LAKE FOREST, Ill., May 8, 2020 /PRNewswire/ -- Tenneco (NYSE:
TEN) reported first quarter 2020 revenue of $3.8 billion, versus $4.5
billion a year ago. Excluding
unfavorable currency of $97M, total
revenue decreased 12% versus last year, while light vehicle
industry production* declined 23% in the quarter. Value-add revenue
for the first quarter was $3.1
billion. The Company estimates the COVID-19 crisis
represented approximately a $340
million negative impact on first quarter value-add
revenue.
Including non-cash impairments of $854
million, $737 million after
tax, the Company reported a net loss for first quarter 2020 of
$839 million, or $(10.34) per diluted share, compared with a first
quarter net loss of $117 million, or
$(1.44) per diluted share in 2019.
First quarter EBIT (earnings before interest, taxes and
noncontrolling interests) was a loss of $845
million, versus a loss of $24
million last year. EBIT as a percent of revenue was
-22.0% versus -0.5% last year.
First quarter 2020 adjusted net loss was $26 million, or $(0.31) per diluted share, compared with income
of $42 million, or 52-cents per diluted share last
year. First quarter adjusted EBITDA was $239 million versus $327
million last year. Adjusted EBITDA as a percent of
value-add revenue was 7.6% versus 8.7% last year. Cash flow
used in operations was $152 million,
on par with last year despite the COVID-19 driven impact of lower
earnings.
"Tenneco responded quickly to the COVID-19 crisis to protect our
team members' health and safety while taking aggressive actions to
mitigate the financial impact of the pandemic on the company," said
Brian Kesseler, Tenneco's Chief
Executive Officer. "We expanded on the structural cost reductions
introduced last quarter, and implemented a range of temporary cost
reductions including plant closures, deferment of discretionary
spending and the reduction of capital expenditures. We have amended
the terms of the company's debt covenants to help us navigate the
COVID-19-driven economic downturn, and adopted a shareholder rights
plan to help protect the availability of Tenneco's tax assets."
Liquidity Update
As of March
31, 2020, Tenneco had liquidity of $1.57 billion, comprised of $770 million cash and $800
million undrawn on the Company's revolving credit facility.
The Company has acted to further bolster its liquidity position by
drawing the remaining amount available under this revolving
facility. Based on available industry forecasts and Company
estimates, the Company believes it has adequate liquidity to
weather the current downturn.
Operations Update
Throughout the Company's operations,
incremental health and safety precautions have been implemented,
including rigorous cleaning and sanitation protocols, wellness
checks for team members and changes within facilities to comply
with social distancing requirements. In China, all of the Company's production
facilities, distribution centers and offices are now open and
operating at near pre-crisis levels. As of the first week of
May, approximately 75% of the Company's plants and distribution
centers worldwide are operating at various levels of production, up
from a low of 47% during the first week of April.
"I appreciate the extraordinary effort made by our team members
and their families, including helping the company safely maintain
operations during the crisis to provide products and services that
are considered vital to public security, health and safety,"
Kesseler added. "Our focus continues to be on protecting the
wellbeing of our team members as we prepare to support our
customers in the restart of production globally. In every part of
our business, we've implemented enhanced operating protocols that
will support a safe and efficient ramp up of our operations as
customer demand grows."
Outlook
Tenneco continues to monitor the effects of
the COVID-19 pandemic, which is impacting the global automotive
industry. Due to uncertainty related to the crisis, the Company is
not providing financial guidance for the balance of 2020 at this
time.
In response to the lower demand environment related to the
COVID-19 crisis, Tenneco will implement additional structural cost
reductions expected to achieve an incremental $65 million in annual run rate cost savings by
the end of 2020.
Recently, the Company also implemented a number of temporary
cost reductions and actions to further mitigate the COVID-19
–related profit pressures and optimize cash performance.
These actions include temporarily suspending or reducing
operations, salary reductions and furloughs, reducing capital
spending and lowering the Board of Director's retainer fees.
*Source: IHS Markit
April V2 2020 global light vehicle production
forecast.
|
Attachment 1
Statements of Income (Loss) – 3
months
Balance Sheets
Statements of Cash Flows – 3 Months
Attachment 2
Reconciliation of GAAP to Non-GAAP
Earnings Measures – 3 Months
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures – 3
Months
Reconciliation of Non-GAAP Measures – Debt Net of Cash/Adjusted LTM
and pro forma adjusted LTM EBITDA including noncontrolling
interests
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures –
Original Equipment and Aftermarket Revenue – 3 Months
Reconciliation of GAAP Revenue and Earnings to Non-GAAP Revenue and
Earnings Measures – 3 Months
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures –
Original Equipment Commercial Truck, Off-Highway, Industrial and
other revenues – quarterly
CONFERENCE CALL
The company will host a webcast
conference call on Friday, May 8,
2020 at 9:30 a.m. ET. The
purpose of the call is to discuss the company's financial results
for the first quarter and full year 2020, as well as to provide
other information regarding matters that may impact the company's
outlook. For a "listen only" broadcast and access to the
presentation materials, go to the company's website
www.investors.tenneco.com. To participate by telephone,
please dial: 1-833-366-1121 (domestic) or 1-412-902-6733
(international), using the passcode "Tenneco Inc." A call playback
will be available for one week, starting approximately one hour
after the conclusion of the call. To connect, please dial
1-877-344-7529 (domestic), 1-412-317-0088 (international),
855-669-9658 (Canada), using the
replay access code 10138628.
About Tenneco
Headquartered in Lake Forest, Illinois, Tenneco is one of the
world's leading designers, manufacturers and marketers of
Aftermarket, Ride Performance, Clean Air and Powertrain products
and technology solutions for diversified markets, including light
vehicle, commercial truck, off-highway, industrial and the
aftermarket, with 2019 revenues of $17.45
billion and approximately 78,000 employees worldwide. On
October 1, 2018, Tenneco completed
the acquisition of Federal-Mogul, a leading global supplier to
original equipment manufacturers and the aftermarket. In the
future, the company expects to separate its divisions to form two
new, independent companies: DRiV, an Aftermarket and Ride
Performance company, and New Tenneco, a Powertrain Technology
company.
About DRiV™ - the future Aftermarket and Ride Performance
Company
Following the separation, DRiV will be one of the
largest global multi-line, multi-brand aftermarket companies, and
one of the largest global OE ride performance and braking
companies. DRiV's principal product brands will feature
Monroe®, Öhlins®, Walker®, Clevite®Elastomers, MOOG®,
Fel-Pro®, Wagner®, Ferodo®, Champion® and others. DRiV would have
2019 revenues of $5.9 billion, with
53% of those revenues from aftermarket and 47% from original
equipment customers.
