ROTTERDAM, The Netherlands, May 12 /PRNewswire-FirstCall/ -- Mittal
Steel Company N.V. ("Mittal Steel" or "the Company"), the world's
largest and most global steel company, today announced results for
the three months ended March 31, 2006. Highlights: - Strong results
higher than guidance-reflecting an improved operating environment -
EPS up 15% from Q405 - Operating income in Q106 up 17% from Q405 -
In Q206, we expect operating income to increase at a rate higher
than the Q106/Q405 increase - Operating conditions expected to
further improve in Q306 (US dollars in millions except per share
and shipment data) 1Q 2006 4Q 2005 1Q 2005 Shipments (000'ST)
15,597 13,642 10,379 Sales $8,430 $7,054 $6,424 Operating income
1,017 871 1,719 Net income 743 650 1,147 Basic Earnings Per Share
1.06 0.92 1.78 The results for 2005 include Mittal Steel USA ISG
Inc. ("ISG"), formerly International Steel Group, from April 15,
2005, and the results of Mittal Steel Kryviy Rih, formerly
Kryvorizhstal, from November 26, 2005. As a result, prior period
results are not entirely comparable. Commenting, Lakshmi N Mittal,
Chairman and CEO Mittal Steel Company, said: "We are pleased to
report a good performance this quarter, despite bottom-cycle market
conditions in Africa and Asia. This performance has been
underpinned by over 50% quarter - on - quarter growth in operating
income of our American and European businesses. We expect the
market recovery to continue in the second and third quarter of
2006, supported by improvements in the Asian market. Mittal Steel
is well placed to capitalize on this trend which should generate
further earnings momentum. We anticipate that the improvements in
market conditions will drive significant growth in operating income
in the second quarter and this momentum can be expected to continue
into the third quarter. Meanwhile our offer for Arcelor is expected
to go live shortly and we are resolute in our determination to
pursue this to a successful conclusion." First quarter 2006
Earnings Analyst Conference Call Lakshmi N. Mittal, Chairman and
Chief Executive Officer, Aditya Mittal, President and Chief
Financial Officer, Malay Mukherjee, Chief Operating Officer,
Michael Pfitzner, Director Marketing and Julien Onillon, Director
Investor Relations will host a conference call for members of the
investment community to discuss the Company's financial results and
general business operations at 9:30 AM New York time / 2:30 PM
London time on Friday, May 12, 2006. The conference call will
include a brief question and answer session with senior management.
The conference call information is as follows: Date: Friday, May
12, 2006 Time: 9:30 AM New York Time / 2:30 PM London Time Dial-In
Number from within the U.S.: +1-617-597-5326 Dial-In Number from
within the U.K.: +44-20-7365-8426 Pass code: Mittal Steel For
individuals unable to participate in the conference call, a
telephone replay will be available until May 17, 2006 at: Replay
Number from within the U.S.: +1-617-801-6888 Replay Number from
within the U.K.: +44-20-7365-8427 Pass code: 14779875 A web cast of
the conference call can also be accessed via
http://www.mittalsteel.com/ and will be available for one week.
Real Player or Windows Media Player will be required in order to
access the web cast. First Quarter 2006 Earnings Media Conference
Call Lakshmi N. Mittal, Chairman and Chief Executive Officer and
Aditya Mittal, President and Chief Financial Officer will host a
conference call for members of the media community to discuss the
Company's financial results and general business operations at 12
PM London time on Friday, May 12, 2006. The conference call will
include a brief question and answer session. The conference call
information is as follows: Date: Friday, May 12, 2006 Time: 12 PM
London Time Dial-In Number from within the U.S.: +1-617-614-2713
Dial-In Number from within the U.K.: +44-20-7365-8426 Pass code:
Mittal Steel For individuals unable to participate in the
conference call, a telephone replay will be available until May 19,
2006 at: Replay Number from within the U.S.: +1-617-801-6888 Replay
Number from within the U.K.: +44-20-7365-8427 Pass code: 62274469
Forward-Looking Statements This communication may contain
forward-looking information and statements about Mittal Steel
Company N.V., Arcelor S.A. and/or their combined businesses after
completion of the proposed acquisition. Forward-looking statements
are statements that are not historical facts. These statements
include financial projections and estimates and their underlying
assumptions, statements regarding plans, objectives and
expectations with respect to future operations, products and
services, and statements regarding future performance.
