EX-99.1

EX-99.1 2 d394233dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Tenneco Reports Third Quarter 2022 Results

Company expects to close transaction with Apollo Funds in mid-November, 2022

Skokie, Illinois, October 31, 2022 – Tenneco Inc. (NYSE: TEN) today announced results for the third quarter ended September 30, 2022, including the following:

•

Third quarter total revenue of $4.9 billion, up 14% year-over-year. Value-add revenue of $3.6 billion was up 17% year-over-year, excluding a negative currency impact of $214 million. The Company’s OE light vehicle value-add revenue growth of 32%, excluding currency, outpaced global industry light vehicle production*, which was up 27% year-over-year. Material, energy, and freight cost recoveries contributed more than $200 million of revenue on a year-over-year basis.

•

EBIT** of $129 million, compared with EBIT of $125 million in third quarter 2021. Adjusted EBITDA*** improved 8% year-over-year to $301 million, compared with $279 million last year. The increase in earnings is primarily a result of higher light vehicle volumes.

•

Net loss of $44 million, or a loss of $0.53 per diluted share, compared to net earnings of $15 million, or $0.17 per diluted share, in the prior year. Third quarter 2022 adjusted net loss of $11 million, or a loss of $0.14 per diluted share, compared to prior year adjusted net income of $15 million, or $0.17 per diluted share. The year-over-year comparisons were primarily driven by higher non-operating interest and tax expenses.

“In a tough business environment, I’m proud of how Team Tenneco delivered year-over-year growth in revenue and adjusted EBITDA” said Brian Kesseler, Tenneco CEO. “Our continued focus on operational excellence, cash generation, and cost control actions also helped us deliver both significant sequential margin improvement across all business groups, and lower net debt.”

As previously disclosed, all conditions to closing with respect to antitrust and/or foreign direct investment laws under Tenneco’s merger agreement with certain affiliates of Apollo Global Management, Inc. have been satisfied or waived in accordance with the terms and conditions of the merger agreement. The Company expects to complete the transaction in mid-November 2022. In light of this, Tenneco will not conduct a conference call or give forward-looking guidance.

*	Source: S&P Global Mobility (formerly IHS Markit) October 2022 global light vehicle production forecast.

**	EBIT: Earnings before interest expense, income taxes and noncontrolling interests.

***	Adjusted EBITDA: Adjusted earnings before interest expense, income taxes, noncontrolling interests, and depreciation and amortization.

-More-

Attachment 1

Statements of Income (Loss) – 3 months

Statements of Income (Loss) – 9 months

Balance Sheets

Statements of Cash Flows – 3 Months

Statements of Cash Flows – 9 Months

Attachment 2

Reconciliation of GAAP to Non-GAAP Earnings Measures – 3 and 9 Months

Reconciliation of GAAP Revenue and Earnings to Non-GAAP Revenue and Earnings Measures – 3 and 9 Months

Reconciliation of GAAP to Non-GAAP Revenue Measures – 3 and 9 Months

Reconciliation of Non-GAAP Measures – Debt Net of Total Cash/Adjusted LTM EBITDA including noncontrolling interests

Reconciliation of GAAP to Non-GAAP Revenue Measures – Original Equipment, Original Equipment Service and Aftermarket Revenue – 3 and 9 Months

Reconciliation of GAAP to Non-GAAP Cash Flow Measures – 3 and 9 Months

About Tenneco

Tenneco is one of the world’s leading designers, manufacturers, and marketers of automotive products for original equipment and aftermarket customers, with full year 2021 revenues of $18 billion and approximately 71,000 team members working at more than 260 sites worldwide. Through our four business groups, Motorparts, Performance Solutions, Clean Air and Powertrain, Tenneco is driving advancements in global mobility by delivering technology solutions for diversified global markets, including light vehicle, commercial truck, off-highway, industrial, motorsport and the aftermarket.

Visit www.tenneco.com to learn more.

Investors and others should note that Tenneco routinely posts important information on its website and considers the Investor section, www.investors.tenneco.com, a channel of distribution.

Safe Harbor

This press release includes forward-looking statements regarding the Agreement and Plan of Merger (the “Merger Agreement”) that the Company entered into with Pegasus Holdings III, LLC (the “Parent”) and Pegasus Merger Co. on February 22, 2022. Pursuant to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into Tenneco (the “Merger”) with Tenneco continuing as the surviving corporation of the Merger and as a wholly owned subsidiary of Parent. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include (without limitation and in addition to the risks set forth above): the inability to consummate the Merger within the anticipated time period, or at all, due to any reason, including the failure to satisfy conditions to the consummation of the Merger; the risk that the Merger disrupts our current plans and operations or diverts management’s attention from its ongoing business; the effect of the announcement of the Merger on our ability to retain and hire key personnel and maintain relationships with our customers, suppliers and others with whom we do business; the effect of the announcement of the Merger on our operating results and business generally; the amount of costs, fees and expenses related to the Merger; the risk that our stock price may decline significantly if the Merger is not consummated; the nature, cost and outcome of any litigation and other legal proceedings, including any such proceedings related to the Merger and instituted against Tenneco and others; and other risks to consummation of the proposed Merger, including the risk that the proposed Merger will not be consummated within the expected time period or at all.

