LAKE FOREST, Ill., Aug. 6, 2020 /PRNewswire/ -- Tenneco (NYSE:
TEN) reported second quarter 2020 revenue of $2.6 billion, versus $4.5
billion a year ago. Excluding
unfavorable currency of $108 million,
total revenue decreased 39% versus last year, with the decline in
revenue from lower light vehicle industry production, down 45%*
versus last year, and other impacts from COVID-19. Value-add
revenue for the second quarter 2020 was $2.0 billion.
"The business impact from the pandemic in the quarter was severe
for both the industry and Tenneco. The response from the
Tenneco team around the world is a testament to their dedication
and resilience," said Brian
Kesseler, Tenneco's chief executive officer. "Our production
facilities safely returned to operations throughout the quarter
following local and federal health guidelines. Our thoughts remain
with our team members, families and communities who have been
impacted by COVID-19, and we continually work to keep them healthy,
both on the job and outside the workplace."
The Company reported a net loss for second quarter 2020 of
$350 million, or $(4.30) per diluted share. Including a
$113 million non-cash charge
primarily related to a realignment project in its North America
Aftermarket distribution network, the Company reported a second
quarter 2020 EBIT (earnings before interest, taxes and
noncontrolling interests) loss of $375
million.
On an adjusted basis, second quarter 2020 EBITDA was
$8 million with an EBIT loss of
$149 million. Adjusted net loss
was $175 million, or ($2.15) per
diluted share.
Company liquidity remained solid, with cash balances of
$1.37 billion as of June 30, 2020. Based on available industry
forecasts and Company estimates, the Company believes it has
adequate liquidity to weather the current downturn and expected
higher demand and production levels over the next several
quarters.
"The Tenneco team's swift and effective actions to reduce costs
and preserve liquidity enabled the Company to respond well in a
very challenging environment," Kesseler continued. "Our
global footprint and the diverse end markets we serve allowed us to
offset a portion of the light vehicle production demand decline in
the quarter. Earnings and cash performance were driven by
effectively flexing our cost structure and working capital with
both structural and temporary actions."
Outlook
Due to the continued uncertainty of the
pandemic's effect on the global markets, the Company is not
providing financial guidance for the full year. Tenneco does
expect third quarter 2020 revenue to improve substantially
compared to the second quarter 2020, but lower than third
quarter 2019 results. The Company also expects the benefit of
incremental structural cost savings and continued capital
management will drive sequential improvement in cash from
operations through the second half of 2020.
"Our continuing focus on structural cost reductions and
accelerating cash generation will build momentum through the
remainder of this year and into 2021," added Kesseler. "The
priority we have placed on debt reduction and targeted growth
investments will create a stronger Tenneco and deliver improved
shareholder value."
*Source: IHS Automotive July 2020
global light vehicle production forecast.
Attachment 1
Statements of Income (Loss) – 3
months
Statements of Income (Loss) – 6 months
Balance Sheets
Statements of Cash Flows – 3 Months
Statements of Cash Flows – 6 Months
Attachment 2
Reconciliation of GAAP to Non-GAAP
Earnings Measures – 3 Months
Reconciliation of GAAP to Non-GAAP Earnings Measures – 6 Months
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures – 3
Months
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures – 6
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, Original Equipment Service and Aftermarket
Revenue – 3 and 6 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 – 6 Months
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures –
Original Equipment Commercial Truck, Off-Highway, Industrial and
other revenues – 3 and 6 Months
Conference Call
The company will host a webcast
conference call on Thursday, August 6,
2020 at 9:30 a.m. ET. The
purpose of the call is to discuss the company's financial results
for the second 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
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
$17.45 billion and approximately
78,000 team members working at more than 300 sites worldwide.
