Mittal Steel Company N.V. Reports Second Quarter and Half Year Results 2006

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ROTTERDAM, August 2 /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 June 30, 2006. Highlights: - Excellent results, higher than guidance - Operating income in Q206 up almost 50% from Q106 - EPS up 36% from Q106 - Operating income expected to increase by approximately 25% in Q306 on Q206 levels (US dollars in millions except per share and shipment data) 2Q 2006 1Q 2006 2Q 2005 1H 2006 1H 2005 Shipments (000'ST) 16,763 15,597 12,181 32,360 22,560 Sales $9,230 $8,430 $7,604 $17,660 $14,028 Operating income 1,517 1,017 1,391 2,534 3,110 Net income 1,015 743 1,090 1,758 2,237 Basic Earnings Per Share 1.44 1.06 1.57 2.49 3.35 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. The results for 2006 include the results of certain Stelco subsidiaries (namely Norambar Inc. and Stelfil Ltee plants located in Quebec and the Stelwire Ltd. plant in Ontario), from February 1, 2006. As a result, prior period results are not entirely comparable. Commenting, Lakshmi N Mittal, Chairman and CEO Mittal Steel Company, said: "We are delighted to report a very strong set of results for the second quarter, with operating income increasing some 49% compared with the first quarter. This improvement is due to improved market conditions in all three of our main operating regions. As we anticipated in May, the recovery is now underway in Asia resulting into higher selling prices. Additionally, we have delivered a strong performance in Europe, particularly in the Ukraine where synergies are now being delivered, and in America, where costs have been reduced. "Looking forward, we expect market conditions to continue to improve, driving further growth in shipments and operating income in the third quarter. "Meanwhile approximately 92% of Arcelor's equity holders (on a fully diluted basis) have accepted our offer for the company and we are now focused on achieving a successful integration. The underlying fundamentals for the industry in the long-term remain positive and we are very excited about the potential of the Company." SECOND QUARTER 2006 EARNINGS ANALYST CONFERENCE CALL Mittal Steel management and Arcelor management will host a combined conference call for members of the investment community to discuss the financial performance of Mittal Steel and Arcelor at 9:00 AM New York time / 2:00 PM London time / 3:00 PM CET on Wednesday, August 2, 2006. The conference call will include a brief question and answer session with senior management. The conference call information is as follows: Date: Wednesday, August 2nd Time: 9:00 am New York Time / 2:00 pm London Time / 3:00 pm CET Dial-In Number from within the U.S.: +1-866-4327-186 Dial-In Number from within the U.K.: +44-207-0705-579 For individuals unable to participate in the conference call, a telephone replay will be available until September 1, 2006 at: International Replay Number: +44-208-196-1998 Access code 634819# 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. SECOND QUARTER 2006 MEDIA CONFERENCE CALL Additionally, Arcelor and Mittal Steel will host a joint conference call for media today at: Date: Wednesday, August 2nd Time: 8:00 am New York Time / 1:00 pm London Time / 2:00 pm CET The dial in number: +44 20 7070 5579 Forward-Looking Statements This document 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. 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 numerous 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 and adversely 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 or will be made in The Netherlands or in any jurisdiction other than Luxembourg, Belgium, Spain, France and the United States. This document does not constitute an offer to exchange or purchase any Arcelor shares or convertible bonds. Such an offer is made only pursuant to the official offer document approved by the appropriate regulators. Important Information In connection with its proposed acquisition of Arcelor S.A., Mittal Steel has filed important documents (1) in Europe, with the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg, the Commission Bancaire, Financiere et des Assurances (CBFA) in Belgium, the Comision Nacional del Mercado de Valores (CNMV) in Spain and the Autorite des marches financiers (AMF) in France, including local versions of the Information Document approved by the CSSF, the CBFA and the AMF (AMF approval no. 06-139) on May 16, 2006 and by the CNMV on May 22, 2006 and local versions of supplements thereto approved by such regulators on May 31, 2006 (AMF approval no. 06-169) and July 4, 2006 (AMF no. 06-250), and a Share Listing Prospectus approved by the Autoriteit Financiele Markten (AFM) in The Netherlands on May 16, 2006 and supplements thereto approved by the AFM on May 31, 2006, June 23, 2006, July 4, 2006, and July 5, 2006 and (2) with the Securities and Exchange Commission (SEC) in the United States, including a registration statement on Form F-4, a Prospectus for the exchange offer, dated June 7, 2006, an Amended and Restated Exchange Offer Prospectus, dated June 29, 2006, a prospectus supplement dated July 7, 2006, and related documents. Investors and Arcelor security holders outside the United States are urged to carefully read the Information Document and the Share Listing Prospectus, including the supplements thereto, which together contain all relevant information in relation to the Offer. Investors and Arcelor security