Good day, ladies and gentlemen, and welcome to the Third Quarter 2012 Tenaris S.A. Earnings Conference Call. My name is Trisha and I’ll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session (Operator Instructions). This call is scheduled for an hour. As a reminder, this conference is also being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Giovanni Sardagna, Investor Relations, Director. Please proceed.

Thank you very much and welcome to Tenaris’ 2012 third quarter results conference call. Before we start, I would like to remind you that we will be discussing forward-looking information in the call and that our actual results may vary from those expressed or implied here-in. Factors that could affect those results include those mentioned in the company’s 20-F and other documents filed with the SEC. With me on the call today are Paolo Rocca, our Chairman and CEO; Guillermo Vogel, Vice President of Finance and Member of Board of Directors; Ricardo Soler, our Chief Financial Officer; Germán Curá, Managing Director of our North American Operation and Alejandro Lammertyn, the Managing Director of our Eastern Hemisphere Operation. Before passing over the call to Paolo for his opening remarks, I will like to briefly comment on our results. Third quarter, sales increased 7% year-on-year led by higher demand in North and South America, but sequentially they were affected by lower shipments in the Middle East and lower demand for industrial products in Europe; in addition to seasonal factors. Our EBITDA excluding extraordinary items reached $629 million, which was up 12% year-on-year but declined 10% sequentially. Our EBITDA margin at 26% was up 2 percentage points versus last year but was down 1 percentage point sequentially as it has been affected by poorer seamless welded mix and efficiency losses related to operational issues at Tamsa steel shop and plant maintenance shutdown. Our revenue per share were up 34% year-on-year as we started to benefit from the acquisition of all the non-controlling interest in our Brazilian subsidiary Confab during the second quarter of this year in addition to a non-recurring asset backed gain of [$49 million] corresponding to a tax lawsuit collected in Brazil. After average selling prices in our tubes operating segments were up 5% compared to the corresponding quarter of last year, but they were flat sequentially. During the quarter, a phase of high end seamless product were 55% over total seamless volume. The Board of Directors has approved the payment of an interim dividend of $0.13 per share or $0.26 per ADS to be paid at the end of this month, in line with the interim dividend paid last year. During the quarter, cash flow from operation remained strong at $491 million, enabling us to strongly reduce our net debt position from $541 million at the end of the previous quarter to $266 million at the end of this quarter. Now I will ask Paolo to say a few words before opening the call to questions.

Thank you Giovanni and good morning to all of you. In our third quarter result, we posted EBITDA of $679 million with a margin of around 26%, which was up 12% year-on-year. This quarter has been affected by efficiency losses resulting from investment and maintenance stoppages in several of our industrial facilities and lower than normal level of shipment to the Middle East and the low level of demand from our industrial customer in Europe. In addition to the normal annual shutdown of our Italian facilities, we had investment in maintenance stoppages in December at our Canadian, US, Colombian and Mexican facilities. And because of Mexico it was three years since the previous major shutdown. Here we performed a major revamp of the steel shop replacing the electrical furnace system and installing a new secondary treatment facility. We experienced some delays and operational issue during the revamp with steel production being affected. This investment and maintenance activity resulted in a higher level of efficiency losses than we had foreseen in the third quarter which will also spill over into the current quarter to a lesser level. If we look at our performance in the first nine months of the year compared to the last year, sales have increased 12%, EBITDA 25% and earnings per share 44%. Our accumulated EBITDA ratio has reached 26.5% and we expect to finish the year around this same level. We had a low level of shipment to the Middle East this quarter, but they will recover in the fourth quarter and we are seeing a good level of demand for our product and service in the region. In Iraq, where our performance in the most technical and commercial execution is widely recognized, we are consolidating our market position. And in Saudi Arabia, demand is increasing…

(Operator Instructions) Your first question comes from the line of Ole Slorer from Morgan Stanley. Please proceed.

Thank you very much. And Paolo, I wonder if you could walk us through the biggest debate right now, it doesn’t seem to be the near term softness in North America that's sort of well understood I think in immediate term outlook as well. First, we divided the supply side both in North America with respect to total supply and the premium components that’s coming on global, to me it seems like there is a lot of apples and pears, some people are throwing numbers out there and also including changes in another plants that don't seem like they are elected to come onstream in the U.S. So I wonder if you could just give us a quick overview on how see the supply side both by region and by segment?