Forward-looking statements may be identified by the words
"believe," "expect," "anticipate," "target" or similar expressions.
Although Mittal Steel's management believes that the expectations
reflected in such forward-looking statements are reasonable,
investors and holders of Arcelor's securities are cautioned that
forward-looking information and statements are subject to various
risks and uncertainties, many of which are difficult to predict and
generally beyond the control of Mittal Steel, that could cause
actual results and developments to differ materially from those
expressed in, or implied or projected by, the forward-looking
information and statements. These risks and uncertainties include
those discussed or identified in the filings with the Netherlands
Authority for the Financial Markets and the SEC made or to be made
by Mittal Steel, including (in the latter case) on Form 20-F and on
Form F-4. Mittal Steel undertakes no obligation to publicly update
its forward-looking statements, whether as a result of new
information, future events, or otherwise. No Offer No offer to
exchange or purchase any Arcelor shares or convertible bonds has
been made in The Netherlands or in any jurisdiction other than
Luxembourg, France, Spain, Belgium and the United States. This
communication does not constitute an offer to exchange or purchase
any Arcelor shares or convertible bonds. Such an offer will be made
only pursuant to an official offer document approved by the
appropriate regulators. Important Information In connection with
its proposed acquisition of Arcelor S.A., Mittal Steel Company has
filed, and will file, important documents with the SEC, including a
registration statement on Form F-4, a prospectus for the exchange
offer and related documents. Investors and Arcelor security holders
are urged to carefully read all such documents because they contain
important information. Investors and Arcelor security holders may
obtain copies of such documents free of charge on the SEC's website
at http://www.sec.gov/ and Mittal Steel's website at
http://www.mittalsteel.com/. For further information, visit our web
site: http://www.mittalsteel.com/, or call: Mittal Steel Company
N.V. Mittal Steel Company N.V. Julien Onillon, Thomas A. McCue,
Director, Investor Relations Director, North American Investor
Relations +44-(0)20-7543-1136 (and Treasurer Mittal Steel USA)
+1-219-399-5166 Mittal Steel Company N.V. Do-hyun AN, Manager,
Investor Relations +44-(0)20-7543-1150 Mittal Steel Company N.V.
Reports First Quarter 2006 Results Mittal Steel Company N.V.
(NYSE:MT)(AEX:MT), net income for the three months ended March 31,
2006, was $743 million or $1.06 per share, as compared with net
income of $650 million or $0.92 per share for the three months
ended December 31, 2005, and $1.1 billion or $1.78 per share for
the three months ended March 31, 2005. Consolidated sales and
operating income for the three months ended March 31, 2006, were
$8.4 billion and $1.0 billion, respectively, as compared with $7.1
billion and $871 million, respectively, for the three months ended
December 31, 2005, and as compared with $6.4 billion and $1.7
billion, respectively, for the three months ended March 31, 2005.
Total steel shipments[1] for the three months ended March 31, 2006,
were 15.6 million tons as compared with 13.6 million tons for the
three months ended December 31, 2005, and 10.4 million tons for the
three months ended March 31, 2005. Group inter-company transactions
have been eliminated in financial consolidation. The financial
information has been prepared based on accounting principles
generally accepted in the United States of America ("US GAAP").
Analysis of operations The following analysis of operations
includes Mittal Steel USA ISG Inc. ("ISG"), formerly International
Steel Group, from April 15, 2005, and the results of Mittal Steel
Kryviy Rih, formerly Kryvorizhstal (Ukraine), from November 26,
2005. As a result, prior period results are not entirely
comparable. Steel shipments in the three months ended March 31,
2006, were higher by 14% as compared with the three months ended
December 31, 2005, primarily due to improved market conditions for
our products and the consolidation of Mittal Steel Kryviy Rih for
the full quarter (9% higher excluding Mittal Steel Kryviy Rih).
