Summary of 2008 Fourth Quarter Results
(Comparison with third quarter of 2008 and fourth quarter of 2007)
Q4 2008 Q3 2008 Q4 2007
-------- -------------- --------------
Net sales (US$ million) 3,238.8 3,118.5 4% 2,628.0 23%
Operating income (US$ million) 559.3 933.9 (40%) 756.7 (26%)
Net income (US$ million) 114.5 631.2 (82%) 595.8 (81%)
Shareholders’ net income (US$
million) 93.7 570.6 (84%) 546.5 (83%)
Earnings per ADS (US$) 0.16 0.97 (84%) 0.93 (83%)
Earnings per share (US$) 0.08 0.48 (84%) 0.46 (83%)
EBITDA* (US$ million) 1,191.4 1,068.8 11% 890.9 34%
EBITDA margin (% of net sales) 37% 34% 34%
*EBITDA is defined as operating income plus depreciation, amortization and
impairment charges
Our operating results in the fourth quarter were affected by impairment
charges on the value of our assets amounting to US$502.9 million, or
US$0.43 per share (US$0.85 per ADS). These charges mainly reflect the
impact on the value of the intangible assets coming from our Maverick
acquisition due to changes in our operating environment in North America,
particularly in respect of the outlook for natural gas drilling in the
region over the next two years. Our EBITDA, however, measured before
impairment charges, reached a record level reflecting strong sales growth,
particularly in North America, and a recovery of operating margins. Our net
financial debt (total financial debt less cash and other current
investments) decreased by US$95.8 million to US$1,392.4 million, from
US$1,488.2 million at the end of the previous quarter, as our free cash
flow (net cash provided by operations less capital expenditures) was
US$273.2 million and we paid an interim dividend during the quarter
amounting to US$153.5 million.
Summary of 2008 Annual Results
Increase/
FY 2008 FY 2007 (Decrease)
----------- ----------- -----------
Net sales (US$ million) 12,131.8 10,042.0 21%
Operating income (US$ million) 3,027.9 2,957.2 2%
Net income (US$ million) 2,275.6 2,076.1 10%
Shareholders’ net income (US$
million) 2,124.8 1,923.7 10%
Earnings per ADS (US$) 3.60 3.26 10%
Earnings per share (US$) 1.80 1.63 10%
EBITDA* (US$ million) 4,063.7 3,449.3 18%
EBITDA margin (% of net sales) 33% 34%
*EBITDA is defined as operating income plus depreciation, amortization and
impairment charges
2008 was a year of strong growth at Tenaris as we consolidated our integrated product and service offering in an expanding North American market. Net sales grew by 21%, compared to 2007, and EBITDA, measured before impairment charges, rose 18% to reach US$4.1 billion. Operating income, after accounting for asset write-downs reflecting changes in our operating environment, rose 2% and earnings per share rose 10% for the year. Net financial debt was reduced by US$1,577.8 million to US$1,392.4 million at year end. Annual Dividend Proposal The board of directors proposes, for the approval of the annual general shareholders' meeting to be held on June 3, 2009, the payment of an annual dividend of US$0.43 per share (US$0.86 per ADS), or approximately US$507 million, which includes the interim dividend of US$0.13 per share (US$0.26 per ADS) paid on November 27, 2008. This would represent an increase of 13% over the annual dividend paid for the 2007 fiscal year. If the annual dividend is approved by the shareholders, a dividend of US$0.30 per share (US$0.60 per ADS), or approximately US$354 million will be paid on June 25, 2009, with an ex-dividend date of June 22, 2009. Tenaris to Acquire Control of Seamless Pipe Indonesia Jaya Tenaris has signed an agreement to acquire from Bakrie & Brothers TbK, Green Pipe International Limited and Cakrawala Baru a 77.45% holding in Seamless Pipe Indonesia Jaya ("SPIJ"), an Indonesian OCTG processing business with heat treatment and premium connection threading facilities, for a purchase price of US$73.5 million, with US$ 24.9 million being payable as consideration for SPIJ's equity and US$ 48.6 million as consideration for the assignment of certain sellers' loan to SPIJ. SPIJ has an annual processing capacity of 120,000 tons and has had a commercial alliance with Tenaris for more than a decade. SPIJ employs around 500 persons and had revenues of approximately US$140 million in 2008. The acquisition, whose completion is subject to customary conditions, including regulatory approval and compliance with certain minority shareholder rights, would allow Tenaris to strengthen its global production capabilities and its local presence in Indonesia, one of the world's leading producers of LNG. Market Background and Outlook Global business and market conditions changed markedly during 2008 as the financial crisis, which had started towards the end of 2007, intensified in September and spread rapidly to other sectors all over the world. It has become increasingly clear that the impact on the real economy is likely to be severe and