About the new Tenneco - the future Powertrain
Technology Company
Following the separation, the new Tenneco
will be one of the world's largest pure-play powertrain companies
serving OE markets worldwide with engineered solutions addressing
fuel economy, power output, and criteria pollution requirements for
gasoline, diesel and electrified powertrains. The new Tenneco would
have 2019 revenues of $11.5 billion,
serving light vehicle, commercial truck, off-highway and industrial
markets.
Safe Harbor
This press release contains
forward-looking statements. The words "will," "would," "could,"
"plan," "expect," "anticipate," "estimate," "opportunities," 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 and market conditions, including
the effect of the COVID-19 pandemic;
- disasters, local and global public health emergencies or
other catastrophic events, such as fires, earthquakes, and
flooding, pandemics or epidemics (including the COVID-19 pandemic),
where we or other customers do business, and any resultant
disruptions in the supply or production of goods or services to us
or by us in demand by our customers or in the operation of our
system, disaster recovery capabilities or business continuity
capabilities;
- 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 ability to comply with the covenants contained in our
debt instruments;
- 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, including, but not limited to,
any of the foregoing arising in connection with the ongoing global
antitrust investigation, product performance, product safety or
intellectual property rights;
- 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 away from historically higher margin products for our
customers and us, to other lower margin vehicles, for which we may
or may not have supply arrangements;
- 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;
- new technologies that reduce the demand for certain of our
products or otherwise render them obsolete;
- our ability to introduce new products and technologies that
satisfy customers' needs in a timely fashion;
- 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,
including economic conditions, such as currency exchange and
inflation rates, political conditions in the countries where we
operate or sell our products, adverse changes in trade agreements,
tariffs, immigration policies, political instability, and tax and
other laws, and potential disruptions of production and
supply;
- increasing competition from lower cost, private-label
products;
- damage to the reputation of one or more of our leading
brands;
- the impact of improvements in automotive parts on
aftermarket demand for some of our products;
- 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;
- developments relating to our intellectual property,
including our ability to changes in technology and the availability
and effectiveness of legal protection for our innovations and
brands;
- costs related to product warranties and other customer
satisfaction actions;
- the failure or breach of our information technology systems,
including the consequences of any misappropriation, exposure or
corruption of sensitive information stored on such systems and the
interruption to our business that such failure or breach may
cause;
- the impact of consolidation among vehicle parts suppliers
and customers on our ability to compete in the highly competitive
automotive and commercial vehicle supplier industry;
- changes in distribution channels or competitive conditions
in the markets and countries where we operate;
- the evolution towards autonomous vehicles and car and ride
sharing;
- customer acceptance of new products;
- our ability to successfully integrate, and benefit from, any
acquisitions that we complete;
- our ability to effectively manage our joint ventures and
other third-party relationships;
- 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;
- the negative impact of fuel price volatility on
transportation and logistics costs, raw material costs,
discretionary purchases of vehicles or aftermarket products and
demand for off-highway equipment;
- 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;
- changes by the Financial Accounting Standards Board ("FASB")
or the Securities and Exchange Commission ("SEC") of generally
accepted accounting principles or other authoritative
guidance;
- changes in accounting estimates and assumptions, including
changes based on additional information;
- any changes by the International Organization for
Standardization ("ISO") or other such committees in their
certification protocols for processes and products, which may have
the effect of delaying or hindering our ability to bring new
products to market;
- 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;
- potential volatility in our effective tax rate;
- acts of war and/or terrorism, as well as actions taken or to
be taken by the United States and
other governments as a result of further acts or threats of
terrorism, and the impact of these acts on economic, financial and
social conditions in the countries where we operate;
- pension obligations and other postretirement
benefits;
- our hedging activities to address commodity price
fluctuations; and
- the timing and occurrence (or non-occurrence) of other
transactions, events and circumstances which may be beyond our
control.
In addition, this release includes forward-looking statements
regarding the Company's ongoing review of strategic alternatives
and the planned separation of the Company into a powertrain
technology company and an aftermarket and ride performance company.
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 the
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 the separation;
- the risk that the combined company and each separate company
following the separation will underperform relative to our
expectations;
- the ongoing transaction costs and risk we may incur greater
costs following the separation of the business;
- the risk the spin-off is determined to be a taxable
transaction;
- the risk the benefits of the separation may not be fully
realized or may take longer to realize than expected;
- the risk the separation may not advance our business
strategy; and
- the risk the 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.