Steel shipments for the three months ended March 31, 2006, were 50%
higher as compared with the three months ended March 31, 2005, due
to the inclusion of ISG and Mittal Steel Kryviy Rih (excluding ISG
and Mittal Steel Kryviy Rih, shipments were flat). Average selling
prices in the three months ended March 31, 2006, remained flat as
compared with the three months ended December 31, 2005 (2% higher
excluding Mittal Steel Kryviy Rih). Average selling prices in the
three months ended March 31, 2006, were lower by 9% as compared
with the three months ended March 31, 2005 (13% lower excluding ISG
and Mittal Steel Kryviy Rih). Average cost of sales (excluding
depreciation) per ton during the three months ended March 31, 2006,
remained flat as compared with the three months ended December 31,
2005 (3% higher excluding Mittal Steel Kryviy Rih). Average cost of
sales (excluding depreciation) per ton during the three months
ended March 31, 2006, was higher by 9% as compared with the three
months ended March 31, 2005, primarily due to an increase in the
cost of inputs (3% higher excluding ISG and Mittal Steel Kryviy
Rih). Selling, general and administrative expenses in the three
months ended March 31, 2006, increased by 3% as compared with the
three months ended December 31, 2005, primarily due to mergers and
acquisition related expenses amounting to $40 million. Selling,
general and administrative expenses in the three months ended March
31, 2006, increased by 15% as compared with the three months ended
March 31, 2005, primarily due to the inclusion of ISG, Mittal Steel
Kryviy Rih and mergers and acquisitions related expenses. Other
operating income for the three months ended March 31, 2006, was $19
million which includes $31 million of CO2 emission sales in Europe.
There was no other operating income for the three months ended
December 31, 2005 and March 31, 2005. Operating income for the
three months ended March 31, 2006, was $1.0 billion as compared
with $871 million for the three months ended December 31, 2005.
Operating income for the three months ended March 31, 2005, was
$1.7 billion. Other income (expense)-net for the three months ended
March 31, 2006, was $7 million as compared with $27 million for the
three months ended December 31, 2005. Other income (expense)-net
for the three months ended March 31, 2005, was $5 million. Income
from equity method investments for the three months ended March 31,
2006, was $25 million as compared with $3 million for the three
months ended December 31, 2005, and $15 million for the three
months ended March 31, 2005. Income from equity method investments
for the three months ended March 31, 2006, includes income from
affiliates of our South African and Polish subsidiaries, and China
(Hunan Valin). Net interest expense at Mittal Steel Company N.V.
for the three months ended March 31, 2006, increased to $110
million as compared with $91 million for the three months ended
December 31, 2005, primarily due to the full quarter effect of
interest on debt incurred to finance the Mittal Steel Kryviy Rih
acquisition, as well as the increase in base interest rates. Net
interest expense for the three months ended March 31, 2006, was
higher as compared with $33 million for the three months ended
March 31, 2005, primarily due to the increased indebtedness
relating to the acquisition of, and assumption of debt at, ISG and
Mittal Steel Kryviy Rih. Mittal Steel Company N.V.'s income tax
expense for the three months ended March 31, 2006, amounted to $116
million as compared with $92 million for the three months ended
December 31, 2005. The effective tax rate for the three months
ended March 31, 2006, was 12% as compared with 11% for the three
months ended December 31, 2005. The effective tax rate of 12% for
three months ended March 31, 2006 is primarily due to the release
of valuation allowances of $107 million. Income tax expense for the
three months ended March 31, 2005, amounted to $397 million, with
an effective tax rate of 23%. Net income for the three months ended
March 31, 2006, increased to $743 million as compared with the
three months ended December 31, 2005, of $650 million. Net income
for the three months ended March 31, 2006, was lower as compared
with the three months ended March 31, 2005, of $1.1 billion, owing
to the reasons discussed above. Americas Total steel shipments in
the Americas region were 6.8 million tons in the three months ended
March 31, 2006, as compared with 6.2 million tons for the three
months ended December 31, 2005, primarily due to improved market
conditions for our products. Total steel shipments were higher in
the three months ended March 31, 2006, as compared with 3.0 million
tons for the three months ended March 31, 2005, primarily due to
the inclusion of ISG. Excluding the impact of ISG, total steel
shipments were lower in the three months ended March 31, 2006, at
2.8 million tons as compared with 3.0 million tons for the three
months ended March 31, 2005. Sales were higher at $4.1 billion for
the three months ended March 31, 2006, as compared with $3.7
billion for the three months ended December 31, 2005, due to
improved market conditions. Sales were higher in the three months
ended March 31, 2006, as compared with $1.9 billion for the three
months ended March 31, 2005, primarily due to the inclusion of ISG.