holders in the United States are urged to carefully read the registration statement on Form F-4, the Amended and Restated Exchange Offer Prospectus, the prospectus supplement thereto, and related documents. All such documents contain important information. Investors and Arcelor security holders may obtain copies of such documents free of charge on Mittal Steel's website at http://www.mittalsteel.com/. In addition, the French version of the Information Document is available on the AMF's website at http://www.amf-france.org/, the Spanish version of the Information Document is available on the CNMV's website at http://www.cnmv.es/, and the registration statement on Form F-4, the Amended and Restated Prospectus, the prospectus supplement thereto and related documents are available on the SEC's website at http://www.sec.gov/. For further information, visit our web site: http://www.mittalsteel.com/ MITTAL STEEL COMPANY N.V. REPORTS SECOND QUARTER 2006 RESULTS Mittal Steel Company N.V. (New York: MT; Amsterdam: MT; Madrid: MTS; Paris: MTP; Brussels: MTBL; Luxembourg: MT), net income for the three months ended June 30, 2006, was $1.0 billion or $1.44 per share, as compared with net income of $743 million or $1.06 per share for the three months ended March 31, 2006, and $1.1 billion or $1.57 per share for the three months ended June 30, 2005. Consolidated sales and operating income for the three months ended June 30, 2006, were $9.2 billion and $1.5 billion, respectively, as compared with $8.4 billion and $1.0 billion, respectively, for the three months ended March 31, 2006, and as compared with $7.6 billion and $1.4 billion, respectively, for the three months ended June 30, 2005. Total steel shipments[1] for the three months ended June 30, 2006, were 16.8 million tons as compared with 15.6 million tons for the three months ended March 31, 2006, and 12.2 million tons for the three months ended June 30, 2005. Group inter-company transactions have been eliminated in financial consolidation. The financial information in this press release has been prepared based on accounting principles generally accepted in the United States of America ("US GAAP"). Appendix 1 includes reconciliation from US GAAP to International Financial Reporting Standards as endorsed by the European Union ("IRFS") and Appendix 4 includes financial information prepared on the basis of IFRS. Analysis of operations The following analysis of operations includes Mittal Steel USA ISG Inc. ("ISG"), formerly International Steel Group, from April 15, 2005, the results of Mittal Steel Kryviy Rih, formerly Kryvorizhstal (Ukraine), from November 26, 2005, and the results of certain former Stelco subsidiaries (namely Norambar Inc. and Stelfil Ltee plants located in Quebec and the Stelwire Ltd. plant in Ontario), from February 1, 2006. As a result, prior period results are not entirely comparable. Steel shipments in the three months ended June 30, 2006, were higher by 7% as compared with the three months ended March 31, 2006, primarily due to improved market conditions for our products and improved sales volumes at Mittal Steel Kryviy Rih. Steel shipments for the three months ended June 30, 2006, were 38% higher as compared with the three months ended June 30, 2005, due primarily to the inclusion of ISG and Mittal Steel Kryviy Rih (16% higher excluding ISG and Mittal Steel Kryviy Rih). Average selling prices in the three months ended June 30, 2006, were higher by 3% as compared with the three months ended March 31, 2006, due to an improved market. However, average selling prices in the three months ended June 30, 2006, were lower by 7% as compared with the three months ended June 30, 2005 (4% lower excluding ISG and Mittal Steel Kryviy Rih). Average cost of sales (excluding depreciation) per ton during the three months ended June 30, 2006, were lower by 2% as compared with the three months ended March 31, 2006, primarily due to improved steel production. Average cost of sales (excluding depreciation) per ton during the three months ended June 30, 2006, was lower by 6% as compared with the three months ended June 30, 2005, due primarily to the lower cost base of Mittal Steel Kryviy Rih relative to Mittal Steel's other operations (1% lower excluding ISG and Mittal Steel Kryviy Rih). Selling, general and administrative expenses in the three months ended June 30, 2006, decreased by 8% as compared with the three months ended March 31, 2006, primarily due to capitalized mergers and acquisition related expenses included in first quarter 2006. In the three months ended June 30, 2006, selling, general and administrative expenses decreased by 2% as compared with the three months ended June 30, 2005 (14% lower excluding ISG and Mittal Steel Kryviy Rih). Other operating income for the three months ended June 30, 2006, was $52 million which includes $34 million reversal of certain provisions in Europe and $6 million worth of CO2 emissions sales in Europe. This compares to $19 million for the three months ended March 31, 2006, which includes $31 million of CO2 emission sales in Europe. There was no other operating income for the three months ended June 30, 2005. Operating income for the three months ended June 30, 2006, was $1.5 billion as compared with $1.0 billion for the three months ended March 31, 2006. Operating income for the three months ended June 30, 2005, was $1.4 billion. Other income (expense)-net for the three months ended June 30, 2006, was $3 million as compared with $7 million