If the proposed transaction is consummated, the Company’s stockholders will cease to have any equity interest in the Company and will have no right to participate in its earnings and future growth. The risks included here are not exhaustive. These and other factors are identified and described in more detail in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, and quarterly reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022, as well as the Company’s subsequent filings and quarterly reports, available online at

-2-

www.sec.gov. Readers are cautioned not to place undue reliance on the Company’s projections and other forward-looking statements, which speak only as of the date thereof. Except as required by applicable law, the Company undertakes no obligation to update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

###

Investor inquiries:

Linae Golla

847-482-5162

lgolla@tenneco.com

Rich Kwas

248-849-1340

rich.kwas@tenneco.com

Media inquiries:

Bill Dawson

847-482-5807

bdawson@tenneco.com

-3-

ATTACHMENT 1

TENNECO INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Unaudited

(millions, except per share amounts)


	Three Months Ended September 30,
	2022			2021
Net sales and operating revenues:
Motorparts	$	723		$	769
Performance Solutions		849			686
Clean Air - Value-add revenues		1,040			897
Clean Air - Substrate sales		1,295			1,039
Powertrain		1,024			941

Total net sales and operating revenues		4,931			4,332

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization)		4,388			3,776
Selling, general, and administrative		219			240
Depreciation and amortization		140			147
Engineering, research, and development		71			71
Restructuring charges, net and asset impairments		3			(4	)

Total costs and expenses		4,821			4,230

Other income (expense):
Non-service pension and postretirement benefit (costs) credits		3			4
Equity in earnings (losses) of nonconsolidated affiliates, net of tax		3			10
Other income (expense), net		13			9

		19			23

Earnings (loss) before interest expense, income taxes, and noncontrolling interests		129			125
Interest expense		(90	)		(66	)

Earnings (loss) before income taxes and noncontrolling interests		39			59
Income tax (expense) benefit		(67	)		(34	)

Net income (loss)		(28	)		25
Less: Net income (loss) attributable to noncontrolling interests		16			10

Net income (loss) attributable to Tenneco Inc.	$	(44	)	$	15

Basic earnings (loss) per share:
Earnings (loss) per share	$	(0.53	)	$	0.17
Weighted average shares outstanding		83.7			82.3
Diluted earnings (loss) per share:
Earnings (loss) per share	$	(0.53	)	$	0.17
Weighted average shares outstanding		83.7			84.1

ATTACHMENT 1

TENNECO INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Unaudited

(millions, except per share amounts)


	Nine Months Ended September 30,
	2022			2021
Net sales and operating revenues:
Motorparts	$	2,174		$	2,282
Performance Solutions		2,433			2,188
Clean Air - Value-add revenues		3,058			2,876
Clean Air - Substrate sales		3,517			3,208
Powertrain		3,063			3,092

Total net sales and operating revenues		14,245			13,646

Costs and expenses:
Cost of sales (exclusive of depreciation and amortization)		12,663			11,810
Selling, general, and administrative		728			764
Depreciation and amortization		429			447
Engineering, research, and development		220			216
Restructuring charges, net and asset impairments		45			48

Total costs and expenses		14,085			13,285

Other income (expense):
Non-service pension and postretirement benefit (costs) credits		9			10
Equity in earnings (losses) of nonconsolidated affiliates, net of tax		25			47
Gain (loss) on extinguishment of debt		—			8
Other income (expense), net		27			30

		61			95

Earnings (loss) before interest expense, income taxes, and noncontrolling interests		221			456
Interest expense		(232	)		(205	)

Earnings (loss) before income taxes and noncontrolling interests		(11	)		251
Income tax (expense) benefit		(140	)		(122	)

Net income (loss)		(151	)		129
Less: Net income (loss) attributable to noncontrolling interests		52			59

Net income (loss) attributable to Tenneco Inc.	$	(203	)	$	70

Basic earnings (loss) per share:
Earnings (loss) per share	$	(2.44	)	$	0.85
Weighted average shares outstanding		83.5			82.2
Diluted earnings (loss) per share:
Earnings (loss) per share	$	(2.44	)	$	0.83
Weighted average shares outstanding		83.5			83.5

ATTACHMENT 1

TENNECO INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(dollars in millions)


	September 30, 2022			December 31, 2021
Assets
Cash and cash equivalents	$	415		$	859
Restricted cash		8			6
Receivables, net		2,819	(a)		2,419	(a)
Inventories		1,948			1,846
Prepayments and other current assets		553			683
Property, plant, and equipment, net		2,557			2,872
Other noncurrent assets		2,652			2,937

Total assets	$	10,952		$	11,622

Liabilities and Shareholders’ Equity
Short-term debt, including current maturities of long-term debt	$	1,427		$	57
Accounts payable		3,288			2,955
Accrued compensation and employee benefits		364			381
Accrued income taxes		70			71
Accrued expenses and other current liabilities		1,153			1,227
Long-term debt		3,603	(b)		5,018	(b)
Deferred income taxes		96			105
Pension and postretirement benefits		723			830
Deferred credits and other liabilities		436			491
Redeemable noncontrolling interests		37			91
Total Tenneco Inc. shareholders’ equity (deficit)		(519	)		85
Noncontrolling interests		274			311

Total liabilities, redeemable noncontrolling interests, and equity	$	10,952		$	11,622


	September 30, 2022			December 31, 2021
(a) Accounts receivable net of:
Accounts receivable outstanding and derecognized	$	1,063		$	1,043
(b) Long-term debt composed of:
Revolver Borrowings	$	39		$	—
LIBOR plus 2.00% Term Loan A due 2019 through 2023⁽¹⁾		1,271			1,396
LIBOR plus 3.00% Term Loan B due 2019 through 2025		1,602			1,606
$225 million of 5.375% Senior Notes due 2024		224			223
$500 million of 5.000% Senior Notes due 2026		496			496
$500 million of 7.875% Senior Secured Notes due 2029		491			490
$800 million of 5.125% Senior Secured Notes due 2029		789			787
Other debt, primarily foreign instruments		25			26

		4,937			5,024
Less: maturities classified as current		1,334			6

Total long-term debt	$	3,603		$	5,018

(1)	The interest rate on Term Loan A at December 31, 2021 was LIBOR plus 1.75%.