long-lasting. Global oil prices rose strongly in the first half of the year, peaking in July in excess of US$140 per barrel, before falling even more abruptly in the second half to their current levels of around US$40 per barrel, reflecting expectations of a significant reduction in demand in the current recessionary environment. North American gas prices also rose rapidly during the first half of the year, peaking in excess of US$12 per million BTU, before falling even more steeply to their current levels close to US$4 per million BTU as increased investment in US gas production resulted in significantly higher production levels at a time when demand began to be affected by lower industrial production. Taking the year as a whole, the international count of active drilling rigs, as published by Baker Hughes, showed an average increase compared to 2007 of 7%. The corresponding rig count in the US, which is more sensitive to North American gas prices, after rising steadily in the first part of the year to peak at 2,031 during the month of September, began falling in the fourth quarter to end the year at 1,623 and has subsequently fallen to 1,300 as of February 20, 2009. For the full year, an average increase of 6% compared to 2007, was registered. 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, showed an average annual increase of 11% compared to 2007. We estimate that global apparent demand for OCTG in 2008 rose by around 11% in 2008 compared to 2007. This increase includes a substantial surge in inventories in the US fueled by surging Chinese imports of standard and non heat-treated products. We expect that apparent demand for OCTG will suffer a strong adjustment in 2009, reflecting an expected decline in oil and gas drilling activity and efforts to reduce inventories. Demand for premium and other high-end OCTG products should hold up better than for standard product grades as oil and gas companies maintain their investments in complex projects already underway. Demand for our large-diameter pipes for pipeline projects in South America rose during 2008 as we made deliveries to a number of pipeline projects in Brazil, Argentina and Colombia. However, sales are expected to decline in 2009 as the current order backlog is lower than last year and customers delay the implementation of new projects. Steelmaking raw material costs for our seamless pipe products and steel costs for our welded pipe products rose steeply in the first half of the year but fell even more steeply during the second half of the year as the recessionary environment had an almost immediate impact on global steelmaking activity. Pipe prices, which had risen during the second and third quarter are now declining following the correction in raw material and energy costs. Considering the decrease in apparent demand and declining prices we expect lower level of sales and EBITDA into the coming quarters.
Analysis of 2008 Fourth Quarter Results
Increase/
Sales volume (metric tons) Q4 2008 Q4 2007 (Decrease)
---------- ---------- ----------
Tubes - Seamless 704,000 714,000 (1%)
Tubes - Welded 242,000 259,000 (7%)
Tubes - Total 946,000 973,000 (3%)
Projects - Welded 134,000 157,000 (15%)
Total 1,080,000 1,130,000 (4%)
Increase/
Tubes Q4 2008 Q4 2007 (Decrease)
---------- ---------- ----------
(Net sales - $ million)
North America 1,419.3 756.0 88%
South America 382.9 324.0 18%
Europe 369.1 460.8 (20%)
Middle East & Africa 424.4 458.7 (7%)
Far East & Oceania 193.1 153.5 26%
Total net sales ($ million) 2,788.8 2,153.0 30%
Cost of sales (% of sales) 50% 53%
Operating income ($ million)* 618.0 656.9 (6%)
Operating income (% of sales) 22% 31%
*Operating income includes impairment charges of US$368.5 million
Net sales of tubular products and services rose 30% to US$2,788.8 million
in the fourth quarter of 2008, compared to US$2,153.0 million in the fourth
quarter of 2007, as an increase in our average selling price for tubular
products and services offset a 3% decline in sales volume. Sales rose
strongly in North America, led by increased volumes and prices for OCTG
products throughout the region. Sales also increased in South America and
Far East and Oceania reflecting higher average selling prices. In Europe,
sales were affected by the decline in industrial activity and imports from
China which are causing injury to the European pipe industry.
Increase/
Projects Q4 2008 Q4 2007 (Decrease)
---------- ---------- ----------
Net sales ($ million) 311.9 315.4 (1%)
Cost of sales (% of sales) 63% 71%
Operating income ($ million) 75.8 78.1 (3%)
Operating income (% of sales) 24% 25%
Net sales of pipes for pipeline projects decreased 1% to US$311.9 million
in the fourth quarter of 2008, compared to US$315.4 million in the fourth
quarter of 2007, as the increase in average selling prices almost entirely
offset the decrease in volumes.