for the three months ended March 31, 2006. Other income (expense)-net for the three months ended June 30, 2005, was $35 million, which included a gain from sale of property and dividends from our investments. Income from equity method investments for the three months ended June 30, 2006, was $13 million as compared with $25 million for the three months ended March 31, 2006. Income from equity method investments were $32 million for the three months ended June 30, 2005. Net interest expense for the three months ended June 30, 2006, declined to $102 million as compared with $110 million for the three months ended March 31, 2006, following an overall reduction in net debt. Net interest expense for the three months ended June 30, 2005, was $55 million. Income tax expense for the three months ended June 30, 2006, amounted to $370 million as compared with $116 million for the three months ended March 31, 2006. The effective tax rate for the three months ended June 30, 2006, was 25% as compared with 12% for three months ended March 31, 2006. The effective tax rate for the three months ended March 31, 2006 was lower primarily due to the release of valuation allowances of $107 million. Income tax expense for the three months ended June 30, 2005, amounted to $165 million with an effective tax rate of 12%. Net income for the three months ended June 30, 2006, increased to $1,015 million as compared with the three months ended March 31, 2006, of $743 million. Net income for the three months ended June 30, 2006, was lower as compared with $1,090 million for the three months ended June 30, 2005, owing to the reasons discussed above. Americas Total steel shipments in the Americas region were 6.9 million tons in the three months ended June 30, 2006, as compared with 6.8 million tons for the three months ended March 31, 2006, primarily due to improved market conditions for our products particularly in our Mexican operations. The effect of these improved market conditions was partly offset by reduced shipments at Mittal Steel USA resulting from a fire in its Indiana Harbor facility in East Chicago on April 28, 2006, which halted production in one of the steelmaking shops. This decreased steel production by approximately 200,000 tons and at Mittal Steel USA's Sparrows Point facility which faced severe production issues following a lightning strike at an electrical substation during a storm on June 23, 2006. The Mittal Steel USA's Sparrows Point facility is expected to lose approximately 250,000 tons of ironmaking as a result of the incident. The damage to equipment and losses associated with business interruption in excess of the Company's deductible is to be covered by insurance in both instances. Total steel shipments were higher in the three months ended June 30, 2006, as compared with 5.4 million tons for the three months ended June 30, 2005, primarily due to the inclusion of ISG. Excluding the impact of ISG, total steel shipments were higher in the three months ended June 30, 2006, at 3.0 million tons, as compared with 2.6 million tons for the three months ended June 30, 2005. Sales were higher at $4.2 billion for the three months ended June 30, 2006, as compared with $4.1 billion for the three months ended March 31, 2006, primarily as a result of increased shipments and a marginal increase in selling prices. Sales were higher in the three months ended June 30, 2006, as compared with $3.5 billion for the three months ended June 30, 2005, primarily due to the inclusion of ISG, with increased shipments offset by marginally lower selling prices. Excluding the impact of ISG, sales were higher at $1.6 billion in the three months ended June 30, 2006, as compared with $1.5 billion for the three months ended June 30, 2005. Operating income was higher at $448 million for the three months ended June 30, 2006, as compared with $340 million for the three months ended March 31, 2006, primarily due to higher volumes and marginally higher average selling prices, as well as lower costs. Operating income for the three months ended June 30, 2006, remained flat as compared with the three months ended June 30, 2005, as the impact of higher shipments and lower cost of sales was offset by lower selling prices. Excluding the impact of ISG, operating income was lower at $173 million for the three months ended June 30, 2006, as compared with $270 million for the three months ended June 30, 2005. Europe Total steel shipments in the European region were 6.8 million tons for the three months ended June 30, 2006, as compared with 5.8 million tons for the three months ended March 31, 2006. Total steel shipments were higher in the three months ended June 30, 2006, as compared with 4.0 million tons for the three months ended June 30, 2005, primarily due to the inclusion of Mittal Steel Kryviy Rih. Excluding Mittal Steel Kryviy Rih, total steel shipments in the European region were higher at 4.8 million tons for the three months ended June 30, 2006, as compared with 4.0 million tons for the three months ended June 30, 2005. Sales were higher at $3.5 billion in the three months ended June 30, 2006, as compared with $2.9 billion for the three months ended March 31, 2006, primarily due to improved shipments in our Ukrainian operations and higher selling prices. Sales were higher in the three months ended June 30, 2006, as compared to $2.6 billion for the three months ended June 30, 2005, primarily due to the inclusion of Mittal Steel Kryviy Rih as well as improved shipments