Excluding the impact of ISG, sales were lower at $1.5 billion in
the three months ended March 31, 2006, as compared with $1.9
billion for the three months ended March 31, 2005. Operating income
was higher at $340 million for the three months ended March 31,
2006, as compared with $225 million for the three months ended
December 31, 2005, primarily due to higher volumes and higher
average selling prices, partly offset by higher costs. Operating
income for the three months ended March 31, 2006, was lower as
compared with $568 million for the three months ended March 31,
2005, primarily due to higher costs. Excluding the impact of ISG,
operating income was lower at $122 million for the three months
ended March 31, 2006, as compared with $568 million for the three
months ended March 31, 2005. Europe Total steel shipments in the
European region were 5.8 million tons for the three months ended
March 31, 2006, as compared with 4.6 million tons for each of the
three months ended December 31, 2005 and March 31, 2005. Excluding
Mittal Steel Kryviy Rih, total steel shipments in the European
region were 4.6 million tons for the three months ended March 31,
2006, as compared with 4.1 million tons for the three months ended
December 31, 2005. (Mittal Steel Kryviy Rih was not included in the
results for the three months ended March 31, 2005). Sales were
higher at $2.9 billion in the three months ended March 31, 2006, as
compared with $2.0 billion for the three months ended December 31,
2005 and lower than $3.0 billion for the three months ended March
31, 2005. Excluding Mittal Steel Kryviy Rih, sales were higher at
$2.5 billion in the three months ended March 31, 2006, as compared
with $1.8 billion for the three months ended December 31, 2005, due
to improved market conditions. Operating income was higher at $344
million for the three months ended March 31, 2006 as compared with
$173 million for the three months ended December 31, 2005,
primarily due to higher volumes, higher selling prices and lower
costs. Operating income for the three months ended March 31, 2006
also includes $56 million from the reduction of customer rebates.
Excluding Mittal Steel Kryviy Rih, operating income was higher at
$284 million for the three months ended March 31, 2006, as compared
with $171 million for the three months ended December 31, 2005.
Operating income for the three months ended March 31, 2006, was
lower as compared with $492 million for the three months ended
March 31, 2005. Excluding Mittal Steel Kryviy Rih, operating income
was lower at $284 million for the three months ended March 31,
2006, as compared with $492 million for the three months ended
March 31, 2005. Asia & Africa Total steel shipments in the Asia
& Africa region were 3.0 million tons in the three months ended
March 31, 2006, as compared with 2.8 million tons for each of the
three months ended December 31, 2005 and March 31, 2005. Sales were
higher at $1.9 billion in the three months ended March 31, 2006, as
compared with $1.8 billion for the three months ended December 31,
2005. Sales were lower in the three months ended March 31, 2006, as
compared with $2.0 billion for the three months ended March 31,
2005. Operating income was lower at $282 million for the three
months ended March 31, 2006, as compared with $477 million for the
three months ended December 31, 2005, primarily due to increased
costs and lower selling prices, partly offset by higher shipments.
Operating income for the three months ended March 31, 2006, was
lower as compared with $632 million for the three months ended
March 31, 2005, for the same reasons. Liquidity / Capital resources
The Company's liquidity position remains strong. As of March 31,
2006, the Company's cash and cash equivalents including restricted
cash and short-term investments were $2.2 billion ($2.1 billion at
December 31, 2005, and $2.7 billion at March 31, 2005). In
addition, the Company, including its operating subsidiaries, had
available borrowing capacity of $2.3 billion at March 31, 2006, as
compared with $1.5 billion at December 31, 2005. The increase in
availability is mainly due to the Company's new five-year $800
million Committed Multicurrency Letter of Credit and Guarantee
Facility, which became effective in January 2006. The facility is
being used by the Company and its subsidiaries for the issuance of
letters of credit and financial guarantees. As of March 31, 2006,
net cash provided by operating activities was $388 million, as
compared with $1.1 billion for the three months ended December 31,
2005, primarily due to the increase in accounts receivables, due to
higher sales. Net working capital (inventory plus accounts
receivable plus prepaid expenses minus accounts payable minus
accrued expenses and other liabilities) increased by $565 million.
