Tenneco Reports First Quarter 2022 Results

*

Source: IHS Markit April 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.

ATTACHMENT 1

TENNECO INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Unaudited

(millions, except per share amounts)

Three Months Ended
March 31,

2022

2021

Net sales and operating revenues:

     Motorparts

$           722

$           719

     Performance Solutions

793

787

     Clean Air - Value-add revenues

1,013

1,036

     Clean Air - Substrate sales

1,090

1,088

     Powertrain

1,031

1,101

          Total net sales and operating revenues

4,649

4,731

Costs and expenses:

   Cost of sales (exclusive of depreciation and amortization)

4,108

4,061

   Selling, general, and administrative

252

255

   Depreciation and amortization

146

155

   Engineering, research, and development

75

72

   Restructuring charges, net and asset impairments

13

25

          Total costs and expenses

4,594

4,568

Other income (expense):

     Non-service pension and postretirement benefit (costs) credits

3

3

     Equity in earnings (losses) of nonconsolidated affiliates, net of tax

12

22

     Gain (loss) on extinguishment of debt

—

8

     Other income (expense), net

7

8

22

41

Earnings (loss) before interest expense, income taxes, and noncontrolling interests

77

204

     Interest expense

(66)

(70)

Earnings (loss) before income taxes and noncontrolling interests

11

134

     Income tax (expense) benefit

(30)

(47)

Net income (loss)

(19)

87

     Less: Net income (loss) attributable to noncontrolling interests

19

22

Net income (loss) attributable to Tenneco Inc.

$            (38)

$             65

Basic earnings (loss) per share:

     Earnings (loss) per share

$         (0.46)

$          0.80

     Weighted average shares outstanding

83.1

82.0

Diluted earnings (loss) per share:

     Earnings (loss) per share

$         (0.46)

$          0.79

     Weighted average shares outstanding

83.1

82.5

ATTACHMENT 1

TENNECO INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(dollars in millions)

March 31, 2022

December 31, 2021

Assets

     Cash and cash equivalents

$                     636

$                     859

     Restricted cash

5

6

     Receivables, net

2,636

(a)

2,419

(a)

     Inventories

2,049

1,846

     Prepayments and other current assets

694

683

     Property, plant, and equipment, net

2,811

2,872

     Other noncurrent assets

2,872

2,937

     Total assets

$                11,703

$                11,622

Liabilities and Shareholders' Equity

     Short-term debt, including current maturities of long-term debt

$                       41

$                       57

     Accounts payable

3,244

2,955

     Accrued compensation and employee benefits

445

381

     Accrued income taxes

52

71

     Accrued expenses and other current liabilities

1,102

1,227

     Long-term debt

4,976

(b)

5,018

(b)

     Deferred income taxes

103

105

     Pension and postretirement benefits

803

830

     Deferred credits and other liabilities

490

491

     Redeemable noncontrolling interests

90

91

     Total Tenneco Inc. shareholders' equity (deficit)

53

85

     Noncontrolling interests

304

311

     Total liabilities, redeemable noncontrolling interests, and equity

$                11,703

$                11,622

March 31, 2022

December 31, 2021

(a) Accounts receivable net of:

     Accounts receivable outstanding and derecognized

$                  1,129

$                  1,043

(b) Long-term debt composed of:

     Revolver Borrowings

$                       —

$                       —

     LIBOR plus 2.00% Term Loan A due 2019 through 2023⁽¹⁾

1,355

1,396

     LIBOR plus 3.00% Term Loan B due 2019 through 2025

1,604

1,606

     $225 million of 5.375% Senior Notes due 2024

223

223

     $500 million of 5.000% Senior Notes due 2026

496

496

     $500 million of 7.875% Senior Secured Notes due 2029

490

490

     $800 million of 5.125% Senior Secured Notes due 2029

788

787

     Other debt, primarily foreign instruments

27

26

4,983

5,024

     Less: maturities classified as current

7

6

     Total long-term debt

$                  4,976

$                  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
March 31,

2021

Operating Activities

Net income (loss)

$             (19)

$              87

Adjustments to reconcile net income (loss) to cash (used) provided by operating activities:

     Depreciation and amortization

146

155

     Deferred income taxes

(3)

(4)

     Stock-based compensation

6

5

     Restructuring charges and asset impairments, net of cash paid

(5)

—

     Change in pension and other postretirement benefit plans

(13)