in our Czech and Polish operations, the effect of which was partially offset by reduced selling prices primarily in our German and French operations. Excluding Mittal Steel Kryviy Rih, sales were higher at $2.7 billion in the three months ended June 30, 2006, as compared with $2.6 billion for the three months ended June 30, 2005, due to higher shipments partially offset by lower selling prices. Operating income was higher at $719 million for the three months ended June 30, 2006 as compared with $344 million for the three months ended March 31, 2006, primarily due to higher volumes, higher selling prices and marginally lower costs. Operating income for the three months ended March 31, 2006 also includes $56 million from the reduction of customer rebates. Operating income for the three months ended June 30, 2006, was higher as compared with $263 million for the three months ended June 30, 2005 primarily due to higher volumes and lower costs offset by reduced selling prices as well as the inclusion of Mittal Steel Kryviy Rih. Excluding Mittal Steel Kryviy Rih, operating income was higher at $501 million for the three months ended June 30, 2006, as compared with $263 million for the three months ended June 30, 2005. Asia & Africa Total steel shipments in the Asia & Africa region were 3.1 million tons in the three months ended June 30, 2006, as compared with 3.0 million tons for three months ended March 31, 2006 and 2.7 million tons for the three months ended June 30, 2005. Sales were higher at $1.7 billion in the three months ended June 30, 2006, as compared with $1.6 billion for the three months ended March 31, 2006 primarily due to higher volumes and selling prices. Sales were lower in the three months ended June 30, 2006, as compared with $2.1 billion for the three months ended June 30, 2005 primarily due to higher shipments offset by lower selling prices. Operating income was higher at $326 million for the three months ended June 30, 2006, as compared with $282 million for the three months ended March 31, 2006, primarily due to higher shipments and selling prices partially offset by increased costs. Operating income for the three months ended June 30, 2006 was lower as compared with $678 million for the three months ended June 30, 2005, primarily due to higher shipments offset by lower selling prices and higher costs. Liquidity / Capital resources The Company's liquidity position remains strong. As of June 30, 2006, the Company's cash and cash equivalents including restricted cash and short-term investments were $3.2 billion ($2.2 billion at March 31, 2006). Restricted cash at June 30, 2006 includes $987 million in respect of cash collateral provided for a bank guarantee in connection with the Arcelor offer. In addition, the Company, including its operating subsidiaries, had available borrowing capacity of $2.2 billion at June 30, 2006, as compared with $2.3 billion at March 31, 2006. For the three months ended June 30, 2006, net cash provided by operating activities was $1,719 million, as compared with $388 million for the three months ended March 31, 2006, primarily due to the increase in trade accounts payables and improvements in trade account receivables. For the three months ended June 30, 2005, net cash provided by operating activities was $983 million. Net working capital (inventory plus accounts receivable plus prepaid expenses minus accounts payable minus accrued expenses and other liabilities) improved by $285 million. As of June 30, 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) declined by $1.1 billion to $5.1 billion as compared to $6.2 billion at March 31, 2006. Capital expenditure during the three months ended June 30, 2006, was $348 million as compared with $263 million for the three months ended March 31, 2006, and $255 million for the three months ended June 30, 2005. Depreciation during the three months ended June 30, 2006, was $261 million as compared with $287 million for the three months ended March 31, 2006. Depreciation during the three months ended June 30, 2006, was higher as compared with $192 million for the three months ended June 30, 2005 (primarily due to inclusion of ISG and Mittal Steel Kryviy Rih). As previously announced, Mittal Steel will pay a US$ 0.125 per share quarterly dividend on September 15, 2006. During the three months ended June 30, 2006, Mittal Steel paid interim dividends of $105 million which includes a $17 million dividend payment to the Ukraine government. 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). 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 was expensed in the three months ended March 31, 2006). 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. Drawdown of this facility took place on May 10, 2006. On April 20, 2006, the Pension Benefit Guaranty Corporation ("PBGC") converted the entire $35 million outstanding principal amount plus accrued interest of the convertible note issued by ISG into 1,268,719 class A common shares of Mittal Steel. On May 23, 2006, the Company entered into a EUR2.8 billion (approximately $3.4 billion) credit agreement to finance (together with a EUR5.0 billion (approximately $6.1 billion) credit agreement entered into on January 30, 2006 with the same group of lenders) the cash portion of the offer for Arcelor. Mittal Steel's $3.5 billion Bridge financing facility used for the Mittal Steel Kryviy Rih acquisition has been repaid in full on June 26, 2006 with the proceeds of the Company's EUR3.0 billion credit