Our four business groups, Motorparts, Ride Performance, Clean Air
and Powertrain, deliver 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 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. 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, 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 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; 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 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 report on Form
10-Q for the quarter ended March 31,
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
(dollars in millions,
except share and per share amounts)
|
|
|
Three Months
Ended June 30,
|
|
2020
|
|
2019
|
Net sales and
operating revenues:
|
|
|
|
Clean Air - Value-add
revenues
|
$
|
517
|
|
|
$
|
1,050
|
|
Clean Air - Substrate
sales
|
623
|
|
|
777
|
|
Powertrain
|
602
|
|
|
1,133
|
|
Motorparts
|
559
|
|
|
835
|
|
Ride
Performance
|
336
|
|
|
709
|
|
Total net sales and operating revenues
|
2,637
|
|
|
4,504
|
|
Costs and
expenses:
|
|
|
|
Cost of
sales (exclusive of depreciation and amortization)
|
2,498
|
|
|
3,801
|
|
Selling,
general, and administrative
|
195
|
|
|
292
|
|
Depreciation and amortization
|
159
|
|
|
169
|
|
Engineering, research, and development
|
55
|
|
|
78
|
|
Restructuring
charges, net and asset impairments
|
121
|
|
|
49
|
|
Total costs and expenses
|
3,028
|
|
|
4,389
|
|
Other income
(expense):
|
|
|
|
Non-service pension
and other postretirement benefit (costs) credits
|
1
|
|
|
(4)
|
|
Equity in earnings
(losses) of nonconsolidated affiliates, net of tax
|
4
|
|
|
17
|
|
Other income
(expense), net
|
11
|
|
|
13
|
|
|
16
|
|
|
26
|
|
Earnings (loss)
before interest expense, income taxes, and noncontrolling
interests
|
(375)
|
|
|
141
|
|
Interest
expense
|
(66)
|
|
|
(82)
|
|
Earnings (loss)
before income taxes and noncontrolling interests
|
(441)
|
|
|
59
|
|
Income tax (expense)
benefit
|
101
|
|
|
(14)
|
|
Net income
(loss)
|
(340)
|
|
|
45
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
10
|
|
|
19
|
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
(350)
|
|
|
$
|
26
|
|
|
|
|
|
Basic earnings (loss)
per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
(4.30)
|
|
|
$
|
0.32
|
|
Weighted average
shares outstanding
|
81.4
|
|
|
80.9
|
|
Diluted earnings
(loss) per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
(4.30)
|
|
|
$
|
0.32
|
|
Weighted average
shares outstanding
|
81.4
|
|
|
80.9
|
|
ATTACHMENT
1
|
|
TENNECO
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
Unaudited
(dollars in millions,
except share and per share amounts)
|
|
|
Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
Net sales and
operating revenues:
|
|
|
|
Clean Air - Value-add
revenues
|
$
|
1,362
|
|
|
$
|
2,123
|
|
Clean Air - Substrate
sales
|
1,323
|
|
|
1,483
|
|
Powertrain
|
1,599
|
|
|
2,308
|
|
Motorparts
|
1,265
|
|
|
1,632
|
|
Ride
Performance
|
924
|
|
|
1,442
|
|
Total net sales and operating revenues
|
6,473
|
|
|
8,988
|
|
Costs and
expenses:
|
|
|
|
Cost of
sales (exclusive of depreciation and amortization)
|
5,837
|
|
|
7,671
|
|
Selling,
general, and administrative
|
444
|
|
|
610
|
|
Depreciation and amortization
|
330
|
|
|
338
|
|
Engineering, research, and development
|
132
|
|
|
170
|
|
Restructuring
charges, net and asset impairments
|
605
|
|
|
65
|
|
Goodwill
and intangible impairment charge
|
383
|
|
|
60
|
|
Total costs and expenses
|
7,731