(1)

     Equity in earnings of nonconsolidated affiliates

(12)

(22)

     Cash dividends received from nonconsolidated affiliates

32

57

     Loss (gain) on sale of assets and other

(19)

(9)

     Changes in operating assets and liabilities:

          Receivables

(320)

(452)

          Inventories

(213)

(120)

          Payables and accrued expenses

325

240

          Accrued interest and accrued income taxes

(22)

8

          Other assets and liabilities

30

6

Net cash (used) provided by operating activities

(87)

(50)

Investing Activities

Proceeds from sale of assets

5

7

Net proceeds from sale of business

1

1

Cash payments for property, plant, and equipment

(93)

(95)

Proceeds from deferred purchase price of factored receivables

99

115

Other

(1)

—

Net cash (used) provided by investing activities

11

28

Financing Activities

Proceeds from term loans and notes

4

813

Repayments and extinguishment costs of term loans and notes

(68)

(862)

Borrowings on revolving lines of credit

1,583

1,382

Payments on revolving lines of credit

(1,584)

(1,394)

Debt issuance costs of long-term debt

—

(11)

Distributions to noncontrolling interest partners

(24)

(7)

Other

(48)

(51)

Net cash (used) provided by financing activities

(137)

(130)

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash

(11)

(20)

Increase (decrease) in cash, cash equivalents, and restricted cash

(224)

(172)

Cash, cash equivalents, and restricted cash, beginning of period

865

803

Cash, cash equivalents, and restricted cash, end of period

$            641

$            631

Supplemental Cash Flow Information

Cash paid during the period for interest

$              56

$              65

Cash paid during the period for income taxes, net of refunds

$              67

$              46

Lease assets obtained in exchange for new operating lease liabilities

$              19

$              15

Non-cash Investing Activities

Period end balance of accounts payable for property, plant, and equipment

$              78

$              91

Deferred purchase price of receivables factored in the period

$            121

$            135

ATTACHMENT 2

TENNECO INC.

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

Unaudited

(millions, except per share amounts)

Q1 2022

Q1 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

$          (38)

$ (0.46)

$             19

$        (30)

$     77

$     223

$           65

$ 0.79

$              22

$       (47)

$  204

$      359

Adjustments:

Restructuring and
related expenses ⁽⁵⁾

16

0.21

—

(2)

18

17

28

0.33

—

(3)

31

28

Inventory write-
down ⁽⁶⁾

3

0.03

—

(1)

4

4

—

—

—

—

—

—

Asset
impairments

4

0.04

—

—

4

4

—

—

—

—

—

—

Loss on sale of
business

2

0.03

—

—

2

2

—

0.01

—

(1)

1

1

Other costs
(including
strategic and
transaction
related)

5

0.05

—

—

5

4

8

0.10

—

—

8

8

Gain on debt
extinguishment

—

—

—

—

—

—

(8)

(0.10)

—

—

(8)

(8)

Other

(1)

(0.01)

—

—

(1)

(1)

—

—

—

—

—

—

Net tax
adjustments

—

—

—

—

—

—

(3)

(0.04)

—

(3)

—

—

Adjusted Net
income, EPS,
NCI, Tax,EBIT,
and EBITDA⁽⁴⁾

$            (9)

$ (0.11)

$             19

$        (33)

$   109

$     253

$           90

$ 1.09

$              22

$       (54)

$  236

$      388

Q1 2022

Global Segments

Motorparts

Performance
Solutions

Clean Air

Powertrain

Total

Corporate

Total

Net income (loss) attributable to Tenneco Inc.

$      (38)

Net income (loss) attributable to noncontrolling
interests

19

Net income (loss)

(19)

Income tax (expense) benefit

(30)

Interest expense

(66)

EBIT, Earnings (Loss) before interest expense,
income taxes and noncontrolling interests

77

Depreciation and amortization

146

Total EBITDA including noncontrolling interests⁽³⁾

$          86

$            15

$       106

$          66

$  273

$       (50)

$      223

     Restructuring and related expenses

—

5

4

4

13

4

17

     Inventory write-down ⁽⁶⁾

4

—

—

—

4

—

4

     Asset impairments

2

—

—

2

4

—

4

     Loss on sale of business

—

—

2

—

2

—

2

     Other costs (including strategic and transaction
     related)

—

—

—

—

—

4

4

     Other

—

1

(2)

—

(1)

—

(1)

Adjusted EBITDA⁽⁴⁾

$          92

$            21

$       110

$          72

$  295

$       (42)

$      253

Q1 2021

Global Segments

Motorparts

Performance
Solutions

Clean Air

Powertrain

Total

Corporate

Total

Net income (loss) attributable to Tenneco Inc.

