
6,868
6,463
6,707
Defined benefits cost (see
note 8.2)
148
153
117
Other staff expenses
1,318
1,300
1,166
Total
8,334
7,916
7,990
", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-697": { "value": "
The total annual compensation of ArcelorMittal\u2019s key
management personnel, including its Board of Directors,
expensed in 2023, 2022 and 2021 was as follows:
\u00a0
Year ended December 31,
\u00a0
2023
2022
2021
Base salary and directors fees
11
11
10
Short-term performance-
related bonus
9
16
12
Post-employment benefits
1
1
2
Share-based payments
9
7
7
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, 2023, 2022 and 2021, 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, 2023, 2022 and 2021, 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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-700": { "value": "8.3\u00a0 \u00a0 Share-based payments
ArcelorMittal issues equity-settled share-based payments to
certain employees which are 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. 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 employees of the Company
(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 over a three-year period from the date of
the PSU grant such as return on capital employed (\"ROCE\"),
total shareholders return (\"TSR\"), earnings per share (\"EPS\")
and gap to competition (until 2022). Since 2021, performance
criteria also include a set of three weighted environmental,
social and governance (\"ESG\") indicators representing 30% and
20% award vesting for the Executive Office and Executive
Officers, respectively, including health & safety, climate action
and diversity & inclusion (\"D&I\"). For health & safety (10%
award vesting for both Executive Office and Executive Officers),
the target is to halve the fatality frequency rate versus a defined
baseline (the baseline is the adjusted average frequency rate
over 5 years before the grant). For D&I (10% and 5% award
vesting for Executive Office and Executive Officers,
respectively), the target is to reduce by 40% the gap between
the Company's 2030 target of having 25% women in
management and 2020 baseline. For climate (10% and 5%
award vesting for Executive Office and Executive Officers,
respectively), the CO2 emission target has been set to be
reached by the end of the vesting period. 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 3 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, 2022
and 2023 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,
May 4, 2022 and May 2, 2023 respectively, at a maximum of
4,250,000 shares, 3,500,000 shares, 3,500,000 shares and
3,500,000 shares, respectively.
Conditions of the 2023 grant were as follows:
Executive Office
Executive Officers
2023
Grant
l
PSUs with a three year performance period
l
PSUs with a three year performance period
l
Value at grant 120% of base salary for the Executive
Chairman and the CEO
l
Vesting conditions:
l
Vesting conditions:
Target
Stretch
Threshold
Target
Stretch
TSR\u00a0 vs. peer group (50%) /
EPS vs. peer group (20%)
100% vs.
weighted
average
\u2265120% vs.
weighted
average
TSR vs. peer group
(40%)
\u2014
100%
weighted
average
\u2265120%
weighted
average
Vesting percentage
100%
150%
Vesting percentage
\u2014
100%
150%
ROCE (40%)
2/3 of
Target
100% of
target
4/3 of
target
ESG (30%): H&S 10%,
Climate action 10% and D&I
10%
100% of
target
120% of
target
Vesting percentage
50%
100%
150%
ESG (20%): H&S 10%,
Climate action 5% and
D&I 5%
\u2014
100% of
target
120% of
target
Vesting percentage
100%
150%
Vesting percentage
\u2014
100%
150%
l
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 2023 grant, the summary of outstanding plans as
of December 31, 2023 is as follows:
Executive Office
Executive Officers
2020
Grant
l
PSUs with a three year performance period
l
PSUs with a three year performance period
l
Value at grant 100% of base salary for the Executive Chairman and
the CEO
l
Vesting conditions:
l
Vesting conditions:
Threshold
Target
Threshold
Target
TSR/EPS vs. peer group
100% median
\u2265120% median
TSR/EPS vs. peer group
100% median
\u2265120% median
Vesting percentage
50%
100%
TSR vs. S&P 500
Performance
equal to Index
\u2265Performance
equal to Index +
2% p.a.
outperformance
Gap to competition (where
applicable)
100% target
100% vesting
Vesting percentage
50%
100%
Vesting percentage
0%
100%
l
RSUs with a three year vesting\u00a0 period
l
RSUs with a one year vesting period
Executive Office
Executive Officers
2021
Grant
l
PSUs with a three year performance period
l
PSUs with a three year performance period
l
Value at grant 100% of base salary for the Executive Chairman and
the CEO
l
Vesting conditions:
l
Vesting conditions:
Threshold
Target
Target
Stretch
TSR\u00a0 vs. peer group (50%) / EPS
vs. peer group (20% )
100% median
\u2265120% median
TSR vs. peer group (40%)
100%
weighted
average
\u2265120%
weighted
average
Vesting percentage
50%
100%
Vesting percentage
100%
150%
Gap to competition (40%)
100% of target
120% of target
ESG (30% )
100% of target
Vesting percentage
100%
150%
ESG (20% )
100% of target
120% of target
Vesting percentage
100%
100%
150%
l
RSUs with a three year vesting\u00a0 period
l
RSUs with a two year vesting period
Executive Office
Executive Officers
2022
Grant
l
PSUs with a three year performance period
l
PSUs with a three year performance period
l
Value at grant 120% of base salary for the Executive Chairman and
the CEO
l
Vesting conditions:
l
Vesting conditions
Threshold
Target
Target
Stretch
TSR\u00a0 vs. peer group (50%) / EPS
vs. peer group (20% )
100% vs.
weighted
average
\u2265120% vs.
weighted
average
TSR vs. peer group (40%)
100%
weighted
average
\u2265120%
weighted
average
Vesting percentage
100%
150%
Vesting percentage
100%
150%
Gap to competition (40%)
100% of target
120% of target
ESG (30% ): H&S 10%, Climate
action 10% and D&I 10%
100% of target
120% of target
Vesting percentage
100%
150%
ESG (20% ): H&S 10%,
Climate action 5% and D&I
5%
100% of target
120% of target
Vesting percentage
100%
150%
Vesting percentage
100%
150%
l
RSUs with a three year vesting period
The following table summarizes the Company\u2019s share unit plans outstanding as of December\u00a031, 2023:
At Grant date
Number of shares issued as of
December 31, 2023
Grant date
Type of plan
Number\u00a0of
shares
Number of
beneficiaries
Maturity
Fair value
per share
Shares
outstanding
Shares
forfeited
Shares
vested
December 8, 2023
RSU
1,269,300
958
December 8, 2026
25.58
1,269,300
\u2014
\u2014
December 8, 2023
PSU
985,700
256
January 1, 2027
22.06
985,700
\u2014
\u2014
December 8, 2023
Executive Office
141,973
2
January 1, 2027
20.49
141,973
\u2014
\u2014
December 13, 2022
RSU
866,000
802
December 13, 2025
27.61
831,600
32,934
1,466
December 13, 2022
PSU
644,800
242
January 1, 2026
23.64
636,300
8,500
\u2014
December 13, 2022
Executive Office
141,564
2
January 1, 2026
22.47
141,564
\u2014
\u2014
December 16, 2021
RSU
729,250
658
December 16, 2024
32.66
656,900
63,659
8,691
December 16, 2021
PSU
575,400
244
January 1, 2025
28.29
529,150
46,250
\u2014
December 16, 2021
Executive Office
109,143
2
January 1, 2025
27.20
109,143
\u2014
\u2014
December 14, 2020
PSU
714,250
235
January 1, 2024
19.74
602,050
112,200
\u2014
December 14, 2020
Executive Office
148,422
2
January 1, 2024
18.19
148,422
\u2014
\u2014
Total
6,325,802
$18.19 \u2013
$ 32.66
6,052,102
263,543
10,157
The compensation expense recognized for PSUs and RSUs
was 39, 38 and 35 for the years ended December\u00a031, 2023,
2022 and 2021.
Share unit plan activity is summarized below as of and for each
year ended December 31, 2023, 2022 and 2021:
RSUs
PSUs and Executive
Office
Number of
shares
Fair
value
per
share
Number of
shares
Fair
value
per
share
Outstanding, December 31,
2020
1,391,284
21.15
7,150,167
17.18
Granted
1,079,250
32.62
684,543
28.12
Exited
(315,699)
21.20
(613,385)
14.04
Forfeited
(59,885)
23.47
(2,915,514)
15.37
Outstanding, December 31,
2021
2,094,950
26.99
4,305,811
20.58
Granted
866,000
27.61
786,364
23.43
Exited
(17,294)
26.21
(673,661)
20.84
Forfeited
(106,506)
26.36
(725,018)
19.54
Outstanding, December 31,
2022
2,837,150
27.20
3,693,496
21.35
Granted
1,269,300
25.58
1,127,673
21.86
Exited
(1,232,074)
24.05
(1,434,251)
18.16
Forfeited
(116,576)
26.90
(92,616)
22.21
Outstanding, December 31,
2023
2,757,800
27.88
3,294,302
22.89
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-699": { "value": "8.3\u00a0 \u00a0 Share-based payments
ArcelorMittal issues equity-settled share-based payments to
certain employees which are 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. 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 employees of the Company
(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 over a three-year period from the date of
the PSU grant such as return on capital employed (\"ROCE\"),
total shareholders return (\"TSR\"), earnings per share (\"EPS\")
and gap to competition (until 2022). Since 2021, performance
criteria also include a set of three weighted environmental,
social and governance (\"ESG\") indicators representing 30% and
20% award vesting for the Executive Office and Executive
Officers, respectively, including health & safety, climate action
and diversity & inclusion (\"D&I\"). For health & safety (10%
award vesting for both Executive Office and Executive Officers),
the target is to halve the fatality frequency rate versus a defined
baseline (the baseline is the adjusted average frequency rate
over 5 years before the grant). For D&I (10% and 5% award
vesting for Executive Office and Executive Officers,
respectively), the target is to reduce by 40% the gap between
the Company's 2030 target of having 25% women in
management and 2020 baseline. For climate (10% and 5%
award vesting for Executive Office and Executive Officers,
respectively), the CO2 emission target has been set to be
reached by the end of the vesting period. 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 3 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, 2022
and 2023 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,
May 4, 2022 and May 2, 2023 respectively, at a maximum of
4,250,000 shares, 3,500,000 shares, 3,500,000 shares and
3,500,000 shares, respectively.
Conditions of the 2023 grant were as follows:
Executive Office
Executive Officers
2023
Grant
l
PSUs with a three year performance period
l
PSUs with a three year performance period
l
Value at grant 120% of base salary for the Executive
Chairman and the CEO
l
Vesting conditions:
l
Vesting conditions:
Target
Stretch
Threshold
Target
Stretch
TSR\u00a0 vs. peer group (50%) /
EPS vs. peer group (20%)
100% vs.
weighted
average
\u2265120% vs.
weighted
average
TSR vs. peer group
(40%)
\u2014
100%
weighted
average
\u2265120%
weighted
average
Vesting percentage
100%
150%
Vesting percentage
\u2014
100%
150%
ROCE (40%)
2/3 of
Target
100% of
target
4/3 of
target
ESG (30%): H&S 10%,
Climate action 10% and D&I
10%
100% of
target
120% of
target
Vesting percentage
50%
100%
150%
ESG (20%): H&S 10%,
Climate action 5% and
D&I 5%
\u2014
100% of
target
120% of
target
Vesting percentage
100%
150%
Vesting percentage
\u2014
100%
150%
l
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 2023 grant, the summary of outstanding plans as
of December 31, 2023 is as follows:
Executive Office
Executive Officers
2020
Grant
l
PSUs with a three year performance period
l
PSUs with a three year performance period
l
Value at grant 100% of base salary for the Executive Chairman and
the CEO
l
Vesting conditions:
l
Vesting conditions:
Threshold
Target
Threshold
Target
TSR/EPS vs. peer group
100% median
\u2265120% median
TSR/EPS vs. peer group
100% median
\u2265120% median
Vesting percentage
50%
100%
TSR vs. S&P 500
Performance
equal to Index
\u2265Performance
equal to Index +
2% p.a.
outperformance
Gap to competition (where
applicable)
100% target
100% vesting
Vesting percentage
50%
100%
Vesting percentage
0%
100%
l
RSUs with a three year vesting\u00a0 period
l
RSUs with a one year vesting period
Executive Office
Executive Officers
2021
Grant
l
PSUs with a three year performance period
l
PSUs with a three year performance period
l
Value at grant 100% of base salary for the Executive Chairman and
the CEO
l
Vesting conditions:
l
Vesting conditions:
Threshold
Target
Target
Stretch
TSR\u00a0 vs. peer group (50%) / EPS
vs. peer group (20% )
100% median
\u2265120% median
TSR vs. peer group (40%)
100%
weighted
average
\u2265120%
weighted
average
Vesting percentage
50%
100%
Vesting percentage
100%
150%
Gap to competition (40%)
100% of target
120% of target
ESG (30% )
100% of target
Vesting percentage
100%
150%
ESG (20% )
100% of target
120% of target
Vesting percentage
100%
100%
150%
l
RSUs with a three year vesting\u00a0 period
l
RSUs with a two year vesting period
Executive Office
Executive Officers
2022
Grant
l
PSUs with a three year performance period
l
PSUs with a three year performance period
l
Value at grant 120% of base salary for the Executive Chairman and
the CEO
l
Vesting conditions:
l
Vesting conditions
Threshold
Target
Target
Stretch
TSR\u00a0 vs. peer group (50%) / EPS
vs. peer group (20% )
100% vs.
weighted
average
\u2265120% vs.
weighted
average
TSR vs. peer group (40%)
100%
weighted
average
\u2265120%
weighted
average
Vesting percentage
100%
150%
Vesting percentage
100%
150%
Gap to competition (40%)
100% of target
120% of target
ESG (30% ): H&S 10%, Climate
action 10% and D&I 10%
100% of target
120% of target
Vesting percentage
100%
150%
ESG (20% ): H&S 10%,
Climate action 5% and D&I
5%
100% of target
120% of target
Vesting percentage
100%
150%
Vesting percentage
100%
150%
l
RSUs with a three year vesting period
The following table summarizes the Company\u2019s share unit plans outstanding as of December\u00a031, 2023:
At Grant date
Number of shares issued as of
December 31, 2023
Grant date
Type of plan
Number\u00a0of
shares
Number of
beneficiaries
Maturity
Fair value
per share
Shares
outstanding
Shares
forfeited
Shares
vested
December 8, 2023
RSU
1,269,300
958
December 8, 2026
25.58
1,269,300
\u2014
\u2014
December 8, 2023
PSU
985,700
256
January 1, 2027
22.06
985,700
\u2014
\u2014
December 8, 2023
Executive Office
141,973
2
January 1, 2027
20.49
141,973
\u2014
\u2014
December 13, 2022
RSU
866,000
802
December 13, 2025
27.61
831,600
32,934
1,466
December 13, 2022
PSU
644,800
242
January 1, 2026
23.64
636,300
8,500
\u2014
December 13, 2022
Executive Office
141,564
2
January 1, 2026
22.47
141,564
\u2014
\u2014
December 16, 2021
RSU
729,250
658
December 16, 2024
32.66
656,900
63,659
8,691
December 16, 2021
PSU
575,400
244
January 1, 2025
28.29
529,150
46,250
\u2014
December 16, 2021
Executive Office
109,143
2
January 1, 2025
27.20
109,143
\u2014
\u2014
December 14, 2020
PSU
714,250
235
January 1, 2024
19.74
602,050
112,200
\u2014
December 14, 2020
Executive Office
148,422
2
January 1, 2024
18.19
148,422
\u2014
\u2014
Total
6,325,802
$18.19 \u2013
$ 32.66
6,052,102
263,543
10,157
The compensation expense recognized for PSUs and RSUs
was 39, 38 and 35 for the years ended December\u00a031, 2023,
2022 and 2021.
