Tenaris S.A. (TS)

6 Financial results

Each item included in this note differs from its corresponding line in the Consolidated Condensed Interim Income Statement because it includes discontinued operations’ results.

Net foreign exchange transaction results include those amounts that affect the gross margin of certain subsidiaries which functional currencies are different from the U.S. dollar.

(*) Interest rate swaps losses, included under “Interest expense” for the nine- month period ended September 30, 2009 and September 30, 2008 amount to $14.1 million and $9.7 million, respectively.

As further described in “Section III.A. Financial Risk Factors” to the Company’s audited Consolidated Financial Statements for the year ended December 31, 2008, in order to partially hedge future interest payments related to long-term debt, as well as to convert borrowings from floating to fixed rates, Tenaris has entered into interest rate swaps and swaps with an embedded knock-in option. A total notional amount of $500 million was covered by these instruments which coverage has begun between April and June, 2009 and expires between April and June, 2011. In September 2009, a Tenaris subsidiary partially prepaid the syndicated loan facility entered into to finance the acquisition of Maverick in an amount of $270 million. Accordingly, Tenaris derecognized the corresponding portion of its hedge reserve designation on interest rate swaps derivatives recording a loss for an amount of $5.4 million, included in the total amount of $14.1 million of interest rate swaps losses for the nine-month period ended September 30, 2009.

(**)Tenaris has identified certain embedded derivatives and in accordance with IAS 39 (“Financial Instruments: Recognition and Measurement”) has accounted them separately from their host contracts. A gain of $23 million and a loss of $7.5 million arising from the valuation of these contracts have been recognized for the nine month period ended September 30, 2009 and September 30, 2008, respectively.