tenaris6k.htm
 



FORM 6 - K



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934


As of March 3, 2010



TENARIS, S.A.
(Translation of Registrant's name into English)


TENARIS, S.A.
46a, Avenue John F. Kennedy
L-1855 Luxembourg
(Address of principal executive offices)


Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or 40-F.
 
Form 20-F ü  Form 40-F__
 
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12G3-2(b) under the Securities Exchange Act of 1934.
 
Yes __ No ü


If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_.

 
 

 

The attached material is being furnished to the Securities and Exchange Commission pursuant to Rule 13a-16 and Form 6-K under the Securities Exchange Act of 1934, as amended.
This report contains Tenaris's press release announcing its 2009 fourth quarter and annual results.

SIGNATURE




Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



Date: March 3, 2010



Tenaris, S.A.




By: /s/ Cecilia Bilesio
Cecilia Bilesio
Corporate Secretary


 
 

 

 
 
   
 
 
Tenaris Announces 2009 Fourth Quarter and Annual Results
 
The Financial and Operational Information Contained in This Press Release Is Based on Audited Consolidated Financial Statements Prepared in Accordance With International Financial Reporting Standards (IFRS) and Presented in U.S. Dollars
 
LUXEMBOURG--(Marketwire - February 24, 2010) - Tenaris S.A. (NYSE: TS) (BAE: TS) (MXSE: TS) (MILAN: TEN) ("Tenaris") today announced its results for the fourth quarter and year ended December 31, 2009 with comparison to its results for the fourth quarter and year ended December 31, 2008.
 
Summary  of  2009  Fourth  Quarter  Results
 
(Comparison with third quarter of 2009 and fourth quarter of 2008)
 
Q4 2009
Q3 2009
Q4 2008
Net sales (US$ million)
1,847.2
1,771.5
4%
3,203.4
(42%)
Operating income (US$ million)
330.6
360.6
(8%)
669.2
(51%)
Net income (US$ million)
240.8
237.3
1%
114.5
110%
Shareholders’ net income (US$ million)
222.4
229.9
(3%)
93.7
137%
Earnings per ADS (US$)
0.38
0.39
(3%)
0.16
137%
Earnings per share (US$)
0.19
0.19
(3%)
0.08
137%
EBITDA* (US$ million)
459.6
488.3
(6%)
1,190.5
(61%)
EBITDA margin (% of net sales)
25%
28%
 
37%
 
* EBITDA is defined as operating income plus depreciation, amortization and impairment  charges
 
Demand for our tubes improved during the fourth quarter and shipments in our Tubes operating segment rose by 25% sequentially. Net sales and operating income, however, did not benefit proportionately as average selling prices declined and were not fully compensated by the decline in costs. A lower level of shipments of high-end products also affected the margin of this quarter.
 
Cash flow from operations remained positive and we reduced our investment in working capital by a further US$202.4 million. Our net cash position (total financial debt less cash and other current investments) increased to US$675.7 million at the end of the period after paying an interim dividend during the quarter of US$153.5 million.
 
 
 


 
Summary of 2009 Annual Results
 
 
FY 2009
FY 2008
Increase/(Decrease)
Net sales (US$ million)
8,149.3
11,987.8
(32%)
Operating income (US$ million)
1,813.6
3,125.6
(42%)
Net income (US$ million)
1,207.6
2,275.6
(47%)
Shareholders’ net income (US$ million)
1,161.6
2,124.8
(45%)
Earnings per ADS (US$)
1.97
3.60
(45%)
Earnings per share (US$)
0.98
1.80
(45%)
EBITDA* (US$ million)
2,318.4
4,044.4
(43%)
EBITDA margin (% of net sales)
28%
34%
 
* EBITDA is defined as operating income plus depreciation, amortization and impairment charges
 
In 2009, we faced a sharp contraction in demand for our products and services as our customers adjusted to the effects of the global economic and financial crisis. Our actions focused on adjusting to the changing demand and competitive environments while positioning the company to take advantage of an eventual recovery. Net sales declined 32% year on year to US$8.1 billion and our EBITDA decreased by 43% to US$2.3 billion. Our financial position, however, was strengthened as we reduced working capital and turned a net debt position of US$1,392.4 million at December 31, 2008 into net cash of $675.7 million at December 31, 2009.
 
