LAKE FOREST, Ill., Nov. 2, 2020 /PRNewswire/ -- Tenneco (NYSE:
TEN) today announced results for the third quarter ended
September 30, 2020, including the
following:
- Revenue of $4.3 billion, down 2%
versus prior year, excluding favorable currency of $17 million. Value-add revenue for the third
quarter 2020 was $3.3 billion, versus
$3.5 billion in the prior year.
- The Company reported a net loss for the third quarter 2020 of
$499 million, or $(6.12) per diluted share, which included a
non-cash tax valuation allowance charge of $523 million. Third quarter 2020 adjusted net
income was $27 million, or
33-cents per diluted share.
- Third quarter EBIT (earnings before interest, taxes and
noncontrolling interests) improved to $236
million versus $148 million in
the prior year, and EBIT as a percent of revenue increased 210
basis points to 5.5% versus 3.4% in the prior year.
- Adjusted EBITDA was $388 million,
up $1 million versus prior year.
Adjusted EBITDA as a percent of value-add revenue was 11.8%, 90
basis points higher year-over-year. Earnings performance was driven
by operating performance and enhanced contribution from structural
and temporary cost savings.
- Cash generated from operations of $486
million was primarily driven by strong earnings resiliency,
effective working capital management, including with respect to
inventories, and a return to more normalized levels of factoring.
Disciplined capital spending also benefitted cash performance in
the quarter.
"Our third quarter results demonstrate the effectiveness of our
operational execution as we leveraged Tenneco's global scale and
diversified portfolio to deliver strong cash flow performance and
year-over-year margin expansion in the face of the prolonged impact
of the COVID pandemic," said Brian
Kesseler, Tenneco's chief executive officer. "My thanks to
our global team members for their strong execution and commitment
to continuous improvement."
Debt and Liquidity Update
Total debt of $5.8 billion improved by $1.1 billion compared to second quarter 2020 due
to the pay down of the revolving credit facility. Net debt of
$5.1 billion improved $429 million compared to the second quarter 2020,
and was $123 million lower than the
prior year. The Company remains in compliance with all lending
covenants.
Liquidity increased to $1.8
billion at September 30, 2020,
consisting of total cash balances of $721
million and undrawn revolving credit facility
availability of $1.1 billion,
compared to liquidity of $1.4 billion
on June 30, 2020.
Outlook
For the fourth quarter, Tenneco expects:
- Value-add revenue to be roughly even with the third quarter
2020. The Company's revenue forecast incorporates more
conservative light vehicle production assumptions than IHS
Markit.
- Value-add adjusted EBITDA margin to increase almost 200 basis
points on a year-over-year basis.
- By year-end 2020, full year capital expenditures of
approximately $380 million, and net
debt at or below the 2019 year-end level of $5.0 billion.
"The health of our global team members and the safe operation of
our facilities remain our top priorities, and we continue to
promote healthy behaviors both inside and outside the workplace,"
added Kesseler. "Our Accelerate+ program is delivering structural
cost savings as planned and contributing to improved cash flow and
margins, positioning Tenneco to finish 2020 strong with positive
momentum."
Earnings Conference Call Details
The Company will host
a webcast conference call on Monday,
November 2, at 10:00 am ET.
The purpose of the call is to discuss the Company's financial
results for the third quarter 2020, as well as to provide other
information regarding matters that may impact the Company's fourth
quarter outlook including vehicle build assumptions, margin rate
expectations as temporary cost actions cease and cash flow
timing.
A live "listen only" webcast and presentation materials will be
available on the investor section of the company's website at
https://investors.tenneco.com. An archive of the webcast will
be available approximately one hour after conclusion of the call
for one year.
Telephone participants are encouraged to pre-register for the
conference call using the following link:
https://dpregister.com/sreg/10147965/d90e9b2872
Callers who pre-register will be given a conference passcode and
unique PIN to gain immediate access to the call and bypass the live
operator. Participants may pre-register at any time,
including up to and after the call start time.
Those without internet access or unable to pre-register may dial
in, using the passcode "Tenneco Inc."
PARTICIPANT DIAL IN (TOLL
FREE): 1-833-366-1121
PARTICIPANT INTERNATIONAL DIAL IN: 1-412-902-6733
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 Months
Reconciliation of GAAP to Non-GAAP Earnings Measures – 9 Months
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures – 3
Months
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures – 9
Months
Reconciliation of Non-GAAP Measures – Debt Net of Cash/Adjusted LTM
EBITDA including noncontrolling interests
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures –
Original Equipment, Original Equipment Service and Aftermarket
Revenue – 3 and 9 Months
Reconciliation of GAAP Revenue and Earnings to Non-GAAP Revenue and
Earnings Measures – 3 Months
Reconciliation of GAAP Revenue and Earnings to Non-GAAP Revenue and
Earnings Measures – 9 Months
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures –
Original Equipment Commercial Truck, Off-Highway, Industrial and
other revenues – 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 2019 revenues of
$17.5 billion and approximately
78,000 team members working at more than 300 sites worldwide.
Through our four business groups, Motorparts, Ride Performance,
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.
About Guidance
Revenue estimates and other
forecasted information in this release are based on OE
manufacturers' programs that have been formally awarded to the
company; programs where Tenneco is highly confident that it will be
awarded business based on informal customer indications consistent
with past practices; and Tenneco's status as supplier for the
existing program and its relationship with the customer. This
information is also based on anticipated vehicle production levels
and pricing, including precious metals pricing and the impact of
material cost changes. Unless otherwise indicated, our methodology
does not attempt to forecast currency fluctuations, and
accordingly, reflects constant currency. Certain elements of the
restructuring and related expenses, legal settlements, substrate
pricing, and other unusual charges we incur from time to time
cannot be forecasted accurately. In this respect, we are not
able to forecast corresponding GAAP measures without unreasonable
efforts on account of these factors and other factors not in our
control.
Safe Harbor
This press release contains
forward-looking statements, including with respect to preliminary
third quarter 2020 results. The words "will," "would," "could,"
"expect," "anticipate," and similar expressions (and variations
thereof), identify these forward-looking statements. These
forward-looking statements are based on the current expectations of
the Company (including its subsidiaries). Because these
statements involve risks and uncertainties, actual results may
differ materially from the expectations expressed in the
forward-looking statements.
Important factors that could cause actual results to differ
materially from the expectations reflected in the forward-looking
statements include: general economic, business, market and social
conditions, including the effect of the COVID-19 pandemic;
disasters, local and global public health emergencies or other
catastrophic events, where we or other customers do business, and
any resultant disruptions; our ability (or inability) to
successfully execute cost reduction, performance improvement and
other plans, including our plans to respond to the COVID-19
pandemic and our previously announced accelerated performance
improvement plan ("Accelerate"), and to realize the anticipated
benefits from these plans; changes in capital availability or
costs, including increases in our cost of borrowing (i.e., interest
rate increases), the amount of our debt, our ability to access
capital markets at favorable rates, and the credit ratings of our
debt and our financial flexibility to respond to COVID-19 pandemic;
our ability to maintain compliance with the agreements governing
our indebtedness and otherwise have sufficient liquidity through
the COVID-19 pandemic; our working capital requirements; our
ability to source and procure needed materials, components and
other products, and services in accordance with customer demand and
at competitive prices; the cost and outcome of existing and any
future claims, legal proceedings or investigations; changes in
consumer demand for our OE products or aftermarket products, prices
and our ability to have our products included on top selling
vehicles, including any shifts in consumer preferences; the
cyclical nature of the global vehicle industry, including the
performance of the global aftermarket sector and the impact of
vehicle parts' longer product lives; changes in automotive and
commercial vehicle manufacturers' production rates and their actual
and forecasted requirements for our products, due to difficult
economic conditions and/or regulatory or legal changes affecting
internal combustion engines and/or aftermarket products; our
dependence on certain large customers, including the loss of any of
our large OE manufacturer customers (on whom we depend for a
significant portion of our revenues), or the loss of market shares
by these customers if we are unable to achieve increased sales to
other OE-customers or any change in customer demand due to delays
in the adoption or enforcement of worldwide emissions regulations;
the overall highly competitive nature of the automotive and
commercial vehicle parts industries, and any resultant inability to
realize the sales represented by our awarded book of business
(which is based on anticipated pricing and volumes over the life of
the applicable program); risks inherent in operating a
multi-national Company; damage to the reputation of one or more of
our leading brands; industry-wide strikes, labor disruptions at our
facilities or any labor or other economic disruptions at any of our
significant customers or suppliers or any of our customers' other
suppliers; changes in distribution channels or competitive
conditions in the markets and countries where we operate; the
evolution towards alternative powertrains, including
electrification, car and ride sharing, and autonomous vehicles;
customer acceptance of new products; our ability to successfully
integrate, and benefit from, any acquisitions that we complete; the
potential impairment in the carrying value of our long-lived
assets, goodwill, and other intangible assets or the inability to
fully realize our deferred tax assets; increases in the costs of
raw materials or components, including our ability to successfully
reduce the impact of any such cost increases through materials
substitutions, cost reduction initiatives, customer recovery and
other methods; the impact of the extensive, increasing, and
changing laws and regulations to which we are subject, including
environmental laws and regulations, which may result in our
incurrence of environmental liabilities in excess of the amount
reserved or increased costs or loss of revenues relating to
products subject to changing regulation; and the timing and
occurrence (or non-occurrence) of other transactions, events and
circumstances which may be beyond our control.
