DGAP-News: Tenaris SAReg.Shs

LUXEMBOURG -- (Marketwired) -- 08/02/17 -- Tenaris S.A. (NYSE: TS)
(BAE: TS) (BMV: TS) (MILAN: TEN) ('Tenaris') today announced its
results for the quarter ended June 30, 2017 in comparison with its
results for the quarter ended June 30, 2016.

Summary of 2017 Second Quarter Results

(Comparison with first quarter 2017 and second quarter of 2016, with Conduit
operations reclassified as discontinued operations)

2Q 2017 1Q 2017 2Q 2016
-------- ------------- ------------
Net sales ($ million) 1,243 1,154 8% 1,055 18%
Operating income (loss) ($ million) 51 36 43% (62) 184%
Net income (loss) ($ million) 73 206 (64%) (9) 900%
Shareholders' net income (loss) ($
million) 75 205 (64%) (13) 662%
Earnings (losses) per ADS ($) 0.13 0.35 (64%) (0.02) 662%
Earnings (losses) per share ($) 0.06 0.17 (64%) (0.01) 662%
EBITDA* ($ million) 200 198 1% 101 98%
EBITDA margin (% of net sales) 16.1% 17.2% 9.6%

*EBITDA includes severance charges of $13 million in Q2 2017, $9
million in Q1 2017 and $43 million in Q2 2016. If these charges were
not included EBITDA would have been $213 million (17%) in Q2 2017,
$207 million (18%) in Q1 2017,and $144 million (14%) in Q2 2016.

Our sales rose by 8% in the second quarter, with sequential increases
in North and South America and a further sequential decline in
shipments to the Middle East. In North America, our Rig Direct(TM)
program continues to gain traction and, even with the Canadian
seasonal effect, our sales rose 16% sequentially. Our EBITDA margin
showed a slight sequential decline and included additional costs
associated with the start up of our Bay City mill, the reopening of
our Prudential mill in Calgary and the preparation of our Confab mill
in Brazil for producing line pipe for the Zohr project. For the third
consecutive quarter we had positive operating and net income.

During the quarter, we had a build up of working capital of $260
million and net cash flow used in operations amounted to $33 million.
After capital expenditures of $155 million and the payment of $331
million in dividends, our net cash position (cash, other current
investments and fixed income investments held to maturity less total
borrowings) declined to $1.1 billion at the end of the quarter.

Market Background and Outlook

The recovery in shale drilling in the USA and Canada continued at a
rapid pace in the first half of the year but is now slowing down as
some operators revise their drilling plans for the second half
following a dip in oil prices below $50 per barrel in June. In the
rest of the world, recovery remains more elusive, as oil and gas
companies continue to focus on strengthening cash flow and their
financial position. In Latin America, however, drilling activity in
Argentina is starting to pick up with various operators moving
forward with investments in the Vaca Muerta shale play, and recent
offshore discoveries in Mexico will provide further impetus to the
energy reform program.

In the second half, we expect growth in demand from Rig Direct(TM)
customers in North America, supported by the start up of our Bay City
mill, and in Argentina, while, in the third quarter, we will have
slower sales in the Middle East and Europe. Pricing conditions
continue to improve gradually but the recent rise in raw material
costs will impact our cost of sales, dampening margin improvements.
Our EBITDA should grow, particularly in the fourth quarter, when our
volumes will be enhanced by shipments for East Mediterranean offshore
gas pipelines.

Analysis of 2017 Second Quarter Results

Tubes

The following table indicates, for our Tubes business segment, sales
volumes of seamless and welded pipes for the periods indicated below:

Tubes Sales volume (thousand metric tons) 2Q 2017 1Q 2017 2Q 2016
------- -------- --------
Seamless 529 509 4% 395 34%
Welded 96 74 29% 80 20%
Total 624 583 7% 475 31%

The following table indicates, for our Tubes business segment, net
sales by geographic region, operating income and operating income as
a percentage of net sales for the periods indicated below:

Tubes 2Q 2017 1Q 2017* 2Q 2016
------- ----------- -------------
(Net sales - $ million)
North America 548 472 16% 266 105%
South America 227 203 12% 245 (7%)
Europe 132 115 15% 162 (28%)
Middle East & Africa 212 249 (15%) 276 (16%)
Asia Pacific 55 46 21% 36 55%
Total net sales ($ million) 1,175 1,085 8% 985 19%
Operating income (loss) ($ million) 46 31 48% (65) (171%)
Operating margin (% of sales) 3.9% 2.8% (6.6%)