Share unit plan activity is summarized below as of and for each
year ended December 31, 2023, 2022 and 2021:
RSUs
PSUs and Executive
Office
Number of
shares
Fair
value
per
share
Number of
shares
Fair
value
per
share
Outstanding, December 31,
2020
1,391,284
21.15
7,150,167
17.18
Granted
1,079,250
32.62
684,543
28.12
Exited
(315,699)
21.20
(613,385)
14.04
Forfeited
(59,885)
23.47
(2,915,514)
15.37
Outstanding, December 31,
2021
2,094,950
26.99
4,305,811
20.58
Granted
866,000
27.61
786,364
23.43
Exited
(17,294)
26.21
(673,661)
20.84
Forfeited
(106,506)
26.36
(725,018)
19.54
Outstanding, December 31,
2022
2,837,150
27.20
3,693,496
21.35
Granted
1,269,300
25.58
1,127,673
21.86
Exited
(1,232,074)
24.05
(1,434,251)
18.16
Forfeited
(116,576)
26.90
(92,616)
22.21
Outstanding, December 31,
2023
2,757,800
27.88
3,294,302
22.89
", "dimensions": { "concept": "ifrs-full:DisclosureOfTermsAndConditionsOfSharebasedPaymentArrangementExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-698": { "value": "8.3\u00a0 \u00a0 Share-based payments
ArcelorMittal issues equity-settled share-based payments to
certain employees which are 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. 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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-704": { "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.
9.1\u00a0 \u00a0 Provisions
Balance at
December\u00a031,
2022
Additions1
Deductions/
Payments
Effects of foreign
exchange and
other movements
Balance at
December\u00a031,
2023
Environmental
566
113
(76)
17
620
Emission obligations
522
3
(486)
(10)
29
Asset retirement obligations
349
21
(3)
13
380
Site restoration
152
8
(17)
4
147
Staff related obligations
137
50
(29)
4
162
Voluntary separation plans
23
8
(17)
18
32
Litigation and other (see note 9.3)
289
66
(62)
56
349
\u00a0 Tax claims
73
16
(14)
6
81
\u00a0 Other legal claims
216
50
(48)
50
268
Commercial agreements and onerous contracts
28
6
(6)
1
29
Other
341
85
(117)
8
317
2,407
360
(813)
111
2,065
Short-term provisions
1,101
588
Long-term provisions
1,306
1,477
2,407
2,065
Balance at
December\u00a031,
2021
Additions1
Deductions/
Payments
Effects of foreign
exchange and
other movements
Balance at
December\u00a031,
2022
Environmental
595
59
(61)
(27)
566
Emission obligations
492
477
(443)
(4)
522
Asset retirement obligations
397
22
(41)
(29)
349
Site restoration
220
\u2014
(54)
(14)
152
Staff related obligations
120
40
(29)
6
137
Voluntary separation plans
31
3
(18)
7
23
Litigation and other (see note 9.3)
323
53
(103)
16
289
\u00a0 Tax claims
79
9
(24)
9
73
\u00a0 Other legal claims
244
44
(79)
7
216
Commercial agreements and onerous
contracts
23
9
(4)
\u2014
28
Other
361
84
(124)
20
341
2,562
747
(877)
(25)
2,407
Short-term provisions
1,064
1,101
Long-term provisions
1,498
1,306
2,562
2,407
1. Additions exclude provisions reversed or utilized during the same year.
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 contamination, available
remediation technology, and environmental regulations.
Estimates are subject to revision as further information develops
or circumstances change.
Provisions for emission obligations are recognized to cover the
shortage between the Company's CO2 emissions and the
allowances granted, based on the market value of the CO2
allowances as of the reporting date or purchase price of the
acquired CO2 emission rights. In 2023 provisions for emission
obligations decreased as a result of the settlement of the 2022
shortage through surrendering the corresponding CO2 emission
rights to the environmental authorities and lower CO2 emissions
during the year\u00a0 as a result of lower production mainly in Europe
(see note 4.5).
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.
Provisions for site restoration are related to costs in connection
with the dismantling of site facilities, mainly in France and
Poland, of which 66 and 79 at December 31, 2023 and 2022,
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 and Brazil, 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 see also note 9.3.
In 2023 and 2022 provisions for commercial agreements and
onerous contracts were primarily linked to onerous contracts in
Poland and Spain.
Other provisions of 182 and 187 at December 31, 2023 and
2022, respectively, are related to the Complementary
Agreement Term signed in 2021 between ArcelorMittal Brazil,
the Federal and State Prosecutor Offices and the Commission
representing affected people, which includes precautionary
evacuation of the communities close to the Serra Azul dam, as
well as the commitment to implement action plans to ensure the
stability, security and decommissioning of the tailing dam. Other
provisions also comprise technical warranties and guarantees.
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, 2023, excluding asset
retirement obligations, ArcelorMittal had established provisions
of 620 for environmental remedial activities and liabilities. The
provisions for all operations by geographic area included mainly
427 in Europe, 98 in South Africa and 91 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 427 and are mainly related to the investigation and
remediation of environmental contamination at current and
former operating sites in Belgium (208), Luxembourg (78),
France (58),\u00a0 Poland (40), Germany (34) 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 of 208 mainly relate to
legal site remediation obligations linked to the closure of the
primary installations at the Li\u00e8ge site of ArcelorMittal Belgium.
The provisions also include 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
Luxembourg
In Luxembourg, environmental provisions of 78 relate to the
post-closure monitoring and remediation of former production
sites, waste disposal areas, slag deposits and mining sites.
They include 33 with respect to obligations to secure, stabilize
and conduct waterproofing treatment in mining galleries and
various dumping areas in Mondercange, Dommeldange and
Dudelange. In addition, a 26 provision is recognized with
respect to the covering process of the Differdange dump which
was used for disposal of ladle slag, sludge and certain other
residues coming from different Luxembourg sites.
France
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 relates mainly to the
Thionville, Moyeuvre-Grande, Homecourt, Hagondange and
Micheville sites, and is related to the 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 2024 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 was idled 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 requested 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
Poland\u00a0
ArcelorMittal Poland\u2019s environmental provision of 40 includes 27
for cleaning and remediation costs following the closure of
primary facilities in Krak\u00f3w and land remediation of post-
industrial areas in Ruszca (district of Krak\u00f3w); the remaining 13
relate to the obligation to reclaim landfills in Krak\u00f3w,
Zdzieszowice, Dabrowa G\u00f3rnicza and to dispose of 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.
Germany\u00a0
In Germany, the 34 environmental provision essentially relates
to ArcelorMittal Bremen\u2019s post-closure obligations at the Prosper
coke plant in Bottrop mainly established for soil remediation,
groundwater treatment and monitoring.
South Africa\u00a0
AMSA has environmental provisions of 98 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 26 relates to the decommissioned Pretoria Works
site. This site is in a state of care and maintenance with ongoing
rehabilitation. 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 civil construction industry continuing
unabated, but other remediation works continued at a slow pace
as remediation actions for these sites are long-term in nature.\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 15.\u00a0
The Newcastle Works site is the main long carbon steel
operation of AMSA. A provision of 23 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 33 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
Canada\u00a0
In Canada, ArcelorMittal Dofasco has a 31 environmental
provision for the expected cost of remediating toxic sediment
located in the Company\u2019s East Boatslip site, for which
management is in process of reviewing the tenders for initiating
the expenditure.
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, 2023, ArcelorMittal had
established provisions for asset retirement obligations of 380,
including mainly 150 for Canada, 63 for Mexico, 47 for Ukraine,
47 for Germany, 30 for Brazil, 19 for Liberia and 11 for South
Africa. As of December 31, 2023, AROs related to mining
activities and total undiscounted amount of site restoration
obligations amounted to 293 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 of the Las
Truchas, El Volcan, San Jose and the joint operation Pe\u00f1a
Colorada iron ore mines.
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 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.
In Poland, AROs relate to the legal obligation to decontaminate
and recultivate a land in Krakow following closure of the
operations.
In Bosnia and Herzegovina, ARO relates to re-cultivation of
dump yard of old iron ore pit Buvac and closing dam Medjedja.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-703": { "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.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-702": { "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, 2023, ArcelorMittal had recorded short-term and
long-term liabilities related to income tax contingencies of 50
and provisions for non-income tax claims in the aggregate of 81
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,
2023, (ii) that constitute a contingent liability, (iii) that were
resolved in 2023 or (iv) that were resolved and had a financial
impact in 2022 or 2021, 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 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
30 relating to a tax incentive (INVEST) it used. The dispute
concerns the definition of fixed assets. Following a series of
decisions and appeals (partially favorable) over a ten-year
period, in July 2021, ArcelorMittal Brasil filed 4 lawsuits (in
relation to 21 tax assessments received in 2011) to discuss the
remaining amount in the court of first instance. All these cases
are pending trial as of December 31, 2023.
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 500 and the ArcelorMittal Brasil's appeal
against the second instance decision largely favorable to the
Federal Revenue Service has been pending trial with the third
instance of the administrative tribunal since March 2018.\u00a0
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 68 financial impact arising from a
write off of 'net operating loss carry forward' with respect to the
2011-2012 tax year. ArcelorMittal Brasil's appeal against the
unfavorable decision on the lower instances of the assessment
has been awaiting judgment in the third instance of the
administrative tribunal since November 2019.
In December 2018, ArcelorMittal Brasil received a tax
assessment of 126, which could have an additional 22 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. After lower court
decisions and appeals in November 2022, the second instance
of the administrative tribunal cancelled the tax assessment. In
January 2023, the Federal Revenue Service filed an appeal to
the third instance of the administrative tribunal.
In December 2020, ArcelorMittal Brasil received a tax
assessment of 44 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 instance of the administrative
tribunal in January 2021 which issued an unfavorable decision
in August 2021. ArcelorMittal Brasil filed an appeal to the second
instance of the administrative tribunal in September 2021.
In the period from 2014 to 2018, ArcelorMittal Brasil received\u00a0
tax assessments from the Federal Revenue Service in\u00a0the
amount of 46 disputing its use of credits for PIS and COFINS
social security taxes\u00a0in 2010, 2011 and 2013. The disputes
relate to the concept of production inputs in the context of these
taxes. In four of the cases, the tax assessments have been
partially reduced and ArcelorMittal Brasil's subsequent appeals
to dispute the remaining amounts are currently pending. One of
these cases has already closed at the administrative level and is
pending a decision at the first judicial level. In the fifth case, the
administrative tribunal of the first instance upheld the tax
assessment in March 2017, and ArcelorMittal Brasil appealed to
the second instance of the administrative tribunal. In the sixth
case, the first instance of the administrative tribunal issued an
unfavorable decision in April 2017, and ArcelorMittal Brasil
appealed to the second instance of the administrative tribunal.
Subsequently, the Superior Court decided two leading cases,
not involving ArcelorMittal Brasil, that are expected to strengthen
ArcelorMittal\u2019s defense in the sixth case in which part of the
contingency is related to scrap acquisition. In February 2011,
ArcelorMittal Brasil also filed 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.
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 40. Following the
conclusion of this proceeding at the administrative level, the
company received the tax enforcement notice in December
2015 and filed its defense in February 2016. In April 2016,
ArcelorMittal Comercializadora de Energia received an
additional tax assessment in the amount, of 58, after taking
account of a reduction of fines mentioned below regarding the
same matter, for infractions which allegedly occurred during the
2014 to 2015 period, and filed its defense in May 2016.
Following appeal, the company received a notice from the tax
authority in November 2017 that reduced the fees in the second
case by 12, due to retrospective application of a new law. In
addition, in February 2019, a reduction of the fine by 7 was
finalized in the first case due to the retrospective application of a
new law. The cases are currently pending in the first judicial
instance.
In 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 89. In
the Administrative instance, all the cases were unfavorably
closed. ArcelorMittal Brasil filed 5 lawsuits to discuss the matter.
In the first judicial instance, ArcelorMittal Brasil obtained a
largely favorable decisions in all cases. There were appeals
from the company and the tax authority. In September 2022, the
second judicial instance ruled a largely favorable decision to the
company in one case (in amount of 4). In November 2023, the
second judicial instance ruled a largely favorable decision in the
Company in two cases (in the amount of 9). In December 2023,
the court of the second judicial instance ruled against the
Company in another case (in the amount of 1) and began
adjudicating the last case (in the amount of 73) for which the
trial is pending.
On May 17, 2016, ArcelorMittal Brasil received a tax
assessment from the state of Santa Catarina in the current
amount of 128 alleging that it had used improper methods to
calculate the amount of its ICMS credits. In the Administrative
instance, the case was unfavorably closed in November 2020,
and ArcelorMittal Brasil filed a lawsuit to challenge the
assessment. The case is pending at the judicial instance
currently.
In January 2023, ArcelorMittal Brasil received a tax assessment
from the Federal Revenue Service in an amount of 156 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, and expenses for freight for finished
products. ArcelorMittal Brasil filed an administrative defense in
February 2023. In November 2023, the company was notified of
the unfavorable decision and filed an appeal in December 2023.
In January 2023, ArcelorMittal Brasil received a tax assessment
in an amount of 16 for a 50% fine for alleged non-payment of
the monthly estimate of CIT related to fiscal year 2018. The
Federal Revenue accuses the company of undue offsetting of
CIT credits paid in Venezuela from 2010 to 2014 when
calculating the monthly IRC estimate for 2018. In February
2023, ArcelorMittal Brasil filed its defense. In September 2023,
the first administrative instance ruled against the company and
ArcelorMittal filed an appeal. In November 2023, ArcelorMittal
Brasil received a new tax assessment of 60. The Federal
Revenue accuses the company of allegedly undue offsetting of
CIT credits paid in Venezuela from 2010 to 2014 and offset by
ArcelorMittal Brasil in 2018. In December 2023, the company
filed an administrative defense. Both cases are currently
pending.
In 2010, ArcelorMittal Brasil received a first tax assessment for
BRL 94 million (19) arguing that the company should not have
used a tax incentive granted by the State of Bahia, according to
which taxpayers could take ICMS credit on the value of freight
paid by them, since AMTC is not a real plant (for the period from
March 2008 to December 2009). Furthermore, the company
also used the tax incentive (\u201cProauto\u201d), which may not be
combined with another tax benefit. In 2012, this case was
closed unfavorably at the administrative level and the company
filed a lawsuit to discuss the tax charge with the the court of first
instance. In 2023, the company obtained a favorable decision
from the court of first instance, canceling the assessment.
Currently, the case is awaiting a trial by the court of second
instance. In June 2014, the company received a second tax
assessment of BRL 23 million (5) discussing the same matter,
but related to a different period (from June 2010 to December
2012). In 2017, the administrative level judged the assessment
partially in favor of the company (cancelling the taxes, but
maintaining the fines) and the company filed a lawsuit, which is
awaiting a decision from the court of first instance. In December
2014, the company received a third tax assessment of BRL 20
million (4) discussing the same matter, but related to a different
period (from January 2013 to December 2013). In 2015, the
administrative court of first instance ruled unfavorably to the
company and the company filed an appeal, currently pending
trial. In November 2022, the company received a fourth tax
assessment of BRL 114 million (24) resulting from the use of the
accumulated credit, which, according to the tax authorities,
could not be used because it had already been extinguished by
the statute of limitations. In May 2023, the administrative court
of first instance dismissed the defense. In June 2023, the
company filed an appeal to the administrative court of second
instance and the appeal is currently pending.
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 categorized as dividends. ArcelorMittal
Mexico's complaint for annulment before a Federal
Administrative and Tax Court is pending. The amount of the tax
assessment as of December\u00a031, 2023 is 247.
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
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 Court. In
June 2023, the Federal Administrative and Tax Court ruled
against the annulment claim. In July 2023, ArcelorMittal Las
Truchas filed an appeal before the Court of Appeal. The amount
of the tax assessment as of December\u00a031, 2023 is 129.