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
|
(dollars in millions,
except share and per share amounts)
|
|
|
Three Months
Ended
March
31,
|
|
2020
|
|
2019
|
Net sales and
operating revenues:
|
|
|
|
Clean Air - Value-add
revenues
|
$
|
845
|
|
|
$
|
1,073
|
|
Clean Air - Substrate
sales
|
700
|
|
|
706
|
|
Powertrain
|
997
|
|
|
1,175
|
|
Motorparts
|
706
|
|
|
797
|
|
Ride
Performance
|
588
|
|
|
733
|
|
Total net sales and operating revenues
|
3,836
|
|
|
4,484
|
|
Costs and
expenses:
|
|
|
|
Cost of
sales (exclusive of depreciation and amortization)
|
3,339
|
|
|
3,870
|
|
Selling,
general, and administrative
|
249
|
|
|
318
|
|
Depreciation and amortization
|
171
|
|
|
169
|
|
Engineering, research, and development
|
77
|
|
|
92
|
|
Restructuring charges and asset impairments
|
484
|
|
|
16
|
|
Goodwill
and intangible impairment charge
|
383
|
|
|
60
|
|
Total costs and expenses
|
4,703
|
|
|
4,525
|
|
Other income
(expense):
|
|
|
|
Non-service pension
and other postretirement benefit (costs) credits
|
1
|
|
|
(2)
|
|
Equity in earnings
(losses) of nonconsolidated affiliates, net of tax
|
13
|
|
|
16
|
|
Other income
(expense), net
|
8
|
|
|
3
|
|
|
22
|
|
|
17
|
|
Earnings (loss)
before interest expense, income taxes, and noncontrolling
interests
|
(845)
|
|
|
(24)
|
|
Interest
expense
|
(75)
|
|
|
(81)
|
|
Earnings (loss)
before income taxes and noncontrolling interests
|
(920)
|
|
|
(105)
|
|
Income tax (expense)
benefit
|
94
|
|
|
—
|
|
Net income
(loss)
|
(826)
|
|
|
(105)
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
13
|
|
|
12
|
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
(839)
|
|
|
$
|
(117)
|
|
|
|
|
|
Basic earnings (loss)
per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
(10.34)
|
|
|
$
|
(1.44)
|
|
Weighted average
shares outstanding
|
81.2
|
|
|
80.9
|
|
Diluted earnings
(loss) per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
(10.34)
|
|
|
$
|
(1.44)
|
|
Weighted average
shares outstanding
|
81.2
|
|
|
80.9
|
|
ATTACHMENT
1
|
|
TENNECO
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
Unaudited
|
(dollars in
millions)
|
|
|
March
31,
2020
|
|
December
31,
2019
|
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
767
|
|
|
$
|
564
|
|
|
Restricted
cash
|
3
|
|
|
2
|
|
|
Receivables,
net
|
2,242
|
|
(a)
|
2,538
|
|
(a)
|
Inventories
|
2,001
|
|
|
1,999
|
|
|
Prepayments and other
current assets
|
623
|
|
|
632
|
|
|
Other noncurrent
assets
|
3,576
|
|
|
3,864
|
|
|
Property, plant and
equipment, net
|
3,012
|
|
|
3,627
|
|
|
Total
assets
|
$
|
12,224
|
|
|
$
|
13,226
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Short-term debt,
including current maturities of long-term debt
|
$
|
175
|
|
|
$
|
185
|
|
|
Accounts
payable
|
2,443
|
|
|
2,647
|
|
|
Accrued compensation
and employee benefits
|
294
|
|
|
325
|
|
|
Accrued income
taxes
|
96
|
|
|
72
|
|
|
Accrued expenses and
other current liabilities
|
968
|
|
|
1,070
|
|
|
Long-term
debt
|
5,837
|
|
(b)
|
5,371
|
|
(b)
|
Deferred income
taxes
|
84
|
|
|
106
|
|
|
Pension and
postretirement benefits
|
1,109
|
|
|
1,145
|
|
|
Deferred credits and
other liabilities
|
497
|
|
|
490
|
|
|
Redeemable
noncontrolling interests
|
72
|
|
|
196
|
|
|
Tenneco Inc.
shareholders' equity
|
384
|
|
|
1,425
|
|
|
Noncontrolling
interests
|
265
|
|
|
194
|
|
|
Total liabilities,
redeemable noncontrolling interests, and equity
|
$
|
12,224
|
|
|
$
|
13,226
|
|
|
|
|
|
March
31,
2020
|
|
December
31,
2019
|
|
(a) Accounts
receivable net of:
|
|
|
|
|
Accounts
receivable outstanding and derecognized
|
$
|
1,061
|
|
|
$
|
1,037
|
|
|
|
|
|
|
|
(b) Long-term debt
composed of:
|
|
|
|
|
Revolver
Borrowings
|
$
|
700
|
|
|
$
|
183
|
|
|
LIBOR plus
1.75% Term Loan A due 2019 through 2023
|
1,584
|
|
|
1,608
|
|
|
LIBOR plus
3.00% Term Loan B due 2019 through 2025
|
1,619
|
|
|
1,623
|
|
|
$225 million
of 5.375% Senior Notes due 2024
|
222
|
|
|
222
|
|
|
$500 million
of 5.000% Senior Notes due 2026
|
494
|
|
|
494
|
|
|
€415 million
4.875% Euro Fixed Rate Notes due 2022
|
470
|
|
|
479
|
|
|
€300 million
of Euribor plus 4.875% Euro Floating Rate Notes due 2024
|
334
|
|
|
340
|
|
|
€350 million
of 5.000% Euro Fixed Rate Notes due 2024
|
405
|
|
|
413
|
|
|
Other Debt,
primarily foreign instruments
|
12
|
|
|
13
|
|
|
|
5,840
|
|
|
5,375
|
|
|
Less:
maturities classified as current
|
3
|
|
|
4
|
|
|
Total
long-term debt
|
$
|
5,837
|
|
|
$
|
5,371
|
|
|
ATTACHMENT
1
|
|
TENNECO
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Unaudited
|
(dollars in
millions)
|
|
|
Three Months
Ended
March
31,
|
|
2020
|
|
2019
|
Operating
Activities
|
|
|
|
Net income
(loss)
|
$
|
(826)
|
|
|
$
|
(105)
|
|
Adjustments to
reconcile net income (loss) to cash provided (used) by operating
activities:
|
|
|
|
Goodwill and
intangible impairment charge
|
383
|
|
|
60
|
|
Depreciation and
amortization
|
171
|
|
|
169
|
|
Deferred income
taxes
|
(166)
|
|
|
(8)
|
|
Stock-based
compensation
|
2
|
|
|
7
|
|
Restructuring charges
and asset impairments, net of cash paid
|
454
|
|
|
(14)
|
|
Change in pension and
other postretirement benefit plans
|
(19)
|
|
|
(17)
|
|
Equity in earnings of
nonconsolidated affiliates
|
(13)
|
|
|
(16)
|
|
Cash dividends
received from nonconsolidated affiliates
|
13
|
|
|
15
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables
|
139
|
|
|
(312)
|
|
Inventories
|
(73)
|
|
|
11
|
|
Payables and accrued
expenses
|
(136)
|
|
|
157
|
|
Accrued interest and
income taxes
|
29
|
|
|
(38)
|
|
Other assets and
liabilities
|
(110)
|
|
|
(59)
|
|
Net cash (used)
provided by operating activities
|
(152)
|
|
|
(150)
|
|
Investing
Activities
|
|
|
|
Acquisitions, net of
cash acquired
|
—
|
|
|
(158)
|
|
Proceeds from sale of
assets
|
2
|
|
|
1
|
|
Net proceeds from
sale of business
|
—
|
|
|
22
|
|
Cash payments for
property, plant and equipment
|
(137)
|
|
|
(210)
|
|
Proceeds from
deferred purchase price of factored receivables
|
56
|
|
|
60
|
|
Other
|
2
|
|
|
2
|
|
Net cash (used)
provided by investing activities
|
(77)
|
|
|
(283)
|
|
Financing
Activities
|
|
|
|
Proceeds from term
loans and notes
|
67
|
|
|
28
|
|
Repayments of term
loans and notes
|
(84)
|
|
|
(64)
|
|
Debt issuance costs
of long-term debt
|
(8)
|
|
|
—
|
|
Borrowings on
revolving lines of credit
|
3,161
|
|
|
2,119
|
|
Payments on revolving
lines of credit
|
(2,659)
|
|
|
(1,981)
|
|
Issuance of common
shares
|
(1)
|
|
|
(2)
|
|
Cash
dividends
|
—
|
|
|
(20)
|
|
Net increase
(decrease) in bank overdrafts
|
(2)
|
|
|
(1)
|
|
Other
|
11
|
|
|
(3)
|
|
Distributions to
noncontrolling interest partners
|
(2)
|
|
|
(1)
|
|
Net cash (used)
provided by financing activities
|
483
|
|
|
75
|
|
Effect of foreign
exchange rate changes on cash, cash equivalents and restricted
cash
|
(50)
|
|
|
19
|
|
Increase (decrease)
in cash, cash equivalents and restricted cash
|
204
|
|
|
(339)
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
566
|
|
|
702
|
|
Cash, cash
equivalents and restricted cash, end of period
|
$
|
770
|
|
|
$
|
363
|
|
Supplemental Cash
Flow Information
|
|
|
|
Cash paid during the
period for interest
|
$
|
67
|
|
|
$
|
74
|
|
Cash paid during the
period for income taxes, net of refunds
|
$
|
41
|
|
|
$
|
43
|
|
Lease assets obtained
in exchange for new operating lease liabilities
|
$
|
51
|
|
|
$
|
19
|
|
Non-cash Investing
and Financing Activities
|
|
|
|
Period end balance of
trade payables for property, plant and equipment
|
$
|
96
|
|
|
$
|
101
|
|
Deferred purchase
price of receivables factored in the period
|
$
|
60
|
|
|
$
|
58
|
|
ATTACHMENT
2
|
|
TENNECO
INC.