agreement. This Bridge facility was subsequently cancelled. Recent Developments - On July 26, 2006 Mittal Steel Company N.V. announced the final results of the initial offering period of its offer for Arcelor securities, which expired on July 13 in Belgium, France, Luxembourg, Spain and the U.S. As of such date, in the aggregate: - 594,549,753 Arcelor shares have been tendered (including Arcelor shares underlying Arcelor ADSs tendered in the U.S. offer); and - 9,858,533 Arcelor convertible bonds (OCEANEs 2017) have been tendered; represent, on a fully-diluted basis, 91.88% of Arcelor's share capital and 91.97% of Arcelor's voting rights. - As a result, 665.6 million new Mittal Steel shares will be issued as consideration for the offer and the cash portion of the total offer consideration will be approximately EUR7.78 billion. The cash portion of the offer was financed with cash resources available to the Company, i.e., its EUR5 billion credit facility and its EUR2.8 million bridge facility. Both of these facilities were entered into to finance the cash portion of the offer. In addition, the settlement of the offer made in the initial offering period, the delivery of the Mittal Steel shares offered, the payment of the cash consideration and the listing of the new Mittal Steel shares issued as consideration on Euronext Amsterdam, Euronext Brussels, Euronext Paris, the Luxembourg Stock Exchange, the New York Stock Exchange and the stock exchanges of Barcelona, Bilbao, Valencia and Madrid, occurred on August 1, 2006. Pursuant to Luxembourg and Belgian laws, the Company has commenced a subsequent offering period of the offer in Belgium, France, Luxembourg, Spain and the U.S., lasting from July 27, 2006 to August 17, 2006. The subsequent offering period will have the same terms and conditions as the initial offering period that ended on July 13, 2006 (except for the minimum tender condition, which has already been met). Pursuant to Luxembourg law, after the end of the subsequent offering period, Arcelor's remaining shareholders will be entitled to initiate proceedings to sell their shares to Mittal Steel. Consideration for such sale may be, at the discretion of Mittal Steel, either the same consideration as offered in the offer, with the cash secondary offer being uncapped, or a cash option only at a price of Euros 40.40 per Arcelor share. This sell-out right must be exercised during the three-month period starting on August 18, 2006 and ending on November 17, 2006. A further press release will detail the terms and conditions of this sell-out right. - Following the announcement of the final results of the offer, on July 26, 2006 Standard & Poor's lowered its long-term corporate credit rating on the Company from "BBB+" to "BBB" and removed the rating from CreditWatch with negative implications. Outlook for third quarter 2006 Operating income is expected to increase by approximately 25% in Q306 on Q206 levels. MITTAL STEEL COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION (UNDER US GAAP) MITTAL STEEL COMPANY N.V. CONSOLIDATED BALANCE SHEETS Balance sheet As of June 30, March 31, December 31, In millions of US dollars 2006 2006 2005 (Unaudited) (Unaudited) (Audited) ASSETS Current Assets Cash and cash equivalents $ 2,121 $ 2,051 $ 2,035 Restricted cash 1,054 85 100 Short-term investments 14 15 14 Trade accounts receivable - 2,895 2,957 2,287 net Inventories 5,856 5,839 6,036 Prepaid expenses and other 1,022 1,116 1,040 current assets Deferred tax assets 195 174 200 Total Current Assets 13,157 12,237 11,712 Property, plant and 15,329 15,555 15,539 equipment -net Investments in affiliates 1,154 1,178 1,187 and joint ventures Deferred tax assets 914 885 785 Goodwill and intangible 1,898 1,671 1,439 assets Other assets 343 357 380 Total Assets $32,795 $31,883 $31,042 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Payable to banks and $ 169 $ 376 $ 334 current portion of long-term debt Trade accounts payable 2,617 2,482 2,504 Accrued expenses and other 2,865 2,701 2,661 current liabilities Deferred tax liabilities 160 140 116 Total Current Liabilities 5,811 5,699 5,615 Long-term debt, net of 8,089 7,940 7,974 current portion Deferred tax liabilities 1,463 1,445 1,602 Deferred employee benefits 2,606 2,634 2,506 Other long-term obligations 1,268 1,385 1,361 Total Liabilities 19,237 19,103 19,058 Minority Interest 2,015 1,904 1,834 Shareholders' Equity Common shares 60 60 60 Treasury stock (90) (110) (111) Additional paid-in capital 2,479 2,458 2,456 Retained earnings 9,470 8,543 7,891 Accumulated other (376) (75) (146) comprehensive income (loss) Total Shareholders' Equity 11,543 10,876 10,150 Total Liabilities and $32,795 $31,883 $31,042 Shareholders' Equity MITTAL STEEL COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION (UNDER US GAAP) MITTAL STEEL COMPANY N.V. CONSOLIDATED STATEMENTS OF INCOME DATA & OTHER INFORMATION Three Months Ended Six Months Ended In millions of US June 30, March 31, June 30, June 30, June 30, dollars, except 2006 2006 2005 2006 2005 shares, per share and shipment data Unaudited Unaudited Unaudited Unaudited Unaudited STATEMENTS OF INCOME DATA Sales $ 9,230 $ 8,430 $ 7,604 $ 17,660 $ 14,028 Costs and expenses: Cost of sales (exclusive of depreciation shown separately) 7,237 6,854 5,748 14,091 10,037 Depreciation 261 287 192 548 355 Selling, general and administrative expenses 267 291 273 558 526 Other operating (income) expense - net (52) (19) - (71) - 7,713 7,413 6,213 15,126 10,918 Operating