On February 24, 2023, the Tax Administration Service notified
ArcelorMittal Las Truchas of a tax assessment, with respect to
2014. In April 2023, ArcelorMittal Las Truchas filed an
administrative appeal in respect of this assessment before the
Tax Administrative Service. The amount of the tax assessment
as of December 31, 2023 is 112.
Ukraine\u00a0
In October 2019, AMKR received 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. AMKR
appealed these orders to the tax authorities resulting in a
significant reduction of the amounts claimed. In January 2020,
AMKR 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 (hereinafter called 'First 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
$50,000. The tax authorities appealed the decision in April 2023.
In July 2023, the Court dismissed the tax authorities appeal and
upheld the first instance decision. In April 2023, tax authorities
filed an appeal claim to the Third Administrative Appellate Court.
Court opened appeal proceedings and in July 2023, the Third
Administrative Appellate Court left the tax authority's appeal
unsatisfied, and the decision of the first instance remained
unchanged. In September 2023, the Supreme Court opened the
cassation proceedings on the claim of tax authority. In
November 2023, the Supreme Court satisfied the cassation
claim of the tax authority partially and changed decisions of the
courts of first and appellate instances. Therefore, AMKR won
this case partially in the amount of 3.4 billion UAH (90). Further,
in January 2024, the tax authority filed to the Dnipro District
Administrative Court the request to review the case based on
newly discovered circumstances, court opened proceedings.
The amount of the new lawsuit is around $35,500.
Competition/Antitrust Claims
ArcelorMittal is a party to various competition/antitrust claims. As
of December\u00a031, 2023, 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
2023 or (iii) that were resolved and had a financial impact in
2022 or 2021, 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 75. ArcelorMittal Brasil's appeal of the court judgment
against it is currently pending.
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 83 based on
the alleged violations investigated by CADE. The injunction
requested by the 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.
Other Legal Claims\u00a0
ArcelorMittal is a party to various other legal claims. As of
December\u00a031, 2023, ArcelorMittal had recorded provisions of
268 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,
2023, (ii) that constitute a contingent liability, (iii) that were
resolved in 2023, or (iv) that were resolved and had a financial
impact in 2022 or 2021, 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 December
2023, the aggregate amount claimed by the Customs Office
Authority in respect of all iron ore shipments is 90 in 17 different
cases. Of these 17 cases, 6 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. The case impacts a
group of approximately 2,500 employees. In July 2022, the
Supreme Court decided a leading case, not involving
ArcelorMittal Brasil, that may favorably impact ArcelorMittal
Brasil's case, which is currently pending on appeal.
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 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 was a
net loss after tax of approximately 126 (67 net of partial recovery
through dividend payment from SITREL) in 2022.
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. 1,091). 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). The
parties have filed their respective statements of defense in the
arbitration and the case is currently pending.
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 January
2019, Finmasi called on the AMDSF guarantee issued in the
context of the enforcement proceedings that were suspended in
2015. After a series of appeals, 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 duly filed its defense in March 2023.
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. A final decision for the two pilot
cases of Esch-sur-Alzette is expected by the end of 2024.
France
Retired and current employees of certain French subsidiaries of
ArcelorMittal 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
employer before a special tribunal. For faute inexcusable cases,
the primary health insurance fund, CPAM - advances, the
amount of damages and pension increase are reimbursed by
the employer found at fault and takes recourse action against
the employer.\u00a0
The number of claims outstanding for asbestos exposure at
December\u00a031, 2023 was 243 as compared to\u00a0308 at
December\u00a031, 2022.
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 the ongoing matter in this regard.
Several other claims brought before other courts and regulators
on similar grounds were dismissed and are definitively closed.\u00a0
On May 15, 2012, ArcelorMittal received a writ of summons on
behalf of Association des Actionnaires d'Arcelor (\"AAA\"), a
French association of former minority shareholders of Arcelor to
appear before the civil court of Paris. The AAA 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 company law.
AAA claimed, 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 of AAA and several hedge funds
(who quantified their total alleged damages at 282). 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 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 431 (\u20ac390 million).
A final hearing date for oral arguments has been scheduled for
June 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-701": { "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.
9.2\u00a0 \u00a0 Other long-term obligations
\u00a0
Balance at December 31,
\u00a0
2023
2022
Derivative financial instruments (notes 6.1
and 6.3)
76
45
Payable from acquisition of financial
assets
125
85
Unfavorable contracts
233
92
Income tax payable
185
202
Put option liability ArcelorMittal Texas HBI
(note 11.5.2)
158
181
Put option liability Sonasid (note 11.5.2)
116
122
Other
168
187
Total
1,061
914
As of December 31, 2023 and 2022, payable from acquisition of
financial assets included 52 and 66 respectively related to
AMNS India's debt guarantee (see note 9.4).
Unfavorable contracts of 233 and 92 as of December\u00a031, 2023
and 2022, respectively, mainly related to ArcelorMittal Pec\u00e9m
(see note 2.2.4) and ArcelorMittal Brasil.
As of December 31, 2023, 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, 2023, ArcelorMittal had recorded short-term and
long-term liabilities related to income tax contingencies of 50
and provisions for non-income tax claims in the aggregate of 81
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,
2023, (ii) that constitute a contingent liability, (iii) that were
resolved in 2023 or (iv) that were resolved and had a financial
impact in 2022 or 2021, 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 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
30 relating to a tax incentive (INVEST) it used. The dispute
concerns the definition of fixed assets. Following a series of
decisions and appeals (partially favorable) over a ten-year
period, in July 2021, ArcelorMittal Brasil filed 4 lawsuits (in
relation to 21 tax assessments received in 2011) to discuss the
remaining amount in the court of first instance. All these cases
are pending trial as of December 31, 2023.
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 500 and the ArcelorMittal Brasil's appeal
against the second instance decision largely favorable to the
Federal Revenue Service has been pending trial with the third
instance of the administrative tribunal since March 2018.\u00a0
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 68 financial impact arising from a
write off of 'net operating loss carry forward' with respect to the
2011-2012 tax year. ArcelorMittal Brasil's appeal against the
unfavorable decision on the lower instances of the assessment
has been awaiting judgment in the third instance of the
administrative tribunal since November 2019.
In December 2018, ArcelorMittal Brasil received a tax
assessment of 126, which could have an additional 22 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. After lower court
decisions and appeals in November 2022, the second instance
of the administrative tribunal cancelled the tax assessment. In
January 2023, the Federal Revenue Service filed an appeal to
the third instance of the administrative tribunal.
In December 2020, ArcelorMittal Brasil received a tax
assessment of 44 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 instance of the administrative
tribunal in January 2021 which issued an unfavorable decision
in August 2021. ArcelorMittal Brasil filed an appeal to the second
instance of the administrative tribunal in September 2021.
In the period from 2014 to 2018, ArcelorMittal Brasil received\u00a0
tax assessments from the Federal Revenue Service in\u00a0the
amount of 46 disputing its use of credits for PIS and COFINS
social security taxes\u00a0in 2010, 2011 and 2013. The disputes
relate to the concept of production inputs in the context of these
taxes. In four of the cases, the tax assessments have been
partially reduced and ArcelorMittal Brasil's subsequent appeals
to dispute the remaining amounts are currently pending. One of
these cases has already closed at the administrative level and is
pending a decision at the first judicial level. In the fifth case, the
administrative tribunal of the first instance upheld the tax
assessment in March 2017, and ArcelorMittal Brasil appealed to
the second instance of the administrative tribunal. In the sixth
case, the first instance of the administrative tribunal issued an
unfavorable decision in April 2017, and ArcelorMittal Brasil
appealed to the second instance of the administrative tribunal.
Subsequently, the Superior Court decided two leading cases,
not involving ArcelorMittal Brasil, that are expected to strengthen
ArcelorMittal\u2019s defense in the sixth case in which part of the
contingency is related to scrap acquisition. In February 2011,
ArcelorMittal Brasil also filed 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.
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 40. Following the
conclusion of this proceeding at the administrative level, the
company received the tax enforcement notice in December
2015 and filed its defense in February 2016. In April 2016,
ArcelorMittal Comercializadora de Energia received an
additional tax assessment in the amount, of 58, after taking
account of a reduction of fines mentioned below regarding the
same matter, for infractions which allegedly occurred during the
2014 to 2015 period, and filed its defense in May 2016.
Following appeal, the company received a notice from the tax
authority in November 2017 that reduced the fees in the second
case by 12, due to retrospective application of a new law. In
addition, in February 2019, a reduction of the fine by 7 was
finalized in the first case due to the retrospective application of a
new law. The cases are currently pending in the first judicial
instance.
In 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 89. In
the Administrative instance, all the cases were unfavorably
closed. ArcelorMittal Brasil filed 5 lawsuits to discuss the matter.
In the first judicial instance, ArcelorMittal Brasil obtained a
largely favorable decisions in all cases. There were appeals
from the company and the tax authority. In September 2022, the
second judicial instance ruled a largely favorable decision to the
company in one case (in amount of 4). In November 2023, the
second judicial instance ruled a largely favorable decision in the
Company in two cases (in the amount of 9). In December 2023,
the court of the second judicial instance ruled against the
Company in another case (in the amount of 1) and began
adjudicating the last case (in the amount of 73) for which the
trial is pending.
On May 17, 2016, ArcelorMittal Brasil received a tax
assessment from the state of Santa Catarina in the current
amount of 128 alleging that it had used improper methods to
calculate the amount of its ICMS credits. In the Administrative
instance, the case was unfavorably closed in November 2020,
and ArcelorMittal Brasil filed a lawsuit to challenge the
assessment. The case is pending at the judicial instance
currently.
In January 2023, ArcelorMittal Brasil received a tax assessment
from the Federal Revenue Service in an amount of 156 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, and expenses for freight for finished
products. ArcelorMittal Brasil filed an administrative defense in
February 2023. In November 2023, the company was notified of
the unfavorable decision and filed an appeal in December 2023.
In January 2023, ArcelorMittal Brasil received a tax assessment
in an amount of 16 for a 50% fine for alleged non-payment of
the monthly estimate of CIT related to fiscal year 2018. The
Federal Revenue accuses the company of undue offsetting of
CIT credits paid in Venezuela from 2010 to 2014 when
calculating the monthly IRC estimate for 2018. In February
2023, ArcelorMittal Brasil filed its defense. In September 2023,
the first administrative instance ruled against the company and
ArcelorMittal filed an appeal. In November 2023, ArcelorMittal
Brasil received a new tax assessment of 60. The Federal
Revenue accuses the company of allegedly undue offsetting of
CIT credits paid in Venezuela from 2010 to 2014 and offset by
ArcelorMittal Brasil in 2018. In December 2023, the company
filed an administrative defense. Both cases are currently
pending.
In 2010, ArcelorMittal Brasil received a first tax assessment for
BRL 94 million (19) arguing that the company should not have
used a tax incentive granted by the State of Bahia, according to
which taxpayers could take ICMS credit on the value of freight
paid by them, since AMTC is not a real plant (for the period from
March 2008 to December 2009). Furthermore, the company
also used the tax incentive (\u201cProauto\u201d), which may not be
combined with another tax benefit. In 2012, this case was
closed unfavorably at the administrative level and the company
filed a lawsuit to discuss the tax charge with the the court of first
instance. In 2023, the company obtained a favorable decision
from the court of first instance, canceling the assessment.
Currently, the case is awaiting a trial by the court of second
instance. In June 2014, the company received a second tax
assessment of BRL 23 million (5) discussing the same matter,
but related to a different period (from June 2010 to December
2012). In 2017, the administrative level judged the assessment
partially in favor of the company (cancelling the taxes, but
maintaining the fines) and the company filed a lawsuit, which is
awaiting a decision from the court of first instance. In December
2014, the company received a third tax assessment of BRL 20
million (4) discussing the same matter, but related to a different
period (from January 2013 to December 2013). In 2015, the
administrative court of first instance ruled unfavorably to the
company and the company filed an appeal, currently pending
trial. In November 2022, the company received a fourth tax
assessment of BRL 114 million (24) resulting from the use of the
accumulated credit, which, according to the tax authorities,
could not be used because it had already been extinguished by
the statute of limitations. In May 2023, the administrative court
of first instance dismissed the defense. In June 2023, the
company filed an appeal to the administrative court of second
instance and the appeal is currently pending.
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 categorized as dividends. ArcelorMittal
Mexico's complaint for annulment before a Federal
Administrative and Tax Court is pending. The amount of the tax
assessment as of December\u00a031, 2023 is 247.
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
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 Court. In
June 2023, the Federal Administrative and Tax Court ruled
against the annulment claim. In July 2023, ArcelorMittal Las
Truchas filed an appeal before the Court of Appeal. The amount
of the tax assessment as of December\u00a031, 2023 is 129.
On February 24, 2023, the Tax Administration Service notified
ArcelorMittal Las Truchas of a tax assessment, with respect to
2014. In April 2023, ArcelorMittal Las Truchas filed an
administrative appeal in respect of this assessment before the
Tax Administrative Service. The amount of the tax assessment
as of December 31, 2023 is 112.
Ukraine\u00a0
In October 2019, AMKR received 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. AMKR
appealed these orders to the tax authorities resulting in a
significant reduction of the amounts claimed. In January 2020,
AMKR 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 (hereinafter called 'First 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
$50,000. The tax authorities appealed the decision in April 2023.
In July 2023, the Court dismissed the tax authorities appeal and
upheld the first instance decision. In April 2023, tax authorities
filed an appeal claim to the Third Administrative Appellate Court.
Court opened appeal proceedings and in July 2023, the Third
Administrative Appellate Court left the tax authority's appeal
unsatisfied, and the decision of the first instance remained
unchanged. In September 2023, the Supreme Court opened the
cassation proceedings on the claim of tax authority. In
November 2023, the Supreme Court satisfied the cassation
claim of the tax authority partially and changed decisions of the
courts of first and appellate instances. Therefore, AMKR won
this case partially in the amount of 3.4 billion UAH (90). Further,
in January 2024, the tax authority filed to the Dnipro District
Administrative Court the request to review the case based on
newly discovered circumstances, court opened proceedings.
The amount of the new lawsuit is around $35,500.
Competition/Antitrust Claims
ArcelorMittal is a party to various competition/antitrust claims. As
of December\u00a031, 2023, 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
2023 or (iii) that were resolved and had a financial impact in
2022 or 2021, 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 75. ArcelorMittal Brasil's appeal of the court judgment
against it is currently pending.
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 83 based on
the alleged violations investigated by CADE. The injunction
requested by the 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.
Other Legal Claims\u00a0
ArcelorMittal is a party to various other legal claims. As of
December\u00a031, 2023, ArcelorMittal had recorded provisions of
268 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,
2023, (ii) that constitute a contingent liability, (iii) that were
resolved in 2023, or (iv) that were resolved and had a financial
impact in 2022 or 2021, 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 December
2023, the aggregate amount claimed by the Customs Office
Authority in respect of all iron ore shipments is 90 in 17 different
cases. Of these 17 cases, 6 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. The case impacts a
group of approximately 2,500 employees. In July 2022, the
Supreme Court decided a leading case, not involving
ArcelorMittal Brasil, that may favorably impact ArcelorMittal
Brasil's case, which is currently pending on appeal.
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 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 was a
net loss after tax of approximately 126 (67 net of partial recovery
through dividend payment from SITREL) in 2022.
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. 1,091). 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). The
parties have filed their respective statements of defense in the
arbitration and the case is currently pending.
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 January
2019, Finmasi called on the AMDSF guarantee issued in the
context of the enforcement proceedings that were suspended in
2015. After a series of appeals, 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 duly filed its defense in March 2023.
