Revenue

The table below presents revenue by reporting segment for the periods presented:

  Year ended December 31    
  2011 2010 Change Change
  in millions of U.S. dollars in millions of U.S. dollars %
Russia 4,788 3,998 790 20%
America 1,590 1,324 266 20%
Europe 375 256 119 46%
TOTAL REVENUE 6,754 5,579 1,175 21%

Russia. Year-on-year, revenue generated by the Russian division increased 20%, or $790 million, primarily reflecting higher selling prices and sales volumes of tubular products.

The revenue growth mainly benefited from higher average selling prices and changes in product mix of seamless and welded pipe which accounted for a $396 million and $63 million increase, respectively. A volume effect accounted for a $242 million increase in seamless pipe revenue, whereas revenue from sales of welded pipe decreased $75 million.

Revenue from other operations grew $10 million mainly due to an increase in revenue from pipe-related services, e.g. protective coating, repair and field services.

The favorable effect of translation from the functional to the presentation currency1 accounted for $155 million.

America. In the American division, revenue grew 20% or $266 million in 2011 as compared to 2010.

Revenue growth due to higher selling prices and changes in product mix of tubular products contributed $94 million and $64 million to the growth of seamless and welded pipe revenue, respectively. In 2011, the share of high-priced seamless OCTG pipe with premium connections more than doubled in total sales volumes of seamless OCTG.

The revenue growth of seamless and welded pipe attributable to changes in sales volumes accounted for $58 million and $78 million, respectively. The growth was mostly derived from increased sales volumes of welded and seamless line pipe as well as seamless industrial pipe.

Revenue from other operations, mainly premium threading services, declined $28 million as threading capacities were intensively used for pipes manufactured by TMK production subsidiaries, including plants located in Russia and Romania. As a result, sales of own-produced pipe with ULTRA premium connection increased and revenue from pipe threading services for external customers declined.

Europe. A 46% year-on-year revenue growth was driven primarily by an increase in selling prices for tubular products in response to the market recovery and increased costs of raw materials.

Changes in selling prices and product mix contributed $51 million to the total revenue growth. Revenue growth attributable to higher sales volumes amounted to $11 million, mainly driven by increased sales of seamless industrial pipe.

An increase in revenue from other operations in the amount of $42 million reflected the substantial growth in sales volumes of steel billets.

The favorable effect of translation from the functional to the presentation currency accounted for a $15 million increase.

In 2011, total revenue growth was mainly attributable to increased sales of seamless pipe. The table below presents pipe sales volumes by group of product for the periods presented:

  Year ended December 31    
  2011 2010 Change Change
  in millions of U.S. dollars in millions of U.S. dollars %
Seamless pipe 3,911 2,952 959 32%
Welded pipe 2,536 2,352 184 8%
REVENUE — PIPE 6,447 5,304 1,143 22%
Other operations 307 275 32 12%
TOTAL REVENUE 6,754 5,579 1,175 21%

1 For the purposes of this management discussion and analysis, the translation effect on revenue/costs and income/expense illustrates an influence of different rates used for translation of such revenue/costs or incomes/expenses from functional to presentation currency in different reporting periods.

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