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GOODWILL, INTANGIBLE AND TANGIBLE ASSETS (Tables)
 12 Months Ended
Dec. 31, 2019
Intangible Assets [Abstract]  
Schedule of Goodwill and Intangible Assets
The carrying amounts of goodwill and intangible assets are summarized as follows:
 
December 31,
 
2019
 
2018
Goodwill on acquisitions
5,104

 
4,986

Concessions, patents and licenses
197

 
293

Customer relationships and trade marks
95

 
90

Other1
36

 
359

Total
5,432

 
5,728


1. In 2018, other included 201 relating to CO2 emission rights, which were surrendered in 2019, and 77 related to favorable land lease contracts in ArcelorMittal Italia, which were reclassified as right-of-use assets upon adoption of IFRS 16 as of January 1, 2019 (see note 7)
Other intangible assets are summarized as follows:
 
Concessions, patents and licenses

Customer relationships and trade marks

Other

Total
Cost
 

 

 

 
At December 31, 2017
766


1,214


96


2,076

Acquisitions
22


—


39


61

Acquisitions through business combinations (note 2.2.4)
2

 
—

 
317

 
319

Disposals
—


—


(5
)

(5
)
Foreign exchange differences
(61
)

(83
)

(4
)

(148
)
Transfers to assets held for sale (note 2.3)
(32
)
 
—

 
—

 
(32
)
Transfers and other movements1
64


1


—


65

Fully amortized intangible assets 2
(16
)

(4
)

—


(20
)
At December 31, 2018
745


1,128


443


2,316

Acquisitions
17


—


65


82

Acquisitions through business combination (note 2.2.4)
—

 
12

 
—

 
12

Disposal
—


—


(6
)

(6
)
Foreign exchange differences
(8
)

(11
)

(4
)

(23
)
Transfers and other movements 1
(107
)

4


(351
)

(454
)
Fully amortized intangible assets 2
(17
)

—


—


(17
)
At December 31, 2019
630


1,133


147


1,910













Accumulated amortization and impairment losses











At December 31, 2017
491


1,096


46


1,633

Amortization charge
47


22


42


111

Foreign exchange differences
(44
)

(76
)

(3
)

(123
)
Transfers to assets held for sale (note 2.3)
(27
)
 
—

 
—

 
(27
)
Transfers and other movements1
1


—


(1
)

—

Fully amortized intangible assets 2
(16
)

(4
)

—


(20
)
At December 31, 2018
452


1,038


84


1,574

Amortization charge
53


11


30


94

Foreign exchange differences
(7
)

(11
)

(2
)

(20
)
Transfers and other movements1
(48
)

—


(1
)

(49
)
Fully amortized intangible assets 2
(17
)

—


—


(17
)
At December 31, 2019
433


1,038


111


1,582













Carrying amount











At December 31, 2018
293


90


359


742

At December 31, 2019
197


95


36


328

1.
In 2019, transfers and other movements mainly relate to CO2 emission rights utilized from the acquisition of ArcelorMittal Italia amounting to 158 (see note 2.2.4) and favorable land lease contracts from the acquisition of ArcelorMittal Italia and advances for land use which were transferred to right-of-use assets upon implementation of IFRS 16 (see notes 1 and 7). In 2018, transfers and other movements correspond mainly to transfer from assets under construction into patents and licenses.
2.
Fully amortized assets correspond mainly to licenses in 2019 and 2018.
Schedule of Goodwill Acquired
Goodwill acquired in business combinations for each of the Company’s operating segments is as follows:
 
December 31, 2017
 
Divestments and assets held for sale 1
 
Foreign exchange differences and other movements 2
 
December 31, 2018
NAFTA
2,249

 
—

 
(51
)
 
2,198

Brazil
1,640

 
(18
)
 
(218
)
 
1,404

Europe
582

 
(16
)
 
(16
)
 
550

ACIS
823

 
—

 
11

 
834

Total
5,294

 
(34
)
 