income 1,517 1,017 1,391 2,534 3,110 Operating margin 16.4% 12.1% 18.3% 14.3% 22.2% Other income (expense) - net 3 7 35 10 40 Income from equity method investments 13 25 32 38 47 Financing costs: Interest (expense) (142) (130) (88) (272) (146) Interest income 40 20 33 60 58 Net gain (loss) from foreign exchange transactions 75 5 4 80 17 (27) (105) (51) (132) (71) Income before taxes and minority interest 1,506 944 1,407 2,450 3,126 Income tax expense: Current 281 151 161 432 451 Deferred 89 (35) 4 54 111 370 116 165 486 562 Income before minority interest 1,136 828 1,242 1,964 2,564 Minority interest (21) (85) (152) (206) (327) Net income $ 1,015 $ 743 $ 1,090 $ 1,758 $ 2,237 Basic earnings per common share $1.44 $1.06 $1.57 $2.49 $3.35 Diluted earnings per common share 1.44 1.05 1.57 2.49 3.35 Weighted average common shares outstanding (in millions) 705 704 695 705 669 Diluted weighted average common shares outstanding (in millions) 706 706 695 706 669 OTHER INFORMATION Total shipments of steel products including inter- company shipments 16,763 15,597 12,181 32,360 22,560 (thousands of short tons) MITTAL STEEL COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION (UNDER US GAAP) MITTAL STEEL COMPANY N.V. CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended Six Months Ended In millions of June 30, March 31, June 30, June 30, June 30, US dollars 2006 2006 2005 2006 2005 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Unaudited) Operating activities: Net income $ 1,015 $ 743 $ 1,090 $ 1,758 $ 2,237 Adjustments to reconcile net income to net cash provided by operations: Depreciation 261 287 192 548 355 Net accretion (101) (89) (42) (190) (42) of purchased intangibles Net foreign 32 (3) (7) 29 (12) exchange loss (gain) Deferred 89 (35) (17) 54 90 income tax Income from (31) (24) - (55) - equity method investment Distribution 13 12 (14) 25 (24) from equity method investments Loss (gain) on 14 2 (15) 16 (15) sale of property plant & equipment Minority 121 85 152 206 327 interest Other non cash (18) (29) (22) (47) (10) operating activities (net) Changes in operating assets and liabilities, net of effects from acquisitions: Trade accounts 2 (544) 448 (542) 274 receivable Short-term - - (8) - (8) investments Inventories (64) 308 210 244 (105) Prepaid 11 (14) (141) (3) (228) expenses and other assets Trade accounts 188 (104) (542) 84 (621) payable Accrued 148 (211) (151) (63) (124) expenses and other liabilities Deferred 39 4 (150) 43 (146) employee benefit costs Net cash 1,719 388 983 2,107 1,948 provided by operating activities Investing activities: Purchase of (348) (263) (255) (611) (460) property, plant and equipment Proceeds from 15 4 37 19 29 sale of assets and investments including affiliates and joint ventures Acquisition of (2) (32) (1,306) (34) (1,306) net assets of subsidiaries, net of cash acquired Investments in 3 1 22 4 22 affiliates and joint ventures - net Restricted (969) 15 (97) (954) (542) cash Other 11 (3) (1) 8 (1) investing activities (net) Net cash used (1,290) (278) (1,600) (1,568) (2,258) in investing activities Financing activities: Proceeds from 33 13 824 46 1,344 payable to banks Proceeds from 4,183 179 3,080 4,362 3,099 long-term debt Debt issuance (57) - (10) (57) (10) cost Payments of (108) (20) (707) (128) (1,215) payable to banks Payments of (4,222) (165) (1,208) (4,387) (1,324) long-term debt Purchase of - 1 - 1 - treasury stock Sale of 3 (2) 4 1 6 treasury stock for stock option exercised Dividends paid (105) (136) (1,375) (241) (1,801) (includes $48 of dividend paid to minority shareholders during the first quarter 2006; $nil for second quarter 2005 and $150 for the first quarter 2005) Other - - (18) - (18) financing activities (net) Net cash (273) (130) 590 (403) 81 provided by (used in) financing activities Net increase 156 (20) (27) 136 (229) (decrease) in cash and cash equivalents Effect of (86) 36 (95) (50) (217) exchange rate changes on cash Cash and cash equivalents: At the 2,051 2,035 2,171 2,035 2,495 beginning of the period At the end of $2,121 $2,051 $2,049 $2,121 $2,049 the period Mittal Steel Company N.V. Appendix 1 - Quarter 2 2006 Unaudited Reconciliation of US GAAP financials to IFRS US GAAP to IFRS reconciliation The Company considers US GAAP as its primary GAAP. The statutory financial statements of Mittal Steel are prepared in accordance IFRS. To provide an understanding of the differences between US GAAP and IFRS, the effect on consolidated shareholders' equity and net income are described in the following table and notes: June 30, 2006 June 30, 2005 Shareholders' equity as reported in accordance with US GAAP $11,543 $9,190 Minority interest as reported in accordance with US GAAP 2,015 1,756 13,558 10,946 Adjustments recorded to comply with IFRS Employee benefits (see note 1) 1,349 1,020 Business combinations (see note 2) 3,219 3,625 Other (see note 3) 1 1 Tax effect on the above (see note 4) (1,286) (1,081) Total increase 3,283 3,565 Total equity as reported in accordance with IFRS $16,841 $14,511 Six months Six months ended June ended June 30, 2006 30, 2005 Net income as reported in accordance with US GAAP $1,758 $2,237 Minority interest as reported in accordance with US GAAP 206 327 Total under US GAAP (including minority interest) 1,964 2,564 Adjustments recorded to comply with IFRS Employee benefits (see note 1) (21) (14) Business combinations (see note 2) (225) 17 Other (see note 3) (23) (4) Tax effect on the above (see note 4) 4 28 Total (decrease) / increase (265) 27 Net income as reported in accordance with IFRS $1,699 $2,591 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. 