HispanicBusiness

Capital expenditures amounted to US$187.0 million in the third quarter of 2012, compared to US$204.5 million in the previous quarter and US$212.1 million in the third quarter of 2011.

Our net debt (total borrowings less cash and other current investments) decreased to US$265.8 million, at the end of the third quarter of 2012, from US$540.5 million at the end of the previous quarter.

Analysis of 2012 First Nine Months Results                                                                  Increase/                                           9M 2012     9M 2011   (Decrease)Net sales (US$ million)                     8,075.9     7,221.9          12%Operating income (US$ million)              1,770.6     1,306.9          35%Net income (US$ million)                    1,351.1       994.4          36%Shareholders' net income (US$ million)      1,341.4       931.6          44%Earnings per ADS (US$)                         2.27        1.58          44%Earnings per share (US$)                       1.14        0.79          44%EBITDA* (US$ million)                       2,142.0     1,707.4          25%EBITDA margin (% of net sales)                   27%         24%*EBITDA is defined as operating income plus depreciation, amortization and impairment charges/(reversals) and in 9M 2012 excludes a non-recurring gain of $49 million, recorded in Other operating income corresponding to a tax related lawsuit collected in Brazil.                                                                 Increase/    Tubes Sales volume (metric tons)      9M 2012     9M 2011    (Decrease)Seamless                                  2,007,000   1,904,000           5%Welded                                      882,000     833,000           7%Total                                     2,889,000   2,737,000           6%                                                                 Increase/                 Tubes                    9M 2012     9M 2011   (Decrease)(Net sales - $ million)North America                              3,798.6     2,906.4          31%South America                              1,612.3     1,531.5           5%Europe                                       799.6       791.7           1%Middle East & Africa                         869.1       946.0          (8%)Far East & Oceania                           365.5       410.5         (11%)Total net sales ($ million)                7,445.2     6,586.1          13%Operating income ($ million)               1,679.6     1,200.5          40%Operating margin (% of sales)                   23%         18%

Net sales of tubular products and services increased 13% to US$7,445.2 million in the first nine months of 2012, compared to US$6,586.1 million in the first nine months of 2011, reflecting a 6% increase in volumes and a 4% increase in average selling prices.

Operating income from tubular products and services increased 40% to US$1,679.6 million in the first nine months of 2012, from US$1,200.5 million in the first nine months of 2011, reflecting a 13% increase in sales and an improvement in the operating margin, mainly reflecting a better absorption of fixed and semi-fixed expenses on higher sales.

                                                                 Increase/                 Others                   9M 2012     9M 2011   (Decrease)Net sales ($ million)                        630.7       635.8          (1%)Operating income ($ million)                  91.0       106.5         (14%)Operating margin (% of sales)                   14%         17%