|
RECONCILIATION OF
GAAP(1) TO NON-GAAP EARNINGS
MEASURES(2)
|
Unaudited
|
(dollars in millions,
except per share amounts)
|
|
|
Q1
2020
|
|
Q1
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
|
$
|
(839)
|
|
|
$
|
(10.34)
|
|
|
$
|
13
|
|
|
$
|
94
|
|
|
$
|
(845)
|
|
|
$
|
(674)
|
|
|
$
|
(117)
|
|
|
$
|
(1.44)
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
(24)
|
|
|
$
|
145
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
related expenses (5)
|
31
|
|
|
0.38
|
|
|
—
|
|
|
(8)
|
|
|
39
|
|
|
34
|
|
|
16
|
|
|
0.19
|
|
|
1
|
|
|
(3)
|
|
|
20
|
|
|
17
|
|
Goodwill and
intangible impairment charge (6)
|
366
|
|
|
4.52
|
|
|
5
|
|
|
(12)
|
|
|
383
|
|
|
383
|
|
|
60
|
|
|
0.74
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
60
|
|
Asset impairments
(7)
|
371
|
|
|
4.57
|
|
|
7
|
|
|
(93)
|
|
|
471
|
|
|
471
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Acquisition and
expected separation costs (8)
|
19
|
|
|
0.23
|
|
|
—
|
|
|
(6)
|
|
|
25
|
|
|
25
|
|
|
32
|
|
|
0.39
|
|
|
—
|
|
|
(8)
|
|
|
40
|
|
|
40
|
|
Cost reduction
initiatives (9)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
0.07
|
|
|
—
|
|
|
(2)
|
|
|
8
|
|
|
8
|
|
Costs to achieve
synergies (10)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
0.08
|
|
|
—
|
|
|
(1)
|
|
|
7
|
|
|
7
|
|
Purchase accounting
charges (11)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
0.42
|
|
|
—
|
|
|
(7)
|
|
|
41
|
|
|
41
|
|
Process harmonization
(12)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
0.09
|
|
|
—
|
|
|
(2)
|
|
|
9
|
|
|
9
|
|
Noncontrolling
interests adjustments (13)
|
11
|
|
|
0.14
|
|
|
(11)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net tax
adjustments
|
15
|
|
|
0.19
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
|
(0.02)
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
—
|
|
Adjusted Net income,
EPS, NCI, Tax, EBIT, and EBITDA (4)
|
$
|
(26)
|
|
|
$
|
(0.31)
|
|
|
$
|
14
|
|
|
$
|
(10)
|
|
|
$
|
73
|
|
|
$
|
239
|
|
|
$
|
42
|
|
|
$
|
0.52
|
|
|
$
|
13
|
|
|
$
|
(25)
|
|
|
$
|
161
|
|
|
$
|
327
|
|
|
Q1 2020
|
|
Global
Segments
|
|
|
|
|
|
Clean
Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net income (loss)
attributable to Tenneco Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(839)
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
13
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
(826)
|
|
Income tax (expense)
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
94
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(75)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
|
(845)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
171
|
|
Total EBITDA
including noncontrolling interests (3)
|
$
|
99
|
|
|
$
|
(70)
|
|
|
$
|
(40)
|
|
|
$
|
(577)
|
|
|
$
|
(588)
|
|
|
$
|
(86)
|
|
|
$
|
(674)
|
|
Restructuring and
related expenses(5)
|
1
|
|
|
—
|
|
|
3
|
|
|
25
|
|
|
29
|
|
|
5
|
|
|
34
|
|
Goodwill and
intangible impairment charge (6)
|
—
|
|
|
160
|
|
|
110
|
|
|
113
|
|
|
383
|
|
|
—
|
|
|
383
|
|
Asset impairments
(7)
|
—
|
|
|
—
|
|
|
—
|
|
|
455
|
|
|
455
|
|
|
16
|
|
|
471
|
|
Acquisition and
expected separation costs (8)
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
21
|
|
|
25
|
|
Adjusted EBITDA
(4)
|
$
|
104
|
|
|
$
|
90
|
|
|
$
|
73
|
|
|
$
|
16
|
|
|
$
|
283
|
|
|
$
|
(44)
|
|
|
$
|
239
|
|
|
|
|
Q1 2019
|
|
Global
Segments
|
|
|
|
|
|
Clean
Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net income (loss)
attributable to Tenneco Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(117)
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
12
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
(105)
|
|
Income tax (expense)
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(81)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
|
(24)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
169
|
|
Total EBITDA
including noncontrolling interests (3)
|
$
|
131
|
|
|
$
|
113
|
|
|
$
|
45
|
|
|
$
|
(45)
|
|
|
$
|
244
|
|
|
$
|
(99)
|
|
|
$
|
145
|
|
Restructuring and
related expenses(5)
|
4
|
|
|
1
|
|
|
1
|
|
|
10
|
|
|
16
|
|
|
1
|
|
|
17
|
|
Cost reduction
initiatives (9)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
Acquisition and
expected separation costs (8)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
40
|
|
Costs to achieve
synergies (10)
|
1
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
7
|
|
|
—
|
|
|
7
|
|
Purchase accounting
charges (11)
|
—
|
|
|
2
|
|
|
36
|
|
|
3
|
|
|
41
|
|
|
—
|
|
|
41
|
|
Goodwill impairment
charge (6)
|
—
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
60
|
|
|
—
|
|
|
60
|
|
Process harmonization
(12)
|
4
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
Adjusted EBITDA
(4)
|
$
|
140
|
|
|
$
|
116
|
|
|
$
|
90
|
|
|
$
|
31
|
|
|
$
|
377
|
|
|
$
|
(50)
|
|
|
$
|
327
|
|
_________________________________
|
(1) U.S. Generally
Accepted Accounting Principles.