(274
)
 
4,986


1. See note 2.3.1 and 2.3.2
2. Other movements for Brazil include 24 related to the acquisition of AMSF (see note 2.2.4)
 
December 31, 2018
 
Divestments and assets held for sale
 
Foreign exchange differences and other movements 1
 
December 31, 2019
NAFTA
2,198

 
—

 
35

 
2,233

Brazil
1,404

 
—

 
(51
)
 
1,353

Europe
550

 
—

 
(5
)
 
545

ACIS
834

 
—

 
139

 
973

Total
4,986

 
—

 
118

 
5,104

1. Other movements for Europe include 6 relating to the acquisition of Münker and 8 for Brazil relating to the increase in goodwill following the completion of the acquisition-date fair value of AMSF (see note 2.2.4).
Schedule of Property, Plant and Equipment
Property, plant and equipment is recorded at cost less accumulated depreciation and impairment. Cost includes all related costs directly attributable to the acquisition or construction of the asset. Except for land and assets used in mining activities, property, plant and equipment is depreciated using the straight-line method over the useful lives of the related assets as presented in the table below.
Asset Category
 
Useful Life Range
Land
 
Not depreciated
Buildings
 
10 to 50 years
Property plant & equipment
 
15 to 50 years
Auxiliary facilities
 
15 to 45 years
Other facilities
 
5 to 20 years

Property, plant and equipment and biological assets are summarized as follows: 
 
Land, buildings and
Improvements
 
Machinery,  equipment and other 2
 
Construction in progress
 
Right-of-use assets4
 
Mining
 Assets   
 
Total
Cost
 
 
 
 
 
 
 
 
 
 
 
At December 31, 2017
12,845

 
50,174

 
3,732

 
—

 
3,875

 
70,626

Additions
36

 
282

 
3,064

 
—

 
28

 
3,410

Acquisitions through business combinations (note 2.2.4)
358

 
1,210

 
58

 
—

 
—

 
1,626

Foreign exchange differences
(888
)
 
(4,006
)
 
(220
)
 
—

 
(100
)
 
(5,214
)
Disposals
(120
)
 
(535
)
 
(113
)
 
—

 
(13
)
 
(781
)
Divestments (note 2.3.1)
(43
)
 
(215
)
 
(2
)
 
—

 
—

 
(260
)
Transfers (to)/ from assets held for sale (note 2.3.2)
(1,434
)
 
(4,532
)
 
(143
)
 
—

 
—

 
(6,109
)
Other movements 1
125

 
1,684

 
(2,013
)
 
—

 
111

 
(93
)
At December 31, 2018
10,879

 
44,062

 
4,363

 
—

 
3,901

 
63,205

Adoption of IFRS 16 (notes 1 and 7)3
—

 
(921
)
 
—

 
2,365

 
—

 
1,444

At January 1, 2019
10,879

 
43,141

 
4,363

 
2,365

 
3,901

 
64,649

Additions
35

 
471

 
3,245

 
259

 
26

 
4,036

Acquisitions through business combinations (note 2.2.4)
24


10


—


—

 
—


34

Foreign exchange differences
(99
)
 
(98
)
 
50

 
(7
)
 
38

 
(116
)
Disposals
(66
)
 
(654
)
 
(16
)
 
(4
)
 
(19
)
 
(759
)
Divestments (note 2.3.1)
—

 
(130
)
 
—

 
(484
)
 
—

 
(614
)
Other movements 1
124

 
1,888

 
(2,152
)
 
(37
)
 
167

 
(10
)
At December 31, 2019
10,897

 
44,628

 
5,490

 
2,092

 
4,113

 
67,220

 
 
 
 
 
 
 
 
 
 
 
 
Accumulated depreciation and impairment
 
 
 
 
 
 
 
 
 