Annual Dividend Proposal
 
The board of directors proposes, for the approval of the annual general shareholders' meeting to be held on June 2, 2010, the payment of an annual dividend of US$0.34 per share (US$0.68 per ADS), or approximately US$401 million, which includes the interim dividend of US$0.13 per share (US$0.26 per ADS) paid in November 2009. If the annual dividend is approved by the shareholders, a dividend of US$0.21 per share (US$0.42 per ADS), or approximately US$248 million will be paid on June 24, 2010, with an ex-dividend date of June 21, 2010.
 
Market Background and Outlook
 
Global oil prices rose during 2009 from their low of around US$30 per barrel and subsequently have fluctuated within a US$70-80 per barrel range. Global oil demand is expected to resume growth in 2010 following two years of contraction led by increased consumption in non-OECD countries. North American gas prices declined in the first half of the year to a low below US$3.00 per million BTU in August before rising to their current levels above US$5.00 per million BTU.
 
 

 
 
Taking the year as a whole, the international count of active drilling rigs, as published by Baker Hughes, showed an average decrease of 8% compared to 2008, after declining in the first three quarters of the year and rising in the fourth quarter . The corresponding rig count in the US, which is more sensitive to North American gas prices, after plummeting in the first part of the year to below 900 rigs in June began recovering in the third quarter led by an increase in oil drilling activity, to end the year at 1,172. More recently, gas drilling activity has also increased and the US rig count has increased to 1,345 as of February 19, 2010. Compared to 2008, however, the decline amounted to 42% over the full year. In Canada, the corresponding rig count, which is also sensitive to North American gas prices and where oil and gas drilling activity is affected by seasonal factors, a similar decline of 42% compared to 2008 was registered.
 
We estimate that apparent demand for OCTG worldwide declined by more than 30% in 2009, reflecting the decline in oil and gas drilling activity and efforts made to adjust inventory levels, particularly in the USA.
 
With activity levels now recovering and inventories at more reasonable levels, we can expect shipments in our Tubes operating segment to show a recovery in 2010 from the low level recorded in 2009. In our Projects segment, however, we expect lower shipments since the order backlog for our large-diameter pipes for pipeline projects in South America declined throughout the year and ended at a low level.
 
In the first quarter, a low level of shipments of high-end products will continue to affect our results. Subsequently, shipments of high-end products should recover. For the year overall, we expect operating margins to be similar to those recorded in 2009.
 
 
Analysis of 2009 Fourth Quarter Results
 
Sales volume (metric tons)
Q4 2009
Q4 2008
Increase/(Decrease)
Tubes – Seamless
487,000
692,000
(30%)
Tubes – Welded
104,000
242,000
(57%)
Tubes – Total
591,000
934,000
(37%)
Projects – Welded
63,000
134,000
(53%)
Total
654,000
1,068,000
(39%)

Tubes
Q4 2009
Q4 2008
Increase/(Decrease)
(Net sales - $ million)
     
North America
563.8
1,419.3
(60%)
South America
261.8
351.7
(26%)
Europe
167.1
369.1
(55%)
Middle East & Africa
414.2
424.4
(2%)
Far East & Oceania
93.8
193.1
(51%)
Total net sales ($ million)
1,500.6
2,757.6
(46%)
Cost of sales (% of sales)
61%
50%
 
Operating income ($ million)*
264.7
628.9
(58%)
Operating income (% of sales)
18%
23%
 
* Operating income includes impairment charges of US$354.9 million in Q4 2008

 
 

 


 
Net sales of tubular products and services decreased 46% to US$1,500.6 million in the fourth quarter of 2009, compared to US$2,757.6 million in the fourth quarter of 2008, due to a 37% reduction in sales volumes and a 14% decrease in average selling prices. In North America, although demand for OCTG products increased in Mexico, regional sales were affected by the adjustment in demand and prices for OCTG and line pipe in the USA and Canada, reflecting the decline in drilling activity and inventory reductions. Sales in South America were affected by low levels of demand in Venezuela and Argentina. In Europe, sales were affected by lower demand from distributors serving the process and power plant sector and lower sales of OCTG principally in Romania. In the Far East and Oceania, sales decreased mainly due to lower demand from the process and power plant sector and lower demand for industrial products.
 