Thank you. I think, the concerning the first issue you were saying forecast on our view let's say on the North American market evolution, what we see is a weakening in the market. There is a very clear reduction in rigs operating to some extent this is clearly affecting the real consumption. This is offset to some extent by improved efficiency but we do not expect this to change the main course. In the fourth quarter, we expect the overall demand and operating consumption to be lower than in the third quarter for all range of products. I would like to ask German to elaborate a little on this how we see the combination of lower level of rigs and efficiency. Germán Curá: Thank you Paolo, very rapidly Ole, and then I will dig on the supply question to add a few comments on that as well. But fundamentally the view we have is that [drill] efficiency I know where the lever is but really in efficiency projects. It’s improving, it has particularly improved in places like the Bakken, Eagle Ford where we've seen wells drilled in 20 days as opposed to 28 days only months ago. But overall, it’s not really capable of offsetting the rig count reductions that we've seen so far and therefore we are expecting operating demand to come down. Now with respect to supply, we insist on what we have said many times, the US market is today serviced by imports at a level that are north of 50% and going forward we believe that there is a clear opportunity to substitute a big component of those imports by domestic reduction in the form of access, in the form of even associated services that we could do with domestic manufacturing. I don't know Paolo if you would expand on that.

Well, I would like to also add one comment on the reason why the outlook has some uncertainty on the number of rigs and the operation of our client, the price of [WTE] went down since the beginning of the year by around $10 or something less. This is affecting the cash flow and I would say that there is today some more concern on the downward rigs on this and this is containing the number of rigs and the investment in the number of rigs operating in the oil sector. As far as gas is concerned, the price of gas increased and personally I think that the imbalance between increasing demand as a whole year-on-year we can have something in the range of 12% increasing demand while in the supply of gas in North America has been much lower in the range of 5%. I think that there is a cold winter or depending on the weather condition, we may see somewhat higher price of gas and we could see a little more stability on the number of rigs and gas and even maybe some increase in the coming quarter during 2013. Now if we look at let’s say the supply side, but in the short-term what we see is a strong pressure from import on the low end part of the market import coming from different continents, especially whether the price coming from Korea, exerting pressure in summer of the low end application and this is reflected in the pipe logic that is moving down as you would have seen. I think this is a trend that could go on in the next future. Now if we look at the medium-term and consider how the supply demand balance would be in three years, four years from now, from…

Okay very clear. Just on one specific example, the change in plant has been talked about for a while, I meant to come on, I think you (inaudible) about a 0.5 billion tonnes, what is the status on that specific at this moment, are you seeing that study the market as tubes, so what is going on there?

When we for the time being, we do not know, let’s say which is the stage or the timing of this investment, I don't know, I mean we should look at expectation or your view because I remember the plant is our only plant; there is a non-steel capacity for the time being. So there will be some limitation in ramp up time to market with this.

As a reminder they have started breaking ground? Germán Curá: I think Ole, it’s fair to recognize that from what we know the public [segments] are TPCO, the projects are upside down and decided to start with a finishing part, trade in and keep treatment and it is our understanding that the initiative the construction of that and decided to postpone delayed for now based dilation of the rolling wheel and ultimately they finish of. So I think you said to recognize that the work has started but they are mostly concentrating on the finishing part. We don't really know their plan as to how fast and when they are going to potentially integrated but this is all we know and for now and this is what they have communicated.

I want to make one additional comment, I wouldn’t focus so much on the question of fuel production capability, there are many mills even today, seamless in mill in the United States. But the point is how strong and how intensive the competition is in our space. Our space is a space of product service premium, support to our clients in a more complex product and in the shales. I think you need a much more than a plant to support a strong competing position here.

I couldn’t agree more but there's just a fair amount of confusion out there, so I just wanted to highlight this point. But thank you very much for helping us out here.

Your next question comes from the line of Michael LaMonte from Guggenheim.