In addition, statements regarding the Company's ongoing
review of strategic alternatives and the potential separation of
the Company into a powertrain technology company and an aftermarket
and ride performance company constitute forward-looking statements.
Important factors that could cause actual results to differ
materially from the expectations reflected in the forward-looking
statements include (in addition to the risks set forth above): the
ability to identify and consummate strategic alternatives that
yield additional value for shareholders; the timing, benefits and
outcome of the Company's strategic review process; the structure,
terms and specific risk and uncertainties associated with any
potential strategic alternative; potential disruptions in our
business and stock price as a result of our exploration, review and
pursuit of any strategic alternatives; the possibility that the
Company may not complete a separation of the aftermarket and ride
performance business from the powertrain technology business (or
achieve some or all of the anticipated benefits of such a
separation); the ability to retain and hire key personnel and
maintain relationships with customers, suppliers or other business
partners; the potential diversion of management's attention
resulting from a separation; the risk that the combined company and
each separate company following a separation will underperform
relative to our expectations; the ongoing transaction costs and
risk we may incur greater costs following a separation of the
business; the risk a spin-off is determined to be a taxable
transaction; the risk the benefits of a separation may not be fully
realized or may take longer to realize than expected; the risk a
separation may not advance our business strategy; and the risk a
transaction may have an adverse effect on existing arrangements
with us, including those related to transition, manufacturing and
supply services and tax matters.
The risks included here are not exhaustive. The Company
undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date of this press
release. Additional information regarding these risk factors and
uncertainties is, and will be, detailed from time to time in the
Company's SEC filings, including but not limited to its annual
report on Form 10-K for the year ended December 31, 2019 and quarterly reports on Form
10-Q for the quarters ended March 31,
2020 and June 30,
2020.
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
ATTACHMENT
1
|
TENNECO
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
Unaudited
(millions, except per
share amounts)
|
|
|
Three Months
Ended
September 30,
|
|
2020
|
|
2019
|
Net sales and
operating revenues:
|
|
|
|
Clean Air - Value-add
revenues
|
$
|
958
|
|
|
$
|
997
|
|
Clean Air - Substrate
sales
|
961
|
|
|
775
|
|
Powertrain
|
1,007
|
|
|
1,082
|
|
Motorparts
|
730
|
|
|
794
|
|
Ride
Performance
|
600
|
|
|
671
|
|
Total net sales and operating revenues
|
4,256
|
|
|
4,319
|
|
Costs and
expenses:
|
|
|
|
Cost of
sales (exclusive of depreciation and amortization)
|
3,610
|
|
|
3,660
|
|
Selling,
general, and administrative
|
214
|
|
|
252
|
|
Depreciation and amortization
|
151
|
|
|
165
|
|
Engineering, research, and development
|
67
|
|
|
78
|
|
Restructuring charges,
net and asset impairments
|
17
|
|
|
33
|
|
Goodwill
and intangible impairment charges
|
—
|
|
|
9
|
|
Total costs and expenses
|
4,059
|
|
|
4,197
|
|
Other income
(expense):
|
|
|
|
Non-service pension
and other postretirement benefit (costs) credits
|
18
|
|
|
(2)
|
|
Equity in earnings
(losses) of nonconsolidated affiliates, net of tax
|
9
|
|
|
1
|
|
Other income
(expense), net
|
12
|
|
|
27
|
|
|
39
|
|
|
26
|
|
Earnings (loss)
before interest expense, income taxes, and noncontrolling
interests
|
236
|
|
|
148
|
|
Interest
expense
|
(68)
|
|
|
(79)
|
|
Earnings (loss)
before income taxes and noncontrolling interests
|
168
|
|
|
69
|
|
Income tax (expense)
benefit
|
(648)
|
|
|
9
|
|
Net income
(loss)
|
(480)
|
|
|
78
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
19
|
|
|
8
|
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
(499)
|
|
|
$
|
70
|
|
|
|
|
|
Basic earnings (loss)
per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
(6.12)
|
|
|
$
|
0.87
|
|
Weighted average
shares outstanding
|
81.5
|
|
|
80.9
|
|
Diluted earnings
(loss) per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
(6.12)
|
|
|
$
|
0.87
|
|
Weighted average
shares outstanding
|
81.5
|
|
|
80.9
|
|
ATTACHMENT
1
|
TENNECO
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
Unaudited
(millions, except per
share amounts)
|
|
|
Nine Months
Ended
September 30,
|
|
2020
|
|
2019
|
Net sales and
operating revenues:
|
|
|
|
Clean Air - Value-add
revenues
|
$
|
2,320
|
|
|
$
|
3,120
|
|
Clean Air - Substrate
sales
|
2,284
|
|
|
2,258
|
|
Powertrain
|
2,606
|
|
|
3,390
|
|
Motorparts
|
1,995
|
|
|
2,426
|
|
Ride
Performance
|
1,524
|
|
|
2,113
|
|
Total net sales and operating revenues
|
10,729
|
|
|
13,307
|
|
Costs and
expenses:
|
|
|
|
Cost of
sales (exclusive of depreciation and amortization)
|
9,447
|
|
|
11,331
|
|
Selling,
general, and administrative
|
658
|
|
|
862
|
|
Depreciation and amortization
|
481
|
|
|
503
|
|
Engineering, research, and development
|
199
|
|
|
248
|
|
Restructuring charges,
net and asset impairments
|
622
|
|
|
98
|
|
Goodwill
and intangible impairment charges
|
383
|
|
|
69
|
|
Total costs and expenses
|
11,790
|
|
|
13,111
|
|
Other income
(expense):
|
|
|
|
Non-service pension
and other postretirement benefit (costs) credits
|
20
|
|
|
(8)
|
|
Equity in earnings
(losses) of nonconsolidated affiliates, net of tax
|
26
|
|
|
34
|
|
Other income
(expense), net
|
31
|
|
|
43
|
|
|
77
|
|
|
69
|
|
Earnings (loss)
before interest expense, income taxes, and noncontrolling
interests
|
(984)
|
|
|
265
|
|
Interest
expense
|
(209)
|
|
|
(242)
|
|
Earnings (loss)
before income taxes and noncontrolling interests
|
(1,193)
|
|
|
23
|
|
Income tax (expense)
benefit
|
(453)
|
|
|
(5)
|
|
Net income
(loss)
|
(1,646)
|
|
|
18
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
42
|
|
|
39
|
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
(1,688)
|
|
|
$
|
(21)
|
|
|
|
|
|
Basic earnings (loss)
per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
(20.75)
|
|
|
$
|
(0.25)
|
|
Weighted average
shares outstanding
|
81.3
|
|
|
80.9
|
|
Diluted earnings
(loss) per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
(20.75)
|
|
|
$
|
(0.25)
|
|
Weighted average
shares outstanding
|
81.3
|
|
|
80.9
|
|
ATTACHMENT
1
|
TENNECO
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
Unaudited
(dollars in
millions)
|
|
|
September 30,
2020
|
|
December 31,
2019
|
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
716
|
|
|
$
|
564
|
|
|
Restricted
cash
|
5
|
|
|
2
|
|
|
Receivables,
net
|
2,783
|
|
(a)
|
2,538
|
|
(a)
|
Inventories
|
1,678
|
|
|
1,999
|
|
|
Prepayments and other
current assets
|
597
|
|
|
632
|
|
|
Other noncurrent
assets
|
3,064
|
|
|
3,864
|
|
|
Property, plant, and
equipment, net
|
2,968
|
|
|
3,627
|
|
|
Total
assets
|
$
|
11,811
|
|
|
$
|
13,226
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Short-term debt,
including current maturities of long-term debt
|
$
|
176
|
|
|
$
|
185
|
|
|
Accounts
payable
|
2,708
|
|
|
2,647
|
|
|
Accrued compensation
and employee benefits
|
370
|
|
|
325
|
|
|
Accrued income
taxes
|
89
|
|
|
72
|
|
|
Accrued expenses and
other current liabilities
|
1,178
|
|
|
1,070
|
|
|
Long-term
debt
|
5,596
|
|
(b)
|
5,371
|
|
(b)
|
Deferred income
taxes
|
90
|
|
|
106
|
|
|
Pension and
postretirement benefits
|
1,129
|
|
|
1,145
|
|
|
Deferred credits and
other liabilities
|
518
|
|
|
490
|
|
|
Redeemable
noncontrolling interests
|
63
|
|
|
196
|
|
|
Tenneco Inc.