$       65

Net income (loss) attributable to noncontrolling
interests

22

Net income (loss)

87

Income tax (expense) benefit

(47)

Interest expense

(70)

EBIT, Earnings (Loss) before interest expense,
income taxes and noncontrolling interests

204

Depreciation and amortization

155

Total EBITDA including noncontrolling interests⁽³⁾

$        102

$            43

$       149

$        115

$   409

$        (50)

$      359

     Restructuring and related expenses

2

4

9

11

26

2

28

     Loss on sale of business

1

—

—

—

1

—

1

     Other costs (including strategic and transaction
     related)

—

—

(1)

—

(1)

9

8

     Gain on debt extinguishment

—

—

—

—

—

(8)

(8)

Adjusted EBITDA⁽⁴⁾

$        105

$            47

$       157

$        126

$   435

$        (47)

$      388

_________________________

(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) Q1 2022 and Q1 2021 include $1 million and $3 million of 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)

Q1 2022

Global Segments

Motorparts

Performance
Solutions

Clean Air

Powertrain

Total

Corporate

Total

Net sales and operating revenues

$       722

$          793

$     2,103

$     1,031

$     4,649

$            —

$     4,649

Less: Substrate sales

—

—

1,090

—

1,090

—

1,090

Value-add revenues

$       722

$          793

$     1,013

$     1,031

$     3,559

$            —

$     3,559

 EBITDA

$         86

$            15

$       106

$         66

$       273

$           (50)

$       223

 EBITDA as a % of revenue

11.9%

1.9%

5.0%

6.4%

5.9%

4.8%

 EBITDA as a % of value-add
revenue

11.9%

1.9%

10.5%

`

6.4%

7.7%

6.3%

 Adjusted EBITDA

$         92

$            21

$       110

$         72

$       295

$           (42)

$       253

 Adjusted EBITDA as a % of
revenue

12.7%

2.6%

5.2%

7.0%

6.3%

5.4%

 Adjusted EBITDA as a % of
value-add revenue

12.7%

2.6%

10.9%

7.0%

8.3%

7.1%

Q1 2021

Global Segments

Motorparts

Performance
Solutions

Clean Air

Powertrain

Total

Corporate

Total

Net sales and operating revenues

$       719

$          787

$     2,124

$     1,101

$     4,731

$            —

$     4,731

Less: Substrate sales

—

—

1,088

—

1,088

—

1,088

Value-add revenues

$       719

$          787

$     1,036

$     1,101

$     3,643

$            —

$     3,643

 EBITDA

$       102

$            43

$       149

$       115

$       409

$             (50)

$       359

 EBITDA as a % of revenue

14.2%

5.5%

7.0%

10.4%

8.6%

7.6%

 EBITDA as a % of value-add
revenue

14.2%

5.5%

14.4%

`

10.4%

11.2%

9.9%

 Adjusted EBITDA

$       105

$            47

$       157

$       126

$       435

$             (47)

$       388

 Adjusted EBITDA as a % of
revenue

14.6%

6.0%

7.4%

11.4%

9.2%

8.2%

 Adjusted EBITDA as a % of
value-add revenue

14.6%

6.0%

15.2%

11.4%

11.9%

10.7%

_________________________

(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)

Q1 2021
Value-add
Revenues

Currency

Volume, Mix
and Other

Q1 2022
Value-add
Revenues

% Change
increase
(decrease)
excluding
currency

Motorparts

$               719

$                (14)

$                 17

$               722

2.4%

Performance Solutions

787

(26)

32

793

4.1%

Clean Air

1,036

(21)

(2)

1,013

(0.2)%

Powertrain

1,101

(39)

(31)

1,031

(2.8)%

Total Tenneco Inc.

$            3,643

$              (100)

$                 16

$            3,559

0.4%

____________________

(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)

March 31,
2022

March 31,
2021

Total debt

$            5,017

$            5,235

Total cash, cash equivalents and restricted cash (total cash)

641

631

Debt net of total cash balances ⁽¹⁾

$            4,376

$            4,604

Adjusted LTM EBITDA including noncontrolling interests^{(2) (3)}

$            1,138

$            1,194

Net leverage ratio ⁽⁴⁾

3.8x

3.9x

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q1 2022
LTM

Net income (loss) attributable to Tenneco Inc.