Excluding the working capital change as discussed above, the cash
flow from operations would be $953 million. As of March 31, 2006
the Company's net debt (which includes long-term debt plus
short-term debt less cash and cash equivalents, short term
investments and restricted cash) remained flat as compared to
December 31, 2005 at $6.2 billion. Capital expenditure during the
three months ended March 31, 2006, was $263 million as compared
with $416 million for the three months ended December 31, 2005, and
$205 million for the three months ended March 31, 2005.
Depreciation during the three months ended March 31, 2006, was $287
million as compared with $259 million for the three months ended
December 31, 2005 (primarily due to inclusion of Mittal Steel
Kryviy Rih results for a full three months). Depreciation during
the three months ended March 31, 2006, was higher as compared with
$163 million for the three months ended March 31, 2005 (primarily
due to inclusion of ISG and Mittal Steel Kryviy Rih). As previously
announced, Mittal Steel will pay a US$ 0.125 quarterly dividend on
June 15, 2006. During the three months ended March 31, 2006, Mittal
Steel paid interim dividends of $136 million (including $48 million
of dividends paid to minority shareholders at Mittal Steel's South
African subsidiary). During the three months ended December 31,
2005, Mittal Steel paid interim dividends of $143 million. On
January 30, 2006, the Company entered into a EUR5 billion
(approximately $6 billion) credit agreement with a group of lenders
to finance the cash portion of the offer for Arcelor along with
related transaction costs. On January 30, 2006, the Company entered
into a EUR3 billion (approximately $3.6 billion) credit agreement
with the same group of lenders to refinance the debt incurred to
finance the Mittal Steel Kryviy Rih acquisition. On January 19,
2006, Moody's Investors Services affirmed Mittal Steel's Corporate
Family Rating at Baa3 and upgraded Mittal Steel's senior unsecured
rating to Baa3 from Ba1. At the same time, Moody's upgraded certain
debt instruments issued by Ispat Inland and Mittal Steel USA ISG.
Following the announcement of Mittal Steel's offer for Arcelor,
Moody's Investors Service placed Mittal Steel's Baa3 Corporate
Family Rating, as well as the Ba1 ratings of the debt of its
subsidiaries, on credit review for possible downgrade, and Standard
& Poor's Rating Services placed its BBB+ long-term credit
rating for Mittal Steel on credit watch with negative implications.
Fitch has also placed Mittal Steel's credit rating on negative
ratings watch. Recent Developments - On April 1, 2006, Ispat Inland
ULC redeemed $150 million of floating rate notes bearing interest
at LIBOR plus 6.75% due April 1, 2010. The floating rate notes were
redeemed at a price of 103.0% of the principal amount (the call
premium of $4.5 million has been included in the first quarter 2006
results). - On April 4, 2006, Mittal Steel signed a $200 million
loan agreement with the European Bank for Reconstruction and
Development, for on lending to Mittal Steel Kryviy Rih. The loan
has a maturity of seven years and bears interest based on LIBOR
plus a margin based on a ratings grid. - On April 20, 2006, the
Pension Benefit Guaranty Corporation ("PBGC") converted the entire
$35 million outstanding principal amount plus accrued interest into
1,268,719 class A common shares of Mittal Steel. - On April 28,
2006, a fire halted production in one of the steelmaking shops at
Mittal Steel USA Indiana Harbor facility in East Chicago, USA. The
current assessment indicates that steel production will be down by
approximately 200,000 tons. The damage to equipment and losses
associated with business interruption in excess of the Company's
deductible is expected to be covered by insurance. We expect our
customer commitment to remain unaffected. Outlook for second
quarter 2006 For the second quarter of 2006 (as compared to the
first quarter of 2006), we expect shipments to increase
significantly, average selling prices to increase slightly, and
cost of sales to remain flat. We expect operating income to
increase at a rate higher than the first quarter 2006/fourth
quarter 2005 increase. MITTAL STEEL COMPANY N.V. CONSOLIDATED
FINANCIAL & OTHER INFORMATION MITTAL STEEL COMPANY N.V.