|
|
|
8,914
|
|
Other income
(expense):
|
|
|
|
Non-service pension
and other postretirement benefit (costs) credits
|
2
|
|
|
(6)
|
|
Equity in earnings
(losses) of nonconsolidated affiliates, net of tax
|
17
|
|
|
33
|
|
Other income
(expense), net
|
19
|
|
|
16
|
|
|
38
|
|
|
43
|
|
Earnings (loss)
before interest expense, income taxes, and noncontrolling
interests
|
(1,220)
|
|
|
117
|
|
Interest
expense
|
(141)
|
|
|
(163)
|
|
Earnings (loss)
before income taxes and noncontrolling interests
|
(1,361)
|
|
|
(46)
|
|
Income tax (expense)
benefit
|
195
|
|
|
(14)
|
|
Net income
(loss)
|
(1,166)
|
|
|
(60)
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
23
|
|
|
31
|
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
(1,189)
|
|
|
$
|
(91)
|
|
|
|
|
|
Basic earnings (loss)
per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
(14.64)
|
|
|
$
|
(1.13)
|
|
Weighted average
shares outstanding
|
81.3
|
|
|
80.9
|
|
Diluted earnings
(loss) per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
(14.64)
|
|
|
$
|
(1.13)
|
|
Weighted average
shares outstanding
|
81.3
|
|
|
80.9
|
|
ATTACHMENT
1
|
|
TENNECO
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
Unaudited
(dollars in
millions)
|
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,362
|
|
$
|
564
|
|
Restricted
cash
|
9
|
|
2
|
|
Receivables,
net
|
2,185
|
(a)
|
2,538
|
(a)
|
Inventories
|
1,656
|
|
1,999
|
|
Prepayments and other
current assets
|
632
|
|
632
|
|
Other noncurrent
assets
|
3,612
|
|
3,864
|
|
Property, plant, and
equipment, net
|
2,939
|
|
3,627
|
|
Total
assets
|
$
|
12,395
|
|
$
|
13,226
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Short-term debt,
including current maturities of long-term debt
|
$
|
222
|
|
$
|
185
|
|
Accounts
payable
|
1,992
|
|
2,647
|
|
Accrued compensation
and employee benefits
|
331
|
|
325
|
|
Accrued income
taxes
|
48
|
|
72
|
|
Accrued expenses and
other current liabilities
|
1,043
|
|
1,070
|
|
Long-term
debt
|
6,629
|
(b)
|
5,371
|
(b)
|
Deferred income
taxes
|
88
|
|
106
|
|
Pension and
postretirement benefits
|
1,112
|
|
1,145
|
|
Deferred credits and
other liabilities
|
502
|
|
490
|
|
Redeemable
noncontrolling interests
|
79
|
|
196
|
|
Tenneco Inc.
shareholders' equity
|
74
|
|
1,425
|
|
Noncontrolling
interests
|
275
|
|
194
|
|
Total liabilities,
redeemable noncontrolling interests, and equity
|
$
|
12,395
|
|
$
|
13,226
|
|
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
(a) Accounts
receivable net of:
|
|
|
|
|
Accounts receivable
outstanding and derecognized
|
$
|
873
|
|
$
|
1,037
|
|
|
|
|
|
|
(b) Long-term debt
composed of:
|
|
|
|
|
Revolver
Borrowings
|
$
|
1,500
|
|
$
|
183
|
|
LIBOR plus 1.75% Term
Loan A due 2019 through 2023
|
1,561
|
|
1,608
|
|
LIBOR plus 3.00% Term
Loan B due 2019 through 2025
|
1,614
|
|
1,623
|
|
$225 million of
5.375% Senior Notes due 2024
|
223
|
|
222
|
|
$500 million of
5.000% Senior Notes due 2026
|
494
|
|
494
|
|
€415 million 4.875%
Euro Fixed Rate Notes due 2022
|
477
|
|
479
|
|
€300 million of
Euribor plus 4.875% Euro Floating Rate Notes due 2024
|
340
|
|
340
|
|
€350 million of
5.000% Euro Fixed Rate Notes due 2024
|
412
|
|
413
|
|
Other Debt, primarily
foreign instruments
|
12
|
|
13
|
|
|
6,633
|
|
5,375
|
|
Less: maturities
classified as current
|
4
|
|
4
|
|
Total long-term
debt
|
$
|
6,629
|
|
$
|
5,371
|
|
ATTACHMENT
1
|
|
TENNECO
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(dollars in