*Includes inter-regional reclassifications

Net sales of tubular products and services increased 8% sequentially
and 19% year on year. The sequential increase reflects a volume
increase of 7% and an average price increase of 1%. In North America
we had higher sales in the United States onshore market, reflecting
an increase in drilling activity, and in Mexico to private operators
participating in the energy reform, partially offset by lower sales
in Canada due to the spring break-up season. In South America we had
higher sales in Argentina (Vaca Muerta) and in the Andean region,
partially offset by lower sales of connectors in Brazil following
shipment advancements in the previous quarter. In Europe we had
higher sales to the European industrial sector. In the Middle East
and Africa sales were down 15% sequentially reflecting further
declines in shipments to Middle East and North African customers. In
Asia Pacific, sales increased due to higher offshore line pipe sales.
Operating results from tubular products and services increased 48%
sequentially, from a gain of $31 million in the previous quarter to a
gain of $46 million in the second quarter of 2017. In addition to the
effect of higher sales, the increase in shipments improved the
utilization of production capacity and therefore the absorption of
fixed costs, positively impacting costs and margins and offsetting
the increase in the cost of steel scrap and other steelmaking raw
materials.

Others

The following table indicates, for our Others business segment, net
sales, operating income and operating income as a percentage of net
sales for the periods indicated below:

Others 2Q 2017 1Q 2017 2Q 2016
------- -------- ---------
Net sales ($ million) 68 68 0% 70 (3%)
Operating income ($ million) 6 5 5% 4 60%
Operating income (% of sales) 8.3% 7.9% 5.0%

Net sales of other products and services remained flat sequentially
and declined 3% year on year. Operating income increased sequentially
mainly due to improved results at our coiled tubing business.

Selling, general and administrative expenses, or SG&A, amounted to
$327 million, or 26.3% of net sales, in the second quarter of 2017,
compared to $294 million, 25.5% in the previous quarter and $333
million, 31.6% in the second quarter of 2016. SG&A during the quarter
increased due to higher logistic costs and a lower recovery of
doubtful accounts, partially offset by lower amortization of
intangibles following the full amortization of Hydril intangibles
acquired ten years ago.

Financial results amounted to a loss of $16 million in the second
quarter of 2017, compared to a loss of $4 million in the previous
quarter and a gain of $10 million in the second quarter of 2016. The
reason for the loss in the second quarter of 2017 is an FX loss of
$23 million, the great majority corresponding to the Euro
appreciation on Euro denominated intercompany liabilities, fully
offset in the currency translation reserve in equity.

Equity in earnings of non-consolidated companies amounted to $30
million in the second quarter of 2017, compared to $35 million in the
previous quarter and $19 million in the second quarter of last year.
These results are mainly derived from our equity investment in
Ternium (NYSE: TX).

Income tax amounted to a gain of $7 million in the second quarter of
2017, primarily reflecting the effect of the Mexican peso revaluation
on the tax base used to calculate deferred taxes at our Mexican
subsidiaries which have the U.S. Dollar as their functional currency.

Cash Flow and Liquidity of 2017 Second Quarter

Net cash used by operating activities during the second quarter of
2017 was $33 million, compared to cash provided by operations of $26
million in the first quarter of 2017 and $380 million in the second
quarter of last year. During the second quarter of 2017 we used $260
million for the increase in working capital related to the increase
in shipments and production.

Capital expenditures amounted to $155 million for the second quarter
of 2017, compared to $139 million in the previous quarter and $211
million in the second quarter of 2016. Capital expenditures mainly
relates to the progress in the construction of the greenfield
seamless facility in Bay City, Texas.

Following a dividend payment of $331 million in May 2017, we
maintained a net cash position (i.e., cash, other current investments
and fixed income investments held to maturity less total borrowings)
of $1.1 billion at the end of the quarter.

Analysis of 2017 First Half Results

Increase/
H1 2017 H1 2016 (Decrease)
------- ------- ----------
Net sales ($ million) 2,397 2,261 6%
Operating income (loss) ($ million) 88 (32) 372%
Net income ($ million) 279 19 1,386%
Shareholders' net income ($ million) 280 5 5,613%
Earnings per ADS ($) 0.47 0.01 5,613%
Earnings per share ($) 0.24 0.00 5,613%
EBITDA* ($ million) 399 292 36%
EBITDA margin (% of net sales) 16.6% 12.9%

*EBITDA includes severance charges of $22 million in H1 2017 and $56
million in H1 2016. If these charges were not included EBITDA would
have been $420 million (18%) in H1 2017 and $348 million (15%) in H1
2016.