CONSOLIDATED BALANCE SHEETS As of March 31, December 31, March 31,
In millions of US dollars 2006 2005 2005 (Unaudited) (Audited)
(Unaudited) ASSETS Current Assets Cash and cash equivalents $ 2,051
$ 2,035 $ 2,171 Restricted cash 85 100 560 Short-term investments
15 14 1 Trade accounts receivable - net 2,957 2,287 2,085
Inventories 5,839 6,036 4,209 Prepaid expenses and other current
1,116 1,040 738 assets Deferred tax assets 174 200 246 Total
Current Assets 12,237 11,712 10,010 Property, plant and equipment -
net 15,555 15,539 7,277 Investments in affiliates and joint 1,178
1,187 682 ventures Deferred tax assets 885 785 789 Goodwill and
intangible assets 1,671 1,439 104 Other assets 357 380 311 Total
Assets $31,883 $31,042 $19,173 LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities Payable to banks and current portion $ 376 $
334 $ 369 of long-term debt Trade accounts payable 2,482 2,504
1,743 Dividend payable - - 1,375 Accrued expenses and other current
2,701 2,661 2,250 liabilities Deferred tax liabilities 140 116 32
Total Current Liabilities 5,699 5,615 5,769 Long-term debt, net of
current 7,940 7,974 1,508 portion Deferred tax liabilities 1,445
1,602 928 Deferred employee benefits 2,634 2,506 1,936 Other
long-term obligations 1,385 1,361 728 Total Liabilities 19,103
19,058 10,869 Minority Interest 1,904 1,834 1,719 Shareholders'
Equity Common shares 60 60 59 Treasury stock (110) (111) (117)
Additional paid-in capital 2,458 2,456 548 Retained earnings 8,543
7,891 5,886 Accumulated other comprehensive (75) (146) 209 income
(loss) Total Shareholders' Equity 10,876 10,150 6,585 Total
Liabilities and Shareholders' $31,883 $31,042 $19,173 Equity MITTAL
STEEL COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION
MITTAL STEEL COMPANY N.V. CONSOLIDATED STATEMENTS OF INCOME DATA
& OTHER INFORMATION Three Months Ended In millions of US
dollars, except March 31, December 31, March 31, shares, per share
and shipment data 2006 2005 2005 (Unaudited) (Unaudited)
(Unaudited) STATEMENTS OF INCOME DATA Sales $8,430 $7,054 $6,424
Costs and expenses: Cost of sales (exclusive of 6,854 5,642 4,289
depreciation shown separately) Depreciation 287 259 163 Selling,
general and administrative 291 282 253 expenses Other operating
(income) (19) - - 7,413 6,183 4,705 Operating income 1,017 871
1,719 Operating margin 12.1% 12.3% 26.8% Other income (expense) -
net 7 27 5 Income from equity method 25 3 15 investments Financing
costs: Interest (expense) (130) (114) (58) Interest income 20 23 25
Net gain (loss) from foreign 5 36 13 exchange transactions (105)
(55) (20) Income before taxes and minority 944 846 1,719 interest
Income tax expense: Current 151 141 290 Deferred (35) (49) 107 116
92 397 Income before minority interest 828 754 1,322 Minority
interest (85) (104) (175) Net income $743 $650 $1,147 Basic
earnings per common share $1.06 $0.92 $1.78 Diluted earnings per
common share 1.05 0.92 1.78 Weighted average common shares 704 704
643 outstanding (in millions) Diluted weighted average common 706
708 643 shares outstanding (in millions) OTHER INFORMATION Total
shipments of steel products 15,597 13,642 10,379 including
inter-company shipments (thousands of short tons) MITTAL STEEL
COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION MITTAL
STEEL COMPANY N.V. CONSOLIDATED STATEMENTS OF CASH FLOWS Three
Months Ended In millions of US dollars March 31, December 31, March
31, 2005 2006 2005 (Unaudited) (Unaudited) (Unaudited) Operating
activities: Net income $743 $650 $1,147 Adjustments to reconcile
net income to net cash provided by operations: Depreciation 287 259
163 Net accretion of purchased (89) (46) - intangibles Net foreign
exchange loss (gain) (3) (11) (5) Deferred income tax (35) (49) 107
Income from equity method (24) (15) (10) investment Distribution
from equity method 12 - - investments Loss (gain) on sale of
property 2 (14) - plant & equipment Minority interest 85 104
175 Other non cash operating (29) (47) 12 activities (net) Changes
in operating assets and liabilities, net of effects from
acquisitions: Trade accounts receivable (544) 236 (174) Inventories
308 (361) (315) Prepaid expenses and other assets (14) (34) (87)
Trade accounts payable (104) 641 (79) Accrued expenses and other
(211) (260) 27 liabilities Deferred employee benefit costs 4 - 4
Net cash provided by operating 388 1,053 965 activities Investing