My first question has to do with the cost side, and I was hoping you could provide some thoughts on what you are seeing in terms of labor inflation, fuel costs, deflation particularly as you go into the ore price negotiations for 2013, here in the fourth quarter. There are a lot of moving pieces and not all in the same direction. So I would like to try to get a sense as to how we should think about that over the next several quarters.

Yeah. Yes thank you Michael. Well, I would say that in general we have an environment of lower cost of raw material. This is turning into our cost of sale; over time it will not be this quarter, it’s likely in the next quarter but it will be more reflected in 2013. We are getting scrap iron ore that are getting into our cost of sale also the cost of household toys will fully transfer into, get into our sale over time. We negotiate iron ore on a quarterly basis and basically are following very closely the spot price. So the price variation are getting into our purchasing price, but then it gets into our cost of sale with some delay. The problem for us this quarter has been having stoppages for maintenance in many of our facilities. In seamless and in welded we had higher cost because of limited absorption of fixed costs, and we had also higher costs because of the inefficiency that has been caused by the delay in the ramp up and the start up of the new installation. Why I'm saying that this will also affect to some extent our fourth quarter, because we are for instance, we are being forced to acquire some of the steel bar during this quarter, but we will see this in our cost of sale during the next quarter. To give you an idea, we estimate that the impact on our cost will be in the range of $30 million in the third quarter, and there will be an impact in the range of $10 million in the quarter, in the fourth quarter. So this is going down. Hopefully after the new facility which should show their potential, and we should be able to recover and reduce cost for two reason; the lower cost of input and the improved efficiency. Now the question of inflation labor; it depends on the exchange rate. For sure we had some of this impact in Argentina, Brazil affecting our cost of labor, but the recent volatility here is difficult to predict how this will affect in the beginning of 2013. These are the factor that are affecting our cost of sale.

Anything on the energy cost side, particularly in Mexico or are things pretty stable there?

I would say nothing significant. At this moment, Mexico is reflecting in it's cost of energy, the competitive advantage of North America in low cost of gas; this is getting in to our cost of energy. This year, we've been also able to contain the cost of energy in other country in Argentina, in Europe, thanks to the full integration, now you know, in Europe we produce our own power, our own electrical energy and we acquired gas. So in the end, I wouldn't say that this has introduced, has been a significant factor in our cost.

German if I can ask a quick on of you on the inventory adjustment factor for the fourth quarter, obviously not being a big supplier to the distributor network, we generally don’t think of inventory adjustments as being as significant for Tenaris as for some of your competitors. But is it fair to assume that when you talk about the inventory adjustments is it a function of the EMP customers shutting down programs at a significant clip here in the fourth quarter and have enough inventory to sort of carry into year-end and that’s what’s driving the slowdown in purchases, and if so wouldn’t that necessarily correspond to a pretty meaningful uptick in the first quarter? Germán Curá: Well there are a couple of moving parts I think Mike with respect to inventory; one, is the impact of activity on the current level of inventories. We have seen upper demand coming down when you look at third quarter to compare to Q2, and despite that that has translated and despite the notion that as you had just indicated this (inaudible) would tend to reduce during Q4, given tax exposures on (inaudible). We are still seeing some increase in the overall level of inventories that has surpassed the 2.5 million tons mark, something north of five months worth of potential consumption. So this is what we are, upper end demand coming down consistent with activity coming down, inventories in terms of month likely up. We see this probably moving into Q1 and then consistent when potential activity pick up; we believe that it’s aligned with that.

Your next question comes from the line of Bill Sanchez from Howard Weil. Please proceed.

You have given a lot of high level detail here with regards to how you see the business. I just wanted to drill down a little bit, on how we think about our modeling here especially for fourth quarter. If we look at just overall volume expectations 3Q to 4Q, Middle East shipments up as I understand it less intervention at the plans which is a net positive and I think the volumes and then onshore North America down. And how do we think about overall volumes if you want to breakup doing seamless and welded. How do we think about how 4Q looks relative to 3Q there?

