Tenneco Reports Third Quarter 2022 Results

*

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.

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) 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 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 %