 
At December 31, 2017
4,356

 
25,700

 
988

 
—

 
2,611

 
33,655

Depreciation charge for the year
356

 
2,212

 
—

 
—

 
120

 
2,688

Impairment (note 5.3)
21

 
930

 
9

 
—

 
—

 
960

Disposals
(110
)
 
(494
)
 
—

 
—

 
(13
)
 
(617
)
Foreign exchange differences
(484
)
 
(2,715
)
 
(7
)
 
—

 
(81
)
 
(3,287
)
Divestments (note 2.3.1)
(31
)
 
(181
)
 
—

 
—

 
—

 
(212
)
Transfers (to)/ from assets held for sale (note 2.3.2)
(989
)
 
(4,456
)
 
(26
)
 
—

 
—

 
(5,471
)
Other movements 1
(6
)
 
(158
)
 
17

 
—

 
(2
)
 
(149
)
At December 31, 2018
3,113

 
20,838

 
981

 
—

 
2,635

 
27,567

Adoption of IFRS 16 (notes 1 and 7)3
—

 
(558
)
 
—

 
597

 
—

 
39

At January 1, 2019
3,113

 
20,280

 
981

 
597

 
2,635

 
27,606

Depreciation charge for the year
338

 
2,171

 
—

 
343

 
121

 
2,973

Impairment (note 5.3)
154

 
1,202

 
9

 
65

 
—

 
1,430

Disposals
(45
)
 
(614
)
 
—

 
(3
)
 
(17
)
 
(679
)
Foreign exchange differences
(58
)
 
(112
)
 
(4
)
 
4

 
24

 
(146
)
Divestments (note 2.3.1)
—

 
(3
)
 
—

 
(94
)
 
—

 
(97
)
Other movements 1
(14
)
 
(35
)
 
5

 
(55
)
 
1

 
(98
)
At December 31, 2019
3,488

 
22,889

 
991

 
857

 
2,764

 
30,989

 
 
 
 
 
 
 
 
 
 
 
 
Carrying amount
 
 
 
 
 
 
 
 
 
 
 
At December 31, 2018
7,766

 
23,224

 
3,382

 
—

 
1,266

 
35,638

At December 31, 2019
7,409

 
21,739

 
4,499

 
1,235

 
1,349

 
36,231

1. Other movements predominantly represent transfers from construction in progress to other categories and retirement of fully amortized assets. In 2019, other movement also include 92 relating to finalization of acquisition date fair values of AM Italia (refer note 2.2.4).
2. Machinery, equipment and other includes biological assets of 59 and 49 as of December 31, 2019 and 2018, respectively, and bearer plants of 38 and 38 as of December 31, 2019 and 2018, respectively.
3. Includes additions due to implementation of IFRS 16 amounting to 1,136 as well as favorable terms of operating leases of ArcelorMittal Italia and amounts prepaid for the right of use of land, both reclassified from intangible assets (refer note 7).
4. Right-of-use assets as of December 31, 2018 include 921 of cost of assets and 558 of accumulated depreciation previously recognized under IAS 17 and presented within machinery, equipment and other. Upon implementation of IFRS 16, the right-of-use assets are presented separately in the table above.


Schedule of Impairment of Assets
Impairment charges recognized were as follows:
 
 
Year ended December 31,
Type of asset
 
2019
 
2018
 
2017
Goodwill
 
—

 
34

 
—

Tangible assets
 
1,927

 
960

 
206

Total
 
1,927

 
994

 
206


Management estimates discount rates using pre-tax rates that reflect current market rates for investments of similar risk. The rate for each GCGU was estimated from the weighted average cost of capital of producers, which operate a portfolio of assets similar to those of the Company’s assets.
 