|
|
(2) Tenneco presents
the above reconciliation of GAAP to non-GAAP earnings measures
primarily to reflect the results in a manner that allows a better
understanding of the results of operational activities separate
from the financial impact of decisions made for the long-term
benefit of the company and other items impacting comparability
between the periods. Adjustments similar to the ones reflected
above have been recorded in earlier periods, and similar types of
adjustments can reasonably be expected to be recorded in future
periods. Using only the non-GAAP earnings measures to analyze
earnings would have material limitations because its calculation is
based on the subjective determinations of management regarding the
nature and classification of events and circumstances that
investors may find material. Management compensates for these
limitations by utilizing both GAAP and non-GAAP earnings measures
reflected above to understand and analyze the results of the
business. The company believes investors find the non-GAAP
information helpful in understanding the ongoing performance of
operations separate from items that may have a disproportionate
positive or negative impact on the company's financial results in
any particular period.
|
|
(3) EBITDA including
noncontrolling interests represents income before interest expense,
income taxes, noncontrolling interests and depreciation and
amortization. EBITDA including noncontrolling interests is
not a calculation based upon GAAP. The amounts included in
the EBITDA including noncontrolling interests calculation, however,
are derived from amounts included in the historical statements of
income data. In addition, EBITDA including noncontrolling
interests should not be considered as an alternative to net income
attributable to Tenneco Inc. or operating income as an indicator of
the company's operating performance, or as an alternative to
operating cash flows as a measure of liquidity. Tenneco has
presented EBITDA including noncontrolling interests because it
regularly reviews EBITDA including noncontrolling interests as a
measure of the company's performance. In addition, Tenneco
believes its investors utilize and analyze the company's EBITDA
including noncontrolling interests for similar purposes.
Tenneco also believes EBITDA including noncontrolling interests
assists investors in comparing a company's performance on a
consistent basis without regard to depreciation and amortization,
which can vary significantly depending upon many factors.
However, the EBITDA including noncontrolling interests measure
presented may not always be comparable to similarly titled measures
reported by other companies due to differences in the components of
the calculation.
|
|
(4) Adjusted results
are presented in order to reflect the results in a manner that
allows a better understanding of operational activities separate
from the financial impact of decisions made for the long term
benefit of the company and other items impacting comparability
between periods. Similar adjustments have been recorded in
earlier periods and similar types of adjustments can reasonably be
expected to be recorded in future periods. The company
believes investors find the non-GAAP information helpful in
understanding the ongoing performance of operations separate from
items that may have a disproportionate positive or negative impact
on the company's financial results in any particular
period.
|
|
(5) Q1 2020 includes
$5 million and Q1 2019 includes $3 million of accelerated
depreciation related to plant closures.
|
|
(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) Amount relates
to adjustments made to mark certain redeemable noncontrolling
interests to their redemption values.
|
ATTACHMENT
2
|
|
TENNECO
INC.
|
RECONCILIATION OF
GAAP(1) TO NON-GAAP REVENUE
MEASURES(2)
|
Unaudited
|
(dollars in millions
except percents)
|
|
|
Q1
2020
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
|
Currency
Impact
on
Value-add
Revenues
|
|
Value-add
Revenues
excluding
Currency
|
Clean Air
|
$
|
1,545
|
|
|
$
|
700
|
|
|
$
|
845
|
|
|
$
|
(19)
|
|
|
$
|
864
|
|
Powertrain
|
997
|
|
|
—
|
|
|
997
|
|
|
(26)
|
|
|
1,023
|
|
Motorparts
|
706
|
|
|
—
|
|
|
706
|
|
|
(19)
|
|
|
725
|
|
Ride
Performance
|
588
|
|
|
—
|
|
|
588
|
|
|
(17)
|
|
|
605
|
|
Total Tenneco
Inc.
|
$
|
3,836
|
|
|
$
|
700
|
|
|
$
|
3,136
|
|
|
$
|
(81)
|
|
|
$
|
3,217
|
|
|
|
|
Q1
2019
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
|
Currency
Impact
on
Value-add
Revenues
|
|
Value-add
Revenues
excluding
Currency
|
Clean Air
|
$
|
1,779
|
|
|
$
|
706
|
|
|
$
|
1,073
|
|
|
$
|
—
|
|
|
$
|
1,073
|
|
Powertrain
|
1,175
|
|
|
—
|
|
|
1,175
|
|
|
—
|
|
|
1,175
|
|
Motorparts
|
797
|
|
|
—
|
|
|
797
|
|
|
—
|
|
|
797
|
|
Ride
Performance
|
733
|
|
|
—
|
|
|
733
|
|
|
—
|
|
|
733
|
|
Total Tenneco
Inc.
|
$
|
4,484
|
|
|
$
|
706
|
|
|
$
|
3,778
|
|
|
$
|
—
|
|
|
$
|
3,778
|
|
|
Q1 2020 vs. Q1
2019 $ Change and % Change Increase (decrease)
|
|
Revenues
|
|
%
Change
|
|
Value-add
Adjusted
Revenues
excluding
Currency
|
|
%
Change
|
Clean Air
|
$
|
(234)
|
|
|
(13)
|
%
|
|
$
|
(209)
|
|
|
(19)
|
%
|
Powertrain
|
(178)
|
|
|
(15)
|
%
|
|
(152)
|
|
|
(13)
|
%
|
Motorparts
|
(91)
|
|
|
(11)
|
%
|
|
(72)
|
|
|
(9)
|
%
|
Ride
Performance
|
(145)
|
|
|
(20)
|
%
|
|
(128)
|
|
|
(17)
|
%
|
Total Tenneco
Inc.