Projects
Q4 2009
Q4 2008
Increase/(Decrease)
Net sales ($ million)
221.2
311.9
(29%)
Cost of sales (% of sales)
69%
63%
 
Operating income ($ million)
54.6
75.8
(28%)
Operating income (% of sales)
25%
24%
 
 
 
Net sales of pipes for pipeline projects decreased 29% to US$221.2 million in the fourth quarter of 2009, compared to US$311.9 million in the fourth quarter of 2008, as the decrease in volumes was partially offset by an increase in average selling prices.
 
Others
Q4 2009
Q4 2008
Increase/(Decrease)
Net sales ($ million)
125.5
133.9
(6%)
Cost of sales (% of sales)
76%
80%
 
Operating income ($ million)*
11.3
(35.5)
132%
Operating income (% of sales)
9%
(27%)
 
* Operating income includes impairment charges of US$ 39.3 million in Q4 2008
 
Net sales of other products and services decreased 6% to US$125.5 million in the fourth quarter of 2009, compared to US$133.9 million in the fourth quarter of 2008, mainly reflecting lower sales of welded pipes for electric conduits in USA and sucker rods, partially offset by higher sales of industrial equipment.
 
 

 
 
Selling, general and administrative expenses, or SG&A, increased as a percentage of net sales to 19.7% in the quarter ended December 31, 2009 compared to 14.3% in the corresponding quarter of 2008, mainly due to the effect of fixed and semi-fixed expenses over lower revenues.
 
Other operating income (expense) amounted to a net gain of US$3.5 million compared to a net loss of US$391.6 million in the corresponding quarter of 2008, which loss was mainly related to impairment charges at our North American operations.
 
Net interest expense decreased to US$16.1 million in the fourth quarter of 2009, compared to a net interest expense of US$38.2 million in the same period of 2008, reflecting the change in our net debt position and lower interest rates.
 
Other financial results generated a gain of US$3.4 million during the fourth quarter of 2009, compared to a loss of US$58.6 million during the fourth quarter of 2008. These results largely reflect gains and losses on net foreign exchange transactions and the fair value of derivative instruments and are to a large extent offset by changes to our net equity position. These gains and losses are mainly attributable to variations in the exchange rates between our subsidiaries' functional currencies (other than the US dollar) and the US dollar in accordance with IFRS.
 
Equity in earnings of associated companies generated a gain of US$18.8 million in the fourth quarter of 2009, compared to a loss of US$32.8 million in the fourth quarter of 2008. These results mainly derived from our equity investment in Ternium.
 
Income tax charges totalled US$96.0 million in the fourth quarter of 2009, equivalent to 30% of income before equity in earnings of associated companies and income tax. In the fourth quarter of 2008, income tax charges amounted to US$314.2 million, which excluding the effect of impairment losses of US$394.3 million during the quarter, resulted in a tax rate of 33%.
 
Income attributable to minority interest decreased to US$18.4 million in the fourth quarter of 2009, compared to US$20.8 million in the corresponding quarter of 2008.
 
Cash Flow and Liquidity
 
Net cash provided by operations during the fourth quarter of 2009 was US$417.0 million (US$3,063.9 million for the year), compared to US$379.3 million in the fourth quarter of 2008 (US$1,465.0 million during the year). Working capital decreased by US$202.4 million during the fourth quarter (US$1,737.3 million during the year), due to a decrease in inventories.
 
Capital expenditures amounted to US$133.1 million for the fourth quarter of 2009 and US$460.9 million for the year, compared to US$106.1 million in the fourth quarter of 2008 and US$443.2 million for the year. Capital expenditures are expected to increase in 2010 as we complete the construction of our new rolling mill in Mexico.
 