millions)
|
|
|
Three Months
Ended June 30,
|
|
2020
|
|
2019
|
Operating
Activities
|
|
|
|
Net income
(loss)
|
$
|
(340)
|
|
|
$
|
45
|
|
Adjustments to
reconcile net income (loss) to cash (used) provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
159
|
|
|
169
|
|
Deferred income
taxes
|
(76)
|
|
|
(6)
|
|
Stock-based
compensation
|
7
|
|
|
6
|
|
Restructuring charges
and asset impairments, net of cash paid
|
86
|
|
|
28
|
|
Change in pension and
other postretirement benefit plans
|
(7)
|
|
|
(15)
|
|
Equity in earnings of
nonconsolidated affiliates
|
(4)
|
|
|
(17)
|
|
Cash dividends
received from nonconsolidated affiliates
|
5
|
|
|
12
|
|
Loss (gain) on sale
of assets
|
(1)
|
|
|
(1)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables
|
35
|
|
|
(89)
|
|
Inventories
|
365
|
|
|
90
|
|
Payables and accrued
expenses
|
(404)
|
|
|
(109)
|
|
Accrued interest and
accrued income taxes
|
(46)
|
|
|
(28)
|
|
Other assets and
liabilities
|
42
|
|
|
(35)
|
|
Net cash (used)
provided by operating activities
|
(179)
|
|
|
50
|
|
Investing
Activities
|
|
|
|
Proceeds from sale of
assets
|
3
|
|
|
4
|
|
Cash payments for
property, plant, and equipment
|
(75)
|
|
|
(169)
|
|
Proceeds from
deferred purchase price of factored receivables
|
35
|
|
|
87
|
|
Other
|
(1)
|
|
|
(3)
|
|
Net cash (used)
provided by investing activities
|
(38)
|
|
|
(81)
|
|
Financing
Activities
|
|
|
|
Proceeds from term
loans and notes
|
29
|
|
|
83
|
|
Repayments of term
loans and notes
|
(49)
|
|
|
(126)
|
|
Debt issuance costs
of long-term debt
|
(8)
|
|
|
—
|
|
Borrowings on
revolving lines of credit
|
1,660
|
|
|
2,406
|
|
Payments on revolving
lines of credit
|
(877)
|
|
|
(2,273)
|
|
Net increase
(decrease) in bank overdrafts
|
61
|
|
|
(7)
|
|
Other
|
(12)
|
|
|
2
|
|
Distributions to
noncontrolling interest partners
|
—
|
|
|
(19)
|
|
Net cash (used)
provided by financing activities
|
804
|
|
|
66
|
|
Effect of foreign
exchange rate changes on cash, cash equivalents, and restricted
cash
|
14
|
|
|
(8)
|
|
Increase (decrease)
in cash, cash equivalents, and restricted cash
|
601
|
|
|
27
|
|
Cash, cash
equivalents, and restricted cash, beginning of period
|
770
|
|
|
363
|
|
Cash, cash
equivalents, and restricted cash, end of period
|
$
|
1,371
|
|
|
$
|
390
|
|
Supplemental Cash
Flow Information
|
|
|
|
Cash paid during the
period for interest
|
$
|
56
|
|
|
$
|
71
|
|
Cash paid during the
period for income taxes, net of refunds
|
$
|
34
|
|
|
$
|
57
|
|
Lease assets obtained
in exchange for new operating lease liabilities
|
$
|
3
|
|
|
$
|
33
|
|
Non-cash inventory
charge due to aftermarket product line exit
|
$
|
82
|
|
|
$
|
—
|
|
Non-cash Investing
Activities
|
|
|
|
Period end balance of
accounts payable for property, plant, and equipment
|
$
|
86
|
|
|
$
|
116
|
|
Deferred purchase
price of receivables factored in the period
|
$
|
35
|
|
|
$
|
52
|
|
ATTACHMENT
1
|
|
TENNECO
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(dollars in
millions)
|
|
|
Six Months
Ended
June 30,
|
Operating
Activities
|
2020
|
|
2019
|
Net income
(loss)
|
$
|
(1,166)
|
|
|
$
|
(60)
|
|
Adjustments to
reconcile net income (loss) to cash (used) provided by operating
activities:
|
|
|
|
Goodwill and
intangible impairment charges
|
383
|
|
|
60
|
|
Depreciation and
amortization
|
330
|
|
|
338
|
|
Deferred income
taxes
|
(242)
|
|
|
(14)
|
|
Stock-based
compensation
|
9
|
|
|
13
|
|