ATTACHMENT 1

TENNECO INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(dollars in millions)


	Three Months Ended September 30,
	2022			2021
Operating Activities
Net income (loss)	$	(28	)	$	25
Adjustments to reconcile net income (loss) to cash (used) provided by operating activities:
Depreciation and amortization		140			147
Deferred income taxes		5			(4	)
Stock-based compensation		5			9
Restructuring charges and asset impairments, net of cash paid		(4	)		(20	)
Change in pension and other postretirement benefit plans		(8	)		(11	)
Equity in earnings of nonconsolidated affiliates		(3	)		(10	)
Cash dividends received from nonconsolidated affiliates		11			—
Loss (gain) on sale of assets and other		6			15
Changes in operating assets and liabilities:
Receivables		(349	)		30
Inventories		56			(1	)
Payables and accrued expenses		156			(238	)
Accrued interest and accrued income taxes		15			(10	)
Other assets and liabilities		53			20

Net cash (used) provided by operating activities		55			(48	)
Investing Activities
Proceeds from sale of assets		1			27
Net proceeds from sale of business		1			—
Proceeds from sale of investment in nonconsolidated affiliates		4			3
Cash payments for property, plant, and equipment		(82	)		(101	)
Proceeds from deferred purchase price of factored receivables		98			102

Net cash (used) provided by investing activities		22			31
Financing Activities
Proceeds from term loans and notes		35			(2	)
Repayments and extinguishment costs of term loans and notes		(54	)		(72	)
Borrowings on revolving lines of credit		2,203			1,896
Payments on revolving lines of credit		(2,170	)		(1,903	)
Debt issuance costs of long-term debt		—			(1	)
Distributions to noncontrolling interest partners		(10	)		(4	)
Collections (payments) on securitization programs, net and other		8			(5	)

Net cash (used) provided by financing activities		12			(91	)

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash		(61	)		(16	)

Increase (decrease) in cash, cash equivalents, and restricted cash		28			(124	)
Cash, cash equivalents, and restricted cash, beginning of period		395			719

Cash, cash equivalents, and restricted cash, end of period	$	423		$	595

Supplemental Cash Flow Information
Cash paid during the period for interest	$	78		$	62
Cash paid during the period for income taxes, net of refunds	$	41		$	42
Lease assets obtained in exchange for new operating lease liabilities	$	32		$	9
Non-cash Investing Activities
Period end balance of accounts payable for property, plant, and equipment	$	81		$	73
Deferred purchase price of receivables factored in the period	$	88		$	102

ATTACHMENT 1

TENNECO INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(dollars in millions)


	Nine Months Ended September 30,
	2022			2021
Operating Activities
Net income (loss)	$	(151	)	$	129
Adjustments to reconcile net income (loss) to cash (used) provided by operating activities:
Depreciation and amortization		429			447
Deferred income taxes		(2	)		8
Stock-based compensation		17			18
Restructuring charges and asset impairments, net of cash paid		13			(17	)
Change in pension and other postretirement benefit plans		(29	)		(22	)
Equity in earnings of nonconsolidated affiliates		(25	)		(47	)
Cash dividends received from nonconsolidated affiliates		55			58
Loss (gain) on sale of assets and other		(4	)		8
Changes in operating assets and liabilities:
Receivables		(920	)		(451	)
Inventories		(237	)		(194	)
Payables and accrued expenses		551			11
Accrued interest and accrued income taxes		(1	)		24
Other assets and liabilities		91			3

Net cash (used) provided by operating activities		(213	)		(25	)
Investing Activities
Proceeds from sale of assets		13			39
Net proceeds from sale of business		3			1
Proceeds from sale of investment in nonconsolidated affiliates		5			6
Cash payments for property, plant and equipment		(253	)		(286	)
Proceeds from deferred purchase price of factored receivables		310			356
Other		(1	)		—

Net cash (used) provided by investing activities		77			116
Financing Activities
Proceeds from term loans and notes		57			836
Repayments and extinguishment costs of term loans and notes		(177	)		(1,011	)
Borrowings on revolving lines of credit		6,221			4,772
Payments on revolving lines of credit		(6,160	)		(4,774	)
Debt issuance costs of long-term debt		—			(13	)
Distributions to noncontrolling interest partners		(44	)		(12	)
Payment for redeemable noncontrolling interest redemption		(53	)		—
Collections (payments) on securitization programs, net and other		(36	)		(78	)

Net cash (used) provided by financing activities		(192	)		(280	)

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash		(114	)		(19	)

Increase (decrease) in cash, cash equivalents, and restricted cash		(442	)		(208	)
Cash, cash equivalents, and restricted cash, beginning of period		865			803

Cash, cash equivalents, and restricted cash, end of period	$	423		$	595

Supplemental Cash Flow Information
Cash paid during the period for interest	$	192		$	162
Cash paid during the period for income taxes, net of refunds	$	172		$	104
Lease assets obtained in exchange for new operating lease liabilities	$	61		$	35
Non-cash inventory charge due to aftermarket product line exit	$	4		$	44
Non-cash Investing Activities
Period end balance of accounts payable for property, plant, and equipment	$	81		$	73
Deferred purchase price of receivables factored in the period	$	319		$	368

ATTACHMENT 2

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ TO NON-GAAP EARNINGS MEASURES⁽²⁾

Unaudited

(millions, except per share amounts)