|
$
|
(648)
|
|
|
(14)
|
%
|
|
$
|
(561)
|
|
|
(15)
|
%
|
__________________________________
|
(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 and Pro Forma Adjusted LTM EBITDA including
noncontrolling interests
|
Unaudited
|
(dollars in millions
except ratios)
|
|
|
March 31,
2020
|
|
March 31,
2019
|
Total debt
|
$
|
6,012
|
|
|
$
|
5,576
|
|
Total cash, cash
equivalents and restricted cash (total cash)
|
770
|
|
|
363
|
|
Debt net of total
cash balances (1)
|
$
|
5,242
|
|
|
$
|
5,213
|
|
Adjusted LTM and Pro
forma Adjusted LTM EBITDA including noncontrolling interests
(2) (3) (5)
|
$
|
1,327
|
|
|
$
|
1,542
|
|
Ratio of debt net of
total cash balances and pro forma ratio of debt net of total cash
balances to adjusted LTM and proforma adjusted LTM EBITDA including
noncontrolling interests (4) (5)
|
4.0x
|
|
|
3.4x
|
|
|
Q2
2019
|
|
Q3
2019
|
|
Q4
2019
|
|
Q1
2020
|
|
Q1
2020
LTM
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
26
|
|
|
$
|
70
|
|
|
$
|
(313)
|
|
|
$
|
(839)
|
|
|
$
|
(1,056)
|
|
Net income (loss)
attributable to noncontrolling interests
|
19
|
|
|
8
|
|
|
75
|
|
|
13
|
|
|
115
|
|
Net income
(loss)
|
45
|
|
|
78
|
|
|
(238)
|
|
|
(826)
|
|
|
(941)
|
|
Income tax (expense)
benefit
|
(14)
|
|
|
9
|
|
|
(14)
|
|
|
94
|
|
|
75
|
|
Interest
expense
|
(82)
|
|
|
(79)
|
|
|
(80)
|
|
|
(75)
|
|
|
(316)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
141
|
|
|
148
|
|
|
(144)
|
|
|
(845)
|
|
|
(700)
|
|
Depreciation and
amortization
|
169
|
|
|
165
|
|
|
170
|
|
|
171
|
|
|
675
|
|
Total EBITDA
including noncontrolling interests (2)
|
$
|
310
|
|
|
$
|
313
|
|
|
$
|
26
|
|
|
$
|
(674)
|
|
|
$
|
(25)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring and
related expenses
|
57
|
|
|
28
|
|
|
36
|
|
|
34
|
|
|
155
|
|
Goodwill and
intangible impairment charge (6)
|
—
|
|
|
9
|
|
|
172
|
|
|
383
|
|
|
564
|
|
Asset impairments
(7)
|
—
|
|
|
—
|
|
|
—
|
|
|
471
|
|
|
471
|
|
Acquisition and
expected separation costs (8)
|
27
|
|
|
30
|
|
|
30
|
|
|
25
|
|
|
112
|
|
Cost reduction
initiatives (9)
|
2
|
|
|
6
|
|
|
(1)
|
|
|
—
|
|
|
7
|
|
Costs to achieve
synergies (10)
|
7
|
|
|
7
|
|
|
8
|
|
|
—
|
|
|
22
|
|
Purchase accounting
charges (11)
|
3
|
|
|
11
|
|
|
2
|
|
|
—
|
|
|
16
|
|
Process harmonization
(12)
|
1
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
17
|
|
Warranty charge
(13)
|
7
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Antitrust reserve
change in estimate (14)
|
—
|
|
|
(9)
|
|
|
—
|
|
|
—
|
|
|
(9)
|
|
Brazil tax credit
(15)
|
—
|
|
|
(22)
|
|
|
—
|
|
|
—
|
|
|
(22)
|
|
Out of period
adjustment (16)
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Impairment of assets
held for sale
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Pension
charges/adjustments (17)
|
—
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
(2)
|
|
Total Adjusted EBITDA
including noncontrolling interests (3)
|
$
|
414
|
|
|
$
|
387
|
|
|
$
|
287
|
|
|
$
|
239
|
|
|
$
|
1,327
|
|
|
|
|
Q2
2018*
|
|
Q3
2018*
|
|
Q4
2018
|
|
Q1
2019
|
|
Q1 2019
LTM
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
47
|
|
|
$
|
57
|
|
|
$
|
(109)
|
|
|
$
|
(117)
|
|
|
$
|
(122)
|
|
Net income (loss)
attributable to noncontrolling interests
|
16
|
|
|
9
|
|
|
17
|
|
|
12
|
|
|
54
|
|
Net income
(loss)
|
63
|
|
|
66
|
|
|
(92)
|
|
|
(105)
|
|
|
(68)
|
|
Income tax (expense)
benefit
|
(26)
|
|
|
(22)
|
|
|
10
|
|
|
—
|
|
|
(38)
|
|
Interest
expense
|
(22)
|
|
|
(24)
|
|
|
(79)
|
|
|
(81)
|
|
|
(206)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
111
|
|
|
112
|
|
|
(23)
|
|
|
(24)
|
|
|
176
|
|
Depreciation and
amortization
|
60
|
|
|
60
|
|
|
165
|
|
|
169
|
|
|
454
|
|
Total EBITDA
including noncontrolling interests (2)
|
$
|
171
|
|
|
$
|
172
|
|
|
$
|
142
|
|
|
$
|
145
|
|
|
$
|
630
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring and
related expenses
|
21
|
|
|
12
|
|
|
17
|
|
|
17
|
|
|
67
|
|
Goodwill impairment
charge (6)
|
—
|
|
|
—
|
|
|
3
|
|
|
60
|
|
|
63
|
|
Acquisition and
expected separation costs (8)
|
18
|
|
|
12
|
|
|
53
|
|
|
40
|
|
|
123
|
|
Cost reduction
initiatives (9)
|
10
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
26
|
|
Costs to achieve
synergies (10)
|
9
|
|
|
4
|
|
|
49
|
|
|
7
|
|
|
69
|
|
Purchase accounting
charges (11)
|
—
|
|
|
—
|
|
|
106
|
|
|
41
|
|
|
147
|
|
Process harmonization
(12)