Increase/
Others Q4 2008 Q4 2007 (Decrease)
----------- ----------- -----------
Net sales ($ million) 138.0 159.6 (14%)
Cost of sales (% of sales) 82% 71%
Operating income ($ million)* (134.5) 21.7 -
Operating income (% of sales) (97%) 14%
*Operating income includes impairment charges of US$ 134.4 million
Net sales of other products and services decreased 14% to US$138.0 million
in the fourth quarter of 2008, compared to US$159.6 million in the fourth
quarter of 2007, mainly reflecting lower sales of excess raw materials and
welded pipes for electric conduits in the USA, partially offset by higher
sales of sucker rods.
Selling, general and administrative expenses, or SG&A, decreased as a
percentage of net sales to 14.5% in the quarter ended December 31, 2008
compared to 15.7% in the corresponding quarter of 2007 but increased in
absolute terms to US$468.2 million compared to US$413.0 million. This
increase in absolute terms was related primarily to higher activity in
terms of net sales and higher selling costs.
Other operating income (expense) amounted to a net loss of US$500.7 million
compared to a net gain of US$16.0 million in the corresponding quarter of
2007, due to impairment charges mainly related to changes in the market
outlook for our North American operations.
Net interest expense decreased to US$40.2 million in the fourth quarter of
2008, compared to a net interest expense of US$41.8 million in the same
period of 2007.
Other financial results generated a loss of US$59.1 million during the
fourth quarter of 2008, compared to a loss of US$12.0 million during the
fourth quarter of 2007. 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 loss of US$32.8
million in the fourth quarter of 2008, compared to a gain of US$39.7
million in the fourth quarter of 2007. These results mainly derived from
our equity investment in Ternium and, in the fourth quarter of 2007,
included a gain of US$18.4 million recorded on the sale of our remaining
25% participation in Dalmine Energie.
Income tax charges totalled US$312.8 million in the fourth quarter of 2008.
Excluding the effect of impairment losses during the quarter amounting to
US$502.9 million, the tax rate was equivalent to 32% of income before
equity in earnings of associated companies and income tax.
Income attributable to minority interest decreased to US$20.8 million in
the fourth quarter of 2008, compared to US$49.3 million in the
corresponding quarter of 2007.
Cash Flow and Liquidity
Net cash provided by operations during the fourth quarter of 2008 was
US$379.3 million (US$1,465.0 million for the year), compared to US$231.5
million in the fourth quarter of 2007 (US$2,020.6 million during the year).
Working capital increased by US$248.6 million during the fourth quarter,
mainly due to an increase in trade receivables and a reduction in trade
payables and customer advances, partially offset by a decrease in the value
of inventories.
Capital expenditures amounted to US$106.1 million for the fourth quarter of
2008 and US$443.2 million for the year, compared to US$113.3 million in the
fourth quarter of 2007 and US$447.9 million for the year. Since last
September, we are reducing our capital expenditure plans to take account of
changed market expectations while confirming our most relevant projects in
technology, safety and quality and our expansion plan to serve the growing
Mexican market.
During 2008, total financial debt decreased by US$1,043.2 million to
US$2,977.0 million at December 31, 2008 from US$4,020.2 million at December
31, 2007. Liquidity (cash and cash equivalents and other current
investments) increased by US$534.6 million to US$1,584.6 million at
December 31, 2008 from US$1,050.0 million at December 31, 2007. Net
financial debt during 2008 decreased by US$1,577.8 million to US$1,392.4
million at December 31, 2008.
Analysis of 2008 Annual Results
Increase/
Sales volume (metric tons) FY 2008 FY 2007 (Decrease)
------------ ------------ ------------
Tubes - Seamless 2,861,000 2,870,000 (0%)
Tubes - Welded 1,057,000 965,000 10%
Tubes - Total 3,918,000 3,835,000 2%
Projects - Welded 591,000 474,000 25%
Total - Tubes + Projects 4,509,000 4,309,000 5%
Increase/
Tubes FY 2008 FY 2007 (Decrease)
------------ ------------ ------------
Net sales ($ million)
- North America 4,519.2 2,921.7 55%
- South America 1,353.7 1,221.7 11%
- Europe 1,705.6 1,661.4 3%
- Middle East & Africa 1,809.9 2,057.6 (12%)
- Far East & Oceania 726.6 690.2 5%
Total net sales 10,115.0 8,552.6 18%
Cost of sales (% of sales) 53% 52%
Operating income ($ million) 2,822.1 2,713.9 4%
Operating income (% of sales) 28% 32%
Net sales of tubular products and services rose 18% to US$10,115.0 million
in 2008, compared to US$8,552.6 million in 2007, due to higher average
selling prices and higher volumes of welded pipe sales. In North America,
demand for our products increased throughout the region, particularly for
our OCTG products as we consolidated our integrated product and service
offering following the acquisition of Hydril in May 2007 in an expanding
market. In South America, sales increased due primarily to higher OCTG
demand in Venezuela and Ecuador. In Europe, sales increased, as higher
average selling prices offset a decrease in volumes due to lower industrial
activity and an increase in Chinese imports. In the Middle East and Africa,
sales were affected by inventory adjustments and lower sales of API OCTG
products. In the Far East and Oceania, sales increased as higher average
selling prices more than offset a decrease in volumes.