shareholders' equity
|
(401)
|
|
|
1,425
|
|
|
Noncontrolling
interests
|
295
|
|
|
194
|
|
|
Total liabilities,
redeemable noncontrolling interests, and equity
|
$
|
11,811
|
|
|
$
|
13,226
|
|
|
|
|
|
|
|
September 30,
2020
|
|
December 31,
2019
|
|
(a) Accounts
receivable net of:
|
|
|
|
|
Accounts receivable
outstanding and derecognized
|
$
|
923
|
|
|
$
|
1,037
|
|
|
|
|
|
|
|
(b) Long-term debt
composed of:
|
|
|
|
|
Revolver
Borrowings
|
$
|
429
|
|
|
$
|
183
|
|
|
LIBOR plus 2.50% Term
Loan A due 2019 through 2023 (1)
|
1,541
|
|
|
1,608
|
|
|
LIBOR plus 3.00% Term
Loan B due 2019 through 2025
|
1,613
|
|
|
1,623
|
|
|
$225 million of 5.375%
Senior Notes due 2024
|
223
|
|
|
222
|
|
|
$500 million of 5.000%
Senior Notes due 2026
|
495
|
|
|
494
|
|
|
€415 million of 4.875%
Euro Fixed Rate Notes due 2022
|
496
|
|
|
479
|
|
|
€300 million of
Euribor plus 4.875% Euro Floating Rate Notes due 2024
|
355
|
|
|
340
|
|
|
€350 million of 5.000%
Euro Fixed Rate Notes due 2024
|
428
|
|
|
413
|
|
|
Other Debt, primarily
foreign instruments
|
20
|
|
|
13
|
|
|
|
5,600
|
|
|
5,375
|
|
|
Less: maturities
classified as current
|
4
|
|
|
4
|
|
|
Total long-term
debt
|
$
|
5,596
|
|
|
$
|
5,371
|
|
|
|
|
(1) The interest rate
on Term Loan A at December 31, 2019 was LIBOR plus 1.75%
|
ATTACHMENT
1
|
TENNECO
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(dollars in
millions)
|
|
|
Three Months
Ended
September 30,
|
|
2020
|
|
2019
|
Operating
Activities
|
|
|
|
Net income
(loss)
|
$
|
(480)
|
|
|
$
|
78
|
|
Adjustments to
reconcile net income (loss) to cash (used) provided by operating
activities:
|
|
|
|
Goodwill and
intangible impairment charges
|
—
|
|
|
9
|
|
Depreciation and
amortization
|
151
|
|
|
165
|
|
Deferred income
taxes
|
544
|
|
|
(101)
|
|
Stock-based
compensation
|
4
|
|
|
7
|
|
Restructuring charges
and asset impairments, net of cash paid
|
(11)
|
|
|
(2)
|
|
Change in pension and
other postretirement benefit plans
|
(23)
|
|
|
(17)
|
|
Equity in earnings of
nonconsolidated affiliates
|
(9)
|
|
|
(1)
|
|
Cash dividends
received from nonconsolidated affiliates
|
—
|
|
|
18
|
|
Loss (gain) on sale of
assets
|
—
|
|
|
1
|
|
Other (gains)
losses
|
2
|
|
|
—
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables
|
(603)
|
|
|
(56)
|
|
Inventories
|
11
|
|
|
11
|
|
Payables and accrued
expenses
|
782
|
|
|
51
|
|
Accrued interest and
accrued income taxes
|
40
|
|
|
54
|
|
Other assets and
liabilities
|
78
|
|
|
(53)
|
|
Net cash (used)
provided by operating activities
|
486
|
|
|
164
|
|
Investing
Activities
|
|
|
|
Proceeds from sale of
assets
|
3
|
|
|
3
|
|
Net proceeds from
sale of business
|
3
|
|
|
—
|
|
Cash payments for
property, plant, and equipment
|
(96)
|
|
|
(162)
|
|
Proceeds from
deferred purchase price of factored receivables
|
85
|
|
|
56
|
|
Other
|
2
|
|
|
1
|
|
Net cash (used)
provided by investing activities
|
(3)
|
|
|
(102)
|
|
Financing
Activities
|
|
|
|
Proceeds from term
loans and notes
|
47
|
|
|
60
|
|
Repayments of term
loans and notes
|
(63)
|
|
|
(88)
|
|
Borrowings on
revolving lines of credit
|
31
|
|
|
2,279
|
|
Payments on revolving
lines of credit
|
(1,111)
|
|
|
(2,294)
|
|
Net increase
(decrease) in bank overdrafts
|
(50)
|
|
|
(4)
|
|
Other
|
11
|
|
|
(1)
|
|
Distributions to
noncontrolling interest partners
|
(16)
|
|
|
—
|
|
Net cash (used)
provided by financing activities
|
(1,151)
|
|
|
(48)
|
|
Effect of foreign
exchange rate changes on cash, cash equivalents, and restricted
cash
|
18
|
|
|
(9)
|
|
Increase (decrease)
in cash, cash equivalents, and restricted cash
|
(650)
|
|
|
5
|
|
Cash, cash
equivalents, and restricted cash, beginning of period
|
1,371
|
|
|
390
|
|
Cash, cash
equivalents, and restricted cash, end of period
|
$
|
721
|
|
|
$
|
395
|
|
Supplemental Cash
Flow Information
|
|
|
|
Cash paid during the
period for interest
|
$
|
65
|
|
|
$
|
85
|
|
Cash paid during the
period for income taxes, net of refunds
|
$
|
39
|
|
|
$
|
39
|
|
Lease assets obtained
in exchange for new operating lease liabilities
|
$
|
7
|
|
|
$
|
21
|
|
Non-cash inventory
charge due to aftermarket product line exit
|
$
|
(9)
|
|
|
$
|
—
|
|
Non-cash Investing
Activities
|
|
|
|
Period end balance of
accounts payable for property, plant, and equipment
|
$
|
79
|
|
|
$
|
118
|
|
Deferred purchase
price of receivables factored in the period
|
$
|
102
|
|
|
$
|
156
|
|
ATTACHMENT
1
|
TENNECO
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(dollars in
millions)
|
|
|
Nine Months Ended
September 30,
|
Operating
Activities
|
2020
|
|
2019
|
Net income
(loss)
|
$
|
(1,646)
|
|
|
$
|
18
|
|
Adjustments to
reconcile net income (loss) to cash (used) provided by operating
activities:
|
|
|
|
Goodwill and
intangible impairment charges
|
383
|
|
|
69
|
|
Depreciation and
amortization
|
481
|
|
|
503
|
|
Deferred income
taxes
|
302
|
|
|
(115)
|
|
Stock-based
compensation
|
13
|
|
|
20
|
|
Restructuring charges
and asset impairments, net of cash paid
|
529
|
|
|
12
|
|
Change in pension and
other postretirement benefit plans
|
(49)
|
|
|
(49)
|
|
Equity in earnings of
nonconsolidated affiliates
|
(26)
|
|
|
(34)
|
|
Cash dividends
received from nonconsolidated affiliates
|
18
|
|
|
45
|
|
Loss (gain) on sale of
assets
|
(1)
|
|
|
—
|
|
Other (gains)
losses
|
2
|
|
|
—
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables
|
(429)
|
|
|
(457)
|
|
Inventories
|
303
|
|
|
112
|
|
Payables and accrued
expenses
|
242
|
|
|
99
|
|
Accrued interest and
accrued income taxes
|
23
|
|
|
(12)
|
|
Other assets and
liabilities
|
10
|
|
|
(147)
|
|
Net cash (used)
provided by operating activities
|
155
|
|
|
64
|
|
Investing
Activities
|
|
|
|
Acquisitions, net of
cash acquired
|
—
|
|
|
(158)
|
|
Proceeds from sale of
assets
|
8
|
|
|
8
|
|
Net proceeds from
sale of business
|
3
|
|
|
22
|
|
Cash payments for
property, plant, and equipment
|
(308)
|
|
|
(541)
|
|
Proceeds from
deferred purchase price of factored receivables
|
176
|
|
|
203
|
|
Other
|
3
|
|
|
—
|
|
Net cash (used)
provided by investing activities
|
(118)
|
|
|
(466)
|
|
Financing
Activities
|
|
|
|
Proceeds from term
loans and notes
|
143
|
|
|
171
|
|
Repayments of term
loans and notes
|
(196)
|
|
|
(278)
|
|
Debt issuance costs
of long-term debt
|
(16)
|
|
|
—
|
|
Borrowings on
revolving lines of credit
|
4,852
|
|
|
6,804
|
|
Payments on revolving
lines of credit
|
(4,647)
|
|
|
(6,548)
|
|
Issuance (repurchase)
of common shares
|
(1)
|
|
|
(2)
|
|
Cash
dividends
|
—
|
|
|
(20)
|
|
Net increase
(decrease) in bank overdrafts
|
9
|
|
|
(12)
|
|
Other
|
10
|
|
|
(2)
|
|
Distributions to
noncontrolling interest partners
|
(18)
|
|
|
(20)
|
|
Net cash (used)
provided by financing activities
|
136
|
|
|
93
|
|
Effect of foreign
exchange rate changes on cash, cash equivalents, and restricted
cash
|
(18)
|
|
|
2
|
|
Increase (decrease)
in cash, cash equivalents, and restricted cash
|
155
|
|
|
(307)
|
|
Cash, cash
equivalents, and restricted cash, beginning of period
|
566
|
|
|
702
|
|
Cash, cash
equivalents, and restricted cash, end of period
|
$
|
721
|
|
|
$
|
395
|
|
Supplemental Cash
Flow Information
|
|
|
|
Cash paid during the
period for interest
|
$
|
188
|
|
|
$
|
230
|
|
Cash paid during the
period for income taxes, net of refunds
|
$
|
114
|
|
|
$
|
139
|
|
Lease assets obtained
in exchange for new operating lease liabilities
|
$
|
61
|
|
|
$
|
54
|
|
Non-cash inventory
charge due to aftermarket product line exit
|
$
|
73
|
|
|
$
|
—
|
|
Non-cash Investing
Activities
|
|
|
|
Period end balance of
accounts payable for property, plant, and equipment
|
$
|
79
|
|
|
$
|
118
|
|
Deferred purchase
price of receivables factored in the period
|
$
|
197
|
|
|
$
|
208
|
|
Reduction in assets
from redeemable noncontrolling interest transaction with
owner
|
$
|
53
|
|
|
$
|
—
|
|
ATTACHMENT
2
|
TENNECO
INC.