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. A final decision for the two pilot
cases of Esch-sur-Alzette is expected by the end of 2024.
France
Retired and current employees of certain French subsidiaries of
ArcelorMittal 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
employer before a special tribunal. For faute inexcusable cases,
the primary health insurance fund, CPAM - advances, the
amount of damages and pension increase are reimbursed by
the employer found at fault and takes recourse action against
the employer.\u00a0
The number of claims outstanding for asbestos exposure at
December\u00a031, 2023 was 243 as compared to\u00a0308 at
December\u00a031, 2022.
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 the ongoing matter in this regard.
Several other claims brought before other courts and regulators
on similar grounds were dismissed and are definitively closed.\u00a0
On May 15, 2012, ArcelorMittal received a writ of summons on
behalf of Association des Actionnaires d'Arcelor (\"AAA\"), a
French association of former minority shareholders of Arcelor to
appear before the civil court of Paris. The AAA 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 company law.
AAA claimed, 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 of AAA and several hedge funds
(who quantified their total alleged damages at 282). 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 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 431 (\u20ac390 million).
A final hearing date for oral arguments has been scheduled for
June 2024.
9.4\u00a0 \u00a0 Commitments
December 31,
2023
2022
Commitments related to purchases of raw
materials and energy
11,346
11,668
Guarantees, pledges and other collateral
8,888
8,470
Capital expenditure commitments
2,799
2,930
Other commitments
1,374
1,533
Total
24,407
24,601
Commitments related to purchases of raw materials and energy
Purchase commitments consist primarily of major agreements
for procuring iron ore, coking coal, coke and hot metal. The
Company also has a number of agreements for electricity,
industrial and natural gas, scrap and freight. In addition to those
purchase commitments disclosed above, the Company enters
into purchasing contracts as part of its normal operations which
have minimum volume requirements but for which there are no
take-or-pay or penalty clauses included in the contract. The
Company does not believe these contracts have an adverse
effect on its liquidity position.
Commitments related to purchases of raw materials and energy
included commitments given to associates for 1,487 and 1,661
as of December\u00a031, 2023 and 2022, respectively. Purchase
commitments given to associates included 704 and 691 as of
December\u00a031, 2023 and 2022, respectively, related to the gas
supply agreement with Kryvyi Rih Industrial Gas. Purchase
commitments included commitments given to joint ventures for
838 and 988 as of December\u00a031, 2023 and 2022, respectively.
Purchase commitments given to joint ventures included 334 and
424 related to Tameh and 413 and 442 related to Enerfos as of
December\u00a031, 2023 and 2022, respectively.
Guarantees, pledges and other collateral
Guarantees related to financial debt and credit lines given on
behalf of third parties were 155 and 181 as of December\u00a031,
2023 and 2022, respectively. Additionally, guarantees of 12 and
12 were given on behalf of associates and guarantees of 4,992
and 4,383 were given on behalf of joint ventures as of
December\u00a031, 2023 and 2022, respectively.
Guarantees given on behalf of joint ventures included 421 and
354 on behalf of Calvert, 208 and 178 on behalf of Al Jubail and
480 and 341 in relation to outstanding lease liabilities for vessels
operated by Global Chartering as of December\u00a031, 2023 and
2022, respectively. Guarantees given on behalf of joint ventures
also included 3,490 and 3,088 as of December 31, 2023 and
2022 corresponding to ArcelorMittal's 60% guarantee of the debt
under the term loan agreements entered into by the AMNS India
joint venture with various Japanese banks.
As of December\u00a031, 2023, 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 162 and ceded
bank accounts to secure environmental obligations, true sale of
receivables programs and the revolving borrowing base finance
facility in South Africa of 98. Pledges of property, plant and
equipment were 59 and 98 as of December\u00a031, 2023 and 2022,
respectively. Other sureties, first demand guarantees, letters of
credit, pledges and other collateral included 319 and 375 of
commitments given on behalf of associates as of December\u00a031,
2023 and 2022, respectively, and 313 and 598 of commitments
given on behalf of joint ventures as of December\u00a031, 2023 and
2022, 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 507 and 340 at
December 31, 2023 and 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,
2023 and 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 49 and 182 at the
iron ore Serra Azul mine (Brazil) at December 31, 2023 and
2022 in connection with the construction of facilities to produce
4.5 million tonnes per annum of DRI quality pellet feed.
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, 2023 and 2022,
ArcelorMittal Brasil estimated the underlying costs to implement
those investments at 78 and 115, respectively. The non-
compliance with ECA would lead to fines amounting to a
maximum of 21 and 19 as of December 31, 2023 and 2022,
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 2026. As of December
31, 2023 and 2022, commitments related to this project were
348 and 420, 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 131 and 368 as of December\u00a031, 2023 and 2022,
respectively, and mainly related to natural gas and electricity.
Other
On July 6, 2023, the Luxembourg Parliament approved the law
enabling the State of the Grand-Duchy of Luxembourg to
exercise the right (following an agreement signed between
ArcelorMittal, the Fonds d'Urbanisation et d'Am\u00e9nagement du
Plateau de Kirchberg and the State of the Grand-Duchy of
Luxembourg on December 20, 2022) 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
acquisition price is based on construction cost. The exercise
date of the right has been extended to February 29, 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-705": { "value": "9.1\u00a0 \u00a0 Provisions
Balance at
December\u00a031,
2022
Additions1
Deductions/
Payments
Effects of foreign
exchange and
other movements
Balance at
December\u00a031,
2023
Environmental
566
113
(76)
17
620
Emission obligations
522
3
(486)
(10)
29
Asset retirement obligations
349
21
(3)
13
380
Site restoration
152
8
(17)
4
147
Staff related obligations
137
50
(29)
4
162
Voluntary separation plans
23
8
(17)
18
32
Litigation and other (see note 9.3)
289
66
(62)
56
349
\u00a0 Tax claims
73
16
(14)
6
81
\u00a0 Other legal claims
216
50
(48)
50
268
Commercial agreements and onerous contracts
28
6
(6)
1
29
Other
341
85
(117)
8
317
2,407
360
(813)
111
2,065
Short-term provisions
1,101
588
Long-term provisions
1,306
1,477
2,407
2,065
Balance at
December\u00a031,
2021
Additions1
Deductions/
Payments
Effects of foreign
exchange and
other movements
Balance at
December\u00a031,
2022
Environmental
595
59
(61)
(27)
566
Emission obligations
492
477
(443)
(4)
522
Asset retirement obligations
397
22
(41)
(29)
349
Site restoration
220
\u2014
(54)
(14)
152
Staff related obligations
120
40
(29)
6
137
Voluntary separation plans
31
3
(18)
7
23
Litigation and other (see note 9.3)
323
53
(103)
16
289
\u00a0 Tax claims
79
9
(24)
9
73
\u00a0 Other legal claims
244
44
(79)
7
216
Commercial agreements and onerous
contracts
23
9
(4)
\u2014
28
Other
361
84
(124)
20
341
2,562
747
(877)
(25)
2,407
Short-term provisions
1,064
1,101
Long-term provisions
1,498
1,306
2,562
2,407
1. Additions exclude provisions reversed or utilized during the same year.
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 contamination, available
remediation technology, and environmental regulations.
Estimates are subject to revision as further information develops
or circumstances change.
Provisions for emission obligations are recognized to cover the
shortage between the Company's CO2 emissions and the
allowances granted, based on the market value of the CO2
allowances as of the reporting date or purchase price of the
acquired CO2 emission rights. In 2023 provisions for emission
obligations decreased as a result of the settlement of the 2022
shortage through surrendering the corresponding CO2 emission
rights to the environmental authorities and lower CO2 emissions
during the year\u00a0 as a result of lower production mainly in Europe
(see note 4.5).
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.
Provisions for site restoration are related to costs in connection
with the dismantling of site facilities, mainly in France and
Poland, of which 66 and 79 at December 31, 2023 and 2022,
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 and Brazil, 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 see also note 9.3.
In 2023 and 2022 provisions for commercial agreements and
onerous contracts were primarily linked to onerous contracts in
Poland and Spain.
Other provisions of 182 and 187 at December 31, 2023 and
2022, respectively, are related to the Complementary
Agreement Term signed in 2021 between ArcelorMittal Brazil,
the Federal and State Prosecutor Offices and the Commission
representing affected people, which includes precautionary
evacuation of the communities close to the Serra Azul dam, as
well as the commitment to implement action plans to ensure the
stability, security and decommissioning of the tailing dam. Other
provisions also comprise technical warranties and guarantees.
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, 2023, excluding asset
retirement obligations, ArcelorMittal had established provisions
of 620 for environmental remedial activities and liabilities. The
provisions for all operations by geographic area included mainly
427 in Europe, 98 in South Africa and 91 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 427 and are mainly related to the investigation and
remediation of environmental contamination at current and
former operating sites in Belgium (208), Luxembourg (78),
France (58),\u00a0 Poland (40), Germany (34) 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 of 208 mainly relate to
legal site remediation obligations linked to the closure of the
primary installations at the Li\u00e8ge site of ArcelorMittal Belgium.
The provisions also include 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
Luxembourg
In Luxembourg, environmental provisions of 78 relate to the
post-closure monitoring and remediation of former production
sites, waste disposal areas, slag deposits and mining sites.
They include 33 with respect to obligations to secure, stabilize
and conduct waterproofing treatment in mining galleries and
various dumping areas in Mondercange, Dommeldange and
Dudelange. In addition, a 26 provision is recognized with
respect to the covering process of the Differdange dump which
was used for disposal of ladle slag, sludge and certain other
residues coming from different Luxembourg sites.
France
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 relates mainly to the
Thionville, Moyeuvre-Grande, Homecourt, Hagondange and
Micheville sites, and is related to the 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 2024 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 was idled 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 requested 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
Poland\u00a0
ArcelorMittal Poland\u2019s environmental provision of 40 includes 27
for cleaning and remediation costs following the closure of
primary facilities in Krak\u00f3w and land remediation of post-
industrial areas in Ruszca (district of Krak\u00f3w); the remaining 13
relate to the obligation to reclaim landfills in Krak\u00f3w,
Zdzieszowice, Dabrowa G\u00f3rnicza and to dispose of 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.
Germany\u00a0
In Germany, the 34 environmental provision essentially relates
to ArcelorMittal Bremen\u2019s post-closure obligations at the Prosper
coke plant in Bottrop mainly established for soil remediation,
groundwater treatment and monitoring.
South Africa\u00a0
AMSA has environmental provisions of 98 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 26 relates to the decommissioned Pretoria Works
site. This site is in a state of care and maintenance with ongoing
rehabilitation. 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 civil construction industry continuing
unabated, but other remediation works continued at a slow pace
as remediation actions for these sites are long-term in nature.\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 15.\u00a0
The Newcastle Works site is the main long carbon steel
operation of AMSA. A provision of 23 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 33 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
Canada\u00a0
In Canada, ArcelorMittal Dofasco has a 31 environmental
provision for the expected cost of remediating toxic sediment
located in the Company\u2019s East Boatslip site, for which
management is in process of reviewing the tenders for initiating
the expenditure.
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, 2023, ArcelorMittal had
established provisions for asset retirement obligations of 380,
including mainly 150 for Canada, 63 for Mexico, 47 for Ukraine,
47 for Germany, 30 for Brazil, 19 for Liberia and 11 for South
Africa. As of December 31, 2023, AROs related to mining
activities and total undiscounted amount of site restoration
obligations amounted to 293 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 of the Las
Truchas, El Volcan, San Jose and the joint operation Pe\u00f1a
Colorada iron ore mines.
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 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.
In Poland, AROs relate to the legal obligation to decontaminate
and recultivate a land in Krakow following closure of the
operations.
In Bosnia and Herzegovina, ARO relates to re-cultivation of
dump yard of old iron ore pit Buvac and closing dam Medjedja.
9.2\u00a0 \u00a0 Other long-term obligations
\u00a0
Balance at December 31,
\u00a0
2023
2022
Derivative financial instruments (notes 6.1
and 6.3)
76
45
Payable from acquisition of financial
assets
125
85
Unfavorable contracts
233
92
Income tax payable
185
202
Put option liability ArcelorMittal Texas HBI
(note 11.5.2)
158
181
Put option liability Sonasid (note 11.5.2)
116
122
Other
168
187
Total
1,061
914
As of December 31, 2023 and 2022, payable from acquisition of
financial assets included 52 and 66 respectively related to
AMNS India's debt guarantee (see note 9.4).
Unfavorable contracts of 233 and 92 as of December\u00a031, 2023
and 2022, respectively, mainly related to ArcelorMittal Pec\u00e9m
(see note 2.2.4) and ArcelorMittal Brasil.
As of December 31, 2023, 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, 2023, ArcelorMittal had recorded short-term and
long-term liabilities related to income tax contingencies of 50
and provisions for non-income tax claims in the aggregate of 81
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,
2023, (ii) that constitute a contingent liability, (iii) that were
resolved in 2023 or (iv) that were resolved and had a financial
impact in 2022 or 2021, 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 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
30 relating to a tax incentive (INVEST) it used. The dispute
concerns the definition of fixed assets. Following a series of
decisions and appeals (partially favorable) over a ten-year
period, in July 2021, ArcelorMittal Brasil filed 4 lawsuits (in
relation to 21 tax assessments received in 2011) to discuss the
remaining amount in the court of first instance. All these cases
are pending trial as of December 31, 2023.
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 500 and the ArcelorMittal Brasil's appeal
against the second instance decision largely favorable to the
Federal Revenue Service has been pending trial with the third
instance of the administrative tribunal since March 2018.\u00a0
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 68 financial impact arising from a
write off of 'net operating loss carry forward' with respect to the
2011-2012 tax year. ArcelorMittal Brasil's appeal against the
unfavorable decision on the lower instances of the assessment
has been awaiting judgment in the third instance of the
administrative tribunal since November 2019.
In December 2018, ArcelorMittal Brasil received a tax
assessment of 126, which could have an additional 22 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. After lower court
decisions and appeals in November 2022, the second instance
of the administrative tribunal cancelled the tax assessment. In
January 2023, the Federal Revenue Service filed an appeal to
the third instance of the administrative tribunal.
In December 2020, ArcelorMittal Brasil received a tax
assessment of 44 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 instance of the administrative
tribunal in January 2021 which issued an unfavorable decision
in August 2021. ArcelorMittal Brasil filed an appeal to the second
instance of the administrative tribunal in September 2021.
In the period from 2014 to 2018, ArcelorMittal Brasil received\u00a0
tax assessments from the Federal Revenue Service in\u00a0the
amount of 46 disputing its use of credits for PIS and COFINS
social security taxes\u00a0in 2010, 2011 and 2013. The disputes
relate to the concept of production inputs in the context of these
taxes. In four of the cases, the tax assessments have been
partially reduced and ArcelorMittal Brasil's subsequent appeals
to dispute the remaining amounts are currently pending. One of
these cases has already closed at the administrative level and is
pending a decision at the first judicial level. In the fifth case, the
administrative tribunal of the first instance upheld the tax
assessment in March 2017, and ArcelorMittal Brasil appealed to
the second instance of the administrative tribunal. In the sixth
case, the first instance of the administrative tribunal issued an
unfavorable decision in April 2017, and ArcelorMittal Brasil
appealed to the second instance of the administrative tribunal.
Subsequently, the Superior Court decided two leading cases,
not involving ArcelorMittal Brasil, that are expected to strengthen
ArcelorMittal\u2019s defense in the sixth case in which part of the
contingency is related to scrap acquisition. In February 2011,
ArcelorMittal Brasil also filed 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.