Cost of sales of tubular products and services, expressed as a percentage
of net sales, rose from 52% to 53%, reflecting a steep increase in raw
material costs for our seamless pipe products and steel costs for our
welded pipe products in the first half of the year, which then started to
correct towards the end of the year.
Operating income from tubular products and services, which included
US$368.5 million in impairment charges, rose 4% to US$2,822.1 million in
2008, from US$2,713.9 million in 2007 as higher sales more than offset a
lower margin resulting from the impairment charges.
Increase/
Projects FY 2008 FY 2007 (Decrease)
---------- ---------- ----------
Net sales ($ million) 1,270.9 876.3 45%
Cost of sales (% of sales) 70% 71%
Operating income ($ million) 249.0 184.8 35%
Operating income (% of sales) 20% 21%
Net sales of pipes for pipeline projects rose 45% to US$1,270.9 million in
2008, compared to US$876.3 million in 2007, reflecting strong shipments to
gas and other pipeline projects in Brazil, Argentina and Colombia and
higher average selling prices.
Operating income from pipes for pipeline projects rose 35% to US$249.0
million in 2008, from US$184.8 million in 2007, due to the increase in net
sales and a relatively stable operating margin.
Increase/
Others FY 2008 FY 2007 (Decrease)
---------- ---------- ----------
Net sales ($ million) 745.9 613.1 22%
Cost of sales (% of net sales) 73% 76%
Operating income ($ million) (43.3) 58.5 -
Operating income (% of sales) (6%) 10%
Net sales of other products and services rose 22% to US$745.9 million in
2008, compared to US$613.1 million in 2007, reflecting higher sales of
electric conduits, sucker rods, industrial equipment and excess raw
materials.
Operating income from other products and services, for the year 2008 were
affected by impairment charges of US$134.4 million on our assets in this
segment.
Selling, general and administrative expenses, or SG&A, decreased as a
percentage of net sales to 15.0% in 2008 compared to 15.7% in 2007 but
increased in absolute terms to US$1,819.0 million compared to US$1,573.9
million. SG&A increased in absolute terms due to higher commissions,
freight and other selling expenses, higher labor costs and higher taxes and
services and fees. These increases were related primarily to higher
activity in terms of net sales.
Other operating income and expenses resulted in net expenses of US$485.8
million in 2008, compared to net income of US$4.9 million in 2007, as in
2008 we recorded impairment charges amounting to US$502.9 million. These
charges reflect changes in our operating environment, particularly in
respect of the outlook for natural gas drilling in North America over the
next two years.
Net interest expenses totalled US$137.0 million in 2008, compared to net
interest expenses of US$182.3 million in 2007, reflecting a lower net debt
position and lower interest rates.
Other financial results generated a loss of US$104.3 million in 2008,
compared to a loss of US$22.8 million during 2007. 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$89.6
million in 2008, compared to a gain of US$113.3 million in 2007. These
gains were derived mainly from our equity investment in Ternium but, in
2007, also included a gain of US$18.4 million recorded on the sale of our
remaining 25% participation in Dalmine Energie.
Income tax charges of US$1,011.7 million were recorded during 2008.
Excluding the effect of impairment losses during the year amounting to
US$502.9 million, the tax rate was equivalent to 31% of income before
equity in earnings of associated companies and income tax. In 2007, we
recorded income tax charges amounting to US$823.9 million, equivalent to
30% of income before equity in earnings of associated companies and income
tax.
Income from discontinued operations amounted to US$411.1 million in 2008,
compared to US$34.5 million in 2007. The 2008 income included the result of
the sale of Hydril's pressure control business, completed on April 1, 2008,
amounting to US$394.3 million.