	Q3 2022															Q3 2021
	Net income (loss) attributable to Tenneco Inc.			Per Share			Net income (loss) attributable to noncontrolling interests		Income tax (expense) benefit			EBIT		EBITDA ₍₃₎		Net income (loss) attributable to Tenneco Inc.			Per Share			Net income (loss) attributable to noncontrolling interests		Income tax (expense) benefit			EBIT		EBITDA ₍₃₎
Earnings (Loss) Measures	$	(44	)	$	(0.53	)	$	16	$	(67	)	$	129	$	269	$	15		$	0.17		$	10	$	(34	)	$	125	$	272
Adjustments:
Restructuring and related expenses ⁽⁵⁾		11			0.13			—		(1	)		12		10		—			—			—		—			—		—
Anti-dumping duty charge		1			—			—		—			1		1		3			0.03			—		—			3		3
Asset impairments		—			—			—		—			—		—		1			0.01			—		—			1		1
Other costs (including strategic and transaction related)		17			0.21			—		—			17		17		2			0.03			—		—			2		2
Loss on sale of unconsolidated affiliate		2			0.03			—		—			2		2		1			0.01			—		—			1		1
Other		2			0.02			—		—			2		2		—			—			—		—			—		—
Net tax adjustments		—			—			—		—			—		—		(7	)		(0.08	)		—		(7	)		—		—

Adjusted Net income, EPS, NCI, Tax, EBIT, and EBITDA ⁽⁴⁾	$	(11	)	$	(0.14	)	$	16	$	(68	)	$	163	$	301	$	15		$	0.17		$	10	$	(41	)	$	132	$	279


	Q3 2022
	Global Segments
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total		Corporate			Total
Net income (loss) attributable to Tenneco Inc.														$	(44	)
Net income (loss) attributable to noncontrolling interests															16

Net income (loss)															(28	)
Income tax (expense) benefit															(67	)
Interest expense															(90	)

EBIT, Earnings (Loss) before interest expense, income taxes and noncontrolling interests															129
Depreciation and amortization															140

Total EBITDA including noncontrolling interests ⁽³⁾	$	73	$	41	$	131	$	90	$	335	$	(66	)	$	269
Restructuring and related expenses		1		5		2		2		10		—			10
Anti-dumping duty charge		1		—		—		—		1		—			1
Loss on sale of unconsolidated affiliate		—		2		—		—		2		—			2
Other costs (including strategic and transaction related)		—		—		—		—		—		17			17
Other		1		1		—		—		2		—			2

Adjusted EBITDA ⁽⁴⁾	$	76	$	49	$	133	$	92	$	350	$	(49	)	$	301


	Q3 2021
	Global Segments
	Motorparts		Performance Solutions			Clean Air			Powertrain		Total			Corporate			Total
Net income (loss) attributable to Tenneco Inc.																	$	15
Net income (loss) attributable to noncontrolling interests																		10

Net income (loss)																		25
Income tax (expense) benefit																		(34	)
Interest expense																		(66	)

EBIT, Earnings (Loss) before interest expense, income taxes and noncontrolling interests																		125
Depreciation and amortization																		147

Total EBITDA including noncontrolling interests ⁽³⁾	$	111	$	42		$	138		$	71	$	362		$	(90	)	$	272
Restructuring and related expenses		—		(5	)		(1	)		3		(3	)		3			—
Anti-dumping duty charge		3		—			—			—		3			—			3
Asset impairments		1		—			—			—		1			—			1
Loss on sale of unconsolidated affiliate		—		1			—			—		1			—			1
Other costs (including strategic and transaction related)		—		—			—			—		—			2			2

Adjusted EBITDA ⁽⁴⁾	$	115	$	38		$	137		$	74	$	364		$	(85	)	$	279

(1)	U.S. Generally Accepted Accounting Principles.

(2)

Tenneco presents the above reconciliation of GAAP to non-GAAP earnings measures primarily to reflect the results in a manner that allows a better understanding of the results of operational activities separate from the financial impact of decisions made for the long-term benefit of the company and other items impacting comparability between the periods. Adjustments similar to the ones reflected above have been recorded in earlier periods, and similar types of adjustments can reasonably be expected to be recorded in future periods. Using only the non-GAAP earnings measures to analyze earnings would have material limitations because its calculation is based on the subjective determinations of management regarding the nature and classification of events and circumstances that investors may find material. Management compensates for these limitations by utilizing both GAAP and non-GAAP earnings measures reflected above to understand and analyze the results of the business. The company believes investors find the non-GAAP information helpful in understanding the ongoing performance of operations separate from items that may have a disproportionate positive or negative impact on the company’s financial results in any particular period.

(3)

EBITDA including noncontrolling interests represents income before interest expense, income taxes, noncontrolling interests and depreciation and amortization. EBITDA including noncontrolling interests is not a calculation based upon GAAP. The amounts included in the EBITDA including noncontrolling interests calculation, however, are derived from amounts included in the historical statements of income data. In addition, EBITDA including noncontrolling interests should not be considered as an alternative to net income attributable to Tenneco Inc. or operating income as an indicator of the company’s operating performance, or as an alternative to operating cash flows as a measure of liquidity. Tenneco has presented EBITDA including noncontrolling interests because it regularly reviews EBITDA including noncontrolling interests as a measure of the company’s performance. In addition, Tenneco believes its investors utilize and analyze the company’s EBITDA including noncontrolling interests for similar purposes. Tenneco also believes EBITDA including noncontrolling interests assists investors in comparing a company’s performance on a consistent basis without regard to depreciation and amortization, which can vary significantly depending upon many factors. However, the EBITDA including noncontrolling interests measure presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.

(4)

Adjusted results are presented in order to reflect the results in a manner that allows a better understanding of operational activities separate from the financial impact of decisions made for the long term benefit of the company and other items impacting comparability between periods. Similar adjustments have been recorded in earlier periods and similar types of adjustments can reasonably be expected to be recorded in future periods. The company believes investors find the non-GAAP information helpful in understanding the ongoing performance of operations separate from items that may have a disproportionate positive or negative impact on the company’s financial results in any particular period.

(5)	Q3 2022 includes $2 million of accelerated depreciation related to restructuring and related expenses.

