Investments in non-consolidated companies

	Year ended December 31,
	2018			2017

At the beginning of the year		640,294			557,031
Translation differences		1,848			(9,548	)
Equity in earnings of non-consolidated companies		193,994			116,140
Dividends and distributions received (*)		(26,581	)		(22,971	)
Decrease / increase in equity reserves and others		(3,987	)		(358	)
At the end of the year		805,568			640,294

(*)Related to Ternium and Usiminas of which

25.7

were collected during the year.

The principal non-consolidated companies are:

		% ownership at December 31,		Value at December 31,
Company	Country of incorporation	2018	2017	2018		2017
a) Ternium (*)	Luxembourg	11.46%	11.46%		725,548		563,735
b) Usiminas (**)	Brazil	3.07%	3.08%		72,988		70,642
Others	-	-	-		7,032		5,917
					805,568		640,294

(*) Including treasury shares.

(**)At

December 31, 2018

and

2017

the voting rights were

5.2%.

a) Ternium

Ternium, is a steel producer with production facilities in Mexico, Argentina, Brazil, Colombia, United States and Guatemala and is

one

of Tenaris’s main suppliers of round steel bars and flat steel products for its pipes business.

December 31, 2018,

the closing price of Ternium’s ADSs as quoted on the New York Stock Exchange was

$27.1

per ADS, giving Tenaris’s ownership stake a market value of approximately

$622.5

million. At

December 31, 2018,

the carrying value of Tenaris’s ownership stake in Ternium, based on Ternium’s IFRS Financial Statements, was approximately

$725.5

million.

As of

December 31, 2018

the Company concluded that the carrying amount does

not

exceed the recoverable value of the investment.

Summarized selected financial information of Ternium, including the aggregated amounts of assets, liabilities, revenues and profit or loss is as follows:

	Ternium
	2018		2017
Non-current assets		8,121,824		7,727,283
Current assets		4,426,038		4,395,283
Total assets		12,547,862		12,122,566
Non-current liabilities		3,236,756		3,442,521
Current liabilities		1,826,530		2,827,275
Total liabilities		5,063,286		6,269,796

Non-controlling interests		1,091,321		842,347

Revenues		11,454,807		9,700,296
Gross profit		2,971,479		2,297,271
Net income for the year attributable to owners of the parent		1,506,647		886,219
Total comprehensive income for the year, net of tax, attributable to owners of the parent		1,176,964		815,434

Investments in non-consolidated companies (Cont.)

b) Usiminas

Usiminas is a Brazilian producer of high quality flat steel products used in the energy, automotive and other industries.

As of

December 31, 2018,

the closing price of the Usiminas’ ordinary and preferred shares, as quoted on the

- Brasil Bolsa Balcão S.A, was

BRL11.44

(

$2.95

) and

BRL9.22

(

$2.38

), respectively, giving Tenaris’s ownership stake a market value of approximately

$110.8

million. As that date, the carrying value of Tenaris’s ownership stake in Usiminas was approximately

$73

million.

Summarized selected financial information of Usiminas, including the aggregated amounts of assets, liabilities, revenues and profit or loss is as follows:

	Usiminas
	2018		2017
Non-current assets		4,696,896		5,661,947
Current assets		2,148,322		2,193,096
Total assets		6,845,218		7,855,043
Non-current liabilities		1,933,207		2,344,042
Current liabilities		860,862		920,924
Total liabilities		2,794,069		3,264,966

Non-controlling interests		369,333		425,988

Revenues		3,766,241		3,367,937
Gross profit		612,156		513,712
Net income for the year attributable to owners of the parent		194,381		74,019

c) Techgen

Techgen is a Mexican company that operates a natural gas-fired combined cycle electric power plant in the Pesquería area of the State of Nuevo León, Mexico. The company started producing energy on

December 1, 2016

and has a power capacity of

900

megawatts. As of

December 31, 2018,

Tenaris held

22%

of Techgen’s share capital, and its affiliates, Ternium and Tecpetrol International S.A. (a wholly-owned subsidiary of San Faustin S.A., the controlling shareholder of both Tenaris and Ternium), held

48%

and

30%

respectively.

Techgen is a party to transportation capacity agreements for a purchasing capacity of

150,000

MMBtu/Gas per day starting on

August 1, 2016

and ending on

July 31, 2036,

and a party to a contract for the purchase of power generation equipment and other services related to the equipment. As of

December 31, 2018,

Tenaris’s exposure under these agreements amounted to

$55.1

million and

$1.8

million respectively. Furthermore, during the quarter, Techgen entered a contract for the purchase of clean energy certificates. As of

December 31, 2018

Tenaris’s exposure under this agreement amounted to

$17.1

million.

Tenaris issued a corporate guarantee covering

22%

of the obligations of Techgen under a syndicated loan agreement between Techgen and several banks, which was used in the construction of the facility. The main covenants under the corporate guarantee are Tenaris’s commitment to maintain its participation in Techgen or the right to purchase at least

22%

of Techgen’s firm energy, and compliance with a maximum permitted leverage ratio. As of

December 31, 2018,

the amount outstanding under the loan agreement was

$600

million and, as a result, the amount guaranteed by Tenaris was approximately

$132

million. For a description of the recently agreed-upon refinancing of the syndicated loan agreement and the release of Tenaris’s corporate guarantee, see “Subsequent events – Techgen refinancing.”

During

2018

the shareholders of Techgen made additional investments, in Techgen, in form of subordinated loans, which in case of Tenaris amounted to

$14.7

million. In the same period, there were repayments of these loans for

$9.4

million. As of

December 31, 2018,

the aggregate outstanding principal amount under these loans was

$98.6

million.