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 40. Following the
conclusion of this proceeding at the administrative level, the
company received the tax enforcement notice in December
2015 and filed its defense in February 2016. In April 2016,
ArcelorMittal Comercializadora de Energia received an
additional tax assessment in the amount, of 58, after taking
account of a reduction of fines mentioned below regarding the
same matter, for infractions which allegedly occurred during the
2014 to 2015 period, and filed its defense in May 2016.
Following appeal, the company received a notice from the tax
authority in November 2017 that reduced the fees in the second
case by 12, due to retrospective application of a new law. In
addition, in February 2019, a reduction of the fine by 7 was
finalized in the first case due to the retrospective application of a
new law. The cases are currently pending in the first judicial
instance.
In 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 89. In
the Administrative instance, all the cases were unfavorably
closed. ArcelorMittal Brasil filed 5 lawsuits to discuss the matter.
In the first judicial instance, ArcelorMittal Brasil obtained a
largely favorable decisions in all cases. There were appeals
from the company and the tax authority. In September 2022, the
second judicial instance ruled a largely favorable decision to the
company in one case (in amount of 4). In November 2023, the
second judicial instance ruled a largely favorable decision in the
Company in two cases (in the amount of 9). In December 2023,
the court of the second judicial instance ruled against the
Company in another case (in the amount of 1) and began
adjudicating the last case (in the amount of 73) for which the
trial is pending.
On May 17, 2016, ArcelorMittal Brasil received a tax
assessment from the state of Santa Catarina in the current
amount of 128 alleging that it had used improper methods to
calculate the amount of its ICMS credits. In the Administrative
instance, the case was unfavorably closed in November 2020,
and ArcelorMittal Brasil filed a lawsuit to challenge the
assessment. The case is pending at the judicial instance
currently.
In January 2023, ArcelorMittal Brasil received a tax assessment
from the Federal Revenue Service in an amount of 156 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, and expenses for freight for finished
products. ArcelorMittal Brasil filed an administrative defense in
February 2023. In November 2023, the company was notified of
the unfavorable decision and filed an appeal in December 2023.
In January 2023, ArcelorMittal Brasil received a tax assessment
in an amount of 16 for a 50% fine for alleged non-payment of
the monthly estimate of CIT related to fiscal year 2018. The
Federal Revenue accuses the company of undue offsetting of
CIT credits paid in Venezuela from 2010 to 2014 when
calculating the monthly IRC estimate for 2018. In February
2023, ArcelorMittal Brasil filed its defense. In September 2023,
the first administrative instance ruled against the company and
ArcelorMittal filed an appeal. In November 2023, ArcelorMittal
Brasil received a new tax assessment of 60. The Federal
Revenue accuses the company of allegedly undue offsetting of
CIT credits paid in Venezuela from 2010 to 2014 and offset by
ArcelorMittal Brasil in 2018. In December 2023, the company
filed an administrative defense. Both cases are currently
pending.
In 2010, ArcelorMittal Brasil received a first tax assessment for
BRL 94 million (19) arguing that the company should not have
used a tax incentive granted by the State of Bahia, according to
which taxpayers could take ICMS credit on the value of freight
paid by them, since AMTC is not a real plant (for the period from
March 2008 to December 2009). Furthermore, the company
also used the tax incentive (\u201cProauto\u201d), which may not be
combined with another tax benefit. In 2012, this case was
closed unfavorably at the administrative level and the company
filed a lawsuit to discuss the tax charge with the the court of first
instance. In 2023, the company obtained a favorable decision
from the court of first instance, canceling the assessment.
Currently, the case is awaiting a trial by the court of second
instance. In June 2014, the company received a second tax
assessment of BRL 23 million (5) discussing the same matter,
but related to a different period (from June 2010 to December
2012). In 2017, the administrative level judged the assessment
partially in favor of the company (cancelling the taxes, but
maintaining the fines) and the company filed a lawsuit, which is
awaiting a decision from the court of first instance. In December
2014, the company received a third tax assessment of BRL 20
million (4) discussing the same matter, but related to a different
period (from January 2013 to December 2013). In 2015, the
administrative court of first instance ruled unfavorably to the
company and the company filed an appeal, currently pending
trial. In November 2022, the company received a fourth tax
assessment of BRL 114 million (24) resulting from the use of the
accumulated credit, which, according to the tax authorities,
could not be used because it had already been extinguished by
the statute of limitations. In May 2023, the administrative court
of first instance dismissed the defense. In June 2023, the
company filed an appeal to the administrative court of second
instance and the appeal is currently pending.
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 categorized as dividends. ArcelorMittal
Mexico's complaint for annulment before a Federal
Administrative and Tax Court is pending. The amount of the tax
assessment as of December\u00a031, 2023 is 247.
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
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 Court. In
June 2023, the Federal Administrative and Tax Court ruled
against the annulment claim. In July 2023, ArcelorMittal Las
Truchas filed an appeal before the Court of Appeal. The amount
of the tax assessment as of December\u00a031, 2023 is 129.
On February 24, 2023, the Tax Administration Service notified
ArcelorMittal Las Truchas of a tax assessment, with respect to
2014. In April 2023, ArcelorMittal Las Truchas filed an
administrative appeal in respect of this assessment before the
Tax Administrative Service. The amount of the tax assessment
as of December 31, 2023 is 112.
Ukraine\u00a0
In October 2019, AMKR received 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. AMKR
appealed these orders to the tax authorities resulting in a
significant reduction of the amounts claimed. In January 2020,
AMKR 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 (hereinafter called 'First 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
$50,000. The tax authorities appealed the decision in April 2023.
In July 2023, the Court dismissed the tax authorities appeal and
upheld the first instance decision. In April 2023, tax authorities
filed an appeal claim to the Third Administrative Appellate Court.
Court opened appeal proceedings and in July 2023, the Third
Administrative Appellate Court left the tax authority's appeal
unsatisfied, and the decision of the first instance remained
unchanged. In September 2023, the Supreme Court opened the
cassation proceedings on the claim of tax authority. In
November 2023, the Supreme Court satisfied the cassation
claim of the tax authority partially and changed decisions of the
courts of first and appellate instances. Therefore, AMKR won
this case partially in the amount of 3.4 billion UAH (90). Further,
in January 2024, the tax authority filed to the Dnipro District
Administrative Court the request to review the case based on
newly discovered circumstances, court opened proceedings.
The amount of the new lawsuit is around $35,500.
Competition/Antitrust Claims
ArcelorMittal is a party to various competition/antitrust claims. As
of December\u00a031, 2023, 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
2023 or (iii) that were resolved and had a financial impact in
2022 or 2021, 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 75. ArcelorMittal Brasil's appeal of the court judgment
against it is currently pending.
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 83 based on
the alleged violations investigated by CADE. The injunction
requested by the 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.
Other Legal Claims\u00a0
ArcelorMittal is a party to various other legal claims. As of
December\u00a031, 2023, ArcelorMittal had recorded provisions of
268 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,
2023, (ii) that constitute a contingent liability, (iii) that were
resolved in 2023, or (iv) that were resolved and had a financial
impact in 2022 or 2021, 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 December
2023, the aggregate amount claimed by the Customs Office
Authority in respect of all iron ore shipments is 90 in 17 different
cases. Of these 17 cases, 6 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. The case impacts a
group of approximately 2,500 employees. In July 2022, the
Supreme Court decided a leading case, not involving
ArcelorMittal Brasil, that may favorably impact ArcelorMittal
Brasil's case, which is currently pending on appeal.
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 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 was a
net loss after tax of approximately 126 (67 net of partial recovery
through dividend payment from SITREL) in 2022.
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. 1,091). 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). The
parties have filed their respective statements of defense in the
arbitration and the case is currently pending.
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 January
2019, Finmasi called on the AMDSF guarantee issued in the
context of the enforcement proceedings that were suspended in
2015. After a series of appeals, 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 duly filed its defense in March 2023.
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. A final decision for the two pilot
cases of Esch-sur-Alzette is expected by the end of 2024.
France
Retired and current employees of certain French subsidiaries of
ArcelorMittal 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
employer before a special tribunal. For faute inexcusable cases,
the primary health insurance fund, CPAM - advances, the
amount of damages and pension increase are reimbursed by
the employer found at fault and takes recourse action against
the employer.\u00a0
The number of claims outstanding for asbestos exposure at
December\u00a031, 2023 was 243 as compared to\u00a0308 at
December\u00a031, 2022.
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 the ongoing matter in this regard.
Several other claims brought before other courts and regulators
on similar grounds were dismissed and are definitively closed.\u00a0
On May 15, 2012, ArcelorMittal received a writ of summons on
behalf of Association des Actionnaires d'Arcelor (\"AAA\"), a
French association of former minority shareholders of Arcelor to
appear before the civil court of Paris. The AAA 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 company law.
AAA claimed, 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 of AAA and several hedge funds
(who quantified their total alleged damages at 282). 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 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 431 (\u20ac390 million).
A final hearing date for oral arguments has been scheduled for
June 2024.
9.4\u00a0 \u00a0 Commitments
December 31,
2023
2022
Commitments related to purchases of raw
materials and energy
11,346
11,668
Guarantees, pledges and other collateral
8,888
8,470
Capital expenditure commitments
2,799
2,930
Other commitments
1,374
1,533
Total
24,407
24,601
Commitments related to purchases of raw materials and energy
Purchase commitments consist primarily of major agreements
for procuring iron ore, coking coal, coke and hot metal. The
Company also has a number of agreements for electricity,
industrial and natural gas, scrap and freight. In addition to those
purchase commitments disclosed above, the Company enters
into purchasing contracts as part of its normal operations which
have minimum volume requirements but for which there are no
take-or-pay or penalty clauses included in the contract. The
Company does not believe these contracts have an adverse
effect on its liquidity position.
Commitments related to purchases of raw materials and energy
included commitments given to associates for 1,487 and 1,661
as of December\u00a031, 2023 and 2022, respectively. Purchase
commitments given to associates included 704 and 691 as of
December\u00a031, 2023 and 2022, respectively, related to the gas
supply agreement with Kryvyi Rih Industrial Gas. Purchase
commitments included commitments given to joint ventures for
838 and 988 as of December\u00a031, 2023 and 2022, respectively.
Purchase commitments given to joint ventures included 334 and
424 related to Tameh and 413 and 442 related to Enerfos as of
December\u00a031, 2023 and 2022, respectively.
Guarantees, pledges and other collateral
Guarantees related to financial debt and credit lines given on
behalf of third parties were 155 and 181 as of December\u00a031,
2023 and 2022, respectively. Additionally, guarantees of 12 and
12 were given on behalf of associates and guarantees of 4,992
and 4,383 were given on behalf of joint ventures as of
December\u00a031, 2023 and 2022, respectively.
Guarantees given on behalf of joint ventures included 421 and
354 on behalf of Calvert, 208 and 178 on behalf of Al Jubail and
480 and 341 in relation to outstanding lease liabilities for vessels
operated by Global Chartering as of December\u00a031, 2023 and
2022, respectively. Guarantees given on behalf of joint ventures
also included 3,490 and 3,088 as of December 31, 2023 and
2022 corresponding to ArcelorMittal's 60% guarantee of the debt
under the term loan agreements entered into by the AMNS India
joint venture with various Japanese banks.
As of December\u00a031, 2023, 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 162 and ceded
bank accounts to secure environmental obligations, true sale of
receivables programs and the revolving borrowing base finance
facility in South Africa of 98. Pledges of property, plant and
equipment were 59 and 98 as of December\u00a031, 2023 and 2022,
respectively. Other sureties, first demand guarantees, letters of
credit, pledges and other collateral included 319 and 375 of
commitments given on behalf of associates as of December\u00a031,
2023 and 2022, respectively, and 313 and 598 of commitments
given on behalf of joint ventures as of December\u00a031, 2023 and
2022, 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 507 and 340 at
December 31, 2023 and 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,
2023 and 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 49 and 182 at the
iron ore Serra Azul mine (Brazil) at December 31, 2023 and
2022 in connection with the construction of facilities to produce
4.5 million tonnes per annum of DRI quality pellet feed.
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, 2023 and 2022,
ArcelorMittal Brasil estimated the underlying costs to implement
those investments at 78 and 115, respectively. The non-
compliance with ECA would lead to fines amounting to a
maximum of 21 and 19 as of December 31, 2023 and 2022,
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 2026. As of December
31, 2023 and 2022, commitments related to this project were
348 and 420, 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 131 and 368 as of December\u00a031, 2023 and 2022,
respectively, and mainly related to natural gas and electricity.
Other
On July 6, 2023, the Luxembourg Parliament approved the law
enabling the State of the Grand-Duchy of Luxembourg to
exercise the right (following an agreement signed between
ArcelorMittal, the Fonds d'Urbanisation et d'Am\u00e9nagement du
Plateau de Kirchberg and the State of the Grand-Duchy of
Luxembourg on December 20, 2022) 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
acquisition price is based on construction cost. The exercise
date of the right has been extended to February 29, 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-707": { "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 position
taken in the tax return will not be accepted by the tax authorities,
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.
The Company has adopted International Tax Reform \u2013 Pillar
Two Model Rules (Amendments to IAS 12 upon their release on
May 23, 2023). The Amendments provide a temporary
mandatory exception from deferred tax accounting for the top-up
tax, which is effective immediately, and require new disclosures
about the Pillar Two exposure as of December 31, 2023. The
Company has applied a temporary mandatory relief from
deferred tax accounting for the impacts of the top-up tax and
accounts for it as a current tax when incurred.
Pillar Two legislation has been enacted or substantively enacted
in the jurisdiction of ArcelorMittal S.A., the ultimate parent of the
Group, and in certain other jurisdictions where the Company
operates. The legislation is effective for the Company\u2019s financial
year beginning January 1, 2024.\u00a0 Based on the applicable
criteria, the Company is subject to Pillar Two minimum tax and
has substantially performed the assessment of its potential
exposure. The assessment that is being carried out is based on
the latest available tax filings, country-by-country reporting for
2022, and the latest financial information for 2023, and
considers the Pillar Two legislation as enacted in Luxembourg
and published by OECD rules and guidelines. Based on the
assessment carried out so far, ArcelorMittal does not expect a
material impact of the Pillar Two legislation to the consolidated
financial statements. Nevertheless, as the rules are complex,
uncertainty exists and unforeseen outcomes of the Pillar Two
legislation may exceptionally result in additional top-up tax.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-706": { "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 position
taken in the tax return will not be accepted by the tax authorities,
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.
The Company has adopted International Tax Reform \u2013 Pillar
Two Model Rules (Amendments to IAS 12 upon their release on
May 23, 2023). The Amendments provide a temporary
mandatory exception from deferred tax accounting for the top-up
tax, which is effective immediately, and require new disclosures
about the Pillar Two exposure as of December 31, 2023. The
Company has applied a temporary mandatory relief from
deferred tax accounting for the impacts of the top-up tax and
accounts for it as a current tax when incurred.
Pillar Two legislation has been enacted or substantively enacted
in the jurisdiction of ArcelorMittal S.A., the ultimate parent of the
Group, and in certain other jurisdictions where the Company
operates. The legislation is effective for the Company\u2019s financial
year beginning January 1, 2024.\u00a0 Based on the applicable
criteria, the Company is subject to Pillar Two minimum tax and
has substantially performed the assessment of its potential
exposure. The assessment that is being carried out is based on
the latest available tax filings, country-by-country reporting for
2022, and the latest financial information for 2023, and
considers the Pillar Two legislation as enacted in Luxembourg
and published by OECD rules and guidelines. Based on the
assessment carried out so far, ArcelorMittal does not expect a
material impact of the Pillar Two legislation to the consolidated
financial statements. Nevertheless, as the rules are complex,
uncertainty exists and unforeseen outcomes of the Pillar Two
legislation may exceptionally result in additional top-up tax.