ATTACHMENT 2

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ TO NON-GAAP EARNINGS MEASURES⁽²⁾

Unaudited

(in millions, except per share amounts)


	Q3 2022 YTD															Q3 2021 YTD
	Net income (loss) attributable to Tenneco Inc.			Per Share			Net income (loss) attributable to noncontrolling interests		Income tax (expense) benefit			EBIT		EBITDA ₍₃₎		Net income (loss) attributable to Tenneco Inc.			Per Share			Net income (loss) attributable to noncontrolling interests		Income tax (expense) benefit			EBIT			EBITDA ₍₃₎
Earnings (Loss) Measures	$	(203	)	$	(2.44	)	$	52	$	(140	)	$	221	$	650	$	70		$	0.83		$	59	$	(122	)	$	456		$	903
Adjustments:
Restructuring and related expenses ⁽⁵⁾		62			0.78			—		(4	)		66		64		57			0.68			—		(5	)		62			59
Anti-dumping duty charge		1			0.01			—		—			1		1		3			0.03			—		—			3			3
Inventory write-down ⁽⁶⁾		3			0.03			—		(1	)		4		4		44			0.53			—		—			44			44
Asset impairments		4			0.05			—		—			4		4		5			0.05			—		1			4			4
Other costs (including strategic and transaction related)		34			0.41			—		—			34		33		15			0.18			—		—			15			15
Loss on sale of unconsolidated affiliate		5			0.06			—		—			5		5		2			0.03			—		—			2			2
Loss on sale of business		2			0.02			—		—			2		2		—			0.01			—		(1	)		1			1
Gain on debt extinguishment		—			—			—		—			—		—		(8	)		(0.10	)		—		—			(8	)		(8	)
Other		3			0.02			—		—			3		3		—			—			—		—			—			—
Net tax adjustments		—			—			—		—			—		—		(14	)		(0.16	)		—		(14	)		—			—

Adjusted Net income, EPS, NCI, Tax, EBIT, and EBITDA ⁽⁴⁾	$	(89	)	$	(1.06	)	$	52	$	(145	)	$	340	$	766	$	174		$	2.08		$	59	$	(141	)	$	579		$	1,023


	Q3 2022 YTD
	Global Segments
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total		Corporate			Total
Net income (loss) attributable to Tenneco Inc.														$	(203	)
Net income (loss) attributable to noncontrolling interests															52

Net income (loss)															(151	)
Income tax (expense) benefit															(140	)
Interest expense															(232	)

EBIT, Earnings (Loss) before interest expense, income taxes and noncontrolling interests															221
Depreciation and amortization															429

Total EBITDA including noncontrolling interests ⁽³⁾	$	229	$	67	$	338	$	198	$	832	$	(182	)	$	650
Restructuring and related expenses		5		19		10		23		57		7			64
Anti-dumping duty charge		1		—		—		—		1		—			1
Inventory write-down ⁽⁶⁾		4		—		—		—		4		—			4
Loss on sale of business		—		—		2		—		2		—			2
Asset impairments		2		—		—		2		4		—			4
Loss on sale of unconsolidated affiliate		—		5		—		—		5		—			5
Other costs (including strategic and transaction related)		—		—		—		—		—		33			33
Other		—		3		—		—	$	3	$	—			3

Adjusted EBITDA ⁽⁴⁾	$	241	$	94	$	350	$	223	$	908	$	(142	)	$	766


	Q3 2021 YTD
	Global Segments
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total		Corporate			Total
Net income (loss) attributable to Tenneco Inc.														$	70
Net income (loss) attributable to noncontrolling interests															59

Net income (loss)															129
Income tax (expense) benefit															(122	)
Interest expense															(205	)

EBIT, Earnings (Loss) before interest expense, income taxes and noncontrolling interests															456
Depreciation and amortization															447

Total EBITDA including noncontrolling interests ⁽³⁾	$	280	$	117	$	430	$	280		1,107	$	(204	)	$	903
Restructuring and related expenses		8		8		10		22		48		11			59
Anti-dumping duty charge		3		—		—		—		3		—			3
Inventory write-down ⁽⁶⁾		44		—		—		—		44		—			44
Loss on sale of business		1		—		—		—		1		—			1
Asset impairments		2		—		—		—		2		2			4
Loss on sale of unconsolidated affiliate		—		2		—		—		2		—			2
Other costs (including strategic and transaction related)		—		—		—		—		—		15			15
Gain on debt extinguishment		—		—		—		—		—		(8	)		(8	)

Adjusted EBITDA ⁽⁴⁾	$	338	$	127	$	440	$	302	$	1,207	$	(184	)	$	1,023

Beginning in the first quarter of 2021, the Company made a change to its operating segments. This change consisted of moving a reporting unit within the Powertrain segment to the Ride Performance segment. In addition, with this change to its segments, Ride Performance was renamed Performance Solutions. As such, prior period operating segment results have been conformed to reflect the Company’s current operating segments.

(1)	U.S. Generally Accepted Accounting Principles.

(2)

items impacting comparability between the periods. Adjustments similar to the ones reflected above have been recorded in earlier periods, and similar types of adjustments can reasonably be expected to be recorded in future periods. Using only the non-GAAP earnings measures to analyze earnings would have material limitations because its calculation is based on the subjective determinations of management regarding the nature and classification of events and circumstances that investors may find material. Management compensates for these limitations by utilizing both GAAP and non-GAAP earnings measures reflected above to understand and analyze the results of the business. The company believes investors find the non-GAAP information helpful in understanding the ongoing performance of operations separate from items that may have a disproportionate positive or negative impact on the company’s financial results in any particular period.

(3)

(4)

(5)	Q3 YTD 2022 and Q3 YTD 2021 includes $2 million and $3 million of accelerated depreciation related to restructuring and related expenses, respectively.