$              (10)

$               15

$              (35)

$              (38)

$              (68)

Net income (loss) attributable to noncontrolling
interests

27

10

6

19

62

Net income (loss)

17

25

(29)

(19)

(6)

Income tax (expense) benefit

(41)

(34)

(60)

(30)

(165)

Interest expense

(69)

(66)

(69)

(66)

(270)

EBIT, Earnings (Loss) before interest expense,
income taxes and noncontrolling interests

127

125

100

77

429

Depreciation and amortization

145

147

146

146

584

Total EBITDA including noncontrolling interests⁽²⁾

$             272

$             272

$             246

$             223

$          1,013

Adjustments:

Restructuring and related expenses

31

—

16

17

64

Anti-dumping duty charge

—

3

—

—

3

Inventory write-down ⁽⁵⁾

44

—

—

4

48

Other costs (including strategic and transaction
related)

5

2

2

4

13

Asset impairments

3

1

17

4

25

Loss on sale of unconsolidated JV affiliate

1

1

2

—

4

(Gain)/Loss on sale of assets or business

—

—

(31)

2

(29)

Other

—

—

(2)

(1)

(3)

Total Adjusted EBITDA including noncontrolling
interests⁽³⁾

$             356

$             279

$             250

$             253

$          1,138

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q1 2021
LTM

Net income (loss) attributable to Tenneco Inc.

$            (350)

$            (499)

$             167

$               65

$            (617)

Net income (loss) attributable to noncontrolling
interests

10

19

19

22

70

Net income (loss)

(340)

(480)

186

87

(547)

Income tax (expense) benefit

101

(648)

(6)

(47)

(600)

Interest expense

(66)

(68)

(68)

(70)

(272)

EBIT, Earnings (Loss) before interest expense,
income taxes and noncontrolling interests

(375)

236

260

204

325

Depreciation and amortization

159

151

158

155

623

Total EBITDA including noncontrolling interests ⁽²⁾

$            (216)

$             387

$             418

$             359

$             948

Adjustments:

Restructuring and related expenses

105

24

6

28

163

Inventory write-down ⁽⁵⁾

82

(9)

—

—

73

Other costs (including strategic and transaction
related)

8

4

1

8

21

Asset impairments

29

3

—

—

32

Antitrust reserve change in estimate ⁽⁶⁾

—

—

(11)

—

(11)

OPEB curtailment⁽⁷⁾

—

(21)

—

—

(21)

(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⁾

$                 8

$             388

$             410

$             388

$          1,194

_________________________

(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) 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.

(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.

(7) OPEB curtailment as a result of an amended union agreement that eliminates healthcare benefits for future retirees.

ATTACHMENT 2 

TENNECO INC.

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

Unaudited

(in millions)

Q1 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

$                       2,786

$                          780

$                       1,083

$                       4,649

Less: Substrate sales

895

153

42

1,090

Value-add revenues

$                       1,891

$                          627

$                       1,041

$                       3,559

Q1 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

$                       2,905

$                          774

$                       1,052

$                       4,731

Less: Substrate sales

906

149

33

1,088

Value-add revenues

$                       1,999

$                          625

$                       1,019

$                       3,643

Q1 2021
Value-add
Revenues

Currency

Volume,
Mix and
Other

Q1 2022
Value-add
Revenues

% Change
increase
(decrease)
excluding
currency

Original equipment light vehicle revenues

$        1,999

$            (49)

$            (59)

$        1,891

(3.0)%

Original equipment commercial truck, off-highway,
industrial and other revenues

625

(20)

22

627

3.5%

Aftermarket & original equipment service revenues

1,019

(31)

53

1,041

5.2%

Total Tenneco Inc.

$        3,643

$          (100)

$             16

$        3,559

0.4%

_________________________

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

Unaudited

(in millions)

Q1 2022

Q1 2021

Cash from operations

$                         (87)

$                         (50)

Proceeds from deferred purchase price of factored receivables ⁽¹⁾

99

115

Capital expenditures

(93)

(95)

Payments to noncontrolling interest partners

(24)

(7)

Other investing and financing

(61)

(37)

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

$                       (166)

$                         (74)

____________________

(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.