Our sales in the first half of 2017 increased 6% compared to the
first half of 2016, mainly due to strong increase in demand in the
USA and Canada, partially offset by lower sales in South America and
in the Middle East and Africa. EBITDA increased 36% to $399 million
in the first half of 2017 compared to $292 million in the first half
of the previous year, following an increase in sales and an
improvement in the EBITDA margin, from 12.9% to 16.6%. EBITDA
includes severance charges, due to the adjustment of the workforce,
which amounted to $22 million in the first half of 2017 and $56
million in the first half of 2016. Net income attributable to owners
of the parent during the first half of 2017 was $280 million or $0.47
per ADS, which compares with $5 million or $0.01 per ADS in the first
half of 2016. The improvement in net income mainly reflects a better
operating environment, where a 22% increase in shipments improved the
utilization of production capacity and therefore the absorption of
fixed costs, a reduction in severance costs, a positive income tax of
$55 million reflecting primarily the effect of the Mexican peso
revaluation on the tax base used to calculate deferred taxes at our
Mexican subsidiaries which have the U.S. dollar as their functional
currency, and a gain of $90 million from the sale of Republic
Conduit.

Cash flow used in operating activities amounted to $7 million during
the first half of 2017 (including an increase in working capital of
$365 million). Following a dividend payment of $331 million in May
2017, and capital expenditures of $294 million during the first half
of 2017, we maintained a positive net cash position (i.e., cash,
other current investments and fixed income investments held to
maturity less total borrowings) of $1.1 billion at the end of June
2017, including the $328 million we collected from the sale of
Republic Conduit.

The following table shows our net sales by business segment for the
periods indicated below:

Increase/
Net sales ($ million) H1 2017 H1 2016 (Decrease)
---------- ---------- ----------
Tubes 2,260 94% 2,115 94% 7%
Others 137 6% 146 6% (6%)
Total 2,397 100% 2,261 100% 6%

Tubes

The following table indicates, for our Tubes business segment, sales
volumes of seamless and welded pipes for the periods indicated below:

Increase/
Tubes Sales volume (thousand metric tons) H1 2017 H1 2016 (Decrease)
------- ------- ----------
Seamless 1,037 761 36%
Welded 170 226 (25%)
Total 1,207 987 22%

The following table indicates, for our Tubes business segment, net
sales by geographic region, operating income and operating income as
a percentage of net sales for the periods indicated below:

Increase/
Tubes H1 2017 H1 2016 (Decrease)
------- ------- ----------
(Net sales - $ million)
North America 1,021 646 58%
South America 430 595 (28%)
Europe 247 295 (16%)
Middle East & Africa 461 515 (10%)
Asia Pacific 101 64 58%
Total net sales ($ million) 2,260 2,115 7%
Operating income (loss) ($ million)* 76 (44) 274%
Operating income (% of sales) 3.4% (2.1%) 257%

*Tubes operating income includes severance charges of $20 million in
the first half of 2017 and $51 million in the first half of 2016. If
these charges were not included Tubes operating income would have
been $96 million in the first half of 2017 and $8 million in the
first half of 2016.

Net sales of tubular products and services increased 7% to $2,260
million in the first half of 2017, compared to $2,115 million in the
first half of 2016, as a result of a 22% increase in shipment volumes
partially offset by a 13% decline in average selling prices. Sales
grew due to strong increase in demand in the USA and Canada,
partially offset by lower sales in South America and in the Middle
East and Africa. In the first half of 2017, the average number of
active drilling rigs, or rig count, in the United States and Canada
averaged 1,022, a 72% increase when compared to the 594 average in
the first half of 2016. In the rest of the world the rig count
declined 3% year on year, from 979 in the first half of 2016 to 948
in the first half of 2017.

Operating results from tubular products and services increased from a
loss of $44 million in the first half of 2016, to a gain of $76
million in the first half of 2017. Results improved following a 22%
increase in shipment volumes, increasing sales and the utilization of
production capacity and therefore the absorption of fixed costs.
Additionally, severance charges were lower as market conditions
improved.