(6)	Non-cash charge to write-down inventory in the Motorparts segment in connection with its initiative to rationalize its supply chain and distribution network.

ATTACHMENT 2

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ REVENUE AND EARNINGS TO NON-GAAP REVENUE AND EARNINGS MEASURES⁽²⁾

Unaudited

(in millions, except percents)


	Q3 2022
	Global Segments
	Motorparts			Performance Solutions			Clean Air			Powertrain			Total			Corporate			Total
Net sales and operating revenues	$	723		$	849		$	2,335		$	1,024		$	4,931		$	—		$	4,931
Less: Substrate sales		—			—			1,295			—			1,295			—			1,295

Value-add revenues	$	723		$	849		$	1,040		$	1,024		$	3,636		$	—		$	3,636

EBITDA	$	73		$	41		$	131		$	90		$	335		$	(66	)	$	269
EBITDA as a % of revenue		10.1	%		4.8	%		5.6	%		8.8	%		6.8	%					5.5	%
EBITDA as a % of value-add revenue		10.1	%		4.8	%		12.6	%		8.8	%		9.2	%					7.4	%
Adjusted EBITDA	$	76		$	49		$	133		$	92		$	350		$	(49	)	$	301
Adjusted EBITDA as a % of revenue		10.5	%		5.8	%		5.7	%		9.0	%		7.1	%					6.1	%
Adjusted EBITDA as a % of value-add revenue		10.5	%		5.8	%		12.8	%		9.0	%		9.6	%					8.3	%

	Q3 2021
	Global Segments
	Motorparts			Performance Solutions			Clean Air			Powertrain			Total			Corporate			Total
Net sales and operating revenues	$	769		$	686		$	1,936		$	941		$	4,332		$	—		$	4,332
Less: Substrate sales		—			—			1,039			—			1,039			—			1,039

Value-add revenues	$	769		$	686		$	897		$	941		$	3,293		$	—		$	3,293

EBITDA	$	111		$	42		$	138		$	71		$	362		$	(90	)	$	272
EBITDA as a % of revenue		14.4	%		6.1	%		7.1	%		7.5	%		8.4	%					6.3	%
EBITDA as a % of value-add revenue		14.4	%		6.1	%		15.4	%		7.5	%		11.0	%					8.3	%
Adjusted EBITDA	$	115		$	38		$	137		$	74		$	364		$	(85	)	$	279
Adjusted EBITDA as a % of revenue		15.0	%		5.5	%		7.1	%		7.9	%		8.4	%					6.4	%
Adjusted EBITDA as a % of value-add revenue		15.0	%		5.5	%		15.3	%		7.9	%		11.1	%					8.5	%


	Q3 2022 YTD
	Global Segments
	Motorparts			Performance Solutions			Clean Air			Powertrain			Total			Corporate			Total
Net sales and operating revenues	$	2,174		$	2,433		$	6,575		$	3,063		$	14,245		$	—		$	14,245
Less: Substrate sales		—			—			3,517			—			3,517			—			3,517

Value-add revenues	$	2,174		$	2,433		$	3,058		$	3,063		$	10,728		$	—		$	10,728

EBITDA	$	229		$	67		$	338		$	198		$	832		$	(182	)	$	650
EBITDA as a % of revenue		10.5	%		2.8	%		5.1	%		6.5	%		5.8	%					4.6	%
EBITDA as a % of value-add revenue		10.5	%		2.8	%		11.1	%		6.5	%		7.8	%					6.1	%
Adjusted EBITDA	$	241		$	94		$	350		$	223		$	908		$	(142	)	$	766
Adjusted EBITDA as a % of revenue		11.1	%		3.9	%		5.3	%		7.3	%		6.4	%					5.4	%
Adjusted EBITDA as a % of value-add revenue		11.1	%		3.9	%		11.4	%		7.3	%		8.5	%					7.1	%

	Q3 2021 YTD
	Global Segments
	Motorparts			Performance Solutions			Clean Air			Powertrain			Total			Corporate			Total
Net sales and operating revenues	$	2,282		$	2,188		$	6,084		$	3,092		$	13,646		$	—		$	13,646
Less: Substrate sales		—			—			3,208			—			3,208			—			3,208

Value-add revenues	$	2,282		$	2,188		$	2,876		$	3,092		$	10,438		$	—		$	10,438

EBITDA	$	280		$	117		$	430		$	280		$	1,107		$	(204	)	$	903
EBITDA as a % of revenue		12.3	%		5.3	%		7.1	%		9.1	%		8.1	%					6.6	%
EBITDA as a % of value-add revenue		12.3	%		5.3	%		15.0	%		9.1	%		10.6	%					8.7	%
Adjusted EBITDA	$	338		$	127		$	440		$	302		$	1,207		$	(184	)	$	1,023
Adjusted EBITDA as a % of revenue		14.8	%		5.8	%		7.2	%		9.8	%		8.8	%					7.5	%
Adjusted EBITDA as a % of value-add revenue		14.8	%		5.8	%		15.3	%		9.8	%		11.6	%					9.8	%

(1)	U.S. Generally Accepted Accounting Principles.

(2)

Tenneco presents the above reconciliation of revenues in order to reflect EBITDA and adjusted EBITDA as a percent of both total revenues and value-add revenues. Substrate sales include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Further, presenting EBITDA and adjusted EBITDA as a percent of value-add revenue assists investors in evaluating the company’s operational performance without the impact of such substrate sales. See prior pages for a discussion of EBITDA and adjusted EBITDA.

