MT » Topics » Dividend Distributions

This excerpt taken from the MT 20-F filed Feb 20, 2009.

Dividend Distributions

Pursuant to Luxembourg law and its Articles of Association, ArcelorMittal allocates at least five percent of its net profits to the creation of a reserve. This allocation ceases to be compulsory when the reserve reaches ten percent (10%) of its issued share capital, and becomes compulsory once again when the reserve falls below that percentage. Under Luxembourg law, the amount of any dividends paid to shareholders may not exceed the amount of the profits at the end of the last financial year plus any profits carried forward and any amounts drawn from reserves that are available for that purpose, less any losses carried forward and sums to be placed in reserve in accordance with Luxembourg law or the Articles of Association. A company may not pay dividends to shareholders when, on the closing date of the last financial year, the net assets are, or following the payment of such dividend would become, lower than the amount of the subscribed capital plus the reserves that may not be distributed by law or by virtue of the articles of association. ArcelorMittal’s Articles of Association provide that the portion of annual net profit that remains unreserved is allocated as follows by the general meeting of shareholders upon the proposal of the Board of Directors:

 

   

a global amount is allocated to the Board of Directors by way of directors’ fees (“tantièmes”). This amount may not be less than one million euro (€1,000,000). In the event that the profits are insufficient, the amount of one million euro shall be imputed in whole or in part to charges. The distribution of this amount among the members of the Board of Directors shall be effected in accordance with the Board of Directors’ rules of procedure; and

 

   

the balance is distributed as dividends to the shareholders or placed in the reserves or carried forward.

Interim dividends may be distributed under the conditions set out by the Luxembourg law by decision of the Board of Directors.

No interest shall be paid on dividends declared but not paid which are held by the Company on behalf of shareholders.

On September 27, 2006, Mittal Steel (a predecessor of ArcelorMittal) announced that its Board of Directors had agreed upon a dividend and cash distribution policy. The policy aimed to return 30% of Mittal Steel’s (and then ArcelorMittal’s) prior year’s annual net income to shareholders every year through an annual base dividend, supplemented by share buy-backs. ArcelorMittal’s Board of Directors proposed an annual base dividend of $1.30 per share. This base dividend was designed to provide a minimum payout per year and would rise in order to reflect ArcelorMittal’s underlying growth. Payment of this dividend was made on a quarterly basis. In addition to this cash dividend, ArcelorMittal’s Board of Directors approved a share buy-back program (completed since then) tailored to achieve the 30% distribution pay-out commitment.

On November 14, 2007, ArcelorMittal’s Board of Directors announced that it had recommended increasing the Company’s base dividend by $0.20 from $1.30 to $1.50 per share. This change to the Company’s dividend policy reconfirmed ArcelorMittal’s commitment to return 30% of net income to shareholders through an annual base dividend, supplemented by share buy-backs. Based on announced annual net income attributable to equity holders of the parent for the year ended December 31, 2007 of $10.4 billion, ArcelorMittal returned a total of $3.1 billion to shareholders by paying a cash dividend of approximately $2.1 billion (paid quarterly at $0.375 per share) and by implementing a $1.0 billion share buy-back program (completed since then).

On March 17, 2008, June 16, 2008, September 15, 2008 and December 15, 2008, an interim dividend of $0.375 cents per share was paid.

 

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In light of the adverse economic and market conditions, on February 10, 2009, ArcelorMittal’s Board of Directors recommended reducing the annual dividend in 2009 to $0.75 per share (with quarterly dividend payments of $0.1875), subject to the approval of the annual general meeting of shareholders on May 12, 2009. The new quarterly dividend payments would take place on March 16, 2009 (an interim dividend), June 15, 2009, September 14, 2009 and December 14, 2009. Moreover, the Company has suspended its previously announced policy to return 30% of net income to shareholders through an annual base dividend supplemented by share buy-backs. Once market conditions have normalized, the Board intends to review the Company’s distribution policy.

Further information on share buy-backs by the Company in 2008 and policy going forward is provided in “Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.”

B. Significant Changes

Not applicable.

 

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ITEM 9. THE OFFER AND LISTING

A. Offer and Listing Details

This excerpt taken from the MT 20-F filed Mar 19, 2008.

Dividend Distributions

Pursuant to Luxembourg law and its Articles of Association, ArcelorMittal allocates at least five percent of its net profits to the creation of a reserve. This allocation ceases to be compulsory when the reserve reaches ten percent (10%) of its issued share capital, and becomes compulsory once again when the reserve falls below that percentage. Under Luxembourg law, the amount of any dividends paid to shareholders may not exceed the amount of the profits at the end of the last financial year plus any profits carried forward and any amounts drawn from reserves that are available for that purpose, less any losses carried forward and sums to be placed in reserve in accordance with the law or the Articles of Association. A company may not pay dividends to shareholders when, on the closing date of the last financial year, the net assets as set out in the annual accounts are, or following the payment of such dividend would become, lower than the amount of the subscribed capital plus the reserves that may not be distributed under law or by virtue of the articles of association. ArcelorMittal’s Articles of Association provide that the portion of annual net profit that remains unreserved shall be allocated as follows by the general meeting of shareholders upon the proposal of the Board of Directors:

 

   

a global amount shall be allocated to the board of directors by way of directors’ fees (“tantièmes”). This amount may not be less than one million euro (€1,000,000). In the event that the profits are insufficient, the amount of one million euro shall be imputed in whole or in part to the charges. The distribution of this amount among the members of the Board of Directors shall be effected in accordance with the Board of Directors’ rules of procedure; and

 

   

the balance shall be distributed as dividends to the shareholders or placed in the reserves or carried forward.

Interim dividends may be distributed under the conditions laid down by the Luxembourg law on commercial companies by decision of the Board of Directors.

No interest shall be paid on dividends declared but not paid which are held by the Company on behalf of shareholders.

On September 27, 2006, Mittal Steel (a predecessor of ArcelorMittal) announced that its Board of Directors had agreed upon a dividend and cash distribution policy. The policy aimed to return 30% of ArcelorMittal’s prior year’s annual net income to shareholders every year through an annual base dividend, supplemented by share buy-backs. ArcelorMittal’s Board of Directors proposed an annual base dividend of $1.30 per share. This base dividend was designed to provide a minimum payout per year and would rise in order to reflect ArcelorMittal’s underlying growth. Payment of this dividend was made on a quarterly basis. In addition to this cash dividend, ArcelorMittal’s Board of Directors approved a share buy-back program (since completed) tailored to achieve the 30% distribution pay-out commitment.

 

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Each quarter in 2007, a dividend of $0.325 per share was paid.

On November 14, 2007, ArcelorMittal’s Board of Directors announced that it had recommended increasing the Company’s base dividend by 20 cents from $1.30 to $1.50 per share. This change to the Company’s dividend policy reconfirmed ArcelorMittal’s commitment to return 30% of net income to shareholders through an annual base dividend, supplemented by additional share buy-backs. Based on announced annual net income attributable to equity holders of the parent for the year ended December 31, 2007 of $10.4 billion, ArcelorMittal will return a total of $3.1 billion to shareholders by paying a cash dividend of approximately $2.1 billion and by implementing a $1.0 billion share buy-back program (since completed). This distribution policy was implemented as of January 1, 2008.

B. Significant Changes

Not applicable.

EXCERPTS ON THIS PAGE:

20-F
Feb 20, 2009
20-F
Mar 19, 2008

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