You know in this quarter in the third quarter, the stoppage has affected both seamless and welded, but probably in our production level more seamless than welded. So the mix or so for safe in third quarter has contained a higher share of welded compared to seamless. This should get back to normal releasing in the fourth quarter. So we expect for the fourth quarter that the volume will recover now, because our production system is recovering and even North America will reflect the weakness we mentioned. But Middle East and particularly the sale in Iraq and Saudi will recover. The third quarter been particularly weak as we anticipated. In the fourth quarter, we think we will fully recover this. So we expect for the fourth quarter higher volume than in the third.

And I guess as just we stick with thinking about price per ton here, which I guess another new reporting that you rolled out it was relatively flat 3Q to 2Q and you've addressed that from a mix perspective. I guess as we think about pricing here on average going forward maybe into the first half of next year, how does the impact of the US onshore market weakening here; how do we think about the mix potentially if internationals continue to grow next year, are we going to start seeing price per ton actually decline here as we think about the first half of next year?

Well, we will, we are feeling the pressure of supply and import on the low end less differentiated products. This is getting into pipe logic and through the pipe logic is also trifling into some of the formulas of the long-term agreement. This may affect to some extent our price. On the other side, the mix with higher level of seamless and the continuous work we are doing in pushing our high end product and component will offset some of this downward effect. So you may expect, we think we can defend the prices at a level close to the present level as a whole.

And I have one other question, just as it relates to the EBITDA margin guidance which is now anticipated to be flat, I guess or you haven't give a fourth quarter before, but fourth quarter EBITDA margin guidance flat with 3Q. I guess just given the mix as you mentioned earlier with the seamless volumes being up sequentially I would expect it perhaps and clearly some of the cost issues abating a bit on the intervention side of the plants that perhaps margin guidance would have been up 4Q versus 3Q; could we talk a little bit about that and then is there just been basically a margin recovery deferral into the first half of next year?

Well, as you know in the last conference call we were guiding the margin level in the range of 27% EBITDA ratio for the entire year. Today, we are guiding in the range of 26.5%, so as a whole, let's say the more differences reflecting the weakness we perceive now more than before in North America. Looking ahead, I really think that we have a period of two-three months in which the oil company will look into the macro economic risk, the fiscal cliff, China dynamics, Europe, and with this in mind and considering the message that could come from the new US, the continuing US administration, they will define better their program for next year. This will have for sure an influence on our view in 2013. In principle, what I see is that this quarter and in the fourth we still have a lot to improve in terms of efficiency and recovering from the stoppages and the inefficiency of the third quarter. So we have room for improvement on our side, on execution side and we will be able to have a better understanding of the investment decision of the oil companies, especially North America, maybe during first quarter of 2013. To-date, there is still a lot of uncertainty.

Your next question comes from the line of Stephen Gengaro from Sterne Agee. Please proceed.

Really two quick questions. The first in the third quarter and then as we sort of look in the fourth quarter, can you at all, can you give us any kind of quantification of the impact of inefficiencies on margin, just so you can kind of help us to think about the underlying business going forward?

In the fourth quarter, I told you, we estimate a $10 million effect on the fourth quarter, following a $30 million effect on the third quarter. Now hopefully in the first quarter of 2013, there will be no effect or even some improvement I hope, we could get from the investment we have realized and we should expect even an improved performance, but for the time being, let’s say, this is what I can tell you.

And then as you look at the Gulf of Mexico, the poorer market and also your position in Brazil, can you give us a sense for what you are seeing in those two markets both in the fourth quarter, but then into next year?

From our point of view this is a dynamic segment that will continue to grow worldwide, but then in the different region there could be different dynamics. In the case of Brazil, we expect Petrobras to slowdown to some extent the pace of development of the offshore and deepwater resources and this will effect during 2013 the expectation of increase let’s say in the level of drilling operation of Petrobras for instance. In Gulf of Mexico, I would turn the question to Germán, but from my point of view there is a clearer medium long term strategy of expanding operation by the oil company in the Gulf of Mexico. Germán any comment? Germán Curá: Thank you Paolo. I think Stephen and this is exactly so particularly for the deepwater part; we have seen an important recovery and important restocking process to serve this the new requirements of deepwater Gulf of Mexico. And I think we are going to continue be seeing the same going forward. The share for the shallow part is probably going from the opposite trend something that we also know. So overall the space will grow driven by deepwater requirements, growing deepwater requirements.

This is important that deepwater represent around 15% of the premium and joint space, so it’s an important segment for us and West Africa is for sure growing with strong dynamic, Alejandro is on this segment you can comment, but what we see looks positive to me.

Yes, thanks Paolo. As such we mentioned in the last conference West Africa is very solid and East Africa also is very solid in terms of the development in the deep offshore, the new blocks in Angola are coming during 2013. And now there is an announcement of Nigeria coming back to the deepwater of segment. They are also very strong in shallow water and onshore. So we are seeing in generally in West Africa and the (inaudible) Africa have good movement in the offshore business and deep offshore.

And then just one quick housekeeping item. The $49 million non-recurring gain, would you tax that at the corporate tax rate to get to sort of an EPS impact?

The $49 million is before tax and we respect this to turn out into, that it is turning into $32 million after-tax in our account.

Your next question comes from the line of Frank McGann from Bank of America. Please proceed.

Just to follow-up a little bit on the cost question and just broadened a bit, in terms of what you are seeing in terms of cost globally and cost versus specific competitors, specific locations of plants, you've had plans that historically have been quite competitive perhaps because of foreign currency movements lately, they have been a little bit less competitive, but I am just wondering how you see your plants and the location of your plants and the cost structure that you have playing out over the next three years to five years relative to other locations globally and in other key competitors particularly China or Korea?

Well, Frank, Tenaris is the most profitable company in this segment. The EBITDA ratio of Tenaris is 26.5. This is built on differentiation, on product, on presence in different market. It’s a deep root in many different markets and also on a very stronger supply base between the entire system from Argentina to Mexico to Columbia to Brazil to Romania and also you can see US or Canada and Japan, are building a group of company of production facility that in our view are complementing themselves in a very efficient way. I really think that this would be mainly a competitive advantage for us in a very long run and we are designing and thinking of the plant in the USA in a way that compound this strength and combine effectively with the rest of our system. Mexico is a very efficient facility independently from the (inaudible) that we can have in one start up or in the operation on one quarter. Argentina is a very efficient facility and independently from the turbulence or any concern we may have but in the long run no doubt, the facility in Argentina that is exporting more than 70% of US production is one of the most competitive facilities and also has very well position I would say from the point of view of full integration from iron ore to the finished product. Romania, the same, so when you look at the entire system, I think in all of the different stages of value added in our chain, I think this will remain the most competitive system worldwide. At the same time, we hope to continue to enhance our differentiation consider issues like Dopeless, the perspective of product of Dopeless product today is gaining ground in environment sensitive areas but also in all of the offshore and operation. We expect from this is development of new design on premium and product; enhance differentiation that could leverage on the competitiveness of our system. Germán Curá: On that Frank, I'll have only a small remark. This past quarter, we started up our Dopeless facility in the States which is already under production and has already supplied the Dopeless for one our alliance customers, deepwater Gulf of Mexico.

Your next question comes from the line of Julien Laurent from Natixis. Please proceed.

I was wondering in your guidance for flat margin in the coming quarters. If you can elaborate a bit on what do you expect in terms of pricing pressure on low end, which will be (inaudible) could you quantify this pricing pressure, is it 5% to 10%? And mentioning the distributable capabilities of your production scheme to-date, do you see a room for further acquisition of low end assets in this kind of market, and upgrade those kind of assets or moving to high end? Thank you.

Yes, if I understand your question is on how strong is the pressure on the low end market internal pricing, no doubt in the US in a moment which rigs are going down and to some extent our product demand is contained. We feel for the welded product and low end seamless, the pressure of import I think is there. I think is reflected fairly into the price evolution of the pipe logic. Pipe logic is not reflecting the evolution of prices in the premium segment but is reflected quite clearly what is happening in the very low end part of the spectrum. But as I told before, I do not expect that in an environment of increasing demand, this pressure of coming in large part from import could maintain, could remain as strong as we see it today. Over time increasing the expansion in the market should a lot of source some of this pressure from import. You mentioned acquisition of low end asset; we have no plan for acquisition in this field at the moment. We have deep root in some of the market of Latin American import market in which we need to supply the entire range of product because we give full service to our client. So in that case, we combine all the range of product and support this with just-in-time service and service to our client. We do this in Romania; we do this in Argentina in other place, in Colombia also. When we get into this market we only get into this when we need to strengthen our industrial operation and to combine in a way to have full range of supply for our client.

Your next question comes from the line of Geoffrey Stern from Cheuvreux. Please proceed.

Before asking you couple of housekeeping question, I would start with the US, I was wondering if you could share your view on the penetration of the welded part in the shale market in the US, and what is your market share in the shale markets in the US that’s my first question. And then a quick housekeeping question, could you [embedded] the depreciation charges for 2012 and 2013, then question for CapEx and the normality’s type of tax rate going forward, thank you.

Yeah, on the first one, we can go back to Germán. [Offshore] shale is a key driver; as you know shale are supplying today 10% of the oil produced in the United States. They are supplying 25% of the GAAP produced in the US and are representing around 50% of the overall demand of pipes in US. So having a very strong package of product for shale is a key target for us. And doing this, we combine all the range and levels and this last part of the market we need to combine welded and seamless. Let me tell that the ability to combine welded and seamless and to fully serve the need of such an important part of America is one of our important competitive advantage. This is in our view, German. Germán Curá : Yeah, thank you Paolo. We will now be able for competitive reason to provide you a number of specifics that, but so you know just short of 50% of our (inaudible) sale in this stage are going to the shales. So we have a very important presence and I think this is going to continue to be so. And out of that about 38% to 40% is ERW material. There is a component of the shales that do required ERW pipe given the strict design, and we also believe that this is going to continue to be (inaudible).

And second point is differentiation and CapEx. I would tell Ricardo to make a comment on, if we expect changes in depreciation and the level of depreciation and then we get back on CapEx.

Yeah for this year (inaudible) $550 million of depreciation and amortization, out of that 350 would be depreciation. For next year, the figure would be something similar and level increased around $300 million for the whole year. Regarding the level of CapEx, we plan today to finish the year with talking only about CapEx, capital expenditure close to $800 million, without taking in to account any expenses in R&D. For next year we are planning to reduce a little bit the number around 750 in that range without taking into consideration any big capital expenditure related to the [whole] profit in the United States.

The project in the United States.

Yeah.

Alright, can you just repeat on (inaudible).

You had another question regarding the tax rate. The tax rate we expect to have this year is around 25% and for next year in a similar level.

Your next question comes from the line of Raphael Veverka from Exane.

Just one question, you mentioned again the pressure you are seeing from imports especially on the low end products. I was wondering if you see room for an [anti dumping] case as the one you boost against Chinese (inaudible) in 2009.

Yes this, German could you comment on this. Germán Curá : Sure. Well, we've seen Korean imports which have reached a level of about 45% of the overall, of welded imports to this stage. The Korean imports have become a major market share participant. When we look at the prices of imports and we compare it to the national price of copper coil, we frankly believe that these are unfairly traded in parts. Now as an industry we probably I could say today are evaluated the specifics as to understand the potential gains. There's not truly much more I can say at this point other than this is an industry effort. We are all working on this and we are convinced that it is unfairly traded on into our market.

Your next question is a follow-up question from the line of Stephen Gengaro.

I just wanted to clarify one comment. On the EBITDA margin guidance, we had I think 25.6 in the quarter for the third quarter or you suggested flat, but then you said 26.5 versus 27. I just wanted to get just clarity on where you were targeting for the fourth quarter.

What we are saying is the, for - the remember in the last call I was saying for the second half of 2012, we were expecting to be able to maintain 27%. Saying that in the first quarter we would have been slightly lower, and in the fourth quarter slightly higher. What we see today is that we should be able to keep for the entire year a level of 26.5, and relatively place in this set. It means that we expect EBITDA ratio to increase in the fourth quarter, but not to the extent to compensate for what we have reduced our number in the third quarter.

And ladies and gentlemen, that concludes the Q&A process. I would now like to turn the conference back over to Mr. Giovanni Sardagna for any closing remarks.

Just to thank all of you that have been participating in today’s call, and we hope to hear from you very soon. Thank you.

Ladies and gentlemen that concludes today’s conference. Thank you for your participation. You may now disconnect. Have a great day.