Net income rose to US$2,275.6 million in 2008, compared to US$2,076.1
million in 2007, reflecting a 2% increase in the operating income after
impairment charges and the result of the sale of Hydril's pressure control
business.
Income attributable to equity holders was US$2,124.8 million, or US$1.80
per share (US$3.60 per ADS), in 2008, compared to US$1,923.7 million, or
US$1.63 per share (US$3.26 per ADS) in 2007.
Income attributable to minority interest was US$150.8 million in 2008,
compared to US$152.3 million in 2007 as higher results at Confab were
offset by lower results at NKKTubes and losses at other subsidiaries.
Registered Major Holders
The following holders have notified Tenaris of holdings in excess of 5% of
its capital or voting rights:
% of capital
Number of and voting
Holders shares rights
-------------- --------------
San Faustin N.V.(1) 717,440,187 60.8
Capital World Investors (2) 64,633,440 5.5
(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 transaction and
other matters concerning the company's policies. There are no controlling
shareholders for Rocca & Partners.
(2) Capital World Investors is a division of Capital Research and
Management Company (CRMC). Capital World Investors is deemed to be the
beneficial owner of these shares as a result of CRMC acting as investment
adviser to various investment companies. Accordingly, Capital World
Investors does not own any shares for its own account; rather, they are
owned by accounts under the discretionary management of Capital World
Investors.
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 Three-month period Year ended December
of U.S. dollars) ended December 31, 31,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
Continuing operations
Net sales 3,238,752 2,627,968 12,131,836 10,042,008
Cost of sales (1,710,525) (1,474,215) (6,799,189) (5,515,767)
---------- ---------- ---------- ----------
Gross profit 1,528,227 1,153,753 5,332,647 4,526,241
Selling, general and
administrative expenses (468,176) (413,041) (1,819,011) (1,573,949)
Other operating income
(expense), net (500,738) 16,012 (485,772) 4,933
---------- ---------- ---------- ----------
Operating income 559,313 756,724 3,027,864 2,957,225
Interest income 3,213 28,375 48,873 93,392
Interest expense (43,382) (70,211) (185,836) (275,648)
Other financial results (59,084) (12,029) (104,272) (22,754)
---------- ---------- ---------- ----------
Income before equity in
earnings of associated
companies and income tax 460,060 702,859 2,786,629 2,752,215
Equity in earnings of
associated companies (32,830) 39,691 89,556 113,276
---------- ---------- ---------- ----------
Income before income tax 427,230 742,550 2,876,185 2,865,491
Income tax (312,765) (159,156) (1,011,675) (823,924)
---------- ---------- ---------- ----------
Income for continuing
operations 114,465 583,394 1,864,510 2,041,567
Discontinued operations
Income for discontinued
operations - 12,421 411,110 34,492
---------- ---------- ---------- ----------
Income for the year 114,465 595,815 2,275,620 2,076,059
---------- ---------- ---------- ----------
Attributable to:
Equity holders of the
Company 93,653 546,542 2,124,802 1,923,748
Minority interest 20,812 49,273 150,818 152,311
---------- ---------- ---------- ----------
114,465 595,815 2,275,620 2,076,059
========== ========== ========== ==========
Consolidated Balance Sheet
(all amounts in thousands of
U.S. dollars) At December 31, 2008 At December 31, 2007
--------------------- ---------------------
ASSETS
Non-current assets
Property, plant and
equipment, net 2,982,871 3,269,007
Intangible assets, net 3,826,987 4,542,352
Investments in associated
companies 527,007 509,354
Other investments 38,355 35,503
Deferred tax assets 390,323 310,590
Receivables 82,752 7,848,295 63,738 8,730,544
---------- ----------
Current assets
Inventories 3,091,401 2,598,856
Receivables and prepayments 251,481 222,410
Current tax assets 201,607 242,757
Trade receivables 2,123,296 1,748,833
Other investments 45,863 87,530
Cash and cash equivalents 1,538,769 7,252,417 962,497 5,862,883
---------- ----------
Current and non current
assets held for sale - 651,160
---------- ----------
7,252,417 6,514,043
---------- ----------
Total assets 15,100,712 15,244,587
========== ==========
EQUITY
Capital and reserves
attributable to the Company’s
equity holders 8,176,571 7,006,277