Others

The following table indicates, for our Others business segment, net
sales, operating income and operating income as a percentage of net
sales for the periods indicated below:

Increase/
Others H1 2017 H1 2016 (Decrease)
------- ------- ----------
Net sales ($ million) 137 146 (6%)
Operating income ($ million) 11 12 (6%)
Operating margin (% of sales) 8.1% 8.0%

Net sales of other products and services decreased 6% to $137 million
in the first half of 2017, compared to $146 million in the first half
of 2016, mainly due to lower sales of industrial equipment in Brazil.

Operating income from other products and services decreased 6%, in
line with the decline in sales as margins remained flat.

Selling, general and administrative expenses, or SG&A, amounted to
$622 million in the first half of 2017 and $612 million in the first
half of 2016, representing 26% of sales in 2017 and 27% in 2016.
Direct selling expenses, like freights, increased due to higher
shipment volumes but were partially offset by lower labor costs
(lower severance costs). Amortization of intangibles also declined
following the full amortization of Hydril intangibles acquired ten
years ago.

Financial results amounted to a loss of $20 million in the first half
of 2017, compared to a loss of $5 million in the first half of 2016.
The main reason for the loss in the first half of 2017 is an FX loss
of $33 million, mainly due to the Euro appreciation on Euro
denominated intercompany liabilities, fully offset in the currency
translation reserve in equity.

Equity in earnings of non-consolidated companies generated a gain of
$65 million in the first half of 2017, compared to a gain of $30
million in the first half of 2016. These results are mainly derived
from our equity investment in Ternium (NYSE: TX).

Income tax amounted to a gain of $55 million in the first half of
2017, compared to a gain of $4 million in the first half of 2016. In
the first half of 2017 this result reflects primarily the effect of
the Mexican peso revaluation on the tax base used to calculate
deferred taxes at our Mexican subsidiaries which have the U.S. dollar
as their functional currency.

Results attributable to non-controlling interests amounted to a loss
of $1 million in the first half of 2017, compared to a gain of $14
million in the first half of 2016. Results during the first half of
2016 were mainly attributable to our pipe coating subsidiary in
Nigeria.

Cash Flow and Liquidity of 2017 First Half

Net cash used in operating activities during the first half of 2017
amounted to $7 million (net of an increase in working capital of $365
million, related to the increase in shipments and production),
compared to cash provided by operations of $689 million in the first
half of 2016 (including working capital reductions of $410 million).

Capital expenditures amounted to $294 million in the first half of
2017, compared to $441 million in the first half of 2016, as we
continue progressing in the construction of the greenfield seamless
facility in Bay City, Texas.

Following a dividend payment of $331 million in May 2017, our
financial position at June 30, 2017, amounted to a net cash position
(i.e., cash, other current investments and fixed income investments
held to maturity less total borrowings) of $1.1 billion, including
the $328 million we collected from the sale of Republic Conduit.

Tenaris Files Half-Year Report

Tenaris S.A. announces that it has filed its half-year report for the
six-month period ended June 30, 2017 with the Luxembourg Stock
Exchange. The half-year report can be downloaded from the Luxembourg
Stock Exchange's website at www.bourse.lu and from Tenaris's website
at www.tenaris.com/investors.

Holders of Tenaris's shares and ADSs, and any other interested
parties, may request a hard copy of the half-year report, free of
charge, at 1-888-300-5432 (toll free from the United States) or
52-229-989-1159 (from outside the United States).

Conference call

Tenaris will hold a conference call to discuss the above reported
results, on August 3, 2017, at 8:00 a.m. (Eastern Time). Following a
brief summary, the conference call will be opened to questions. To
access the conference call dial in +1 877 730 0732 within North
America or +1 530 379 4676 Internationally. The access number is
'59393286'. Please dial in 10 minutes before the scheduled start
time. The conference call will be also available by webcast at
www.tenaris.com/investors

A replay of the conference call will be available on our webpage
http://ir.tenaris.com/ or by phone from 11:00 am ET on Aug 3, through
11:59 pm on Aug 11, 2017. To access the replay by phone, please dial
+1 855 859 2056 or +1 404 537 3406 and enter passcode '59393286' when
prompted.

Some of the statements contained in this press release are
'forward-looking statements'. Forward-looking statements are based on
management's current views and assumptions and involve known and
unknown risks that could cause actual results, performance or events
to differ materially from those expressed or implied by those
statements. These risks include but are not limited to risks arising
from uncertainties as to future oil and gas prices and their impact
on investment programs by oil and gas companies.