RECONCILIATION OF
GAAP(1) TO NON-GAAP EARNINGS
MEASURES(2)
Unaudited
(dollars in millions,
except per share amounts)
|
|
|
Q3
2020
|
|
Q3
2019
|
|
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
|
$
|
(499)
|
|
|
$
|
(6.12)
|
|
|
$
|
19
|
|
|
$
|
(648)
|
|
|
$
|
236
|
|
|
$
|
387
|
|
|
$
|
70
|
|
|
$
|
0.87
|
|
|
$
|
8
|
|
|
$
|
9
|
|
|
$
|
148
|
|
|
$
|
313
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
related expenses (5)
|
23
|
|
|
0.28
|
|
|
—
|
|
|
(2)
|
|
|
25
|
|
|
24
|
|
|
22
|
|
|
0.30
|
|
|
2
|
|
|
(7)
|
|
|
31
|
|
|
28
|
|
Inventory write-down
(6)
|
(9)
|
|
|
(0.12)
|
|
|
—
|
|
|
—
|
|
|
(9)
|
|
|
(9)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Asset impairments
(7)
|
3
|
|
|
0.04
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Acquisition and
expected separation costs (8)
|
4
|
|
|
0.06
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
23
|
|
|
0.29
|
|
|
—
|
|
|
(7)
|
|
|
30
|
|
|
30
|
|
OPEB curtailment
(9)
|
(21)
|
|
|
(0.26)
|
|
|
—
|
|
|
—
|
|
|
(21)
|
|
|
(21)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Cost reduction
initiatives (10)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
0.05
|
|
|
—
|
|
|
(1)
|
|
|
6
|
|
|
6
|
|
Costs to achieve
synergies (11)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
0.06
|
|
|
—
|
|
|
(2)
|
|
|
7
|
|
|
7
|
|
Purchase accounting
charges (12)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
0.12
|
|
|
—
|
|
|
(1)
|
|
|
11
|
|
|
11
|
|
Goodwill impairment
(13)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
0.12
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
Warranty charge
(14)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
Antitrust reserve
change in estimate (15)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7)
|
|
|
(0.08)
|
|
|
—
|
|
|
2
|
|
|
(9)
|
|
|
(9)
|
|
Brazil tax credit
(16)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14)
|
|
|
(0.18)
|
|
|
—
|
|
|
8
|
|
|
(22)
|
|
|
(22)
|
|
Out of period
adjustment (17)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
0.04
|
|
|
1
|
|
|
—
|
|
|
5
|
|
|
5
|
|
Impairment of assets
held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
0.07
|
|
|
—
|
|
|
(2)
|
|
|
8
|
|
|
8
|
|
Net tax adjustments
(18)
|
526
|
|
|
6.45
|
|
|
—
|
|
|
526
|
|
|
—
|
|
|
—
|
|
|
(35)
|
|
|
(0.43)
|
|
|
—
|
|
|
(35)
|
|
|
—
|
|
|
—
|
|
Adjusted Net income,
EPS, NCI, Tax, EBIT, and EBITDA (4)
|
$
|
27
|
|
|
$
|
0.33
|
|
|
$
|
19
|
|
|
$
|
(124)
|
|
|
$
|
238
|
|
|
$
|
388
|
|
|
$
|
99
|
|
|
$
|
1.23
|
|
|
$
|
11
|
|
|
$
|
(36)
|
|
|
$
|
225
|
|
|
$
|
387
|
|
|
Q3 2020
|
|
Global
Segments
|
|
|
|
|
|
Clean Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net income (loss)
attributable to Tenneco Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(499)
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
19
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
(480)
|
|
Income tax (expense)
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
(648)
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(68)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
|
236
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
151
|
|
Total EBITDA
including noncontrolling interests (3)
|
$
|
149
|
|
|
$
|
111
|
|
|
$
|
138
|
|
|
$
|
23
|
|
|
$
|
421
|
|
|
$
|
(34)
|
|
|
$
|
387
|
|
Restructuring and
related expenses(5)
|
1
|
|
|
13
|
|
|
(1)
|
|
|
11
|
|
|
24
|
|
|
—
|
|
|
24
|
|
Inventory
write-down(6)
|
—
|
|
|
—
|
|
|
(9)
|
|
|
—
|
|
|
(9)
|
|
|
—
|
|
|
(9)
|
|
Asset impairments
(7)
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
Acquisition and
expected separation costs (8)
|
(1)
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
|
(3)
|
|
|
7
|
|
|
4
|
|
OPEB curtailment
(9)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21)
|
|
|
(21)
|
|
Adjusted EBITDA
(4)
|
$
|
149
|
|
|
$
|
124
|
|
|
$
|
131
|
|
|
$
|
32
|
|
|
$
|
436
|
|
|
$
|
(48)
|
|
|
$
|
388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2019
|
|
Global
Segments
|
|
|
|
|
|
Clean Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net income (loss)
attributable to Tenneco Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
70
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
8
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
78
|
|
Income tax (expense)
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(79)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
|
148
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
165
|
|
Total EBITDA
including noncontrolling interests (3)
|
$
|
169
|
|
|
$
|
90
|
|
|
$
|
113
|
|
|
$
|
20
|
|
|
$
|
392
|
|
|
$
|
(79)
|
|
|
$
|
313
|
|
Restructuring and
related expenses(5)
|
2
|
|
|
11
|
|
|
—
|
|
|
15
|
|
|
28
|
|
|
—
|
|
|
28
|
|
Acquisition and
expected separation costs (8)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
30
|
|
Cost reduction
initiatives (10)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
Costs to achieve
synergies (11)
|
4
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
6
|
|
|
1
|
|
|
7
|
|
Purchase accounting
charges (12)
|
—
|
|
|
8
|
|
|
4
|
|
|
(1)
|
|
|
11
|
|
|
—
|
|
|
11
|
|
Goodwill impairment
charge (13)
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|
—
|
|
|
9
|
|
Warranty charge
(14)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Antitrust reserve
change in estimate (15)
|
(9)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9)
|
|
|
—
|
|
|
(9)
|
|
Brazil tax credit
(16)
|
(9)
|
|
|
—
|
|
|
(7)
|
|
|
(6)
|
|
|
(22)
|
|
|
—
|
|
|
(22)
|
|
Out of period
adjustment (17)
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
—
|
|
|
5
|
|
Impairment of assets
held for sale
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
Adjusted EBITDA
(4)
|
$
|
157
|
|
|
$
|
109
|
|
|
$
|
121
|
|
|
$
|
42
|
|
|
$
|
429
|
|
|
$
|
(42)
|
|
|
$
|
387
|
|
|
|
|
|
|
(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 2020 includes $1
million of depreciation related to restructuring and related
expenses and Q3 2019 includes $3 million of accelerated
depreciation related to plant closures.
|
|
|
(6)
|
Margin on
discontinued product that was previously written-down in connection
with the initiative in the Motorparts segment to rationalize its
supply chain and distribution network.
|
|
|
(7)
|
Asset impairment
charges.
|
|
|
(8)
|
Costs related to
acquisitions and costs related to expected separation.
|
|
|
(9)
|
OPEB curtailment as a
result of an amended union agreement that eliminates healthcare
benefits for future retirees.
|
|
|
(10)
|
Costs related to cost
reduction initiatives.
|
|
|
(11)
|
Costs to achieve
synergies related to the Acquisitions.
|
|
|
(12)
|
This primarily
relates to a non-cash charge to cost of sales for the amortization
of the inventory fair value step-up recorded as part of the
Acquisitions.
|
|
|
(13)
|
Non-cash asset
impairment charge related to goodwill.
|
|
|
(14)
|
Charge related to
warranty. Although Tenneco regularly incurs warranty costs, this
specific charge is of an unusual nature in the period
incurred.
|
|
|
(15)
|
Reduction in
estimated antitrust accrual.
|
|
|
(16)
|
Recovery of
value-added tax in a foreign jurisdiction.
|
|
|
(17)
|
Inventory losses
attributable to prior
periods.
|
|
|
(18)
|
Q3 2020 includes
non-cash tax valuation allowance charge of $523 million.
|
ATTACHMENT
2
|
TENNECO
INC.