 
 

 
During 2009, total financial debt decreased by US$1,530.3 million to US$1,446.8 million at December 31, 2009 from US$2,977.0 million at December 31, 2008. Liquidity (cash and cash equivalents and other current investments) increased by US$537.9 million to US$2,122.5 million at December 31, 2009 from US$1,584.6 million at December 31, 2008. Net financial debt during 2009 decreased by US$2,068.1 million to a positive net cash position of US$675.7 million at December 31, 2009.
 
Analysis of 2009 Annual Results
 
Sales volume (metric tons)
FY 2009
FY 2008
Increase/(Decrease)
Tubes – Seamless
1,970,000
2,818,000
(30%)
Tubes – Welded
346,000
1,057,000
(67%)
Tubes – Total
2,316,000
3,875,000
(40%)
Projects – Welded
334,000
591,000
(43%)
Total – Tubes + Projects
2,650,000
4,466,000
(41%)

Tubes
FY 2009
FY 2008
Increase/(Decrease)
Net sales ($ million)
     
- North America
2,756.1
4,519.3
(39%)
- South America
981.9
1,248.7
(21%)
- Europe
828.8
1,705.6
(51%)
- Middle East & Africa
1,622.6
1,809.9
(10%)
- Far East & Oceania
481.5
726.6
(34%)
Total net sales
6,670.9
10,010.1
(33%)
Cost of sales (% of sales)
57%
53%
 
Operating income ($ million)
1,576.8
2,827.0
(44%)
Operating income (% of sales)
24%
28%
 
 
  
Net sales of tubular products and services decreased 33% to US$6,670.9 million in 2009, compared to US$10,010.1 million in 2008, due to a sharp reduction in volumes (down 40%). This reduction in shipments was partially offset by higher average selling prices (up 12%), reflecting, in part, a higher proportion of sales of specialized high-end products and the lagged effect of price variations as average selling prices rose to a peak in the second quarter of 2009. In North America, notwithstanding higher demand for OCTG products in Mexico, sales decreased 39%, due primarily to substantially lower demand for OCTG and line pipe products in the US and Canada, reflecting the decline in drilling activity and inventory adjustments following the surge in imports of Chinese products in the second half of 2008 and first half of 2009. In South America, sales decreased reflecting sharply lower demand from all sectors in Argentina and for OCTG in Venezuela. In Europe, sales were affected by lower demand from all sectors, including the process and power plant sector, the industrial and automotive sector and the oil and gas sector. Sales in the Middle East and Africa declined by 10% as reduced demand for OCTG products was partially offset by higher sales of deepwater linepipe products in West Africa. In the Far East and Oceania, sales decreased in China and demand for all our products decreased in the rest of the region.
 
 

 
 
Cost of sales of tubular products and services expressed as a percentage of net sales, rose from 53% to 57%, mainly due to the negative effect of low production capacity utilization rates, on efficiency, absorption of fixed and semi-fixed costs and on the time lag between raw material cost decreases and their impact on the cost of sales.
 
Operating income from tubular products and services decreased 44% to US$1,576.8 million in 2009, from US$2,827.0 million in 2008, (in 2008 operating income included impairment charges amounting to US$354.9 million), mainly due to the decrease in volumes.
 

Projects
FY 2009
FY 2008
Increase/(Decrease)
Net sales ($ million)
986.5
1,270.9
(22%)
Cost of sales (% of sales)
71%
70%
 
Operating income ($ million)
208.6
249.0
(16%)
Operating income (% of sales)
21%
20%
 
 
 
Net sales of pipes for pipeline projects decreased 22% to US$986.5 million in 2009, compared to US$1,270.9 million in 2008, reflecting a sharp decrease in shipments to gas and other pipeline projects in Brazil, Argentina and Colombia partially offset by higher average selling prices particularly for offshore projects in Brazil.
 
Operating income from pipes for pipeline projects decreased 16% to US$208.6 million in 2009, from US$249.0 million in 2008, due to the decrease in net sales and a stable operating margin.
     

