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Tenaris S.A. Form 6-K Summary

Business Context and Reporting Period

This filing contains the Consolidated Condensed Interim Financial Statements for Tenaris S.A., a global steel pipe manufacturer, for the three-month period ended March 31, 2012. The report was filed with the SEC on April 30, 2012. The Company operates primarily through three segments: Tubes, Projects, and Other. Significant operational changes in the period include the acquisition of a 5.0% stake in Usiminas and the delisting of its Brazilian subsidiary, Confab.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Net sales increased by 12.6% year-over-year, driven primarily by the Tubes segment, which saw sales rise from $1.97 billion to $2.29 billion.
• Profitability: Operating income increased by 32.1% to $566.2 million. Net income attributable to equity holders rose 39.0% to $443.8 million.
• Cost Structure: Cost of sales increased by 11.5%, slightly lower than the revenue growth rate, contributing to an improved gross margin. Selling, general, and administrative expenses decreased by 1.6%.
• Financial Results: Net financial results improved significantly from a loss of $4.3 million in Q1 2011 to a gain of $12.7 million in Q1 2012, largely due to favorable foreign exchange transaction results ($16.0 million gain vs. $2.0 million loss).
• Cash Flow: Net cash provided by operating activities surged to $604.7 million from $165.7 million, aided by a reduction in working capital usage compared to the prior year.

Guidance, Outlook, and Material Events

• Acquisitions:
  • Usiminas: On January 16, 2012, Tenaris acquired a 5.0% stake in Usiminas for approximately $504.6 million. This was part of a larger consortium deal with Ternium.
  • Confab Delisting: Tenaris completed a tender offer to acquire remaining public shares of its Brazilian subsidiary, Confab, for approximately $697.4 million. Upon settlement, Tenaris will hold approximately 95.9% of Confab.
• Dividends: The Board proposed an annual dividend of $0.38 per share ($0.76 per ADS), totaling approximately $449 million. A portion of this ($0.25 per share) is scheduled for payment in May 2012, subject to shareholder approval.
• Accounting Changes: Effective January 1, 2012, the functional currency for Mexican, Canadian, and Japanese subsidiaries was changed to the U.S. dollar to better reflect their economic environment.
• Risks and Contingencies:
  • Venezuela Nationalization: Tenaris continues to pursue arbitration (ICSID) regarding the expropriation of its Venezuelan subsidiaries (Tavsa and Matesi). The Company holds net receivables of approximately $28 million from these entities.
  • Commitments: Significant outstanding commitments include raw material purchase contracts with Nucor ($247 million) and Rio Tinto ($181 million).

Investor Verification Checklist

• Usiminas Valuation: Verify the purchase price allocation for the Usiminas stake, as the filing notes this procedure was not yet complete at the time of issuance.
• Confab Settlement: Confirm the final settlement of the Confab delisting tender offer and the exact percentage of ownership achieved.
• Dividend Approval: Monitor the outcome of the annual general shareholders' meeting (scheduled for May 2, 2012) regarding the proposed dividend.
• Venezuela Arbitration: Track the status of the ICSID arbitration proceedings regarding the expropriation of Venezuelan assets.
• Functional Currency Impact: Assess the impact of the functional currency change for key subsidiaries on future financial reporting and foreign exchange exposure.