Tenaris Restates Carrying Value of Usiminas Investment

LUXEMBOURG -- (Marketwired) -- 05/18/15 -- Tenaris S.A. Tenaris S.A. (NYSE: TS) (BAE: TS) (BMV: TS) (MILAN: TEN) (the "Company") has revised its value in use calculation for its investment in Usinas Siderúrgicas de Minas Gerais S.A. - Usiminas ("Usiminas") and will restate its financial statements to reduce the carrying amount of the Usiminas investment to USD122 million as of September 30, 2014. As a result of this restatement, the financial statements at December 31, 2014 and March 15, 2015 will also be restated to reflect the lower carrying value of the Usiminas investment. Tenaris's cash flows are not affected.

These actions follow the conclusion of previously disclosed discussions with the Staff of the U.S. Securities and Exchange Commission regarding Staff comments relating to the carrying value of the Company's investment in Usiminas under IFRS as of September 30, 2014 and subsequent periods. The Staff had requested information regarding Tenaris's value in use calculations and the differences between the value in use carrying amounts and certain fair value indicators, including in particular the purchase price of BRL12 (approximately USD4.8) per share which the Company's affiliate Ternium S.A. paid in October 2014 for the acquisition of 51.4 million additional Usiminas ordinary shares from Caixa de Previdência dos Funcionários do Banco do Brazil - PREVI ("PREVI"). In connection with these discussions, the Company revised the assumptions used to calculate the carrying value of the Usiminas investment at September 30, 2014 in light of the Staff's comment that the PREVI transaction price provided objective evidence of the value of the Usiminas investment. The restated carrying value as of September 30, 2014 has been revised to reflect a per share value equal to the PREVI transaction price.

The expected impact of this restatement on the Company's previously issued financial statements will be as follows:

CONSOLIDATED INCOME STATEMENT
(all amounts in millions of U.S. dollars, unless otherwise stated) Nine-month period ended September 30, 2014 Year ended
December 31, 2014
Three-month period ended
March 31, 2015
Issued Adj. Restated Issued Adj. Restated Issued Adj. Restated
Equity in earnings (losses) of non-consolidated companies 43 (236) (193) 20 (185) (165) (25) 33 8
Income for the period 1,171 (236) 935 1,366 (185) 1,181 221 33 254
Income for the period attributable to owners of the parent 1,148 (236) 912 1,343 (185) 1,159 222 33 255
Earnings per share (U.S. dollars per share) 0.97 (0.20) 0.77 1.14 (0.16) 0.98 0.19 0.03 0.22
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(all amounts in USD millions) At September 30, 2014 At December 31, 2014 At March 31, 2015
Issued Adj. Restated Issued Adj. Restated Issued Adj. Restated
Investments in non-consolidated companies 893 (236) 657 809 (165) 644 719 (104) 615
Total assets 17,031 (236) 16,795 16,676 (165) 16,511 16,676 (104) 16,572
Capital and reserves attributable to owners of the parent 12,923 (236) 12,686 12,819 (165) 12,654 12,796 (104) 12,692
Total equity 13,077 (236) 12,840 12,971 (165) 12,806 12,947 (104) 12,843

The following chart shows the Company's carrying values of the Usiminas investment on a per-share basis, compared to the book value resulting from Usiminas' financial statements under IFRS and the quoted market price of the Usiminas ordinary shares, at each of September 30 and December 31, 2014, and March 31, 2015:

Amounts in USD/Share Tenaris's issued carrying value Tenaris's restated carrying value Usiminas book value Quoted market price
September 30, 2014 11.3 4.9 7.0 2.7
December 31, 2014 8.4 4.4 6.4 4.6
March 31, 2015 6.1 3.6 5.2 6.7

The Company will file its Annual Report on Form 20-F for the year ended December 31, 2014 as soon as practicable upon the issuance of its restated financial statements and the completion of the audit of such financial statements by its registered public accounting firm, PricewaterhouseCoopers, Société Cooperative. The Company also expects that its revision of the carrying value of the Usiminas investment will be treated as a material weakness in its internal control over financial reporting. It is currently expected that the filing of the Form 20-F will occur on or before June 1, 2015.

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.

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

Source: Tenaris S.A.

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