RECONCILIATION OF
GAAP(1) TO NON-GAAP EARNINGS
MEASURES(2)
Unaudited
(dollars in millions,
except per share amounts)
|
|
|
Q3 2020
YTD
|
|
Q3 2019
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
|
$
|
(1,688)
|
|
|
$
|
(20.75)
|
|
|
$
|
42
|
|
|
$
|
(453)
|
|
|
$
|
(984)
|
|
|
$
|
(503)
|
|
|
$
|
(21)
|
|
|
$
|
(0.25)
|
|
|
$
|
39
|
|
|
$
|
(5)
|
|
|
$
|
265
|
|
|
$
|
768
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
related expenses (5)
|
136
|
|
|
1.66
|
|
|
—
|
|
|
(35)
|
|
|
171
|
|
|
163
|
|
|
82
|
|
|
1.03
|
|
|
5
|
|
|
(24)
|
|
|
111
|
|
|
102
|
|
Inventory write-down
(6)
|
54
|
|
|
0.66
|
|
|
—
|
|
|
(19)
|
|
|
73
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Asset impairments
(7)
|
396
|
|
|
4.87
|
|
|
7
|
|
|
(100)
|
|
|
503
|
|
|
503
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Acquisition and
expected separation costs (8)
|
29
|
|
|
0.37
|
|
|
—
|
|
|
(8)
|
|
|
37
|
|
|
37
|
|
|
74
|
|
|
0.91
|
|
|
—
|
|
|
(23)
|
|
|
97
|
|
|
97
|
|
OPEB curtailment
(9)
|
(21)
|
|
|
(0.26)
|
|
|
—
|
|
|
—
|
|
|
(21)
|
|
|
(21)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Goodwill and
intangible impairment charges (10)
|
366
|
|
|
4.51
|
|
|
5
|
|
|
(12)
|
|
|
383
|
|
|
383
|
|
|
69
|
|
|
0.86
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|
69
|
|
Cost reduction
initiatives (11)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
0.14
|
|
|
—
|
|
|
(4)
|
|
|
16
|
|
|
16
|
|
Costs to achieve
synergies (12)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
0.20
|
|
|
—
|
|
|
(5)
|
|
|
21
|
|
|
21
|
|
Purchase accounting
charges (13)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
0.56
|
|
|
—
|
|
|
(10)
|
|
|
55
|
|
|
55
|
|
Process harmonization
(14)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
0.09
|
|
|
—
|
|
|
(3)
|
|
|
10
|
|
|
10
|
|
Warranty charge
(15)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
0.07
|
|
|
—
|
|
|
(2)
|
|
|
8
|
|
|
8
|
|
Antitrust reserve
change in estimate (16)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7)
|
|
|
(0.08)
|
|
|
—
|
|
|
2
|
|
|
(9)
|
|
|
(9)
|
|
Brazil tax credit
(17)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14)
|
|
|
(0.18)
|
|
|
—
|
|
|
8
|
|
|
(22)
|
|
|
(22)
|
|
Out of period
adjustment (18)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
0.04
|
|
|
1
|
|
|
—
|
|
|
5
|
|
|
5
|
|
Impairment of assets
held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
0.07
|
|
|
—
|
|
|
(2)
|
|
|
8
|
|
|
8
|
|
Noncontrolling
interests adjustments (19)
|
11
|
|
|
0.14
|
|
|
(11)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net tax adjustments
(20)
|
543
|
|
|
6.67
|
|
|
—
|
|
|
543
|
|
|
—
|
|
|
—
|
|
|
(41)
|
|
|
(0.51)
|
|
|
—
|
|
|
(41)
|
|
|
—
|
|
|
—
|
|
Adjusted Net income,
EPS, NCI, Tax, EBIT, and EBITDA (4)
|
$
|
(174)
|
|
|
$
|
(2.13)
|
|
|
$
|
43
|
|
|
$
|
(84)
|
|
|
$
|
162
|
|
|
$
|
635
|
|
|
$
|
238
|
|
|
$
|
2.95
|
|
|
$
|
45
|
|
|
$
|
(109)
|
|
|
$
|
634
|
|
|
$
|
1,128
|
|
|
Q3 2020
YTD
|
|
Global
Segments
|
|
|
|
|
|
Clean Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net income (loss)
attributable to Tenneco Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1,688)
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
42
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,646)
|
|
Income tax (expense)
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
(453)
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(209)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
|
(984)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
481
|
|
Total EBITDA
including noncontrolling interests (3)
|
$
|
265
|
|
|
$
|
(21)
|
|
|
$
|
46
|
|
|
$
|
(624)
|
|
|
$
|
(334)
|
|
|
$
|
(169)
|
|
|
$
|
(503)
|
|
Restructuring and
related expenses(5)
|
23
|
|
|
50
|
|
|
19
|
|
|
65
|
|
|
157
|
|
|
6
|
|
|
163
|
|
Inventory
write-down(6)
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
Asset impairments
(7)
|
—
|
|
|
4
|
|
|
27
|
|
|
455
|
|
|
486
|
|
|
17
|
|
|
503
|
|
Acquisition and
expected separation costs (8)
|
3
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
|
1
|
|
|
36
|
|
|
37
|
|
OPEB curtailment
(9)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21)
|
|
|
(21)
|
|
Goodwill and
intangible impairment charges (10)
|
—
|
|
|
160
|
|
|
110
|
|
|
113
|
|
|
383
|
|
|
—
|
|
|
383
|
|
Adjusted EBITDA
(4)
|
$
|
291
|
|
|
$
|
193
|
|
|
$
|
275
|
|
|
$
|
7
|
|
|
$
|
766
|
|
|
$
|
(131)
|
|
|
$
|
635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2019
YTD
|
|
Global
Segments
|
|
|
|
|
|
Clean Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net income (loss)
attributable to Tenneco Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(21)
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
39
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
18
|
|
Income tax (expense)
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(242)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
|
265
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
503
|
|
Total EBITDA
including noncontrolling interests (3)
|
$
|
452
|
|
|
$
|
303
|
|
|
$
|
268
|
|
|
$
|
1
|
|
|
$
|
1,024
|
|
|
$
|
(256)
|
|
|
$
|
768
|
|
Restructuring and
related expenses(5)
|
21
|
|
|
28
|
|
|
4
|
|
|
48
|
|
|
101
|
|
|
1
|
|
|
102
|
|
Acquisition and
expected separation costs (8)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
96
|
|
|
97
|
|
Goodwill impairment
charge (10)
|
—
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|
69
|
|
|
—
|
|
|
69
|
|
Cost reduction
initiatives (11)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
16
|
|
Costs to achieve
synergies (12)
|
5
|
|
|
2
|
|
|
9
|
|
|
2
|
|
|
18
|
|
|
3
|
|
|
21
|
|
Purchase accounting
charges (13)
|
—
|
|
|
10
|
|
|
41
|
|
|
4
|
|
|
55
|
|
|
—
|
|
|
55
|
|
Process harmonization
(14)
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
Warranty charge
(15)
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
Antitrust reserve
change in estimate (16)
|
(9)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9)
|
|
|
—
|
|
|
(9)
|
|
Brazil tax credit
(17)
|
(9)
|
|
|
—
|
|
|
(7)
|
|
|
(6)
|
|
|
(22)
|
|
|
—
|
|
|
(22)
|
|
Out of period
adjustment (18)
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
—
|
|
|
5
|
|
Impairment of assets
held for sale
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
Adjusted EBITDA
(4)
|
$
|
465
|
|
|
$
|
343
|
|
|
$
|
337
|
|
|
$
|
123
|
|
|
$
|
1,268
|
|
|
$
|
(140)
|
|
|
$
|
1,128
|
|
|
|
|
|
|
(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 2020 includes
$7 million of accelerated depreciation related to plant closures
and $1 million depreciation related to restructuring and related
expenses and Q3 YTD 2019 includes $9 million of accelerated
depreciation related to plant closures.
|
|
|
(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.
|
|
|
(7)
|
Asset impairment
charges.
|
|
|
(8)
|
Costs related to
acquisitions and costs related to expected separation.
|
|
|
(9)
|
OPEB curtailment as a
result of an amended union agreement that eliminates healthcare
benefits for future retirees.
|
|
|
(10)
|
Non-cash asset
impairment charge related to goodwill and intangibles.
|
|
|
(11)
|
Costs related to cost
reduction initiatives.
|
|
|
(12)
|
Costs to achieve
synergies related to the Acquisitions.
|
|
|
(13)
|
This primarily
relates to a non-cash charge to cost of sales for the amortization
of the inventory fair value step-up recorded as part of the
Acquisitions.
|
|
|
(14)
|
Charge due to process
harmonization.
|
|
|
(15)
|
Charge related to
warranty. Although Tenneco regularly incurs warranty costs, this
specific charge is of an unusual nature in the period
incurred.
|
|
|
(16)
|
Reduction in
estimated antitrust accrual.
|
|
|
(17)
|
Recovery of
value-added tax in a foreign
jurisdiction.
|
|
|
(18)
|
Inventory losses
attributable to prior periods.
|
|
|
(19)
|
Amount relates to
adjustments made to mark certain redeemable noncontrolling
interests to their redemption
values.
|
|
|
(20)
|
Q3 YTD 2020 includes
non-cash tax valuation allowance charge of $523 million.
|
ATTACHMENT
2
|
TENNECO
INC.