Consolidated Condensed Interim Income Statement

(all amounts in thousands of Three-month period Six-month period ended
U.S. dollars) ended June 30, June 30,
2017 2016 2017 2016
----------------------------------------------
Continuing operations Unaudited Unaudited
Net sales 1,242,804 1,054,917 2,396,664 2,261,267
Cost of sales (865,729) (779,623) (1,689,585) (1,676,685)
----------------------------------------------
Gross profit 377,075 275,294 707,079 584,582
Selling, general and
administrative expenses (327,132) (333,160) (621,563) (612,008)
Other operating income
(expense), net 1,547 (3,644) 1,988 (4,774)
----------------------------------------------
Operating income (loss) 51,490 (61,510) 87,504 (32,200)
Finance Income 11,059 24,212 23,986 44,107
Finance Cost (6,020) (4,814) (11,958) (9,118)
Other financial results (20,667) (9,830) (32,082) (39,928)
----------------------------------------------
Income (loss) before equity
in earnings of non-
consolidated companies and
income tax 35,862 (51,942) 67,450 (37,139)
Equity in earnings of non-
consolidated companies 30,201 18,612 65,401 30,339
----------------------------------------------
Income (loss) before income
tax 66,063 (33,330) 132,851 (6,800)
Income tax 7,357 10,416 54,602 3,975
----------------------------------------------
Income (loss) for continuing
operations 73,420 (22,914) 187,453 (2,825)
----------------------------------------------

Discontinued operations
Result for discontinued
operations - 13,737 91,542 21,598
----------------------------------------------
Income (loss) for the period 73,420 (9,177) 278,995 18,773
----------------------------------------------

Attributable to:
Owners of the parent 74,524 (13,266) 279,651 4,895
Non-controlling interests (1,104) 4,089 (656) 13,878
----------------------------------------------
73,420 (9,177) 278,995 18,773
----------------------------------------------
Consolidated Condensed Interim Statement of Financial Position

(all amounts in thousands of
U.S. dollars) At June 30, 2017 At December 31, 2016
Unaudited
ASSETS
Non-current assets
Property, plant and equipment,
net 6,124,342 6,001,939
Intangible assets, net 1,761,686 1,862,827
Investments in non-
consolidated companies 601,712 557,031
Available for sale assets 21,572 21,572
Other investments 284,738 249,719
Deferred tax assets 149,849 144,613
Receivables, net 198,233 9,142,132 197,003 9,034,704
----------- -----------
Current assets
Inventories, net 1,988,820 1,563,889
Receivables and prepayments,
net 186,950 124,715
Current tax assets 180,624 140,986
Trade receivables, net 1,024,453 954,685
Other investments 1,431,881 1,633,142
Cash and cash equivalents 271,224 5,083,952 399,737 4,817,154
----------- -----------
Assets of disposal group
classified as held for sale - 151,417
----------- ----------
Total assets 14,226,084 14,003,275
----------- ----------
EQUITY
Capital and reserves
attributable to owners of the
parent 11,341,154 11,287,417
Non-controlling interests 106,155 125,655
----------- ----------
Total equity 11,447,309 11,413,072
----------- ----------
LIABILITIES
Non-current liabilities
Borrowings 32,015 31,542
Deferred tax liabilities 536,157 550,657
Other liabilities 220,176 213,617
Provisions 42,914 831,262 63,257 859,073
----------- -----------
Current liabilities
Borrowings 820,850 808,694
Current tax liabilities 97,818 101,197
Other liabilities 215,587 183,887
Provisions 23,179 22,756
Customer advances 80,334 39,668
Trade payables 709,745 1,947,513 556,834 1,713,036
----------- -----------
Liabilities of disposal group
classified as held for sale - 18,094
----------- ----------
Total liabilities 2,778,775 2,590,203
----------- ----------
Total equity and liabilities 14,226,084 14,003,275
----------- ----------
Consolidated Condensed Interim Statement of Cash Flows

Three-month period Six-month period ended
ended June 30, June 30,
(all amounts in thousands of
U.S. dollars) 2017 2016 2017 2016
----------------------------------------------
Cash flows from operating
activities Unaudited Unaudited