10.1\u00a0 \u00a0 Income tax expense
The components of income tax expense (benefit) are
summarized as follows:
\u00a0
Year ended December 31,
\u00a0
2023
2022
2021
Total current tax expense
1,008
2,080
2,953
Total deferred tax expense
(benefit)
(770)
(363)
(493)
Total income tax expense
238
1,717
2,460
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:
\u00a0
Year ended December 31,
\u00a0
2023
2022
2021
Net income (loss) (including non-
controlling interests)
1,022
9,538
15,565
Income tax expense
238
1,717
2,460
Income before tax
1,260
11,255
18,025
Tax expense at the statutory rates
applicable to income in the
countries1
454
2,818
4,146
Permanent items
(101)
(303)
500
Rate changes
\u2014
\u2014
12
Net change in measurement of
deferred tax assets
(423)
(1,154)
(2,956)
Tax effects of foreign currency
translation
(20)
(34)
\u2014
Tax credits
(26)
(22)
(24)
Other taxes
324
394
688
Others
30
18
94
Income tax expense
238
1,717
2,460
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.
Permanent items
Year ended December 31,
2023
2022
2021
Taxable reversals of (tax
deductible) write-downs on shares
and receivables
(647)
(109)
735
Non-deductible loss on disposal of
Kazakhstan operations
573
\u2014
\u2014
Juros sobre o Capital Pr\u00f3prio
(117)
(229)
(323)
Other permanent items
90
35
88
Total permanent items
(101)
(303)
500
Taxable reversals of (tax deductible) write-downs on shares and
receivables: in connection with the Company's impairment test
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.
Non-deductible loss on disposal of Kazakhstan operations: the
Company recorded 0.9\u00a0billion impairment charges and 1.5\u00a0billion
foreign exchange translation losses in connection with the
divestment of its operations in Kazakhstan. Both items are non-
deductible for tax purposes, see note 2.3.
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 2023 net change in measurement of deferred tax assets of
(423) mainly consists of (i) recognition of deferred tax assets in
Luxembourg of (314) including recognition of tax losses carried
forward based on revised taxable income forecast of (366), and
(ii) net recognition of (109) of deferred tax assets in other tax
jurisdictions, including (292) recognition related to higher future
profits expectation.
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
other tax jurisdictions, following profits generated during the
year.
The 2021 net change in measurement of deferred tax assets of\u00a0
(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.
Tax effects of foreign currency translation
The tax effects of foreign currency translation of\u00a0(20), (34)and nil
at December\u00a031, 2023, 2022 and 2021, 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 , Corporate Alternative Minimum
Tax (\"CAMT\") and Base Erosion and Anti-Abuse Tax (\"BEAT\") in
the United States, and Cotisation sur la Valeur Ajout\u00e9e des
Entrepris es (\"CVAE'') in France.
Others
Year ended December 31,
2023
2022
2021
Tax contingencies/settlements
43
(3)
137
Prior period taxes
(4)
14
(31)
Others
(9)
7
(12)
Total
30
18
94
Tax contingencies/settlements of 43, (3), and 137 at
December\u00a031, 2023, 2022 and 2021, respectively, consist of
uncertain tax positions (see note 10.3) mainly related to North
America and ACIS.
10.2\u00a0 \u00a0 Income tax recorded directly in equity and/or other
comprehensive income\u00a0
\u00a0
Year ended December 31,
\u00a0
2023
2022
2021
Recognized in other comprehensive
income on:
Deferred tax expense (benefit)
\u00a0
\u00a0
\u00a0
Unrealized gain on investments in
equity instruments at FVOCI
\u2014
\u2014
167
Gain (loss) on derivative financial
instruments
(126)
(31)
648
Recognized actuarial gain (loss)
(18)
193
144
Foreign currency translation
adjustments
110
143
59
(34)
305
1,018
Recognized directly in equity on:
Current tax expense (benefit)
Realized gain on investments in equity
instruments at FVOCI
\u2014
\u2014
\u2014
Deferred tax expense (benefit)
Loss related to repurchase of MCNs
(231)
\u2014
(185)
Realized gain on investments in equity
instruments at FVOCI
\u2014
\u2014
\u2014
(231)
\u2014
(185)
\u00a0
Total
(265)
305
833
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 beyond the income tax contingencies
recorded as of the reporting date. (see notes 9.2 and 9.3).
10.4\u00a0 \u00a0 Deferred tax assets and liabilities
The origin of the deferred tax assets and liabilities is as follows:
Assets
Liabilities
Net
2023
2022
2023
2022
2023
2022
Intangible assets
19
21
(618)
(553)
(599)
(532)
Property, plant and equipment
412
172
(3,666)
(3,757)
(3,254)
(3,585)
Inventories
193
214
(73)
(116)
120
98
Financial instruments
16
47
(139)
(16)
(123)
31
Other assets
201
161
(499)
(538)
(298)
(377)
Provisions
815
819
(472)
(389)
343
430
Other liabilities
464
474
(126)
(119)
338
355
Tax losses and other tax benefits carried forward
10,302
9,340
\u2014
\u2014
10,302
9,340
Tax credits carried forward
208
128
\u2014
\u2014
208
128
Deferred tax assets (liabilities)
12,630
11,376
(5,593)
(5,488)
7,037
5,888
Deferred tax assets
9,469
8,554
Deferred tax liabilities
(2,432)
(2,666)
Deferred tax assets recognized by the Company as of December\u00a031, 2023 included the following:
Gross amount
Total deferred
tax assets
Recognized
deferred tax
assets
Unrecognized
deferred tax
assets
Tax losses and other tax benefits carried forward
139,108
34,360
10,302
24,058
Tax credits carried forward
690
690
208
482
Other temporary differences
13,140
3,108
2,120
988
Total
\u00a0
38,158
12,630
25,528
Deferred tax assets recognized by the Company as of December\u00a031, 2022 included the following:
Gross amount
Total deferred
tax assets
Recognized
deferred tax
assets
Unrecognized
deferred tax
assets
Tax losses and other tax benefits carried forward
126,685
31,587
9,340
22,247
Tax credits carried forward
600
600
128
472
Other temporary differences
10,543
2,663
1,908
755
Total
34,850
11,376
23,474
As of December\u00a031, 2023, the majority of unrecognized deferred
tax assets relates to tax losses carried forward attributable to
various subsidiaries located in different jurisdictions (primarily
Brazil, France, 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, 2023, the total amount of accumulated tax
losses in Luxembourg with respect to the ArcelorMittal S.A. tax
integration amounted to 120.6 billion, of which 35.3 billion is
considered realizable, resulting in the recognition of 8.8 billion of
deferred tax assets at the applicable income tax rate in
Luxembourg. At December\u00a031, 2022, the total amount of
accumulated tax losses in Luxembourg with respect to the main
tax consolidation amounted to approximately 110.7 billion, of
which 34 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, 61 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, 2023, 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 9.5 billion . The amount of future taxable income
required to be generated by ArcelorMittal\u2019s subsidiaries to utilize
the deferred tax assets of 9.5 billion is at least 41.5 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, 2023, ArcelorMittal recorded 168 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 146 as of
December\u00a031, 2022. 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 870 at
December 31, 2023 (795 at December 31, 2022).
10.5\u00a0 \u00a0 Tax losses, tax credits and other tax benefits carried
forward
At December\u00a031, 2023, the Company had total estimated tax
losses carried forward and other tax benefits of 139.1\u00a0billion.
This includes net operating losses and other tax benefits of 15.2
billion primarily related to subsidiaries in the Basque Country in
Spain, Luxembourg and the United States, which expire as
follows:\u00a0
Year expiring
Recognized
Unrecognized
Total
2024
25
43
68
2025
10
63
73
2026
1
30
31
2027
4
3
7
2028
272
34
306
2029 - 2044
1,066
13,619
14,685
Total
1,378
13,792
15,170
The remaining tax losses carried forward and other tax benefits
for an amount of 123.9\u00a0billion (of which 40.3\u00a0billion are
recognized and 83.6\u00a0billion are unrecognized) are carried
forward for unlimited period of time and primarily relate to the
Company\u2019s operations in Brazil, France, Luxembourg, Spain
and in the United States.
At December\u00a031, 2023, the Company also had total estimated
tax credits carried forward of 690.
Such amount includes tax credits of 499 (of which 129
recognized and 370 unrecognized) and primarily attributable to
subsidiaries in the Basque country in Spain which expire as
follows:
Year expiring
Recognized
Unrecognized
Total
2024
\u2014
1
1
2025
\u2014
1
1
2026
\u2014
1
1
2027
\u2014
1
1
2028
\u2014
1
1
2028 - 2043
129
365
494
Total
129
370
499
The remaining tax credits for an amount of 191 of which 79 are
recognized and 112 are unrecognized) are indefinite and
primarily attributable to the Company\u2019s operations in Brazil,
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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-708": { "value": "10.4\u00a0 \u00a0 Deferred tax assets and liabilities
The origin of the deferred tax assets and liabilities is as follows:
Assets
Liabilities
Net
2023
2022
2023
2022
2023
2022
Intangible assets
19
21
(618)
(553)
(599)
(532)
Property, plant and equipment
412
172
(3,666)
(3,757)
(3,254)
(3,585)
Inventories
193
214
(73)
(116)
120
98
Financial instruments
16
47
(139)
(16)
(123)
31
Other assets
201
161
(499)
(538)
(298)
(377)
Provisions
815
819
(472)
(389)
343
430
Other liabilities
464
474
(126)
(119)
338
355
Tax losses and other tax benefits carried forward
10,302
9,340
\u2014
\u2014
10,302
9,340
Tax credits carried forward
208
128
\u2014
\u2014
208
128
Deferred tax assets (liabilities)
12,630
11,376
(5,593)
(5,488)
7,037
5,888
Deferred tax assets
9,469
8,554
Deferred tax liabilities
(2,432)
(2,666)
Deferred tax assets recognized by the Company as of December\u00a031, 2023 included the following:
Gross amount
Total deferred
tax assets
Recognized
deferred tax
assets
Unrecognized
deferred tax
assets
Tax losses and other tax benefits carried forward
139,108
34,360
10,302
24,058
Tax credits carried forward
690
690
208
482
Other temporary differences
13,140
3,108
2,120
988
Total
\u00a0
38,158
12,630
25,528
Deferred tax assets recognized by the Company as of December\u00a031, 2022 included the following:
Gross amount
Total deferred
tax assets
Recognized
deferred tax
assets
Unrecognized
deferred tax
assets
Tax losses and other tax benefits carried forward
126,685
31,587
9,340
22,247
Tax credits carried forward
600
600
128
472
Other temporary differences
10,543
2,663
1,908
755
Total
34,850
11,376
23,474
As of December\u00a031, 2023, the majority of unrecognized deferred
tax assets relates to tax losses carried forward attributable to
various subsidiaries located in different jurisdictions (primarily
Brazil, France, 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, 2023, the total amount of accumulated tax
losses in Luxembourg with respect to the ArcelorMittal S.A. tax
integration amounted to 120.6 billion, of which 35.3 billion is
considered realizable, resulting in the recognition of 8.8 billion of
deferred tax assets at the applicable income tax rate in
Luxembourg. At December\u00a031, 2022, the total amount of
accumulated tax losses in Luxembourg with respect to the main
tax consolidation amounted to approximately 110.7 billion, of
which 34 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, 61 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, 2023, 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 9.5 billion . The amount of future taxable income
required to be generated by ArcelorMittal\u2019s subsidiaries to utilize
the deferred tax assets of 9.5 billion is at least 41.5 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, 2023, ArcelorMittal recorded 168 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 146 as of
December\u00a031, 2022. 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 870 at
December 31, 2023 (795 at December 31, 2022).
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-709": { "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.
Share capital
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.
On April 28, 2023, ArcelorMittal cancelled 25\u00a0million treasury
shares to keep the number of treasury shares within appropriate
levels. This cancellation took into account the shares already
purchased under the 60,431,380 share buyback program (see
below). Following this cancellation, the aggregate number of
shares issued and fully paid up and share capital decreased
from 877,809,772 and 312 as of December 31, 2022 to
852,809,772 and 303 as of December 31, 2023, respectively.
The Company\u2019s shares consist of the following:
December 31, 2021
Movement in year
December 31, 2022
Movement in year
December 31, 2023
Issued shares
982,809,772
(105,000,000)
877,809,772
(25,000,000)
852,809,772
Treasury shares
(71,916,570)
(555,273)
(72,471,843)
38,933,827
(33,538,016)
Total outstanding shares
910,893,202
(105,555,273)
805,337,929
13,933,827
819,271,756
The number of issued shares was 982,809,772 at December 31,
2021, 877,809,772 at December 31, 2022 and 852,809,772 at
December 31, 2023.\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.
Following the cancellation of treasury shares on April 28, 2023,
authorized share capital decreased from 404 represented by
1,136,418,599 ordinary shares without nominal value as of
December 31, 2022 to 395 represented by 1,111,418,599
ordinary shares without nominal value as of December 31,
2023.
Share buyback\u00a0
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, the Company 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.\u00a0
On March 31, 2023, ArcelorMittal completed the share buyback
program. The total repurchase value was \u20ac1,456 million (1,492)
at an approximate average price per share of \u20ac24.10 ($24.68).
On May 5, 2023, ArcelorMittal announced the commencement
of a new buyback program of up to 85\u00a0million shares under the
authorization given by the annual general meeting of
shareholders of May 2, 2023, to be completed by May 2025.
The actual amount of shares that will be repurchased pursuant
to this new program will depend on the level of post-dividend
free cash flow (\"FCF\") (calculated as net cash provided by
operating activities less purchases of property, plant and
equipment and intangibles less dividends paid to non-controlling
shareholders) generated over the period (the Company\u2019s
defined policy is to return a minimum of 50% of post-dividend
annual FCF), the continued authorization by shareholders, and
market conditions. At market closure on December 31, 2023,
ArcelorMittal had repurchased 26.2\u00a0million shares for a total
value of \u20ac601\u00a0million (652) at an average price per share of
\u20ac22.88 ($24.85).
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, 33.5 million and 72.5
million treasury shares as of December 31, 2023 and\u00a0
December 31, 2022, 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.
On March 14, 2023, the Company, through its wholly-owned
subsidiary Hera Ermac, early repaid 226,666 out of the 666,666
outstanding unsecured and unsubordinated bonds mandatorily
convertible into preferred shares of such subsidiary (\"MCBs\") for
a total cash consideration of 340. The bonds were placed
privately with a Luxembourg affiliate of Cr\u00e9dit Agricole. The
Company determined that the MCBs are a hybrid instrument
including an equity component recognized as non-controlling
interests and a liability component. Following the early partial
repayment, the Company allocated the cash consideration to
the liability component (25) and equity component (315) of the
instrument, which resulted in 291 decrease in non-controlling
interests and 24 decrease in retained earnings consistent with
the original allocation using the net present value of the future
interest payments at the date of early redemption.
On December 21, 2023, the Company signed an agreement for
an extension of the conversion date of the mandatory
convertible bonds to January 30, 2026. 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 547 and other liabilities for 113. The
derecognition of the previous instrument and the recognition at
fair value of the new instrument resulted in 66 expense included
in financing costs-net in the consolidated statement of
operations and 32 decrease in non-controlling interests.
Mandatorily convertible subordinated notes
On May 18, 2020, the Company completed an offering of\u00a0
mandatorily convertible subordinated notes (\u201cMCNs\u201d) for 1,250.
The MCNs had a three-year maturity, were issued at 100% of
the principal amount and were 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.
The Significant Shareholder participated in the offerings by
contributing an amount of 100 for the MCNs.
The Company determined that the MCNs were a hybrid
instrument including an equity component and a debt
component.
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.