Others
FY 2009
FY 2008
Increase/(Decrease)
Net sales ($ million)
491.8
706.8
(30%)
Cost of sales (% of net sales)
79%
73%
 
Operating income ($ million)
28.1
49.6
(43%)
Operating income (% of sales)
6%
7%
 

Net sales of other products and services decreased 30% to US$491.8 million in 2009, compared to US$706.8 million in 2008, mainly due to lower sales of welded pipes for electric conduits in USA as well as sucker rods.
 
Operating income from other products and services decreased 43% to US$28.1 million in 2009, from US$49.6 million in 2008, due to the decrease in net sales.
 
Selling, general and administrative expenses, or SG&A, increased as a percentage of net sales to 18.1% in 2009 compared to 14.9% in 2008, mainly due to the effect of fixed and semi-fixed expenses over lower revenues. However, in absolute terms SG&A decreased US$314.2 million to US$1,473.8 million in 2009, from US$1,788.0 million in 2008, mainly due to lower commissions, freight and other selling expenses, taxes and labor costs, reflecting lower activity in terms of net sales.
 
 

 
Other operating income and expenses resulted in net income of US$3.0 million in 2009, compared to a net loss of US$375.9 million in 2008, which loss was mainly related to impairment charges at our North American operations.
 
Net interest expenses totalled US$87.5 million in 2009, compared to net interest expenses of US$131.2 million in 2008, reflecting the change in our net debt position and lower interest rates.
 
Other financial results generated a loss of US$64.2 million in 2009, compared to a loss of US$99.8 million during 2008. These results largely reflect losses on net foreign exchange transactions and the fair value of derivative instruments and are to a large extent offset by changes to our net equity position. These losses are mainly attributable to variations in the exchange rates between our subsidiaries' functional currencies (other than the US dollar) and the US dollar in accordance with IFRS.
 
Equity in earnings of associated companies generated a gain of US$87.0 million in 2009, compared to a gain of US$89.4 million in 2008. These gains were derived mainly from our equity investment in Ternium.
 
Income tax charges of US$513.2 million were recorded during 2009, equivalent to 31% of income before equity in earnings of associated companies and income tax, like in 2008, when excluding the effect of impairment losses during the year amounting to US$394.3 million, the tax rate was also 31%.
 
Result for discontinued operations amounted to a loss of US$28.1 million in 2009, relating to the discontinuation of Tavsa and Matesi's operations, compared to a gain of US$306.9 million in 2008, relating to income from discontinued operations, which was principally attributed to the result of the sale of Hydril's pressure control business. In May 2009, the Venezuelan government announced the nationalization of Tavsa and Matesi. In August 2009, Venezuela, acting through the transition committee appointed by the Venezuelan Ministry of Basic Industries and Mining, unilaterally assumed exclusive operational control over the assets of Matesi. In November 2009, Venezuela, acting through PDVSA Industrial S.A. (a subsidiary of Petroleos de Venezuela S.A.), formally assumed exclusive operational control over the assets of Tavsa.
 
Net income decreased to US$1,207.6 million in 2009, compared to US$2,275.6 million in 2008, mainly reflecting lower operating results.
 
 
 

 
Income attributable to equity holders was US$1,161.6 million, or US$0.98 per share (US$1.97 per ADS), in 2009, compared to US$2,124.8 million, or US$1.80 per share (US$3.60 per ADS) in 2008.
 
Income attributable to minority interest was US$46.0 million in 2009, compared to US$150.8 million in 2008, mainly reflecting lower results at Confab and losses at NKKTubes.
 
Registered Major Holders
 
The following holder has notified Tenaris of holdings in excess of 5% of its capital or voting rights:
   
 
Holders
Number of shares
% of capital and voting rights
San Faustin N.V (1)
713,605,187
60.45
 
(1) San Faustín N.V. owns all of its shares in the Company through its wholly-owned subsidiary I.I.I. Industrial Investments Inc. Rocca & Partners S.A. controls a significant portion of the voting power of San Faustín N.V. and has the ability to influence matters affecting, or submitted to a vote of the shareholders of, San Faustín N.V., such as the election of directors, the approval of certain corporate transactions and other matters concerning the company's policies. There are no controlling shareholders for Rocca & Partners.
 