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
Anti-dumping duty
charge (18)
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
Pension
charges/adjustments (17)
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
Environmental charge
(19)
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
Litigation settlement
accrual
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
Loss on debt
modification (20)
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
Total Adjusted EBITDA
including noncontrolling interests (3)
|
$
|
233
|
|
|
$
|
210
|
|
|
$
|
407
|
|
|
$
|
327
|
|
|
$
|
1,177
|
|
|
|
|
|
|
|
|
|
|
|
Legacy Federal-Mogul
Reconciliation of Non-GAAP earnings measures
|
|
Q2
2018
|
|
Q3
2018
|
|
|
|
|
|
|
Net income (loss)
attributable to Federal-Mogul
|
$
|
25
|
|
|
$
|
35
|
|
|
|
|
|
|
|
Net income (loss)
attributable to noncontrolling interests
|
3
|
|
|
1
|
|
|
|
|
|
|
|
Net income
(loss)
|
28
|
|
|
36
|
|
|
|
|
|
|
|
Income tax (expense)
benefit
|
(13)
|
|
|
(16)
|
|
|
|
|
|
|
|
Interest
expense
|
(52)
|
|
|
(49)
|
|
|
|
|
|
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
93
|
|
|
101
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
96
|
|
|
99
|
|
|
|
|
|
|
|
Total EBITDA
including noncontrolling interests (2)
|
$
|
189
|
|
|
$
|
200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring charges
and asset impairments, net
|
—
|
|
|
15
|
|
|
|
|
|
|
|
Transaction related
costs
|
13
|
|
|
—
|
|
|
|
|
|
|
|
Cost to exit a
multiemployer pension plan
|
5
|
|
|
—
|
|
|
|
|
|
|
|
Gain (loss) on sale
of assets
|
—
|
|
|
(65)
|
|
|
|
|
|
|
|
Charge for
extinguishment of dissenting shareholders shares
|
—
|
|
|
5
|
|
|
|
|
|
|
|
Other
|
2
|
|
|
1
|
|
|
|
|
|
|
|
Total Adjusted EBITDA
including noncontrolling interests (3)
|
$
|
209
|
|
|
$
|
156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2
2018*
|
|
Q3
2018*
|
|
Q4
2018
|
|
Q1
2019
|
|
Q1 2019
LTM
|
Adjusted EBITDA and
Pro forma Adjusted EBITDA including noncontrolling interests
(2) (3) (5)
|
$
|
442
|
|
|
$
|
366
|
|
|
$
|
407
|
|
|
$
|
327
|
|
|
$
|
1,542
|
|
_______________________________
|
* Financial results
for Q2 and Q3 2018 have been revised for certain immaterial
adjustments as discussed in Tenneco's Form 10-K for the year ended
December 31, 2018.
|
|
(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 and Pro Forma adjusted LTM EBITDA
including noncontrolling interests is used as an indicator of the
company's performance and debt net of total cash is presented as an
indicator of the company's credit position and progress toward
reducing the company's financial leverage. This reconciliation is
provided as supplemental information and not intended to replace
the company's existing covenant ratios or any other financial
measures that investors may find useful in describing the company's
financial position. See notes (1), (2) and (3) for a description of
the limitations of using debt net of total cash, EBITDA including
noncontrolling interests and Adjusted EBITDA including
noncontrolling interests.
|
|
(5) Tenneco is
providing Pro Forma Adjusted LTM EBITDA and the ratio of debt net
of cash balances to Pro Forma Adjusted LTM EBITDA to show the
company's Adjusted LTM EBITDA as if Federal-Mogul had been
consolidated with Tenneco for the entirety of 2018 (and the
resultant impact on the net debt ratio). Tenneco believes this
supplemental information is useful to investors who are trying to
understand the results of the entire enterprise, including
Federal-Mogul, for 2018 and 2019 and the ability of the company to
service its debt.
|
|
(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) Charge related
to warranty. Although Tenneco regularly incurs warranty costs, this
specific charge is of an unusual nature in the period
incurred.
|
|
(14) Reduction in
estimated antitrust accrual.
|
|
(15) Recovery of
value-added tax in a foreign jurisdiction.
|
|
(16) Inventory losses
attributable to prior periods.
|
|
(17) Charges related
to pension derisking and other adjustments.
|
|
(18) Charge due to
retroactive application of anti-dumping duty on a supplier's
products.
|
|
(19) Environmental
charge related to an acquired site whereby an indemnification
reverted back to the company resulting from a 2009 bankruptcy
filing of Mark IV Industries.
|
|
(20) Loss on debt
modification.
|
ATTACHMENT
2
|
|
TENNECO
INC.
