Investments in non-consolidated companies

	Year ended December 31,
	2019			2018
At the beginning of the year		805,568			640,294
Translation differences		(10,781	)		1,848
Equity in earnings of non-consolidated companies		82,036			193,994
Increase due to business combinations		20,635			-
Dividends and distributions received (*)		(28,037	)		(26,581	)
Additions		19,610			-
Decrease / increase in equity reserves and others		(9,066	)		(3,987	)
At the end of the year		879,965			805,568

(*) Related to Ternium and Usiminas. During

2019,

$29.0

million were collected.

The principal non-consolidated companies are:

			% ownership at December 31,						Value at December 31,
Company	Country of incorporation		2019			2018			2019		2018
a) Ternium (*)		Luxembourg		11.46	%		11.46	%		751,105		725,548
b) Usiminas (**)		Brazil		3.07	%		3.07	%		74,593		72,988
Others		-		-			-			54,267		7,032
										879,965		805,568

(*) Including treasury shares.

(**) At

December 31, 2019

and

2018

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, 2019,

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

$22

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

$505.4

million. At

December 31, 2019,

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

$751.1

million.

As of

December 31, 2019

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
	2019		2018
Non-current assets		8,757,320		8,121,824
Current assets		4,178,213		4,426,038
Total assets		12,935,533		12,547,862
Non-current liabilities		3,452,535		3,236,756
Current liabilities		1,768,125		1,826,530
Total liabilities		5,220,660		5,063,286

Non-controlling interests		1,103,208		1,091,321

Revenues		10,192,818		11,454,807
Gross profit		1,740,378		2,971,479
Net income for the year attributable to owners of the parent		564,269		1,506,647
Total comprehensive income for the year, net of tax, attributable to owners of the parent		445,473		1,176,964

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, 2019,

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

- Brasil Bolsa Balcão S.A, was

BRL9.83

(

$2.44

) and

BRL9.51

(

$2.36

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

$92

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

$74.6

million.

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

	Usiminas
	2019		2018
Non-current assets		4,335,662		4,696,896
Current assets		2,198,449		2,148,322
Total assets		6,534,111		6,845,218
Non-current liabilities		1,955,395		1,933,207
Current liabilities		716,930		860,862
Total liabilities		2,672,325		2,794,069

Non-controlling interests		377,667		369,333

Revenues		3,790,206		3,766,241
Gross profit		478,141		612,156
Net income for the year attributable to owners of the parent		52,779		194,381

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,

with a power capacity of

900

megawatts. As of

December 31, 2019,

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, 2019,

Tenaris’s exposure under these agreements amounted to

$51.9

million and

$0.9

million respectively. Furthermore, during

2018,

Techgen entered a contract for the purchase of clean energy certificates. As of

December 31, 2019

Tenaris’s exposure under this agreement amounted to

$18.2

million.

During

2019,

Techgen repaid certain subordinated loans to Techgen’s sponsors; the part corresponding to Tenaris amounted to

$40.5

million. As of

December 31, 2019,

the aggregate outstanding principal amount under these subordinated loans was

$58.1

million.

February 13, 2019,

Techgen entered into a

$640

million syndicated loan agreement with several banks to refinance an existing loan, resulting in the release of certain corporate guarantee issued by Techgen’s shareholders to secure the replaced facility.

Techgen’s obligations under the current facility, which is “non-recourse” on the sponsors, are guaranteed by a Mexican security trust covering Techgen’s shares, assets and accounts as well as Techgen’s affiliates rights under certain contracts. In addition, Techgen’s collection and payment accounts

not

subject to the trust have been pledged in favor of the lenders under the new loan agreement, and certain direct agreements –customary for these type of transactions– have been entered into with

third

parties and affiliates, including in connection with the agreements for the sale of energy produced by the project and the agreements for the provision of gas and long-term maintenance services to Techgen. The commercial terms and conditions governing the purchase, by the Company’s Mexican subsidiary Tamsa, of

22%

of the energy generated by the project remain unchanged.

Under the loan agreement, Techgen is committed to maintain a debt service reserve account covering debt service becoming due during

two

consecutive quarters; such account is funded by stand-by letters of credit issued for the account of Techgen’s sponsors in proportion to their respective participations in Techgen. Accordingly, the Company and its Swiss subsidiary, Tenaris Investments Switzerland AG, applied for stand-by letters of credit covering

22%

of the debt service coverage ratio, which as of the date hereof amounts to

$9.8

million.