Minority interest 525,316 523,573
---------- ----------
Total equity 8,701,887 7,529,850
========== ==========
LIABILITIES
Non-current liabilities
Borrowings 1,241,048 2,869,466
Deferred tax liabilities 1,053,838 1,233,836
Other liabilities 223,142 185,410
Provisions 89,526 97,912
Trade payables 1,254 2,608,808 47 4,386,671
---------- ----------
Current liabilities
Borrowings 1,735,967 1,150,779
Current tax liabilities 610,313 341,028
Other liabilities 242,620 252,204
Provisions 28,511 19,342
Customer advances 275,815 449,829
Trade payables 896,791 3,790,017 847,842 3,061,024
---------- ----------
Liabilities associated with
current and non-current
assets held for sale - 267,042
---------- ----------
3,790,017 3,328,066
---------- ----------
Total liabilities 6,398,825 7,714,737
========== ==========
Total equity and liabilities 15,100,712 15,244,587
========== ==========
Consolidated Cash Flow statement
Three-month period Twelve-month period
ended December 31, ended December 31,
(all amounts in thousands
of U.S. dollars) 2008 2007 2008 2007
---------- ---------- ---------- ----------
Cash flows from operating
activities
Income for the year 114,465 595,815 2,275,620 2,076,059
Adjustments for:
Depreciation and
amortization 129,176 143,173 532,934 514,820
Income tax accruals less
payments (5,288) (172,473) (225,038) (393,055)
Equity in earnings of
associated companies 32,830 (21,303) (89,556) (94,888)
Interest accruals less
payments, net 28,985 (84,821) 55,492 (21,302)
Income from disposal of
investment and other - (18,388) (394,323) (18,388)
Changes in provisions (10,056) 3,858 783 (421)
Impairment charge 502,899 - 502,899 -
Changes in working capital (248,554) (205,094) (1,051,632) (110,425)
Other, including currency
translation adjustment (165,143) (9,274) (142,174) 68,224
---------- ---------- ---------- ----------
Net cash provided by
operating activities 379,314 231,493 1,465,005 2,020,624
========== ========== ========== ==========
Cash flows from investing
activities
Capital expenditures (106,100) (113,349) (443,238) (447,917)
Acquisitions of
subsidiaries and minority
interest (8,717) (35) (18,585) (1,927,262)
Other disbursements
relating to the
acquisition of Hydril - - - (71,580)
Proceeds from the sale of
pressure control business - - 1,113,805 -
Decrease in subsidiaries /
associated - 28,516 - 27,321
Proceeds from disposal of
property, plant and
equipment and intangible
assets 4,995 17,118 17,161 24,041
Dividends and distributions
received from associated
companies 1,396 674 15,032 12,170
Changes in restricted bank
deposits - 21 - 21
Investments in short terms
securities (18,866) 126,916 41,667 96,074
Other - - (3,428) -
---------- ---------- ---------- ----------
Net cash (used in) provided
by investing activities (127,292) 59,861 722,414 (2,287,132)
========== ========== ========== ==========
Cash flows from financing
activities
Dividends paid (153,470) (153,470) (448,604) (507,631)
Dividends paid to minority
interest in subsidiaries (27,083) (14,948) (87,200) (60,263)
Proceeds from borrowings 356,444 266,301 1,087,649 2,718,264
Repayments of borrowings (344,804) (1,099,730) (2,122,268) (2,347,054)
---------- ---------- ---------- ----------
Net cash (used in)
financing activities (168,913) (1,001,847) (1,570,423) (196,684)
========== ========== ========== ==========
Increase (decrease) in cash
and cash equivalents 83,109 (710,493) 616,996 (463,192)
Movement in cash and cash
equivalents
At the beginning of the
period 1,463,642 1,648,554 954,303 1,365,008
Effect of exchange rate
changes (21,729) 16,242 (46,277) 52,487
Increase (decrease) in cash
and cash equivalents 83,109 (710,493) 616,996 (463,192)
========== ========== ========== ==========
At December 31, 1,525,022 954,303 1,525,022 954,303
========== ========== ========== ==========
----------------------
Cash and cash equivalents At December 31, At December 31,
2008 2007 2008 2007
---------- ---------- ---------- ----------
Cash and bank deposits 1,538,769 962,497 1,538,769 962,497
Bank overdrafts (13,747) (8,194) (13,747) (8,194)
========== ========== ========== ==========
1,525,022 954,303 1,525,022 954,303
========== ========== ========== ==========
Non Cash financing
activities
Conversion of debt to
equity in subsidiaries 35,140
Contact Information: CONTACT: Giovanni Sardagna Tenaris 1-888-300-5432 www.tenaris.com