RECONCILIATION OF
GAAP(1) TO NON-GAAP REVENUE
MEASURES(2)
Unaudited
(dollars in millions
except percents)
|
|
|
Q3
2020
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
|
Currency
Impact on
Value-add
Revenues
|
|
Value-add
Revenues
excluding
Currency
|
Clean Air
|
$
|
1,919
|
|
|
$
|
961
|
|
|
$
|
958
|
|
|
$
|
8
|
|
|
$
|
950
|
|
Powertrain
|
1,007
|
|
|
—
|
|
|
1,007
|
|
|
12
|
|
|
995
|
|
Motorparts
|
730
|
|
|
—
|
|
|
730
|
|
|
(10)
|
|
|
740
|
|
Ride
Performance
|
600
|
|
|
—
|
|
|
600
|
|
|
8
|
|
|
592
|
|
Total Tenneco
Inc.
|
$
|
4,256
|
|
|
$
|
961
|
|
|
$
|
3,295
|
|
|
$
|
18
|
|
|
$
|
3,277
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
2019
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
|
Currency
Impact on
Value-add
Revenues
|
|
Value-add
Revenues
excluding
Currency
|
Clean Air
|
$
|
1,772
|
|
|
$
|
775
|
|
|
$
|
997
|
|
|
$
|
—
|
|
|
$
|
997
|
|
Powertrain
|
1,082
|
|
|
—
|
|
|
1,082
|
|
|
—
|
|
|
1,082
|
|
Motorparts
|
794
|
|
|
—
|
|
|
794
|
|
|
—
|
|
|
794
|
|
Ride
Performance
|
671
|
|
|
—
|
|
|
671
|
|
|
—
|
|
|
671
|
|
Total Tenneco
Inc.
|
$
|
4,319
|
|
|
$
|
775
|
|
|
$
|
3,544
|
|
|
$
|
—
|
|
|
$
|
3,544
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2020 vs. Q3
2019 $ Change and % Change Increase (decrease)
|
|
Revenues
|
|
%
Change
|
|
Value-add
Revenues
excluding
Currency
|
|
%
Change
|
Clean Air
|
$
|
147
|
|
|
8
|
%
|
|
$
|
(47)
|
|
|
(5)
|
%
|
Powertrain
|
(75)
|
|
|
(7)
|
%
|
|
(87)
|
|
|
(8)
|
%
|
Motorparts
|
(64)
|
|
|
(8)
|
%
|
|
(54)
|
|
|
(7)
|
%
|
Ride
Performance
|
(71)
|
|
|
(11)
|
%
|
|
(79)
|
|
|
(12)
|
%
|
Total Tenneco
Inc.
|
$
|
(63)
|
|
|
(1)
|
%
|
|
$
|
(267)
|
|
|
(8)
|
%
|
|
|
|
|
|
(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 REVENUE
MEASURES(2)
Unaudited
(dollars in millions
except percents)
|
|
|
Q3 2020
YTD
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
|
Currency
Impact
on Value-add
Revenues
|
|
Value-add
Revenues
excluding
Currency
|
Clean Air
|
$
|
4,604
|
|
|
$
|
2,284
|
|
|
$
|
2,320
|
|
|
$
|
(27)
|
|
|
$
|
2,347
|
|
Powertrain
|
2,606
|
|
|
—
|
|
|
2,606
|
|
|
(49)
|
|
|
2,655
|
|
Motorparts
|
1,995
|
|
|
—
|
|
|
1,995
|
|
|
(56)
|
|
|
2,051
|
|
Ride
Performance
|
1,524
|
|
|
—
|
|
|
1,524
|
|
|
(24)
|
|
|
1,548
|
|
Total Tenneco
Inc.
|
$
|
10,729
|
|
|
$
|
2,284
|
|
|
$
|
8,445
|
|
|
$
|
(156)
|
|
|
$
|
8,601
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2019
YTD
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
|
Currency
Impact
on Value-add
Revenues
|
|
Value-add
Revenues
excluding
Currency
|
Clean Air
|
$
|
5,378
|
|
|
$
|
2,258
|
|
|
$
|
3,120
|
|
|
$
|
—
|
|
|
$
|
3,120
|
|
Powertrain
|
3,390
|
|
|
—
|
|
|
3,390
|
|
|
—
|
|
|
3,390
|
|
Motorparts
|
2,426
|
|
|
—
|
|
|
2,426
|
|
|
—
|
|
|
2,426
|
|
Ride
Performance
|
2,113
|
|
|
—
|
|
|
2,113
|
|
|
—
|
|
|
2,113
|
|
Total Tenneco
Inc.
|
$
|
13,307
|
|
|
$
|
2,258
|
|
|
$
|
11,049
|
|
|
$
|
—
|
|
|
$
|
11,049
|
|
|
Q3 2020 YTD vs. Q3
2019 YTD $ Change and % Change Increase (decrease)
|
|
Revenues
|
|
%
Change
|
|
Value-add
Revenues
excluding Currency
|
|
%
Change
|
Clean Air
|
$
|
(774)
|
|
|
(14)
|
%
|
|
$
|
(773)
|
|
|
(25)
|
%
|
Powertrain
|
(784)
|
|
|
(23)
|
%
|
|
(735)
|
|
|
(22)
|
%
|
Motorparts
|
(431)
|
|
|
(18)
|
%
|
|
(375)
|
|
|
(15)
|
%
|
Ride
Performance
|
(589)
|
|
|
(28)
|
%
|
|
(565)
|
|
|
(27)
|
%
|
Total Tenneco
Inc.
|
$
|
(2,578)
|
|
|
(19)
|
%
|
|
$
|
(2,448)
|
|
|
(22)
|
%
|
|
|
|
|
|
|
(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
(dollars in millions
except ratios)
|
|
|
September 30,
2020
|
|
September 30,
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
$
|
5,772
|
|
|
$
|
5,569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash, cash
equivalents and restricted cash (total cash)
|
721
|
|
|
395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt net of total
cash balances (1)
|
$
|
5,051
|
|
|
$
|
5,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted LTM EBITDA
including noncontrolling interests (2) (3)
|
$
|
922
|
|
|
$
|
1,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of debt net of
total cash balances to adjusted LTM EBITDA including noncontrolling
interests (4)
|
5.5x
|
|
|
3.4x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4
2019
|
|
Q1
2020
|
|
Q2
2020
|
|
Q3
2020
|
|
Q3 2020
LTM
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
(313)
|
|
|
$
|
(839)
|
|
|
$
|
(350)
|
|
|
$
|
(499)
|
|
|
$
|
(2,001)
|
|
Net income (loss)
attributable to noncontrolling interests
|
75
|
|
|
13
|
|
|
10
|
|
|
19
|
|
|
117
|
|
Net income
(loss)
|
(238)
|
|
|
(826)
|
|
|
(340)
|
|
|
(480)
|
|
|
(1,884)
|
|
Income tax (expense)
benefit
|
(14)
|
|
|
94
|
|
|
101
|
|
|
(648)
|
|
|
(467)
|
|
Interest
expense
|
(80)
|
|
|
(75)
|
|
|
(66)
|
|
|
(68)
|
|
|
(289)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
(144)
|
|
|
(845)
|
|
|
(375)
|
|
|
236
|
|
|
(1,128)
|
|
Depreciation and
amortization
|
170
|
|
|
171
|
|
|
159
|
|
|
151
|
|
|
651
|
|
Total EBITDA
including noncontrolling interests (2)
|
$
|
26
|
|
|
$
|
(674)
|
|
|
$
|
(216)
|
|
|
$
|
387
|
|
|
$
|
(477)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring and
related expenses
|
36
|
|
|
34
|
|
|
105
|
|
|
24
|
|
|
199
|
|
Inventory write-down
(5)
|
—
|
|
|
—
|
|
|
82
|
|
|
(9)
|
|
|
73
|
|
Goodwill and
intangible impairment charges (6)
|
172
|
|
|
383
|
|
|
—
|
|
|
—
|
|
|
555
|
|
Asset impairments
(7)
|
—
|
|
|
471
|
|
|
29
|
|
|
3
|
|
|
503
|
|
Acquisition and
expected separation costs (8)
|
30
|
|
|
25
|
|
|
8
|
|
|
4
|
|
|
67
|
|
Cost reduction
initiatives (9)
|
(1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
Costs to achieve
synergies (10)
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Purchase accounting
charges (11)
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Process harmonization
(12)
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
Pension
charges/adjustments (13)
|
(2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
OPEB curtailment
(14)
|
—
|
|
|
—
|
|
|
—
|
|
|
(21)
|
|
|
(21)
|
|
Total Adjusted EBITDA
including noncontrolling interests (3)
|
$
|
287
|
|
|
$
|
239
|
|
|
$
|
8
|
|
|
$
|
388
|
|
|
$
|
922
|
|
|
|
Q4
2018
|
|
Q1
2019
|
|
Q2
2019
|
|
Q3
2019
|
|
Q3 2019
LTM
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
(109)
|
|
|
$
|
(117)
|
|
|
$
|
26
|
|
|
$
|
70
|
|
|
$
|
(130)
|
|
Net income (loss)
attributable to noncontrolling interests
|
17
|
|
|
12
|
|
|
19
|
|
|
8
|
|
|
56
|
|
Net income
(loss)
|
(92)
|
|
|
(105)
|
|
|
45
|
|
|
78
|
|
|
(74)
|
|
Income tax (expense)
benefit
|
10
|
|
|
—
|
|
|
(14)
|
|
|
9
|
|
|
5
|
|
Interest
expense
|
(79)
|
|
|
(81)
|
|
|
(82)
|
|
|
(79)
|
|
|
(321)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
(23)
|
|
|
(24)
|
|
|
141
|
|
|
148
|
|
|
242
|
|
Depreciation and
amortization
|
165
|
|
|
169
|
|
|
169
|
|
|
165
|
|
|
668
|
|
Total EBITDA
including noncontrolling interests (2)
|
$
|
142
|
|
|
$
|
145
|
|
|
$
|
310
|
|
|
$
|
313
|
|
|
$
|
910
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring and
related expenses
|
17
|
|
|
17
|
|
|
57
|
|
|
28
|
|
|
119
|
|
Goodwill impairment
charge (6)
|
3
|
|
|
60
|
|
|
—
|
|
|
9
|
|
|
72
|
|
Acquisition and
expected separation costs (8)
|
53
|
|
|
40
|
|
|
27
|
|
|
30
|
|
|
150
|
|
Cost reduction
initiatives (9)
|
8
|
|
|
8
|
|
|
2
|
|
|
6
|
|
|
24
|
|
Costs to achieve
synergies (10)
|
49
|
|
|
7
|
|
|
7
|
|
|
7
|
|
|
70
|
|
Purchase accounting
charges (11)
|
106
|
|
|
41
|
|
|
3
|
|
|
11
|
|
|
161
|
|
Process harmonization
(12)
|
—
|
|
|
9
|
|
|
1
|
|
|
—
|
|
|
10
|
|
Pension
charges/adjustments (13)
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Warranty charge
(15)
|
—
|
|
|
—
|
|
|
7
|
|
|
1
|
|
|
8
|
|
Anti-dumping duty
charge (16)
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
Loss on debt
modification (17)
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
Antitrust reserve
change in estimate (18)
|
—
|
|
|
—
|
|
|
—
|
|
|
(9)
|
|
|
(9)
|
|
Brazil tax credit
(19)
|
—
|
|
|
—
|
|
|
—
|
|
|
(22)
|
|
|
(22)
|
|
Out of period
adjustment (20)
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
Impairment of assets
held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
Total Adjusted EBITDA
including noncontrolling interests (3)
|
$
|
407
|
|
|
$
|
327
|
|
|
$
|
414
|
|
|
$
|
387
|
|
|
$
|
1,535
|
|
|
|
|
|
|
|
(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 (loss)
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)
|
Tenneco presents the
above reconciliation of the ratio of debt net of total cash to LTM
Adjusted EBITDA including noncontrolling interests 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 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.