On May 19, 2023, upon mandatory conversion of the
24,290,025 outstanding mandatorily convertible subordinated
notes (\"MCNs\") due May 18, 2023, ArcelorMittal delivered a
total of 57,057,991 treasury shares (of which 9,396,120 to the
Significant Shareholder) with a carrying amount of 1,534. The
Company determined that the MCNs are a hybrid instrument
including an equity component and a debt component. Following
the mandatory conversion, it derecognized the 509 equity
component presented separately in the statements of changes
in equity and recognized a 1,025 (794 net of tax) decrease in
additional paid-in capital.
11.3\u00a0 \u00a0 Earnings per common share
Basic earnings per common share is computed by dividing net
income by the weighted average number of common shares
outstanding during the year. Diluted earnings per share is
computed by dividing income 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, 2023 , 2022 and 2021.
Year ended December 31,
2023
2022
2021
Net income attributable to equity holders of the parent
919
9,302
14,956
Weighted average common shares outstanding (in millions) for the purposes of basic earnings per share
842
911
1,105
Incremental shares from assumed conversion of restricted share units and performance share units (in
millions)
3
3
3
Weighted average common shares outstanding (in millions) for the purposes of diluted earnings per share
845
914
1,108
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.
Description
Approved by
Dividend per
share (in $)
Payout date
Total (in
millions of $)
Dividend for financial year 2020
Annual general shareholders\u2019 meeting on June 8, 2021
0.30
June 15, 2021
312
Dividend for financial year 2021
Annual general shareholders\u2019 meeting on May 4, 2022
0.38
June 10, 2022
332
Dividend for financial year 2022
Annual general shareholders\u2019 meeting on May 2, 2023
0.44
June 15, 2023 and
December 7, 2023
369
On May 2, 2023 at the annual general meeting of shareholders,
the shareholders approved the Company\u2019s dividend of $0.44 per
share. The dividend amounted to 369 and payment includes two
installments; the first installment of 185 was paid on June 15,
2023 and the second one of 184 was settled on December 7,
2023.
In February 2024, the Board of Directors recommended the
base annual dividend of $0.50 per share, to be paid in two equal
installments in June and December 2024, subject to the
approval of shareholders at the annual general meeting of
shareholders in April 2024.
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, 2023 and 2022
and for the years ended December\u00a031, 2023, 2022 and 2021.
Name of Subsidiary
Country of
incorporation
and operation
% of non-
controlling
interests
and non-
controlling
voting
rights at
December
31, 2023
% of non-
controlling
interests
and non-
controlling
voting
rights at
December
31, 2022
Net income
(loss)
attributable
to non-
controlling
interests for
the year
ended
December
31, 2023
Non-
controlling
interests at
December
31, 2023
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
AMSA
South Africa
30.78%
30.78%
(67)
115
55
198
151
Soci\u00e9t\u00e9 Nationale de Sid\u00e9rurgie
S.A. (\"Sonasid\")1
Morocco
67.57%
67.57%
3
115
5
103
9
AMKR
Ukraine
4.87%
4.87%
(15)
55
(68)
74
45
Belgo Bekaert Arames (\"BBA\")
Brazil
45.00%
45.00%
55
225
60
215
127
Hera Ermac2
Luxembourg
\u2014
\u2014
532
\u2014
855
\u2014
AMMC
Canada
15.00%
15.00%
149
561
183
492
257
Arceo
Belgium
62.86%
62.86%
3
150
1
144
2
ArcelorMittal Liberia Ltd3
Liberia
15.00%
15.00%
(11)
(169)
\u2014
(173)
4
ArcelorMittal Texas HBI4
USA
20.00%
20.00%
(8)
216
(9)
225
\u2014
Other
\u00a0
\u00a0
\u00a0
(6)
307
9
305
14
Total
\u00a0
\u00a0
\u00a0
103
2,107
236
2,438
609
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 30, 2026
(see note 11.2).
3. ArcelorMittal Liberia Ltd is incorporated in Cyprus. On December 21, 2023 and December 20, 2022, ArcelorMittal fully settled 100 and 300 capital increases, respectively,
in ArcelorMittal Liberia Ltd including 15 and 45, respectively, 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, 2023
and 2022 and summarized statements of operations and summarized statements of cash flows for the years ended December\u00a031,
2023 , 2022 and 2021.
December 31, 2023
Summarized statements
of financial position
AMSA
Sonasid
AMKR
BBA
Hera Ermac
AMMC
Arceo
AM Liberia
ArcelorMittal
Texas HBI LLC
Current assets
1,058
318
561
293
166
1,860
205
186
361
Non-current assets
464
113
1,230
232
990
3,108
39
919
812
Total assets
1,522
431
1,791
525
1,156
4,968
244
1,105
1,173
Current liabilities
876
251
638
94
58
530
\u2014
546
68
Non-current liabilities
273
17
168
15
200
504
\u2014
1,512
25
Net assets
373
163
985
416
898
3,934
244
(953)
1,080
December 31, 2023
Summarized statements of
operations
AMSA
Sonasid
AMKR
BBA
Hera Ermac
AMMC
Arceo
AM Liberia
ArcelorMittal
Texas HBI LLC
Revenue
2,256
471
1,144
915
\u2014
3,216
\u2014
248
732
Net (loss) income
(217)
4
(328)
128
(51)
943
5
(85)
(40)
Total comprehensive
income (loss)
(216)
13
(336)
127
(51)
935
5
(85)
(43)
\u00a0
December 31, 2023
Summarized statements of cash
flows
AMSA
Sonasid
AMKR
BBA
Hera
Ermac
AMMC
Arceo
AM
Liberia
ArcelorMittal
Texas HBI LLC
Net cash provided by / (used in)
operating activities
52
16
49
209
33
997
10
90
125
Net cash provided by / (used in)
investing activities
(93)
(20)
(112)
(66)
509
(553)
(7)
(314)
(122)
Net cash provided by / (used in)
financing activities
27
(13)
52
(148)
(535)
(538)
(3)
225
(6)
Impact of currency movements on
cash
(9)
5
(1)
1
\u2014
\u2014
2
\u2014
\u2014
Cash and cash equivalents:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At the beginning of the year / at
acquisition date
157
89
26
18
\u2014
206
93
4
4
At the end of the year
134
77
14
14
7
112
95
5
1
Dividend to non-controlling interests
\u2014
(4)
\u2014
(62)
\u2014
(79)
(2)
\u2014
(1)
\u00a0
December 31, 2022
Summarized statements of
financial position
AMSA
Sonasid
AMKR
BBA
Hera
Ermac
AMMC
Arceo
AM
Liberia
ArcelorMittal
Texas HBI LLC
Current assets
1,124
280
801
362
704
1,444
191
371
311
Non-current assets
608
98
1,186
160
953
3,029
42
423
963
Total assets
1,732
378
1,987
522
1,657
4,473
233
794
1,274
Current liabilities
762
193
493
107
64
480
\u2014
1,727
113
Non-current liabilities
327
32
165
15
102
460
\u2014
36
31
Net assets
643
153
1,329
400
1,491
3,533
233
(969)
1,130
\u00a0
December 31, 2022
Summarized statements of operations
AMSA
Sonasid
AMKR
BBA
Hera
Ermac
AMMC
Arceo
AM
Liberia
ArcelorMittal
Texas HBI LLC
Revenue
2,516
471
1,435
1,032
\u2014
3,467
\u2014
303
462
Net income (loss)
177
9
(1,429)
141
(55)
1,171
2
4
(43)
Total comprehensive income (loss)
178
15
(1,386)
140
(55)
1,273
2
4
(43)
\u00a0
December 31, 2022
Summarized statements of cash flows
AMSA
Sonasid
AMKR
BBA
Hera
Ermac
AMMC
Arceo
AM
Liberia
ArcelorMittal
Texas HBI LLC
Net cash provided by / (used in) operating
activities
22
30
77
202
17
1,159
6
154
125
Net cash provided by / (used in) investing
activities
(69)
(14)
(73)
(59)
(11)
432
6
(452)
(133)
Net cash provided by / (used in) financing
activities
5
(15)
(20)
(156)
(6)
(1,601)
(3)
300
\u2014
Impact of currency movements on cash
(4)
(11)
(6)
\u2014
\u2014
\u2014
(5)
\u2014
\u2014
Cash and cash equivalents:
At the beginning of the year
203
99
48
31
\u2014
216
89
2
12
At the end of the year
157
89
26
18
\u2014
206
93
4
4
Dividend to non-controlling interests
\u2014
(10)
\u2014
(71)
\u2014
(237)
(2)
\u2014
\u2014
\u00a0
December 31, 2021
Summarized statements of operations
AMSA
Sonasid
AMKR
BBA
Hera
Ermac
AMMC
Arceo
AM Liberia
Revenue
2,695
480
4,015
1,021
\u2014
3,997
\u2014
372
Net income (loss)
489
15
920
272
(4)
1,713
3
63
Total comprehensive income (loss)
491
17
918
273
(4)
1,796
3
63
\u00a0
December 31, 2021
Summarized statements of cash flows
AMSA
Sonasid
AMKR
BBA
Hera
Ermac
AMMC
Arceo
AM
Liberia
Net cash provided by / (used in) operating
activities
180
23
778
90
5
2,310
8
214
Net cash provided by / (used in) investing
activities
(85)
(6)
(313)
(5)
8
(844)
19
(78)
Net cash provided by / (used in) financing
activities
(49)
(4)
(449)
(72)
(13)
(1,375)
(5)
(135)
Impact of currency movements on cash
(16)
(6)
1
(2)
\u2014
\u2014
(6)
\u2014
Cash and cash equivalents:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At the beginning of the year
173
92
31
20
\u2014
125
73
1
At the end of the year
203
99
48
31
\u2014
216
89
2
Dividend to non-controlling interests
\u2014
(2)
(17)
(22)
\u2014
(202)
(3)
\u2014
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).\u00a0
Put option liabilities
On March 30, 2022 Votorantim S.A. exercised the put option
right it has under its shareholders\u2019 agreement with the Company
with respect to its 2.9% preferred share interest in ArcelorMittal
Brasil following the acquisition of Votorantim S.A.'s long steel
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 carrying amount of the financial liability at amortized
cost was 116 and 122 as of December 31, 2023 and 2022,
respectively, and is 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 (158 as of
December 31, 2023) 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:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-711": { "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.
Share capital
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.
On April 28, 2023, ArcelorMittal cancelled 25\u00a0million treasury
shares to keep the number of treasury shares within appropriate
levels. This cancellation took into account the shares already
purchased under the 60,431,380 share buyback program (see
below). Following this cancellation, the aggregate number of
shares issued and fully paid up and share capital decreased
from 877,809,772 and 312 as of December 31, 2022 to
852,809,772 and 303 as of December 31, 2023, respectively.
The Company\u2019s shares consist of the following:
December 31, 2021
Movement in year
December 31, 2022
Movement in year
December 31, 2023
Issued shares
982,809,772
(105,000,000)
877,809,772
(25,000,000)
852,809,772
Treasury shares
(71,916,570)
(555,273)
(72,471,843)
38,933,827
(33,538,016)
Total outstanding shares
910,893,202
(105,555,273)
805,337,929
13,933,827
819,271,756
The number of issued shares was 982,809,772 at December 31,
2021, 877,809,772 at December 31, 2022 and 852,809,772 at
December 31, 2023.\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.
Following the cancellation of treasury shares on April 28, 2023,
authorized share capital decreased from 404 represented by
1,136,418,599 ordinary shares without nominal value as of
December 31, 2022 to 395 represented by 1,111,418,599
ordinary shares without nominal value as of December 31,
2023.
Share buyback\u00a0
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, the Company 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.\u00a0
On March 31, 2023, ArcelorMittal completed the share buyback
program. The total repurchase value was \u20ac1,456 million (1,492)
at an approximate average price per share of \u20ac24.10 ($24.68).
On May 5, 2023, ArcelorMittal announced the commencement
of a new buyback program of up to 85\u00a0million shares under the
authorization given by the annual general meeting of
shareholders of May 2, 2023, to be completed by May 2025.
The actual amount of shares that will be repurchased pursuant
to this new program will depend on the level of post-dividend
free cash flow (\"FCF\") (calculated as net cash provided by
operating activities less purchases of property, plant and
equipment and intangibles less dividends paid to non-controlling
shareholders) generated over the period (the Company\u2019s
defined policy is to return a minimum of 50% of post-dividend
annual FCF), the continued authorization by shareholders, and
market conditions. At market closure on December 31, 2023,
ArcelorMittal had repurchased 26.2\u00a0million shares for a total
value of \u20ac601\u00a0million (652) at an average price per share of
\u20ac22.88 ($24.85).
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, 33.5 million and 72.5
million treasury shares as of December 31, 2023 and\u00a0
December 31, 2022, respectively.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-710": { "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.
Share capital
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.
On April 28, 2023, ArcelorMittal cancelled 25\u00a0million treasury
shares to keep the number of treasury shares within appropriate
levels. This cancellation took into account the shares already
purchased under the 60,431,380 share buyback program (see
below). Following this cancellation, the aggregate number of
shares issued and fully paid up and share capital decreased
from 877,809,772 and 312 as of December 31, 2022 to
852,809,772 and 303 as of December 31, 2023, respectively.
The Company\u2019s shares consist of the following:
December 31, 2021
Movement in year
December 31, 2022
Movement in year
December 31, 2023
Issued shares
982,809,772
(105,000,000)
877,809,772
(25,000,000)
852,809,772
Treasury shares
(71,916,570)
(555,273)
(72,471,843)
38,933,827
(33,538,016)
Total outstanding shares
910,893,202
(105,555,273)
805,337,929
13,933,827
819,271,756
The number of issued shares was 982,809,772 at December 31,
2021, 877,809,772 at December 31, 2022 and 852,809,772 at
December 31, 2023.\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.
Following the cancellation of treasury shares on April 28, 2023,
authorized share capital decreased from 404 represented by
1,136,418,599 ordinary shares without nominal value as of
December 31, 2022 to 395 represented by 1,111,418,599
ordinary shares without nominal value as of December 31,
2023.
Share buyback\u00a0
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, the Company 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.\u00a0
On March 31, 2023, ArcelorMittal completed the share buyback
program. The total repurchase value was \u20ac1,456 million (1,492)
at an approximate average price per share of \u20ac24.10 ($24.68).
On May 5, 2023, ArcelorMittal announced the commencement
of a new buyback program of up to 85\u00a0million shares under the
authorization given by the annual general meeting of
shareholders of May 2, 2023, to be completed by May 2025.
The actual amount of shares that will be repurchased pursuant
to this new program will depend on the level of post-dividend
free cash flow (\"FCF\") (calculated as net cash provided by
operating activities less purchases of property, plant and
equipment and intangibles less dividends paid to non-controlling
shareholders) generated over the period (the Company\u2019s
defined policy is to return a minimum of 50% of post-dividend
annual FCF), the continued authorization by shareholders, and
market conditions. At market closure on December 31, 2023,
ArcelorMittal had repurchased 26.2\u00a0million shares for a total
value of \u20ac601\u00a0million (652) at an average price per share of
\u20ac22.88 ($24.85).