activities: Purchase of property, plant and (263) (416) (205)
equipment Proceeds from sale of assets and 4 15 - investments
including affiliates and joint ventures Acquisition of net assets
of (32) (4,891) - subsidiaries, net of cash acquired Investments in
affiliates and 1 15 - joint ventures - net Restricted cash 15 152
(445) Other investing activities (net) (3) (3) (8) Net cash used in
investing (278) (5,128) (658) activities Financing activities:
Proceeds from payable to banks 13 12 520 Proceeds from long-term
debt 179 5,129 19 Payments of payable to banks (20) (10) (508)
Payments of long-term debt (165) (657) (116) Purchase of treasury
stock 1 - - Sale of treasury stock for stock (2) (3) 2 option
exercised Dividends paid (includes $48 of (136) (143) (426)
dividend paid to minority shareholders during the first quarter
2006; $nil for fourth quarter 2005 and $150 for the first quarter
2005) Other financing activities (net) - 5 - Net cash provided by
(used in) (130) 4,333 (509) financing activities Net increase
(decrease) in cash (20) 258 (202) and cash equivalents Effect of
exchange rate changes on 36 (10) (122) cash Cash and cash
equivalents: At the beginning of the period 2,035 1,787 2,495 At
the end of the period $2,051 $2,035 $2,171 Mittal Steel Company
N.V. Appendix 1 - Quarter 1 2006 Reconciliation of US GAAP
financials to IFRS US GAAP to IFRS reconciliation The Company
considers Generally Accepted Accounting Principles in the United
States of America (US GAAP) as its primary GAAP. The statutory
financial statements of Mittal Steel are prepared in accordance
with International Financial Reporting Standards (IFRS) as endorsed
by the European Union. To provide an understanding on the
differences between US GAAP and IFRS, the effect on consolidated
shareholders' equity and net income are described in the following
table and notes: December 31, March 31, 2005 2006 share
Shareholders' equity as reported in accordance with US GAAP $10,150
$10,876 Minority interest as reported in accordance with US GAAP
1,834 1,904 11,984 12,780 Adjustments recorded to comply with IFRS
Employee benefits (see note 1) 1,322 1,333 Business combinations
(see note 2) 3,562 3,483 Other (see note 3) 3 12 Tax effect on the
above (see note 4) (1,236) (1,305) Total increase 3,651 3,523 Total
equity as reported in accordance with IFRS $15,635 $16,303 Period
ended Period ended March 31, March 31, 2005 2006 Net income as
reported in accordance with US GAAP $1,147 $743 Minority interest
as reported in accordance with US GAAP 175 85 Total under US GAAP
(including minority interest) 1,322 828 Adjustments recorded to
comply with IFRS Employee benefits (see note 1) (5) (10) Business
combinations (see note 2) (62) (152) Other (see note 3) (3) 30 13
Tax effect on the above (see note 4) (4) Total decrease (57) (136)
Net income as reported in accordance with IFRS $1,265 $692 Notes to
the reconciliation from US GAAP to IFRS 1) Employee benefits Under
US GAAP past service cost is amortized over the remaining working
lives for both vested and unvested rights, whereas under IFRS only
unvested rights remain unrecognized. Under US GAAP a company is
required to recognize a minimum pension liability if certain
conditions have been met. IFRS does not require such a minimum
pension liability. 2) Business combinations Under US GAAP, negative
goodwill is deducted, on a pro-rata basis, from the value of the
non-current assets acquired, primarily property, plant and
equipment. Under IFRS negative goodwill is directly recognized in
the income statement. Because the carrying amount of non current
assets is higher under IFRS, the depreciation in the income
statement increases proportionally. Under IFRS, the requirements
for including a restructuring provision in the liabilities assumed
in a business combination are more stringent than under US GAAP. In
2006 additional purchase accounting liabilities were recorded,
which do not qualify for IFRS. Also additional values were assigned
to assets acquired and liabilities assumed, which were equal for
IFRS and US GAAP. As the adjustment to assets acquired exceeded the
adjustment to liabilities assumed, additional negative goodwill
income was recognized to an amount of $51 million (net of tax). The
difference is included in opening equity in accordance with IFRS 3.