|
|
|
(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)
|
Non-cash asset
impairment charge related to goodwill and intangibles.
|
|
|
(7)
|
Asset impairment
charges.
|
|
|
(8)
|
Costs related to
acquisitions and costs related to expected separation.
|
|
|
(9)
|
Costs related to cost
reduction initiatives.
|
|
|
(10)
|
Costs to achieve
synergies related to the Acquisitions.
|
|
|
(11)
|
This primarily
relates to a non-cash charge to cost of sales for the amortization
of the inventory fair value step-up recorded as part of the
Acquisitions.
|
|
|
(12)
|
Charge due to process
harmonization.
|
|
|
(13)
|
Charges related
to pension derisking and other adjustments.
|
|
|
(14)
|
OPEB curtailment as a
result of an amended union agreement that eliminates healthcare
benefits for future retirees.
|
|
|
(15)
|
Charge related to
warranty. Although Tenneco regularly incurs warranty costs, this
specific charge is of an unusual nature in the period
incurred.
|
|
|
(16)
|
Charge due to
retroactive application of anti-dumping duty on a supplier's
products.
|
|
|
(17)
|
Loss on debt
modification.
|
|
|
(18)
|
Reduction in
estimated antitrust accrual.
|
|
|
(19)
|
Recovery of
value-added tax in a foreign jurisdiction.
|
|
|
(20)
|
Inventory losses
attributable to prior periods.
|
ATTACHMENT
2
|
TENNECO
INC.
RECONCILIATION OF
GAAP(1) TO NON-GAAP REVENUE
MEASURES(2)
Unaudited
(dollars in
millions)
|
|
|
Q3
2020
|
|
Revenues
|
|
Currency
|
|
Revenues
Excluding
Currency
|
|
Substrate
Sales
Excluding
Currency
|
|
Value-add
Revenues
Excluding
Currency
|
Original equipment
light vehicle revenues
|
$
|
2,691
|
|
|
$
|
35
|
|
|
$
|
2,656
|
|
|
$
|
832
|
|
|
$
|
1,824
|
|
Original equipment
commercial truck, off-highway, industrial and other
revenues
|
523
|
|
|
(11)
|
|
|
534
|
|
|
104
|
|
|
430
|
|
Aftermarket &
original equipment service revenues
|
1,042
|
|
|
(7)
|
|
|
1,049
|
|
|
26
|
|
|
1,023
|
|
Net sales and
operating revenues
|
$
|
4,256
|
|
|
$
|
17
|
|
|
$
|
4,239
|
|
|
$
|
962
|
|
|
$
|
3,277
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
2019*
|
|
Revenues
|
|
Currency
|
|
Revenues
Excluding
Currency
|
|
Substrate
Sales
Excluding
Currency
|
|
Value-add
Revenues
Excluding
Currency
|
Original equipment
light vehicle revenues
|
$
|
2,604
|
|
|
$
|
—
|
|
|
$
|
2,604
|
|
|
$
|
663
|
|
|
$
|
1,941
|
|
Original equipment
commercial truck, off-highway, industrial and other
revenues
|
590
|
|
|
—
|
|
|
590
|
|
|
94
|
|
|
496
|
|
Aftermarket &
original equipment service revenues
|
1,125
|
|
|
—
|
|
|
1,125
|
|
|
18
|
|
|
1,107
|
|
Net sales and
operating revenues
|
$
|
4,319
|
|
|
$
|
—
|
|
|
$
|
4,319
|
|
|
$
|
775
|
|
|
$
|
3,544
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2020
YTD*
|
|
Revenues
|
|
Currency
|
|
Revenues
Excluding
Currency
|
|
Substrate
Sales
Excluding
Currency
|
|
Value-add
Revenues
Excluding
Currency
|
Original equipment
light vehicle revenues
|
$
|
6,371
|
|
|
$
|
(64)
|
|
|
$
|
6,435
|
|
|
$
|
1,926
|
|
|
$
|
4,509
|
|
Original equipment
commercial truck, off-highway, industrial and other
revenues
|
1,480
|
|
|
(64)
|
|
|
1,544
|
|
|
327
|
|
|
1,217
|
|
Aftermarket &
original equipment service revenues
|
2,878
|
|
|
(60)
|
|
|
2,938
|
|
|
63
|
|
|
2,875
|
|
Net sales and
operating revenues
|
$
|
10,729
|
|
|
$
|
(188)
|
|
|
$
|
10,917
|
|
|
$
|
2,316
|
|
|
$
|
8,601
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2019
YTD*
|
|
Revenues
|
|
Currency
|
|
Revenues
Excluding
Currency
|
|
Substrate
Sales
Excluding Currency
|
|
Value-add
Revenues
Excluding Currency
|
Original equipment
light vehicle revenues
|
$
|
7,937
|
|
|
$
|
—
|
|
|
$
|
7,937
|
|
|
$
|
1,896
|
|
|
$
|
6,041
|
|
Original equipment
commercial truck, off-highway, industrial and other
revenues
|
1,794
|
|
|
—
|
|
|
1,794
|
|
|
303
|
|
|
1,491
|
|
Aftermarket &
original equipment service revenues
|
3,576
|
|
|
—
|
|
|
3,576
|
|
|
59
|
|
|
3,517
|
|
Net sales and
operating revenues
|
$
|
13,307
|
|
|
$
|
—
|
|
|
$
|
13,307
|
|
|
$
|
2,258
|
|
|
$
|
11,049
|
|
|
* Prior to the second
quarter 2020, original equipment service revenues was previously
classified within original equipment light vehicle revenues and
original equipment commercial truck, off-highway, industrial and
other revenues.