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, 33.5 million and 72.5
million treasury shares as of December 31, 2023 and\u00a0
December 31, 2022, respectively.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-712": { "value": "877809772", "decimals": 0, "dimensions": { "concept": "ifrs-full:NumberOfSharesIssued", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00", "unit": "xbrli:shares" } }, "f-713": { "value": "852809772", "decimals": 0, "dimensions": { "concept": "ifrs-full:NumberOfSharesIssued", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2024-01-01T00:00:00", "unit": "xbrli:shares" } }, "f-714": { "value": "72471843", "decimals": 0, "dimensions": { "concept": "mt:NumberOfTreasuryShares", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00", "unit": "xbrli:shares" } }, "f-715": { "value": "805337929", "decimals": 0, "dimensions": { "concept": "ifrs-full:NumberOfSharesOutstanding", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00", "unit": "xbrli:shares" } }, "f-716": { "value": "877809772", "decimals": 0, "dimensions": { "concept": "ifrs-full:NumberOfSharesIssued", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00", "unit": "xbrli:shares" } }, "f-717": { "value": "852809772", "decimals": 0, "dimensions": { "concept": "ifrs-full:NumberOfSharesIssued", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2024-01-01T00:00:00", "unit": "xbrli:shares" } }, "f-718": { "value": "1111418599", "decimals": 0, "dimensions": { "concept": "ifrs-full:NumberOfSharesAuthorised", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2024-01-01T00:00:00", "unit": "xbrli:shares" } }, "f-720": { "value": "11.3\u00a0 \u00a0 Earnings per common share
Basic earnings per common share is computed by dividing net
income by the weighted average number of common shares
outstanding during the year. Diluted earnings per share is
computed by dividing income 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, 2023 , 2022 and 2021.
Year ended December 31,
2023
2022
2021
Net income attributable to equity holders of the parent
919
9,302
14,956
Weighted average common shares outstanding (in millions) for the purposes of basic earnings per share
842
911
1,105
Incremental shares from assumed conversion of restricted share units and performance share units (in
millions)
3
3
3
Weighted average common shares outstanding (in millions) for the purposes of diluted earnings per share
845
914
1,108
", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-719": { "value": "11.3\u00a0 \u00a0 Earnings per common share
Basic earnings per common share is computed by dividing net
income by the weighted average number of common shares
outstanding during the year. Diluted earnings per share is
computed by dividing income 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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-722": { "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.
Description
Approved by
Dividend per
share (in $)
Payout date
Total (in
millions of $)
Dividend for financial year 2020
Annual general shareholders\u2019 meeting on June 8, 2021
0.30
June 15, 2021
312
Dividend for financial year 2021
Annual general shareholders\u2019 meeting on May 4, 2022
0.38
June 10, 2022
332
Dividend for financial year 2022
Annual general shareholders\u2019 meeting on May 2, 2023
0.44
June 15, 2023 and
December 7, 2023
369
On May 2, 2023 at the annual general meeting of shareholders,
the shareholders approved the Company\u2019s dividend of $0.44 per
share. The dividend amounted to 369 and payment includes two
installments; the first installment of 185 was paid on June 15,
2023 and the second one of 184 was settled on December 7,
2023.
In February 2024, the Board of Directors recommended the
base annual dividend of $0.50 per share, to be paid in two equal
installments in June and December 2024, subject to the
approval of shareholders at the annual general meeting of
shareholders in April 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-721": { "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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-723": { "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" } }, "f-724": { "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" } }, "f-725": { "value": "0.44", "decimals": 2, "dimensions": { "concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:USD/xbrli:shares" } }, "f-726": { "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, 2023 and 2022
and for the years ended December\u00a031, 2023, 2022 and 2021.
Name of Subsidiary
Country of
incorporation
and operation
% of non-
controlling
interests
and non-
controlling
voting
rights at
December
31, 2023
% of non-
controlling
interests
and non-
controlling
voting
rights at
December
31, 2022
Net income
(loss)
attributable
to non-
controlling
interests for
the year
ended
December
31, 2023
Non-
controlling
interests at
December
31, 2023
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
AMSA
South Africa
30.78%
30.78%
(67)
115
55
198
151
Soci\u00e9t\u00e9 Nationale de Sid\u00e9rurgie
S.A. (\"Sonasid\")1
Morocco
67.57%
67.57%
3
115
5
103
9
AMKR
Ukraine
4.87%
4.87%
(15)
55
(68)
74
45
Belgo Bekaert Arames (\"BBA\")
Brazil
45.00%
45.00%
55
225
60
215
127
Hera Ermac2
Luxembourg
\u2014
\u2014
532
\u2014
855
\u2014
AMMC
Canada
15.00%
15.00%
149
561
183
492
257
Arceo
Belgium
62.86%
62.86%
3
150
1
144
2
ArcelorMittal Liberia Ltd3
Liberia
15.00%
15.00%
(11)
(169)
\u2014
(173)
4
ArcelorMittal Texas HBI4
USA
20.00%
20.00%
(8)
216
(9)
225
\u2014
Other
\u00a0
\u00a0
\u00a0
(6)
307
9
305
14
Total
\u00a0
\u00a0
\u00a0
103
2,107
236
2,438
609
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 30, 2026
(see note 11.2).
3. ArcelorMittal Liberia Ltd is incorporated in Cyprus. On December 21, 2023 and December 20, 2022, ArcelorMittal fully settled 100 and 300 capital increases, respectively,
in ArcelorMittal Liberia Ltd including 15 and 45, respectively, 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, 2023
and 2022 and summarized statements of operations and summarized statements of cash flows for the years ended December\u00a031,
2023 , 2022 and 2021.
December 31, 2023
Summarized statements
of financial position
AMSA
Sonasid
AMKR
BBA
Hera Ermac
AMMC
Arceo
AM Liberia
ArcelorMittal
Texas HBI LLC
Current assets
1,058
318
561
293
166
1,860
205
186
361
Non-current assets
464
113
1,230
232
990
3,108
39
919
812
Total assets
1,522
431
1,791
525
1,156
4,968
244
1,105
1,173
Current liabilities
876
251
638
94
58
530
\u2014
546
68
Non-current liabilities
273
17
168
15
200
504
\u2014
1,512
25
Net assets
373
163
985
416
898
3,934
244
(953)
1,080
December 31, 2023
Summarized statements of
operations
AMSA
Sonasid
AMKR
BBA
Hera Ermac
AMMC
Arceo
AM Liberia
ArcelorMittal
Texas HBI LLC
Revenue
2,256
471
1,144
915
\u2014
3,216
\u2014
248
732
Net (loss) income
(217)
4
(328)
128
(51)
943
5
(85)
(40)
Total comprehensive
income (loss)
(216)
13
(336)
127
(51)
935
5
(85)
(43)
\u00a0
December 31, 2023
Summarized statements of cash
flows
AMSA
Sonasid
AMKR
BBA
Hera
Ermac
AMMC
Arceo
AM
Liberia
ArcelorMittal
Texas HBI LLC
Net cash provided by / (used in)
operating activities
52
16
49
209
33
997
10
90
125
Net cash provided by / (used in)
investing activities
(93)
(20)
(112)
(66)
509
(553)
(7)
(314)
(122)
Net cash provided by / (used in)
financing activities
27
(13)
52
(148)
(535)
(538)
(3)
225
(6)
Impact of currency movements on
cash
(9)
5
(1)
1
\u2014
\u2014
2
\u2014
\u2014
Cash and cash equivalents:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At the beginning of the year / at
acquisition date
157
89
26
18
\u2014
206
93
4
4
At the end of the year
134
77
14
14
7
112
95
5
1
Dividend to non-controlling interests
\u2014
(4)
\u2014
(62)
\u2014
(79)
(2)
\u2014
(1)
\u00a0
December 31, 2022
Summarized statements of
financial position
AMSA
Sonasid
AMKR
BBA
Hera
Ermac
AMMC
Arceo
AM
Liberia
ArcelorMittal
Texas HBI LLC
Current assets
1,124
280
801
362
704
1,444
191
371
311
Non-current assets
608
98
1,186
160
953
3,029
42
423
963
Total assets
1,732
378
1,987
522
1,657
4,473
233
794
1,274
Current liabilities
762
193
493
107
64
480
\u2014
1,727
113
Non-current liabilities
327
32
165
15
102
460
\u2014
36
31
Net assets
643
153
1,329
400
1,491
3,533
233
(969)
1,130
\u00a0
December 31, 2022
Summarized statements of operations
AMSA
Sonasid
AMKR
BBA
Hera
Ermac
AMMC
Arceo
AM
Liberia
ArcelorMittal
Texas HBI LLC
Revenue
2,516
471
1,435
1,032
\u2014
3,467
\u2014
303
462
Net income (loss)
177
9
(1,429)
141
(55)
1,171
2
4
(43)
Total comprehensive income (loss)
178
15
(1,386)
140
(55)
1,273
2
4
(43)
\u00a0
December 31, 2022
Summarized statements of cash flows
AMSA
Sonasid
AMKR
BBA
Hera
Ermac
AMMC
Arceo
AM
Liberia
ArcelorMittal
Texas HBI LLC
Net cash provided by / (used in) operating
activities
22
30
77
202
17
1,159
6
154
125
Net cash provided by / (used in) investing
activities
(69)
(14)
(73)
(59)
(11)
432
6
(452)
(133)
Net cash provided by / (used in) financing
activities
5
(15)
(20)
(156)
(6)
(1,601)
(3)
300
\u2014
Impact of currency movements on cash
(4)
(11)
(6)
\u2014
\u2014
\u2014
(5)
\u2014
\u2014
Cash and cash equivalents:
At the beginning of the year
203
99
48
31
\u2014
216
89
2
12
At the end of the year
157
89
26
18
\u2014
206
93
4
4
Dividend to non-controlling interests
\u2014
(10)
\u2014
(71)
\u2014
(237)
(2)
\u2014
\u2014
\u00a0
December 31, 2021
Summarized statements of operations
AMSA
Sonasid
AMKR
BBA
Hera
Ermac
AMMC
Arceo
AM Liberia
Revenue
2,695
480
4,015
1,021
\u2014
3,997
\u2014
372
Net income (loss)
489
15
920
272
(4)
1,713
3
63
Total comprehensive income (loss)
491
17
918
273
(4)
1,796
3
63
\u00a0
December 31, 2021
Summarized statements of cash flows
AMSA
Sonasid
AMKR
BBA
Hera
Ermac
AMMC
Arceo
AM
Liberia
Net cash provided by / (used in) operating
activities
180
23
778
90
5
2,310
8
214
Net cash provided by / (used in) investing
activities
(85)
(6)
(313)
(5)
8
(844)
19
(78)
Net cash provided by / (used in) financing
activities
(49)
(4)
(449)
(72)
(13)
(1,375)
(5)
(135)
Impact of currency movements on cash
(16)
(6)
1
(2)
\u2014
\u2014
(6)
\u2014
Cash and cash equivalents:
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
\u00a0
At the beginning of the year
173
92
31
20
\u2014
125
73
1
At the end of the year
203
99
48
31
\u2014
216
89
2
Dividend to non-controlling interests
\u2014
(2)
(17)
(22)
\u2014
(202)
(3)
\u2014
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).\u00a0
Put option liabilities
On March 30, 2022 Votorantim S.A. exercised the put option
right it has under its shareholders\u2019 agreement with the Company
with respect to its 2.9% preferred share interest in ArcelorMittal
Brasil following the acquisition of Votorantim S.A.'s long steel
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 carrying amount of the financial liability at amortized
cost was 116 and 122 as of December 31, 2023 and 2022,
respectively, and is 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 (158 as of
December 31, 2023) 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": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-727": { "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, 39.87% 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
Year ended December 31,
December 31,
Sales
Trade receivables
Related parties and their subsidiaries where applicable
Category
2023
2022
2021
2023
2022
Calvert
Joint Venture
3,405
3,521
3,549
17
38
Gonvarri Steel Industries 1
Associate
2,474
2,526
2,234
98
118
Aperam
Other
445
536
478
44
69
Bor\u00e7elik
Joint Venture
371
427
484
33
6
Bamesa
Associate
345
311
370
33
20
Tuper
Joint Venture
238
336
326
39
43
ArcelorMittal CLN Distribuzione Italia
Joint Venture
214
333
499
1
2
Tameh
Joint Venture
214
292
107
16
29
Coils Lamiere Nastri (C.L.N.)
Associate
185
195
150
21
3
WDI 2
Associate
183
195
195
1
1
AMNS India
Joint Venture
101
69
59
1
31
ArcelorMittal RZK \u00c7elik Servis Merkezi
Joint Venture
88
177
154
2
6
Other 3
562
826
1,914
66
311
Total
8,825
9,744
10,519
372
677
1. Gonvarri Steel Industries include mainly the joint ventures ArcelorMittal Gonvarri Brasil Productos Sider\u00fargicos and ArcelorMittal Gonvarri SSC Slovakia.
2. WDI includes Westf\u00e4lische Drahtindustrie Verwaltungsgesellschaft mbH & Co. KG and Westf\u00e4lische Drahtindustrie GmbH.
3. Other includes\u00a0 Acciaierie d'Italia. On April 14, 2021, ArcelorMittal completed an investment agreement with Invitalia, an Italian state-owned company, forming the joint
venture Acciaierie d\u2019Italia (see note 2.3). On September 30, 2021, the raw material supply agreement between Acciaierie d\u2019Italia and the Company expired without
renewal.
12.2\u00a0 \u00a0 Purchases and trade payables\u00a0
Year ended December 31,
December 31,
Purchases
Trade payables
Related parties and their subsidiaries where applicable
Category
2023
2022
2021
2023
2022
Tameh
Joint Venture
669
830
404
111
147
Global Chartering
Joint Venture
296
413
286
13
13
Integrated Metal Recycling
Joint Venture
125
99
167
1
3
AMNS India
Joint Venture
96
105
166
20
8
Aperam
Other
92
126
86
10
12
Exeltium
Associate
85
85
71
16
14
Alkat
Associate
75
90
68
12
9
Baycoat
Joint Venture
62
60
53
8
6
Enerfos
Joint Venture
60
44
46
21
9
Sitrel
Joint Venture
60
110
88
3
\u2014
CFL Cargo
Associate
59
52
71
4
14
Other
370
286
367
141
131
Total
2,049
2,300
1,873
360
366
12.3\u00a0 \u00a0 Other transactions with related parties\u00a0
As of December\u00a03, 2014, ArcelorMittal Calvert LLC signed a
member capital expenditure loan agreement with the joint
venture Calvert and as of December\u00a031, 2023 and 2022, the
loans amounted to 230 and 212, respectively, including accrued
interest. The loans bear interest from 2.27% to 6.93% and have
various maturity dates ranging from less than 1 to 25 years.
On November 8, 2019, Baffinland entered into an agreement
with a bank to finance up to 6 million tonnes at 78% of the value
of the iron ore produced and hauled to the port of Milne Inlet by
Baffinland up to a limit of 450. This arrangement was renewed
several times since then, most recently on November 23, 2023.
That renewal provides for the bank to finance 87% of the value
of the iron ore produced and hauled to the port of Milne Inlet by
Baffinland up to a limit of 600.", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-728": { "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, 39.87% 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:", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-729": { "value": "
NOTE 13: PRINCIPAL ACCOUNTANT FEES AND SERVICES
Ernst & Young S.A. acted as the principal independent
registered public accounting firm for ArcelorMittal for the fiscal
years ended December\u00a031, 2023 and for the fiscal year ended
December\u00a031, 2022. Set forth below is a breakdown of fees for
services rendered by the auditor in 2023 and 2022.
Audit Fees. Audit fees for the audits of financial statements in
2023 and 2022 were 24.2 and 21.1, respectively, and for
regulatory filings 0.1 and 0.1 in 2023 and 2022, respectively.
Audit-Related Fees. Audit-related fees in 2023 and 2022 were
2.5 and 0.9, respectively. Audit-related fees include fees for
agreed upon procedures for various transactions or reports.
Tax Fees. Fees relating to tax planning, advice and compliance
in 2023 and 2022 were 1.2 and 0.3, respectively.
All Other Fees. Fees in 2023 and 2022 for all other services
were 0.1 and 0.3 , respectively. All other fees relate to services
not included in the first three categories.", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:2EULGUTUI56JI9SAL165", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } } } }