Segment information

As mentioned in section II. AP – C, the Segment Information is disclosed as follows:

Reportable operating segments

(All amounts in million US dollar)

Year ended December 31, 2017	Tubes			Other			Continuing operations			Discontinued operations
IFRS - Net Sales		4,966			323			5,289			12
Management view - operating income		115			48			163			3
Difference in cost of sales		164			1			165			(1	)
Direct cost and others		115			-			115			(1	)
Absorption		49			1			50			-
Differences in depreciation and amortization		(3	)		-			(3	)		-
Differences in selling, general and administrative expenses		14			(6	)		8			-
Differences in other operating income (expenses), net		2			-			2			-
IFRS - operating income		292			43			335			2
Financial income (expense), net								(23	)		-
Income before equity in earnings of non-consolidated companies and income tax								312			2
Equity in earnings of non-consolidated companies								116			-
Income before income tax								428			2
Capital expenditures		550			8			558			-
Depreciation and amortization		594			15			609			-

Year Ended December 31, 2016	Tubes			Other			Continuing operations			Discontinued operations
IFRS - Net Sales		4,015			278			4,294			235
Management view - operating income		19			19			38			62
Difference in cost of sales		(108	)		(8	)		(116	)		4
Direct cost and others		(114	)		(8	)		(122	)		4
Absorption		6			-			6			-
Differences in Depreciation and Amortization		28			-			28			-
Differences in Selling, general and administrative expenses		(5	)		1			(4	)		-
Differences in Other operating income (expenses), net		(5	)		-			(5	)		-
IFRS - operating (loss) income		(71	)		12			(59	)		66
Financial income (expense), net								22			-
(Loss) income before equity in earnings of non-consolidated companies and income tax								(37	)		66
Equity in earnings of non-consolidated companies								71			-
Income before income tax								34			66
Capital expenditures		752			33			785			2
Depreciation and amortization		643			14			657			5

Year Ended December 31, 2015	Tubes			Other		Continuing operations			Discontinued operations
IFRS - Net Sales		6,444			459		6,903			198
Management view - operating income		686			27		713			39
Difference in cost of sales		(225	)		-		(225	)		(9	)
Direct cost and others		(184	)		-		(184	)		(9	)
Absorption		(41	)		-		(41	)		-
Differences in Depreciation and Amortization		(319	)		1		(318	)		-
Differences in Selling, general and administrative expenses		(4	)		-		(4	)		-
Differences in Other operating income (expenses), net		-			-		-			-
IFRS - operating income		138			28		166			30
Financial income (expense), net							15			-
Income before equity in earnings of non-consolidated companies and income tax							181			30
Equity in losses of non-consolidated companies							(40	)		-
Income before income tax							141			30
Capital expenditures		1,089			41		1,130			1
Depreciation and amortization		638			15		653			5

Transactions between segments, which were eliminated in consolidation, are mainly related to sales of scrap, energy, surplus raw materials and others from the Other segment to the Tubes segment for

$53,

$47

and

$57

million in

2017,

2016

and

2015,

respectively.

In addition to the amounts reconciled above, the main differences in net income arise from the impact of functional currencies on financial result, deferred income taxes as well as the result of investment in non-consolidated companies and changes on the valuation of inventories according to cost estimation internally defined.

Geographical information

(all amounts in thousands of U.S. dollars)	North America		South America		Europe		Middle East & Africa		Asia Pacific		Unallocated (*)		Total continuing operations		Total discontinued operations
Year ended December 31, 2017
Net sales		2,451,357		1,142,142		545,777		937,439		211,789		-		5,288,504		11,899
Total assets		7,925,520		2,975,599		2,002,658		391,029		441,546		661,866		14,398,218		-
Trade receivables		582,204		234,877		214,944		135,524		46,511		-		1,214,060		-
Property, plant and equipment, net		3,914,229		1,190,145		878,788		102,481		143,500		-		6,229,143		-
Capital expenditures		430,143		58,949		57,285		7,562		4,153		-		558,092		145
Depreciation and amortization		354,091		126,273		93,900		12,094		22,282		-		608,640		-

Year ended December 31, 2016
Net sales		1,320,297		1,210,527		565,173		1,055,994		141,601		-		4,293,592		234,911
Total assets		7,467,842		2,803,848		1,925,784		593,649		482,132		578,603		13,851,858		151,417
Trade receivables		229,390		204,746		161,291		308,919		50,339		-		954,685		33,620
Property, plant and equipment, net		3,652,032		1,237,391		847,318		106,941		158,257		-		6,001,939		41,470
Capital expenditures		646,545		59,780		35,270		24,166		19,201		-		784,962		1,911
Depreciation and amortization		381,811		128,458		113,875		11,053		21,912		-		657,109		5,303

Year ended December 31, 2015
Net sales		2,668,724		2,132,221		728,815		1,096,688		276,675		-		6,903,123		197,630
Total assets		8,625,806		2,931,297		1,877,429		429,317		423,479		512,217		14,799,545		87,429
Trade receivables		339,499		396,834		181,084		137,278		52,494		-		1,107,189		27,940
Property, plant and equipment, net		3,207,661		1,269,995		907,466		86,181		155,299		-		5,626,602		45,656
Capital expenditures		822,396		168,140		82,344		36,867		20,566		-		1,130,313		1,206
Depreciation and amortization		385,189		125,754		112,742		9,912		19,716		-		653,313		5,465

There are

revenues from external customers attributable to the Company’s country of incorporation (Luxembourg). For geographical information purposes, “North America” comprises Canada, Mexico and the USA (

31.8%

); “South America” comprises principally Argentina (

14.0%

), Brazil and Colombia; “Europe” comprises principally Italy and Romania; “Middle East and Africa” comprises principally Kazakhstan, United Arab Emirates, Nigeria and Saudi Arabia and; “Asia Pacific” comprises principally China, Japan and Thailand.

(*) Includes Investments in non-consolidated companies and Available for sale assets for

21.6

million in

2017,

2016

and

2015

(see Note

and