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 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 2 2006 Shipments by country (Thousands of short tons) Three Months Ended June 30, 2006 March 31 June 30, 2005 2006 Americas United States of America 5,095 5,154 3,799 Mexico 1,005 937 1,073 Canada 538 466 357 Trinidad 226 193 194 TOTAL AMERICAS 6,864 6,750 5,423 Europe West Europe (Germany and France) 1003 970 798 Poland 1,337 1,321 1,052 Romania 1,309 1,251 1,399 Czech Republic 836 833 555 Ukraine 2,022 1,289 - Others 276 176 237 TOTAL EUROPE 6,783 5,840 4,041 Asia and Africa Kazakhstan 983 915 790 South Africa 1,802 1,761 1,652 Algeria 331 331 275 TOTAL ASIA AND AFRICA 3,116 3,007 2,717 MITTAL STEEL COMPANY N.V. 16,763 15,597 12,181 - Amounts for total shipments of steel products (including inter-company shipments). - The above analysis includes results of Mittal Steel USA ISG Inc. from April 15, 2005 and the results of certain former Stelco subsidiaries from February 1, 2006 (within Americas region), and the results of Mittal Steel Kryviy Rih (within European region) from November 26, 2005. Mittal Steel Company N.V. Appendix 3- Quarter 2 2006 Key Financial and operational information (Under US GAAP) Amounts in millions Americas Europe Asia & Elimination Mittal of US dollars Africa Steel unless otherwise stated (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Financial Information Sales $4,200 $3,480 $1,744 $(194) $9,230 Cost of sales (exclusive of depreciation) 3,556 2,597 1,279 (195) 7,237 Gross profit (before deducting depreciation) 644 883 465 1 1,993 Gross margin (as percentage of sales) 15.3% 25.4% 26.7% 21.6% Depreciation 115 80 66 - 261 Selling, general and administrative expenses 81 134 75 (23) 267 Other Operating Expenses (Income) - (50) (2) - (52) Operating income 448 719 326 24 1,517 Operating margin (as percentage of sales) 10.7% 20.7% 18.7% 16.4% EBITDA* 561 914 461 (67) 1,869 EBITDA margin ( as percentage of sales) 13.4% 26.3% 26.4% 20.2% Capital expenditure 113 135 100 - 348 Operational Information Liquid Steel Production ('000 MT) 7,001 6,498 3,176 16,675 Liquid Steel Production ('000 ST) 7,718 7,163 3,501 18,382 Shipments ('000 MT) 6,227 6,153 2,827 15,207 Shipments ('000 ST) 6,864 6,783 3,116 16,763 Employees 25,300 125,900 69,400 220,600 * EBITDA is income before tax and minority interest plus interest plus depreciation - Shipment numbers include intercompany shipments. - Sales as per statement of income above, includes other non-steel product sales (raw materials etc) and other sales (non-product). When computing average selling prices only steel sales are considered. - Sales and cost of sales include shipping and handling fees as per EITF Issue No. 00-10. Mittal Steel Company N.V. Appendix 3- 1H 2006 Key Financial and operational information (Under US GAAP) Amounts in millions Americas Europe Asia Elimination Mittal of US dollars & Africa Steel unless otherwise stated (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Financial Information Sales $8,347 $6,395 $3,301* $(383)* $17,660 Cost of sales (exclusive of depreciation) 7,153 4,930 2,424* (416)* 14,091 Gross profit (before deducting depreciation) 1,194 1,465 877 33 3,569 Gross margin (as percentage of sales) 14.3% 22.9% 26.6% 20.2% Depreciation 235 182 131 - 548 Selling, general and administrative expenses 173 292 137 (44) 558 Other Operating Expenses (Income) - (71) - - (71) Operating income 786 1,062 609 77 2,534 Operating margin (as percentage of sales) 9.4% 16.6% 18.4% 14.3% EBITDA** 1,022 1,392 878 (82) 3,210 EBITDA margin ( as percentage of sales) 12.2% 21.8% 26.6% 18.2% Capital expenditure 188 246 177 - 611 Operational Information Liquid Steel Production ('000 MT) 14,006 12,503 5,927 32,436 Liquid Steel Production ('000 ST) 15,439 13,783 6,533 35,755 Shipments ('000 MT) 12,350 11,451 5,555 29,356 Shipments ('000 ST) 13,614 12,623 6,123 32,360 Employees 25,300 125,900 69,400 220,600 * First quarter 2006 figures have been reclassed ** EBITDA is income before tax and minority interest plus interest plus depreciation - Shipment numbers include intercompany shipments. - Sales as per statement of income above, includes other non-steel product sales (raw materials etc) and other sales (non-product). When computing average selling prices only steel sales are considered. - Sales and cost of sales include shipping and handling fees as per EITF Issue No. 00-10. Appendix 4 MITTAL STEEL COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION (UNDER IFRS) MITTAL STEEL COMPANY N.V. CONSOLIDATED BALANCE SHEETS Balance sheet As of June 30, March 31, December 31, In millions of US dollars 2006 2006 2005 (Unaudited) (Unaudited) (Audited) ASSETS Current Assets Cash and cash equivalents $ 2,121 $ 2,051 $ 2,035 Restricted cash 1,054 85 100 Short-term investments 14 15 14 Trade accounts receivable - net 2,895 2,957 2,287 Inventories 5,849 5,825 5,994 Prepaid expenses and other 1,010 1,116 1,040 current assets Total Current Assets 12,943 12,049 11,470 Property, plant and equipment - 18,888 18,928 18,651 net Investments in affiliates and 1,170 1,195 927 joint ventures Deferred tax assets 479 367 314 Goodwill and intangible assets 1,751 1,715 1,706 Other assets 276 370 691 Total Assets 35,507 $34,624 $33,759 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Payable to banks and current 169 $ 376 $ 334 portion of