|
|
(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) REVENUE AND EARNINGS TO NON-GAAP REVENUE AND
EARNINGS MEASURES(2)
UNAUDITED
(dollars in millions
except percents)
|
|
|
Q3
2020
|
|
Global
Segments
|
|
|
|
|
|
Clean
Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
1,919
|
|
|
$
|
1,007
|
|
|
$
|
730
|
|
|
$
|
600
|
|
|
$
|
4,256
|
|
|
$
|
—
|
|
|
$
|
4,256
|
|
Less: Substrate
sales
|
961
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
961
|
|
|
—
|
|
|
961
|
|
Value-add
revenues
|
$
|
958
|
|
|
$
|
1,007
|
|
|
$
|
730
|
|
|
$
|
600
|
|
|
$
|
3,295
|
|
|
$
|
—
|
|
|
$
|
3,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
149
|
|
|
$
|
111
|
|
|
$
|
138
|
|
|
$
|
23
|
|
|
$
|
421
|
|
|
$
|
(34)
|
|
|
$
|
387
|
|
EBITDA as a % of
revenue
|
7.8
|
%
|
|
11.0
|
%
|
|
18.9
|
%
|
|
3.8
|
%
|
|
9.9
|
%
|
|
|
|
9.1
|
%
|
EBITDA as a % of
value-add revenue
|
15.6
|
%
|
`
|
11.0
|
%
|
|
18.9
|
%
|
|
3.8
|
%
|
|
12.8
|
%
|
|
|
|
11.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
149
|
|
|
$
|
124
|
|
|
$
|
131
|
|
|
$
|
32
|
|
|
$
|
436
|
|
|
$
|
(48)
|
|
|
$
|
388
|
|
Adjusted EBITDA as a
% of revenue
|
7.8
|
%
|
|
12.3
|
%
|
|
17.9
|
%
|
|
5.3
|
%
|
|
10.2
|
%
|
|
|
|
9.1
|
%
|
Adjusted EBITDA as a
% of value-add revenue
|
15.6
|
%
|
|
12.3
|
%
|
|
17.9
|
%
|
|
5.3
|
%
|
|
13.2
|
%
|
|
|
|
11.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
2019
|
|
Global
Segments
|
|
|
|
|
|
Clean
Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
1,772
|
|
|
$
|
1,082
|
|
|
$
|
794
|
|
|
$
|
671
|
|
|
$
|
4,319
|
|
|
$
|
—
|
|
|
$
|
4,319
|
|
Less: Substrate
sales
|
775
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
775
|
|
|
—
|
|
|
775
|
|
Value-add
revenues
|
$
|
997
|
|
|
$
|
1,082
|
|
|
$
|
794
|
|
|
$
|
671
|
|
|
$
|
3,544
|
|
|
$
|
—
|
|
|
$
|
3,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
169
|
|
|
$
|
90
|
|
|
$
|
113
|
|
|
$
|
20
|
|
|
$
|
392
|
|
|
$
|
(79)
|
|
|
$
|
313
|
|
EBITDA as a % of
revenue
|
9.5
|
%
|
|
8.3
|
%
|
|
14.2
|
%
|
|
3.0
|
%
|
|
9.1
|
%
|
|
|
|
7.2
|
%
|
EBITDA as a % of
value-add revenue
|
17.0
|
%
|
`
|
8.3
|
%
|
|
14.2
|
%
|
|
3.0
|
%
|
|
11.1
|
%
|
|
|
|
8.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
157
|
|
|
$
|
109
|
|
|
$
|
121
|
|
|
$
|
42
|
|
|
$
|
429
|
|
|
$
|
(42)
|
|
|
$
|
387
|
|
Adjusted EBITDA as a
% of revenue
|
8.9
|
%
|
|
10.1
|
%
|
|
15.2
|
%
|
|
6.3
|
%
|
|
9.9
|
%
|
|
|
|
9.0
|
%
|
Adjusted EBITDA as a
% of value-add revenue
|
15.7
|
%
|
|
10.1
|
%
|
|
15.2
|
%
|
|
6.3
|
%
|
|
12.1
|
%
|
|
|
|
10.9
|
%
|
|
|
|
|
|
(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) REVENUE AND EARNINGS TO NON-GAAP REVENUE AND
EARNINGS MEASURES(2)
UNAUDITED
(dollars in millions
except percents)
|
|
|
Q3 2020
YTD
|
|
Global
Segments
|
|
|
|
|
|
Clean
Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
4,604
|
|
|
$
|
2,606
|
|
|
$
|
1,995
|
|
|
$
|
1,524
|
|
|
$
|
10,729
|
|
|
$
|
—
|
|
|
$
|
10,729
|
|
Less: Substrate
sales
|
2,284
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,284
|
|
|
—
|
|
|
2,284
|
|
Value-add
revenues
|
$
|
2,320
|
|
|
$
|
2,606
|
|
|
$
|
1,995
|
|
|
$
|
1,524
|
|
|
$
|
8,445
|
|
|
$
|
—
|
|
|
$
|
8,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
265
|
|
|
$
|
(21)
|
|
|
$
|
46
|
|
|
$
|
(624)
|
|
|
$
|
(334)
|
|
|
$
|
(169)
|
|
|
$
|
(503)
|
|
EBITDA as a % of
revenue
|
5.8
|
%
|
|
(0.8)
|
%
|
|
2.3
|
%
|
|
(40.9)
|
%
|
|
(3.1)
|
%
|
|
|
|
(4.7)
|
%
|
EBITDA as a % of
value-add revenue
|
11.4
|
%
|
`
|
(0.8)
|
%
|
|
2.3
|
%
|
|
(40.9)
|
%
|
|
(4.0)
|
%
|
|
|
|
(6.0)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
291
|
|
|
$
|
193
|
|
|
$
|
275
|
|
|
$
|
7
|
|
|
$
|
766
|
|
|
$
|
(131)
|
|
|
$
|
635
|
|
Adjusted EBITDA as a
% of revenue
|
6.3
|
%
|
|
7.4
|
%
|
|
13.8
|
%
|
|
0.5
|
%
|
|
7.1
|
%
|
|
|
|
5.9
|
%
|
Adjusted EBITDA as a
% of value-add revenue
|
12.5
|
%
|
|
7.4
|
%
|
|
13.8
|
%
|
|
0.5
|
%
|
|
9.1
|
%
|
|
|
|
7.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2019
YTD
|
|
Global
Segments
|
|
|
|
|
|
Clean
Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
5,378
|
|
|
$
|
3,390
|
|
|
$
|
2,426
|
|
|
$
|
2,113
|
|
|
$
|
13,307
|
|
|
$
|
—
|
|
|
$
|
13,307
|
|
Less: Substrate
sales
|
2,258
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,258
|
|
|
—
|
|
|
2,258
|
|
Value-add
revenues
|
$
|
3,120
|
|
|
$
|
3,390
|
|
|
$
|
2,426
|
|
|
$
|
2,113
|
|
|
$
|
11,049
|
|
|
$
|
—
|
|
|
$
|
11,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
452
|
|
|
$
|
303
|
|
|
$
|
268
|
|
|
$
|
1
|
|
|
$
|
1,024
|
|
|
$
|
(256)
|
|
|
$
|
768
|
|
EBITDA as a % of
revenue
|
8.4
|
%
|
|
8.9
|
%
|
|
11.0
|
%
|
|
—
|
%
|
|
7.7
|
%
|
|
|
|
5.8
|
%
|
EBITDA as a % of
value-add revenue
|
14.5
|
%
|
`
|
8.9
|
%
|
|
11.0
|
%
|
|
—
|
%
|
|
9.3
|
%
|
|
|
|
7.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
465
|
|
|
$
|
343
|
|
|
$
|
337
|
|
|
$
|
123
|
|
|
$
|
1,268
|
|
|
$
|
(140)
|
|
|
$
|
1,128
|
|
Adjusted EBITDA as a
% of revenue
|
8.6
|
%
|
|
10.1
|
%
|
|
13.9
|
%
|
|
5.8
|
%
|
|
9.5
|
%
|
|
|
|
8.5
|
%
|
Adjusted EBITDA as a
% of value-add revenue
|
14.9
|
%
|
|
10.1
|
%
|
|
13.9
|
%
|
|
5.8
|
%
|
|
11.5
|
%
|
|
|
|
10.2
|
%
|
|
|
|
|
|
(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) REVENUE TO NON-GAAP REVENUE
MEASURES(2)
Original equipment
commercial truck, off-highway, industrial and other
revenues
Unaudited
(dollars in
millions)
|
|
|
Q3
2020
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
Clean Air
|
$
|
262
|
|
|
$
|
100
|
|
|
$
|
162
|
|
Powertrain
|
203
|
|
|
—
|
|
|
203
|
|
Ride
Performance
|
58
|
|
|
—
|
|
|
58
|
|
Total Tenneco
Inc.
|
$
|
523
|
|
|
$
|
100
|
|
|
$
|
423
|
|
|
|
|
|
|
|
|
Q3
2019*
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
Clean Air
|
$
|
261
|
|
|
$
|
94
|
|
|
$
|
167
|
|
Powertrain
|
247
|
|
|
—
|
|
|
247
|
|
Ride
Performance
|
82
|
|
|
—
|
|
|
82
|
|
Total Tenneco
Inc.
|
$
|
590
|
|
|
$
|
94
|
|
|
$
|
496
|
|
|
|
|
|
|
|
|
Q3 2020
YTD*
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
Clean Air
|
$
|
767
|
|
|
$
|
316
|
|
|
$
|
451
|
|
Powertrain
|
541
|
|
|
—
|
|
|
541
|
|
Ride
Performance
|
172
|
|
|
—
|
|
|
172
|
|
Total Tenneco
Inc.
|
$
|
1,480
|
|
|
$
|
316
|
|
|
$
|
1,164
|
|
|
|
|
|
|
|
|
Q3 2019
YTD*
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
Clean Air
|
$
|
850
|
|
|
$
|
303
|
|
|
$
|
547
|
|
Powertrain
|
676
|
|
|
—
|
|
|
676
|
|
Ride
Performance
|
268
|
|
|
—
|
|
|
268
|
|
Total Tenneco
Inc.
|
$
|
1,794
|
|
|
$
|
303
|
|
|
$
|
1,491
|
|
|
|
|
|
|
|
|
* Prior to the second
quarter 2020, original equipment service revenues related to
original equipment commercial truck, off-highway, industrial and
other were previously classified within original equipment
commercial truck, off-highway, industrial and other
revenues.
|
|
|
(1)
|
U.S. Generally
Accepted Accounting Principles.
|
|
|
(2)
|
Tenneco presents the
above reconciliation of revenues in order to reflect value-add
revenues separately from substrate sales which 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.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/tenneco-reports-third-quarter-2020-results-301164114.html
SOURCE Tenneco Inc.