By KEVIN NEVERS

ArcelorMittal (AM) is reporting an actual record net income in 2007 of $10.368 billion or $7.41 basic earnings per share, compared to a pro forma net income of $7.973 billion or $5.76 per share in 2006, an increase of 30 percent.

Other numbers, all actual, for 2007:

•EBITDA—operating income plus depreciation—was $19.4 billion, compared to a pro forma EBITDA of $15.272 billion in 2006, an increase of 27 percent.

•Operating income was $14.83 billion, compared to a pro forma operating income of $11.824 billion in 2006, an increase of 25 percent.

•Sales were $105.216 billion, compared to pro forma sales of $88.576 billion in 2006, an increase of 19 percent.

•Shipments were 109.7 million metric tons, compared to pro forma shipments of 110.5 million metric tons in 2006, a decrease of 1 percent.

“2007 has been a truly excellent year for ArcelorMittal,” AM President and CEO Lakshmi Mittal said in a statement released on Wednesday. “We are announcing today record earnings with EBITDA of $19.4 billion, some 27 percent higher than pro forma 2006 results, and strong cash flow from operations. This reflects the strength of the ArcelorMittal business model, which enables us to benefit from a healthy global demand for steel in both the high-quality developed and fast-growth developing economies.”

“2007 was the first full year following the merger of Arcelor and Mittal Steel to create the world’s leading steel company,” Mittal continued. “I am very proud of the way the two companies have integrated so successfully, building a steel company which is focused on leading the transformation of our industry towards a sustainable future.”

“Separately,” Mittal added, “we have not let the integration process distract us from continuing to identify further opportunities for progress. In 2007, we announced 35 acquisitions, all of which serve to strengthen ArcelorMittal’s global steel offering further. We have also identified 20 million tons of organic growth potential.”

Mittal also said that he expected first-quarter 2008 results to be comparable to fourth-quarter 2007 ones.

Actual results for the fourth quarter of 2007:

•Net income was $2.435 billion or $1.72 per share, compared to $2.96 billion or $2.10 per share in the third quarter and a pro forma net income of $2.371 billion or $1.72 per share in the year-ago period.

•EBITDA was $4.847 billion, compared to $4.881 billion in the third quarter and a pro forma EBITDA of $4.118 billion in the year-ago period.

•Operating income was $3.29 billion, compared to $3.853 billion in the third quarter and a pro forma operating income of $3.243 billion in the year-ago period.

•Sales were $27.993 billion, compared to $25.524 billion in the third quarter and pro forma sales of $23.203 billion in the year-ago period.

•Shipments were 28 million metric tons, compared to 26 million metric tons in the third quarter and pro forma shipments of 26.7 million metric tons in the year-ago period.

Flat Carbon Americas,

Fourth Quarter

The Flat Carbon America’s segment reported the following numbers for the fourth quarter of 2007:

•Total steel shipments were 7.3 million metric tons, compared to 6.9 million metric tons in the third quarter.

•Sales were $6.2 billion, compared to $5.7 billion in the third quarter.

•Operating income was $693 million, compared to $864 million in the third quarter. Operating income was impacted by impairment expenses of $122 million in Contrecoeur, Canada.

Operating results for the fourth quarter, the company said, were impacted by impairment expenses and higher costs, driven by higher input prices, partially offset by higher volumes.

The company is projecting improved steel selling prices levels to benefit EBITDA in the first quarter of 2007 for Flat Carbon Americas.

Other Numbers

•In November the company’s Board of Directors recommended increasing the base dividend by 20 cents, from $1.30 to $1.50. This policy reconfirms the company’s commitment of returning 30 percent of net income to shareholders through the annual base dividend, supplemented by additional share buy-backs. In 2007 the company returned $4.4 billion to shareholders, consisting of $1.8 billion in cash dividends and $2.6 billion in share buy-backs.

•As of Dec. 31, 2007, the company’s cash and cash equivalents, including restricted cash and short-term investments, were $8.1 billion, compared to $7.2 billion on Sept. 30. In addition, the company had a borrowing capacity of $8.6 billion.

•As of Dec. 31, the company’s net debit—long-term debt plus short-term debt less cash and cash equivalents, restricted cash, and short-term investments—was $22.5 billion, compared to $22.2 billion on Sept. 30.

•The company is projecting EBITDA for the first quarter in the range of $4.7 to $5 billion, comparable to that of the fourth quarter.

•Standard & Poor’s Rating Services has raised the company’s long-term corporate credit rating from BBB to BBB+ with a stable outlook.

Posted 2/14/2008