|
RECONCILIATION OF
GAAP(1) TO NON-GAAP REVENUE
MEASURES(2)
|
Unaudited
|
(dollars in
millions)
|
|
|
Q1
2020
|
|
Revenues
|
|
Currency
|
|
Revenues
Excluding
Currency
|
|
Substrate
Sales
Excluding
Currency
|
|
Value-add
Revenues
Excluding
Currency
|
Original equipment
light vehicle revenues
|
$
|
2,394
|
|
|
$
|
(50)
|
|
|
$
|
2,444
|
|
|
$
|
598
|
|
|
$
|
1,846
|
|
Original equipment
commercial truck, off-highway, industrial and other
revenues
|
736
|
|
|
(28)
|
|
|
764
|
|
|
118
|
|
|
646
|
|
Aftermarket
revenues
|
706
|
|
|
(19)
|
|
|
725
|
|
|
—
|
|
|
725
|
|
Net sales and
operating revenues
|
$
|
3,836
|
|
|
$
|
(97)
|
|
|
$
|
3,933
|
|
|
$
|
716
|
|
|
$
|
3,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
2019
|
|
Revenues
|
|
Currency
|
|
Revenues
Excluding
Currency
|
|
Substrate
Sales
Excluding
Currency
|
|
Value-add
Revenues
Excluding
Currency
|
Original equipment
light vehicle revenues
|
$
|
2,792
|
|
|
$
|
—
|
|
|
$
|
2,792
|
|
|
$
|
591
|
|
|
$
|
2,201
|
|
Original equipment
commercial truck, off-highway, industrial and other
revenues
|
895
|
|
|
—
|
|
|
895
|
|
|
115
|
|
|
780
|
|
Aftermarket
revenues
|
797
|
|
|
—
|
|
|
797
|
|
|
—
|
|
|
797
|
|
Net sales and
operating revenues
|
$
|
4,484
|
|
|
$
|
—
|
|
|
$
|
4,484
|
|
|
$
|
706
|
|
|
$
|
3,778
|
|
__________________________________
|
(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)
|
|
|
Q1
2020
|
|
Global
Segments
|
|
|
|
|
|
Clean
Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
1,545
|
|
|
$
|
997
|
|
|
$
|
706
|
|
|
$
|
588
|
|
|
$
|
3,836
|
|
|
$
|
—
|
|
|
$
|
3,836
|
|
Less: Substrate
sales
|
700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
700
|
|
|
—
|
|
|
700
|
|
Value-add
revenues
|
$
|
845
|
|
|
$
|
997
|
|
|
$
|
706
|
|
|
$
|
588
|
|
|
$
|
3,136
|
|
|
$
|
—
|
|
|
$
|
3,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
99
|
|
|
$
|
(70)
|
|
|
$
|
(40)
|
|
|
$
|
(577)
|
|
|
$
|
(588)
|
|
|
$
|
(86)
|
|
|
$
|
(674)
|
|
EBITDA as a %
of revenue
|
6.4
|
%
|
|
(7.0)
|
%
|
|
(5.7)
|
%
|
|
(98.1)
|
%
|
|
(15.3)
|
%
|
|
|
|
(17.6)
|
%
|
EBITDA as a %
of value-add revenue
|
11.7
|
%
|
`
|
(7.0)
|
%
|
|
(5.7)
|
%
|
|
(98.1)
|
%
|
|
(18.8)
|
%
|
|
|
|
(21.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
104
|
|
|
$
|
90
|
|
|
$
|
73
|
|
|
$
|
16
|
|
|
$
|
283
|
|
|
$
|
(44)
|
|
|
$
|
239
|
|
Adjusted EBITDA
as a % of revenue
|
6.7
|
%
|
|
9.0
|
%
|
|
10.3
|
%
|
|
2.7
|
%
|
|
7.4
|
%
|
|
|
|
6.2
|
%
|
Adjusted EBITDA
as a % of value-add revenue
|
12.3
|
%
|
|
9.0
|
%
|
|
10.3
|
%
|
|
2.7
|
%
|
|
9.0
|
%
|
|
|
|
7.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
2019
|
|
Global
Segments
|
|
|
|
|
|
Clean
Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
1,779
|
|
|
$
|
1,175
|
|
|
$
|
797
|
|
|
$
|
733
|
|
|
$
|
4,484
|
|
|
$
|
—
|
|
|
$
|
4,484
|
|
Less: Substrate
sales
|
706
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
706
|
|
|
—
|
|
|
706
|
|
Value-add
revenues
|
$
|
1,073
|
|
|
$
|
1,175
|
|
|
$
|
797
|
|
|
$
|
733
|
|
|
$
|
3,778
|
|
|
$
|
—
|
|
|
$
|
3,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
131
|
|
|
$
|
113
|
|
|
$
|
45
|
|
|
$
|
(45)
|
|
|
$
|
244
|
|
|
$
|
(99)
|
|
|
$
|
145
|
|
EBITDA as a %
of revenue
|
7.4
|
%
|
|
9.6
|
%
|
|
5.6
|
%
|
|
(6.1)
|
%
|
|
5.4
|
%
|
|
|
|
3.2
|
%
|
EBITDA as a %
of value-add revenue
|
12.2
|
%
|
`
|
9.6
|
%
|
|
5.6
|
%
|
|
(6.1)
|
%
|
|
6.5
|
%
|
|
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
140
|
|
|
$
|
116
|
|
|
$
|
90
|
|
|
$
|
31
|
|
|
$
|
377
|
|
|
$
|
(50)
|
|
|
$
|
327
|
|
Adjusted EBITDA
as a % of revenue
|
7.9
|
%
|
|
9.9
|
%
|
|
11.3
|
%
|
|
4.2
|
%
|
|
8.4
|
%
|
|
|
|
7.3
|
%
|
Adjusted EBITDA
as a % of value-add revenue
|
13.0
|
%
|
|
9.9
|
%
|
|
11.3
|
%
|
|
4.2
|
%
|
|
10.0
|
%
|
|
|
|
8.7
|
%
|
___________________________
|
(1) U.S. Generally
Accepted Accounting Principles.
|
|
(2) Tenneco presents
the above reconciliation of revenues in order to reflect EBITDA and
adjusted EBITDA as a percent of both total revenues and value-add
revenues. Substrate sales include precious metals pricing,
which may be volatile. Substrate sales occur when, at the
direction of its OE customers, Tenneco purchases catalytic
converters or components thereof from suppliers, uses them in its
manufacturing processes and sells them as part of the completed
system. While Tenneco original equipment customers assume the risk
of this volatility, it impacts reported revenue. Excluding
substrate sales removes this impact. Further, presenting
EBITDA and adjusted EBITDA as a percent of value-add revenue
assists investors in evaluating the company's operational
performance without the impact of such substrate sales. See
prior pages for a discussion of EBITDA and adjusted
EBITDA.
|
ATTACHMENT
2
|
|
TENNECO
INC.
|
RECONCILIATION OF
GAAP(1) REVENUE TO NON-GAAP REVENUE
MEASURES(2)
|
Original equipment
commercial truck, off-highway, industrial and other
revenues
|
Unaudited
|
(dollars in
millions)
|
|
|
Q1
2020
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
Clean Air
|
$
|
276
|
|
|
$
|
114
|
|
|
$
|
162
|
|
Powertrain
|
344
|
|
|
—
|
|
|
344
|
|
Ride
Performance
|
116
|
|
|
—
|
|
|
116
|
|
Total Tenneco
Inc.
|
$
|
736
|
|
|
$
|
114
|
|
|
$
|
622
|
|
|
|
|
Q1
2019
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
Clean Air
|
$
|
319
|
|
|
$
|
115
|
|
|
$
|
204
|
|
Powertrain
|
426
|
|
|
—
|
|
|
426
|
|
Ride
Performance
|
150
|
|
|
—
|
|
|
150
|
|
Total Tenneco
Inc.
|
$
|
895
|
|
|
$
|
115
|
|
|
$
|
780
|
|
______________________________
|
(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:http://www.prnewswire.com/news-releases/tenneco-reports-first-quarter-2020-results-301055375.html
SOURCE Tenneco Inc.