Income for the period 73,420 (9,177) 278,995 18,773
Adjustments for:
Depreciation and
amortization 148,848 163,963 311,066 327,118
Income tax accruals less
payments (36,888) (52,560) (129,818) (68,731)
Equity in earnings of non-
consolidated companies (30,201) (18,612) (65,401) (30,339)
Interest accruals less
payments, net 7,349 (227) 4,889 (12,906)
Changes in provisions (2,082) 1,373 (19,920) 8,171
Income from the sale of
Conduit business - - (89,694) -
Changes in working capital (260,284) 307,317 (365,222) 410,232
Other, including currency
translation adjustment 67,008 (12,349) 68,409 36,557
----------------------------------------------
Net cash (used in)
providedby operating
activities (32,830) 379,728 (6,696) 688,875
----------------------------------------------

Cash flows from investing
activities
Capital expenditures (155,191) (211,174) (293,806) (441,423)
Changes in advance to
suppliers of property,
plant and equipment 826 20,094 4,329 34,352
Proceeds from disposal of
Conduit business - - 327,631 -
Investment in non-
consolidated companies - (17,108) - (17,108)
Loan to non-consolidated
companies - (13,464) (9,006) (23,848)
Investment in companies
under cost method (3,681) - (3,681) -
Proceeds from disposal of
property, plant and
equipment and intangible
assets 916 2,256 2,878 3,979
Dividends received from non-
consolidated companies 22,971 20,674 22,971 20,674
Changes in investments in
securities 218,540 195,754 170,071 325,682
----------------------------------------------
Net cash provided by (used
in) investing activities 84,381 (2,968) 221,387 (97,692)
----------------------------------------------

Cash flows from financing
activities
Dividends paid (330,550) (354,161) (330,550) (354,161)
Dividends paid to non-
controlling interest in
subsidiaries (19,200) - (19,200) (4,311)
Acquisitions of non-
controlling interests (13) (111) (31) (477)
Proceeds from borrowings (*) 438,188 242,471 1,062,371 495,942
Repayments of borrowings (*) (297,816) (407,071) (1,060,486) (627,904)
----------------------------------------------
Net cash (used in) financing
activities (209,391) (518,872) (347,896) (490,911)
----------------------------------------------

----------------------------------------------
(Decrease) increase in cash
and cash equivalents (157,840) (142,112) (133,205) 100,272
----------------------------------------------
Movement in cash and cash
equivalents
At the beginning of the
period 426,741 530,743 398,580 286,198
Effect of exchange rate
changes 1,936 4,012 5,462 6,173
----------------------------------------------
(Decrease) increase in cash
and cash equivalents (157,840) (142,112) (133,205) 100,272
----------------------------------------------
At June 30, 270,837 392,643 270,837 392,643
----------------------------------------------

Exhibit I - Alternative performance measures

EBITDA, Earnings before interest, tax, depreciation and amortization.

EBITDA provides an analysis of the operating results excluding
depreciation and amortization and impairments, as they are non-cash
variables which can vary substantially from company to company
depending on accounting policies and the accounting value of the
assets. EBITDA is an approximation to pre-tax operating cash flow and
reflects cash generation before working capital variation. EBITDA is
widely used by investors when evaluating businesses (multiples
valuation), as well as by rating agencies and creditors to evaluate
the level of debt, comparing EBITDA with net debt.

EBITDA is calculated in the following manner:

EBITDA= Operating results + Depreciation and amortization +
Impairment charges/(reversals).

(all amounts in thousands of Three-month period Six-month period
U.S. dollars) ended June 30, ended June 30,
--------------------- ---------------------
2017 2016 2017 2016
Operating income 51,490 (61,510) 87,504 (32,200)
Depreciation and amortization 148,848 163,963 311,066 327,118
Depreciation and amortization
from discontinued operations - (1,366) - (2,728)
---------- ---------- ---------- ----------
EBITDA 200,338 101,087 398,570 292,190

Net Cash / (Debt)

This is the net balance of cash and cash equivalents, other current
investments and fixed income investments held to maturity less total
borrowings. It provides a summary of the financial solvency and
liquidity of the company. Net cash / (debt) is widely used by
investors and rating agencies and creditors to assess the company's
leverage, financial strength, flexibility and risks.

Net cash/ debt is calculated in the following manner:

Net cash= Cash and cash equivalents + Other investments (Current)+
Fixed income investments held to maturity - Borrowings (Current and
Non-current).

(all amounts in thousands of U.S. dollars) At June 30,
--------------------
2017 2016
--------- ---------
Cash and cash equivalents 271,224 394,351
Other current investments 1,431,881 1,879,082
Fixed income investments held to maturity 279,232 329,182
Borrowings - current and non-current (852,865) (820,046)
--------- ---------
Net cash / (debt) 1,129,472 1,782,569