Pursuant to Schedule 13G/A filed with the U.S. Securities and Exchange Commission on February 10, 2010, Capital World Investors, a division of Capital Research and Management Company, is deemed to be the beneficial owner of 48,317,436 ordinary shares of Tenaris, representing 4.1% of Tenaris's capital and voting rights. Accordingly, Capital World Investors has fallen below the 5% share ownership threshold referred to in Luxembourg Transparency Law.
 
Some of the statements contained in this press release are "forward-looking statements." Forward-looking statements are based on management's current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to future oil and gas prices and their impact on investment programs by oil and gas companies.
 
 
 
 

 
 
Consolidated Income Statement
 
(all amounts in thousands of U.S. dollars, unless otherwise stated)
Three-month period ended December 31,
Year ended December 31,
 
2009
2008
2009
2008
Continuing operations
     
Net sales
1,847,213
3,203,359
8,149,320
11,987,760
Cost of sales
(1,156,550)
(1,683,037)
(4,864,922)
(6,698,285)
Gross profit
690,663
1,520,322
3,284,398
5,289,475
Selling, general and administrative expenses
(363,551)
(459,461)
(1,473,791)
(1,787,952)
Other operating income (expenses) net
3,504
(391,614)
3,000
(375,873)
Operating income
330,616
669,247
1,813,607
3,125,650
Interest income
7,659
3,120
30,831
48,711
Interest expense
(23,712)
(41,319)
(118,301)
(179,885)
Other financial results
3,413
(58,615)
(64,230)
(99,850)
Income before equity in earnings of associated companies and income tax
317,976
572,433
1,661,907
2,894,626
Equity in earnings of associated companies
18,812
(32,830)
87,041
89,423
Income before income tax
336,788
539,603
1,748,948
2,984,049
Income tax
(96,036)
(314,202)
(513,211)
(1,015,334)
Income for continuing operations
240,752
225,401
1,235,737
1,968,715
         
Discontinued operations
       
Results for discontinued operations
 -
(110,936)
(28,138)
306,905
         
Income for the Year
240,752
114,465
1,207,599
2,275,620
         
Attributable to:
       
Equity holders of the Company
222,367
93,653
1,161,555
2,124,802
Minority interest
18,385
20,812
46,044
150,818
 
240,752
114,465
1,207,599
2,275,620
 
 
 
 

 
 

 


 
Consolidated Statement of Financial Position
 
(all amounts in thousands of U.S. dollars)  At December 31, 2009    At December 31, 2008
       
ASSETS
         
Non-current assets
         
  Property, plant and equipment, net
3,254,587
   
2,982,871
 
  Intangible assets, net
3,670,920
   
3,826,987
 
  Investments in associated companies
602,572
   
527,007
 
  Other investments
34,167
   
38,355
 
  Deferred tax assets
197,603
   
390,323
 
  Receivables
101,618
7,861,467
 
82,752
7,848,295
           
Current assets
         
  Inventories
1,687,059
   
3,091,401
 
  Receivables and prepayments
220,124
   
251,481
 
  Current tax assets
260,280
   
201,607
 
  Trade receivables
1,310,302
   
2,123,296
 
  Available for sale assets
21,572
   
 -
 
  Other investments
579,675
   
45,863
 
  Cash and cash equivalents
1,542,829
5,621,841
 
1,538,769
7,252,417
Total assets
 
13,483,308
   
15,100,712
           
EQUITY
         
Capital and reserves attributable to the Company’s equity holders
 
9,092,164
   
8,176,571
Minority interest
 
628,672
   
525,316
Total equity
 
9,720,836
   
8,701,887
           
LIABILITIES
         
Non-current liabilities
         
  Borrowings
655,181
   
1,241,048
 
  Deferred tax liabilities
860,787
   
1,053,838
 
  Other liabilities
192,467
   
223,142
 
  Provisions
80,755
   
89,526
 
  Trade payables
2,812
1,792,002
 
1,254
2,608,808
           
Current liabilities
         
  Borrowings
791,583
   
1,735,967
 
  Current tax liabilities
306,539
   
610,313
 
  Other liabilities
192,190
   
242,620
 
  Provisions
28,632
   
28,511
 
  Customer advances
95,107
   
275,815
 
  Trade payables
556,419
1,970,470
 
896,791
3,790,017
Total liabilities
 
3,762,472
   
6,398,825
           
Total equity and liabilities
 
13,483,308
   
15,100,712
 
 
 