As a consequence, expenses recorded against the provision under US
GAAP are expensed under IFRS. Compared to the balance sheet as of
December 31, 2005, property, plant and equipment increased by $131
million and liabilities increased by $80 million. 3) Other Other
adjustments relate mostly to measurement of inventory. Under IFRS
inventory is measured on the basis of First In - First Out (FIFO).
Under US GAAP the Company measures certain inventory on the basis
of Last In - First Out (LIFO). This measurement is adjusted for
IFRS. 4) Deferred income tax Under US GAAP, negative goodwill is
deducted, on a pro-rata basis, from the value of the non-current
assets acquired, primarily property, plant and equipment. A
corresponding tax asset for the temporary difference thus created
is recorded, less a valuation allowance if applicable. Under IFRS,
negative goodwill is directly recognized in the income statement
with no tax asset recorded. Mittal Steel Company N.V. Appendix 2 -
Quarter 1 2006 Shipments by country (Thousands of short tons) Three
Months Ended March 31, 2006 December 31, 2005 March 31, 2005
Americas United States of America 5,154 4,838 1,340 Mexico 937 799
1,060 Canada 466 371 393 Trinidad 193 194 217 TOTAL AMERICAS 6,750
6,202 3,010 Europe West Europe (Germany and France) 970 753 968
Poland 1,321 1,252 1,433 Romania 1,251 1,210 1,362 Czech Republic
833 755 691 Ukraine 1,289 493 - Others 176 143 149 TOTAL EUROPE
5,840 4,606 4,603 Asia and Africa Kazakhstan 915 936 808 South
Africa 1,761 1,675 1,738 Algeria 331 223 220 TOTAL ASIA AND AFRICA
3,007 2,834 2,766 MITTAL STEEL COMPANY N.V. 15,597 13,642 10,379
Amounts for total shipments of steel products (including
inter-company shipments). The above analysis includes results of
Mittal Steel USA ISG Inc. (within Americas region) from April 15,
2005, and the results of Mittal Steel Kryviy Rih (within European
region) from November 26, 2005. Mittal Steel Company N.V. Appendix
3- Quarter 1 2006 Key Financial and operational information Amounts
in millions US dollars unless otherwise stated Americas Europe Asia
Elimination Mittal & Africa Steel
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited) Financial
Information Sales $4,148 $2,916 $1,884 $(518) $8,430 Cost of sales
(exclusive of depreciation) 3,597 2,333 1,472 (548) 6,854 Gross
profit (before deducting depreciation) 551 583 412 30 1,576 Gross
margin (as percentage of sales) 13.3% 20.0% 21.9% 18.7%
Depreciation 120 102 65 - 287 Selling, general and administrative
expenses 92 158 62 (21) 291 Other Operating Expenses (Income) (1)
(21) 3 - (19) Operating income 340 344 282 51 1,017 Operating
margin (as percentage of sales) 8.2% 11.8% 15.0% 12.1% EBITDA* 461
478 416 (14) 1,341 EBITDA margin (as percentage of sales) 11.1%
16.4% 22.1% 15.9% Capital expenditure 75 111 77 - 263 Operational
Information Liquid Steel Production ('000 MT) 7,005 6,005 2,751
15,761 Liquid Steel Production ('000 ST) 7,722 6,620 3,032 17,374
Shipments ('000 MT) 6,124 5,297 2,728 14,149 Shipments ('000 ST)
6,750 5,840 3,007 15,597 Employees ('000) 24 126 70 220 * EBITDA is
income before tax and minority interest plus interest plus
depreciation [1] Total steel shipments include inter-company
shipments. DATASOURCE: Mittal Steel Company NV CONTACT: Mittal
Steel Company N.V., Julien Onillon, Director, Investor Relations,
+44-(0)20-7543-1136, Mittal Steel Company N.V., Thomas A. McCue,
Director, North American Investor Relations (and Treasurer Mittal
Steel USA), +1-219-399-5166, Mittal Steel Company N.V., Do-hyun AN,
Manager, Investor Relations, +44-(0)20-7543-1150
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