NAFTA

Brazil

Europe

ACIS
GCGU weighted average pre-tax discount rate used in 2019 (in %)
10.8

15.0

9.1

14.5
GCGU weighted average pre-tax discount rate used in 2018 (in %)
12.9

15.5

10.6

15.4

During the six months ended June 30, 2019, the Company recognized an impairment charge for property, plant and equipment amounting to 600 relating to ArcelorMittal USA as a result of a downward revision of cash flow projections in particular with respect to near-term steel selling prices as follows:
Cash-Generating Unit
 
Country
 
Operating Segment
 
Impairment Recorded
 
2019 Pre-Tax Discount Rate
 
2018 Pre-Tax Discount Rate
 
Carrying amount of property, plant and equipment as of June 30, 2019
ArcelorMittal USA
 
USA
 
NAFTA
 
600

 
13.98
%
 
16.91
%
 
3,213


In the second half of 2019, in connection with management’s annual test for impairment of goodwill, property, plant and equipment was also tested for impairment at that date. The Company recognized an impairment charge for property, plant and equipment amounting to 700 relating to ArcelorMittal USA in the NAFTA operating segment as a result of a downward revision of cash flow projections in particular with respect to near-term steel selling prices consisting of the following:
Cash-Generating Unit
 
Country
 
Operating Segment
 
Impairment Recorded
 
2019 Pre-Tax Discount Rate
 
2018 Pre-Tax Discount Rate
 
Carrying amount of property, plant and equipment as of December 31, 2019
ArcelorMittal USA
 
USA
 
NAFTA
 
700

 
10.17
%
 
16.91
%
 
2,568


In the same context, the Company recognized a impairment charge for property, plant and equipment of 75 relating to the Long Steel Products facility of Newcastle in ArcelorMittal South Africa as a result of a lower domestic volumes as follows:
Cash-Generating Unit
 
Country
 
Operating Segment
 
Impairment Recorded
 
2019 Pre-Tax Discount Rate
 
2018 Pre-Tax Discount Rate
 
Carrying amount of property, plant and equipment as of December 31, 2019
Long Steel Products
 
South Africa
 
ACIS
 
75

 
13.87
%
 
15.13
%
 
163


During the six months ended June 30, 2017, management performed a test for impairment relating to the Long Steel Products cash-generating unit of ArcelorMittal South Africa as a result of a downward revision of cash flow projections. Accordingly, the Company recognized an impairment charge of 46 consisting of the following:
Cash-Generating Unit
 
Country
 
Operating Segment
 
Impairment Recorded
 
2017 Pre-Tax Discount Rate
 
2016 Pre-Tax Discount Rate
 
Carrying amount of property, plant and equipment as of June 30, 2017
Long Steel Products
 
South Africa
 
ACIS
 
46

 
17.12
%
 
16.63
%
 
325

In connection with management’s annual test for impairment of goodwill, property, plant and equipment was also tested for impairment at that date. As of December 31, 2017, the Company concluded that the value in use of property, plant and equipment in ArcelorMittal South Africa was lower than its carrying amount in the context of the appreciation of the rand against U.S. dollar and the uncertainties about demand outlook. Accordingly, the Company recognized a total impairment charge of 160 consisting mainly of the following:
Cash-Generating Unit
 
Country
 
Operating Segment
 
Impairment Recorded
 
2017 Pre-Tax Discount Rate
 
2016 Pre-Tax Discount Rate
 
Carrying amount of property, plant and equipment as of December 31, 2017
Vanderbijlpark facility
 
South Africa
 
ACIS
 
86

 
15.23
%
 
14.97
%
 
296

Long Steel Products
 
South Africa
 
ACIS
 
33

 
15.24
%
 
15.22
%
 
306
Schedule of Key Assumptions in Project Earnings
The following changes in key assumptions in projected earnings in every year of initial five-year period and perpetuity, at the GCGU level, assuming unchanged values for the other assumptions, would cause the recoverable amount to equal respective carrying value as of the impairment test date (i.e.: October 1, 2019).
 
2019
 
NAFTA
 
ACIS
Excess of recoverable amount over carrying amount
789
 
152
Increase in pre-tax discount rate (change in basis points)
65
 
27
Decrease in average selling price (change in %)
0.37
 
0.29
Decrease in shipments (change in %)
1.06
 
1.00