ATTACHMENT 2

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ TO NON-GAAP REVENUE MEASURES⁽²⁾

Unaudited

(in millions, except percents)


	Q3 2021 Value-add Revenues		Currency			Volume, Mix and Other			Q3 2022 Value-add Revenues		% Change increase (decrease) excluding currency
Motorparts	$	769	$	(34	)	$	(12	)	$	723		(1.6	)%
Performance Solutions		686		(54	)		217			849		31.6	%
Clean Air		897		(55	)		198			1,040		22.1	%
Powertrain		941		(71	)		154			1,024		16.4	%

Total Tenneco Inc.	$	3,293	$	(214	)	$	557		$	3,636		16.9	%


	Q3 2021 YTD Value-add Revenues		Currency			Volume, Mix and Other			Q3 2022 YTD Value-add Revenues		% Change increase (decrease) excluding currency
Motorparts	$	2,282	$	(73	)	$	(35	)	$	2,174		(1.5	)%
Performance Solutions		2,188		(122	)		367			2,433		16.8	%
Clean Air		2,876		(119	)		301			3,058		10.5	%
Powertrain		3,092		(174	)		145			3,063		4.7	%

Total Tenneco Inc.	$	10,438	$	(488	)	$	778		$	10,728		7.5	%

(1)	U.S. Generally Accepted Accounting Principles.

(2)

Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from the effects of doing business in currencies other than the U.S. dollar. Additionally, substrate sales include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Tenneco uses this information to analyze the trend in revenues before these factors. Tenneco believes investors find this information useful in understanding period to period comparisons in the company’s revenues.

ATTACHMENT 2

TENNECO INC.

RECONCILIATION OF NON-GAAP MEASURES

Debt net of total cash / Adjusted LTM EBITDA including noncontrolling interests

Unaudited

(in millions, except ratios)


	September 30, 2022		September 30, 2021
Total debt	$	5,030	$	5,128
Total cash, cash equivalents and restricted cash (total cash)		423		595

Debt net of total cash balances ⁽¹⁾	$	4,607	$	4,533
Adjusted LTM EBITDA including noncontrolling interests ^{(2) (3)}	$	1,016	$	1,433
Net leverage ratio ⁽⁴⁾		4.5x		3.2x


	Q4 2021			Q1 2022			Q2 2022			Q3 2022			Q3 2022 LTM
Net income (loss) attributable to Tenneco Inc.	$	(35	)	$	(38	)	$	(121	)	$	(44	)	$	(238	)
Net income (loss) attributable to noncontrolling interests		6			19			17			16			58

Net income (loss)		(29	)		(19	)		(104	)		(28	)		(180	)
Income tax (expense) benefit		(60	)		(30	)		(43	)		(67	)		(200	)
Interest expense		(69	)		(66	)		(76	)		(90	)		(301	)

EBIT, Earnings (Loss) before interest expense, income taxes and noncontrolling interests		100			77			15			129			321
Depreciation and amortization		146			146			143			140			575

Total EBITDA including noncontrolling interests ⁽²⁾	$	246		$	223		$	158		$	269		$	896

Adjustments:
Restructuring and related expenses		16			17			37			10			80
Anti-dumping duty charge		—			—			—			1			1
Inventory write-down ⁽⁵⁾		—			4			—			—			4
Other costs (including strategic and transaction related)		2			4			12			17			35
Asset impairments		17			4			—			—			21
Loss on sale of unconsolidated affiliate		2			—			3			2			7
(Gain)/Loss on sale of assets or business		(31	)		2			—			—			(29	)
Other		(2	)		(1	)		2			2			1

Total Adjusted EBITDA including noncontrolling interests ⁽³⁾	$	250		$	253		$	212		$	301		$	1,016


	Q4 2020			Q1 2021			Q2 2021			Q3 2021			Q3 2021 LTM
Net income (loss) attributable to Tenneco Inc.	$	167		$	65		$	(10	)	$	15		$	237
Net income (loss) attributable to noncontrolling interests		19			22			27			10			78

Net income (loss)		186			87			17			25			315
Income tax (expense) benefit		(6	)		(47	)		(41	)		(34	)		(128	)
Interest expense		(68	)		(70	)		(69	)		(66	)		(273	)

EBIT, Earnings (Loss) before interest expense, income taxes and noncontrolling interests		260			204			127			125			716
Depreciation and amortization		158			155			145			147			605

Total EBITDA including noncontrolling interests ⁽²⁾	$	418		$	359		$	272		$	272		$	1,321

Adjustments:
Restructuring and related expenses		6			28			31			—			65
Inventory write-down ⁽⁵⁾		—			—			44			—			44
Other costs (including strategic and transaction related)		1			8			5			2			16
Asset impairments		—			—			3			1			4
Loss on sale of unconsolidated affiliate		—			—			1			1			2
Antitrust reserve change in estimate ⁽⁶⁾		(11	)		—			—			—			(11	)
Anti-dumping duty charge		—			—			—			3			3
(Gain)/Loss on sale of assets or business		(2	)		1			—			—			(1	)
Gain on extinguishment of debt		(2	)		(8	)		—			—			(10	)

Total Adjusted EBITDA including noncontrolling interests ⁽³⁾	$	410		$	388		$	356		$	279		$	1,433

(1)	Tenneco presents debt net of total cash balances because management believes it is a useful measure of Tenneco’s credit position and progress toward reducing leverage. The calculation is limited in that the company may not always be able to use cash to repay debt on a dollar-for-dollar basis.

(2)

(3)

Adjusted EBITDA including noncontrolling interests is presented in order to reflect the results in a manner that allows a better understanding of operational activities separate from the financial impact of decisions made for the long term benefit of the company and other items impacting comparability between the periods. Similar adjustments to EBITDA including noncontrolling interests have been recorded in earlier periods, and similar types of adjustments can reasonably be expected to be recorded in future periods. The company believes investors find the non-GAAP information helpful in understanding the ongoing performance of operations separate from items that may have a disproportionate positive or negative impact on the company’s financial results in any particular period.