 

 
 
 

 

 
 
Consolidated Statement of Cash Flows
   
         Three-month period ended December 31,
 
           Year ended December 31,
(all amounts in thousands of U.S. dollars)
 
2009
2008
 
2009  
2008  
                   
Cash flows from operating activities
           
Income for the year
 
240,752
114,465
 
1,207,599
2,275,620
Adjustments for:
           
Depreciation and amortization
 
129,014
129,176
 
504,864
532,934
Income tax accruals less payments
 
(112,655)
(5,288)
 
(458,086)
(225,038)
Equity in earnings of associated companies
 
(18,812)
32,830
 
(86,179)
(89,556)
Interest accruals less payments, net
 
(6,210)
28,985
 
(24,167)
55,492
Income from disposal of investment and other
 
 -
 -
 
 -
(394,323)
Changes in provisions
 
(11,294)
(10,056)
 
(7,268)
783
Impairment charge
 
 -
502,899
 
 -
502,899
Changes in working capital
 
202,400
(248,554)
 
1,737,348
(1,051,632)
Other, including currency translation adjustment
 
(6,233)
(165,143)
 
189,837
(142,174)
Net cash provided by operating activities
 
416,962
379,314
 
3,063,948
1,465,005
             
Cash flows from investing activities
           
Capital expenditures
 
(133,132)
(106,100)
 
(460,927)
(443,238)
Acquisitions of subsidiaries and minority interest
 
(20)
(8,717)
 
(73,584)
(18,585)
Other disbursements relating to the acquisition of Hydril
 
 -
 -
 
 -
 -
Proceeds from the sale of pressure control business (*)
 
 -
 -
 
 -
1,113,805
Decrease in subsidiaries / associated
 
 -
 -
 
 -
 -
Proceeds from disposal of property, plant and equipment and intangible assets
 
4,306
4,995
 
16,310
17,161
Dividends and distributions received from associated companies
 
2,517
1,396
 
11,420
15,032
Investments in short terms securities
 
(50,814)
(18,866)
 
(533,812)
41,667
Other
 
 -
 -
 
 -
(3,428)
Net cash used in investing activities
 
(177,143)
(127,292)
 
(1,040,593)
722,414
             
Cash flows from financing activities
           
Dividends paid
 
(153,470)
(153,470)
 
(507,631)
(448,604)
Dividends paid to minority interest in subsidiaries
 
(13,388)
(27,083)
 
(46,086)
(87,200)
Proceeds from borrowings
 
121,742
356,444
 
631,544
1,087,649
Repayments of borrowings
 
(392,752)
(344,804)
 
(2,096,925)
(2,122,268)
Net cash used in financing activities
 
(437,868)
(168,913)
 
(2,019,098)
(1,570,423)
(Decrease) increase in cash and cash equivalents
 
(198,049)
83,109
 
4,257
616,996
Movement in cash and cash equivalents
           
At the beginning of the period
 
1,733,420
1,463,642
 
1,525,022
954,303
Effect of exchange rate changes
 
(6,664)
(21,729)
 
9,124
(46,277)
Decrease in cash due to deconsolidation
 
 -
 -
 
(9,696)
 -
Increase (decrease) in cash and cash equivalents
 
(198,049)
83,109
 
4,257
616,996
At December 31,
 
1,528,707
1,525,022
 
1,528,707
1,525,022
             
Cash and cash equivalents                          At December 31,                          At December 31,
    2009 2008   2009   2008
Cash and bank deposits   1,542,829 1,538,769   1,542,829 1,538,769
Bank overdrafts   (14,122) (13,747)   (14,122)  (13,747)
Restricted bank deposits   - -    -  -
    1,528,707 1,525,022   1,528,707  1,525,022

 
Giovanni Sardagna
Tenaris
1-888-300-5432
www.tenaris.com