long-term debt Trade accounts payable 2,617 2,482 2,504 Accrued expenses and other 2,956 2,701 2,661 current liabilities Total Current Liabilities 5,742 5,559 5,499 Long-term debt, net of current 8,089 7,940 7,974 portion Deferred tax liabilities 2,305 2,205 2,253 Deferred employee benefits 1,195 1,198 1,054 Other long-term obligations 1,335 1,419 1,395 Total Liabilities 18,666 18,321 18,175 Shareholders' Equity Common shares 60 60 60 Treasury stock (90) (110) (111) Additional paid-in capital 2,262 2,241 2,239 Retained earnings 11,735 10,926 10,407 Other reserves 579 989 828 Equity attributable to the equity 14,546 14,106 13,423 holders of the parent Minority Interest 2,295 2,197 2,161 Total Equity 16,841 16,303 15,584 Total Liabilities and $35,507 $34,624 $33,759 Shareholders' Equity MITTAL STEEL COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION (UNDER IFRS) MITTAL STEEL COMPANY N.V. CONSOLIDATED STATEMENTS OF INCOME DATA & OTHER INFORMATION Three Months Ended Six Months Ended In millions of US June 30, March 31, June 30, June 30, dollars, except shares, 2006 2006 2006 2005 per share and shipment data (Unaudited) (Unaudited) (Unaudited) (Unaudited) STATEMENTS OF INCOME DATA Sales $ 9,230 $ 8,430 $ 17,660 $ 14,028 Costs and expenses: Cost of sales (exclusive of depreciation shown separately) 7,318 6,849 14,167 10,054 Depreciation 342 357 699 485 Selling, general and administrative expenses 266 291 557 527 Other operating (income) expense - net (55) (19) (74) - 7,871 7,478 15,349 11,066 Operating income 1,359 952 2,311 2,962 Operating margin 14.7% 11.3% 13.1% 21.1% Other income (expense) - net (6) 7 1 187 Income from equity method investments 13 25 38 47 Financing costs: Interest (expense) (150) (200) (350) (146) Interest income 40 20 60 58 Net gain (loss) from foreign exchange transactions 90 5 95 17 (20) (175) (195) (71) Income before taxes and minority interest 1,346 809 2,155 3,125 Income tax expense: Current 281 151 432 451 Deferred 58 (34) 24 83 339 117 456 534 Income before minority interest 1,007 692 1,699 2,591 Minority interest (110) (82) (192) (324) Net income $ 897 $ 610 $ 1,507 $ 2,267 Basic earnings per common share $1.27 $0.87 $2.14 $3.39 Diluted earnings per common share $1.27 0.86 2.13 3.39 Weighted average common shares outstanding (in millions) 705 704 705 669 Diluted weighted average common shares outstanding (in millions) 706 706 706 669 OTHER INFORMATION Total shipments of steel products including inter- company shipments (thousands of short tons) 16,763 15,597 32,360 22,560 MITTAL STEEL COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION (UNDER IFRS) MITTAL STEEL COMPANY N.V. CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended Six Months Ended In millions of US dollars June 30, June 30, June 30, 2006 2006 2005 (Unaudited) (Unaudited) (Unaudited) Operating activities: Net income $ 1,007 $ 1,699 $ 2,591 Adjustments to reconcile net income to net cash provided by operations: Depreciation 342 699 485 Net accretion of purchased intangibles (101) (190) (42) Net foreign exchange loss (gain) 32 29 (12) Deferred income tax 108 50 62 Income from equity method investment (31) (55) - Distribution from equity method 13 25 (24) investments Loss (gain) on sale of property plant 14 16 (15) & equipment Other non cash operating activities (1) (48) (153) (net) Changes in operating assets and liabilities, net of effects from acquisitions: Trade accounts receivable 2 (542) 274 Short-term investments - - (8) Inventories (64) 260 (105) Prepaid expenses and other assets 11 (3) (228) Trade accounts payable 188 84 (621) Accrued expenses and other liabilities 148 18 (124) Deferred employee benefit costs 51 65 (132) Net cash provided by operating 1,719 2,107 1,948 activities Investing activities: Purchase of property, plant and (348) (611) (460) equipment Proceeds from sale of assets and 15 19 29 investments including affiliates and joint ventures Acquisition of net assets of (2) (34) (1,306) subsidiaries, net of cash acquired Investments in affiliates and joint 3 4 22 ventures - net Restricted cash (969) (954) (542) Other investing activities (net) 11 8 (1) Net cash used in investing activities (1,290) (1,568) (2,258) Financing activities: Proceeds from payable to banks 33 46 1,344 Proceeds from long-term debt 4,183 4,362 3,099 Debt issuance cost (57) (57) (10) Payments of payable to banks (108) (128) (1,215) Payments of long-term debt (4,222) (4,387) (1,324) Purchase of treasury stock - 1 - Sale of treasury stock for stock 3 1 6 option exercised Dividends paid (includes $48 of (105) (241) (1,801) dividend paid to minority shareholders during the first quarter 2006; $nil for second quarter 2005 and $150 for the first quarter 2005) Other financing activities (net) - - (18) Net cash provided by (used in) (273) (403) 81 financing activities Net increase (decrease) in cash and 156 136 (229) cash equivalents Effect of exchange rate changes on (86) (50) (217) cash Cash and cash equivalents: At the beginning of the period 2,051 2,035 2,495 At the end of the period $2,121 $2,121 $2,049 --------------------------------- [1] Total steel shipments include inter-company shipments. DATASOURCE: Mittal Steel Company NV CONTACT: For further information, visit our web site: http://www.mittalsteel.com/, or call: 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), +1-312-899-3927; Mittal Steel Company N.V., Do-hyun AN, Manager, Investor Relations, +44(0)20-7543-1150

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