(4)

Net leverage ratio represents ratio of debt net of total cash balances to adjusted LTM EBITDA including noncontrolling interests. Tenneco presents the above reconciliation of the net leverage ratio to show trends that investors may find useful in understanding the company’s ability to service its debt. For purposes of this calculation, Adjusted LTM EBITDA including noncontrolling interests is used as an indicator of the company’s performance and debt net of total cash is presented as an indicator of the company’s credit position and progress toward reducing the company’s financial leverage. This reconciliation is provided as supplemental information and not intended to replace the company’s existing covenant ratios or any other financial measures that investors may find useful in describing the company’s financial position. See notes (1), (2) and (3) for a description of the limitations of using debt net of total cash, EBITDA including noncontrolling interests and Adjusted EBITDA including noncontrolling interests. See the company’s fourth quarter earnings release dated February 23, 2022 for the calculation of net leverage ratio as of December 31, 2021.

(5)	Non-cash charge to write-down inventory in the Motorparts segment in connection with its initiative to rationalize its supply chain and distribution network.

(6)	Reduction in estimated antitrust accrual.

ATTACHMENT 2

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ TO NON-GAAP REVENUE MEASURES⁽²⁾

Unaudited

(in millions)


	Q3 2022

	Original equipment light vehicle revenues		Original equipment commercial truck, off- highway, industrial and other revenues		Aftermarket & original equipment service revenues		Total
Net sales and operating revenues	$	3,111	$	733	$	1,087	$	4,931
Less: Substrate sales		1,109		145		41		1,295

Value-add revenues	$	2,002	$	588	$	1,046	$	3,636


	Q3 2021

	Original equipment light vehicle revenues		Original equipment commercial truck, off- highway, industrial and other revenues		Aftermarket & original equipment service revenues		Total
Net sales and operating revenues	$	2,439	$	757	$	1,136	$	4,332
Less: Substrate sales		837		160		42		1,039

Value-add revenues	$	1,602	$	597	$	1,094	$	3,293


	Q3 2022 YTD

	Original equipment light vehicle revenues		Original equipment commercial truck, off- highway, industrial and other revenues		Aftermarket & original equipment service revenues		Total
Net sales and operating revenues	$	8,690	$	2,281	$	3,274	$	14,245
Less: Substrate sales		2,952		444		121		3,517

Value-add revenues	$	5,738	$	1,837	$	3,153	$	10,728


	Q3 2021 YTD

	Original equipment light vehicle revenues		Original equipment commercial truck, off- highway, industrial and other revenues		Aftermarket & original equipment service revenues		Total
Net sales and operating revenues	$	7,945	$	2,319	$	3,382	$	13,646
Less: Substrate sales		2,614		471		123		3,208

Value-add revenues	$	5,331	$	1,848	$	3,259	$	10,438


	Q3 2021 Value-add Revenues		Currency			Volume, Mix and Other		Q3 2022 Value-add Revenues		% Change increase (decrease) excluding currency
Original equipment light vehicle revenues	$	1,602	$	(106	)	$	506	$	2,002		31.6	%
Original equipment commercial truck, off-highway, industrial and other revenues		597		(39	)		30		588		5.0	%
Aftermarket & original equipment service revenues		1,094		(69	)		21		1,046		1.9	%

Total Tenneco Inc.	$	3,293	$	(214	)	$	557	$	3,636		16.9	%


	Q3 2021 YTD Value- add Revenues		Currency			Volume, Mix and Other		Q3 2022 YTD Value- add Revenues		% Change increase (decrease) excluding currency
Original equipment light vehicle revenues	$	5,331	$	(249	)	$	656	$	5,738		12.3	%
Original equipment commercial truck, off-highway, industrial and other revenues		1,848		(85	)		74		1,837		4.0	%
Aftermarket & original equipment service revenues		3,259		(154	)		48		3,153		1.5	%

Total Tenneco Inc.	$	10,438	$	(488	)	$	778	$	10,728		7.5	%

(1)	U.S. Generally Accepted Accounting Principles.

(2)

ATTACHMENT 2

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ TO NON-GAAP CASH FLOW MEASURES⁽²⁾

Unaudited

(in millions)


	Q3 2022			Q3 2021
Cash from operations	$	55		$	(48	)
Proceeds from deferred purchase price of factored receivables⁽¹⁾		98			102
Capital expenditures		(82	)		(101	)
Payments to noncontrolling interest partners		(10	)		(4	)
Other investing and financing		(44	)		6

Free cash flow for debt service ⁽²⁾ (Change in net debt)	$	17		$	(45	)


	Q3 2022 YTD			Q3 2021 YTD
Cash from operations	$	(213	)	$	(25	)
Proceeds from deferred purchase price of factored receivables⁽¹⁾		310			356
Capital expenditures		(253	)		(286	)
Payments to noncontrolling interest partners		(97	)		(12	)
Other investing and financing		(144	)		(36	)

Free cash flow for debt service ⁽²⁾ (Change in net debt)	$	(397	)	$	(3	)

(1)	U.S. Generally Accepted Accounting Principles requires reclassification of amount from Change in receivables in the Cash from operations section.

(2)

Tenneco presents the above reconciliation of cash flow from operation to Free Cash Flow for debt service. Free Cash Flow for debt service represents cash flow from operations, plus the proceeds from deferred purchase price of factored receivables less the amount of cash payments for property, plant and equipment and payments to noncontrolling interest partners, as well as various other amounts. Free Cash Flow for debt service is not a GAAP calculation and should not be considered as an alternative to operating cash flows as a measure of liquidity. Tenneco has presented Free Cash Flow for debt service because it regularly reviews Free Cash Flow for debt service as a measure of the company’s performance and ability to reduce net debt. In addition, Tenneco believes its investors utilize and analyze the company’s Free Cash Flow for debt service for similar purposes. However, the Free Cash Flow for debt service measure presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.