Restructuring charges
and asset impairments, net of cash paid
|
540
|
|
|
14
|
|
Change in pension and
other postretirement benefit plans
|
(26)
|
|
|
(32)
|
|
Equity in earnings of
nonconsolidated affiliates
|
(17)
|
|
|
(33)
|
|
Cash dividends
received from nonconsolidated affiliates
|
18
|
|
|
27
|
|
Loss (gain) on sale
of assets
|
(1)
|
|
|
(1)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables
|
174
|
|
|
(401)
|
|
Inventories
|
292
|
|
|
101
|
|
Payables and accrued
expenses
|
(540)
|
|
|
48
|
|
Accrued interest and
accrued income taxes
|
(17)
|
|
|
(66)
|
|
Other assets and
liabilities
|
(68)
|
|
|
(94)
|
|
Net cash (used)
provided by operating activities
|
(331)
|
|
|
(100)
|
|
Investing
Activities
|
|
|
|
Acquisitions, net of
cash acquired
|
—
|
|
|
(158)
|
|
Proceeds from sale of
assets
|
5
|
|
|
5
|
|
Net proceeds from
sale of business
|
—
|
|
|
22
|
|
Cash payments for
property, plant, and equipment
|
(212)
|
|
|
(379)
|
|
Proceeds from
deferred purchase price of factored receivables
|
91
|
|
|
147
|
|
Other
|
1
|
|
|
(1)
|
|
Net cash (used)
provided by investing activities
|
(115)
|
|
|
(364)
|
|
Financing
Activities
|
|
|
|
Proceeds from term
loans and notes
|
96
|
|
|
111
|
|
Repayments of term
loans and notes
|
(133)
|
|
|
(190)
|
|
Debt issuance costs
of long-term debt
|
(16)
|
|
|
—
|
|
Borrowings on
revolving lines of credit
|
4,821
|
|
|
4,525
|
|
Payments on revolving
lines of credit
|
(3,536)
|
|
|
(4,254)
|
|
Issuance (repurchase)
of common shares
|
(1)
|
|
|
(2)
|
|
Cash
dividends
|
—
|
|
|
(20)
|
|
Net increase
(decrease) in bank overdrafts
|
59
|
|
|
(8)
|
|
Other
|
(1)
|
|
|
(1)
|
|
Distributions to
noncontrolling interest partners
|
(2)
|
|
|
(20)
|
|
Net cash (used)
provided by financing activities
|
1,287
|
|
|
141
|
|
Effect of foreign
exchange rate changes on cash, cash equivalents, and restricted
cash
|
(36)
|
|
|
11
|
|
Increase (decrease)
in cash, cash equivalents, and restricted cash
|
805
|
|
|
(312)
|
|
Cash, cash
equivalents, and restricted cash, beginning of period
|
566
|
|
|
702
|
|
Cash, cash
equivalents, and restricted cash, end of period
|
$
|
1,371
|
|
|
$
|
390
|
|
Supplemental Cash
Flow Information
|
|
|
|
Cash paid during the
period for interest
|
$
|
123
|
|
|
$
|
145
|
|
Cash paid during the
period for income taxes, net of refunds
|
$
|
75
|
|
|
$
|
100
|
|
Lease assets obtained
in exchange for new operating lease liabilities
|
$
|
54
|
|
|
$
|
33
|
|
Non-cash inventory
charge due to aftermarket product line exit
|
$
|
82
|
|
|
$
|
—
|
|
Non-cash Investing
Activities
|
|
|
|
Period end balance of
accounts payable for property, plant, and equipment
|
$
|
86
|
|
|
$
|
116
|
|
Deferred purchase
price of receivables factored in the period
|
$
|
95
|
|
|
$
|
52
|
|
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)
|
|
|
Q2
2020
|
|
Q2
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
|
$
|
(350)
|
|
|
$
|
(4.30)
|
|
|
$
|
10
|
|
|
$
|
101
|
|
|
$
|
(375)
|
|
|
$
|
(216)
|
|
|
$
|
26
|
|
|
$
|
0.32
|
|
|
$
|
19
|
|
|
$
|
(14)
|
|
|
$
|
141
|
|
|
$
|
310
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
related expenses (5)
|
82
|
|
|
1.00
|
|
|
—
|
|
|
(25)
|
|
|
107
|
|
|
105
|
|
|
44
|
|
|
0.54
|
|
|
2
|
|
|
(14)
|
|
|
60
|
|
|
57
|
|
Inventory write-down
(6)
|
63
|
|
|
0.78
|
|
|
—
|
|
|
(19)
|
|
|
82
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Asset impairments
(7)
|
22
|
|
|
0.27
|
|
|
—
|
|
|
(7)
|
|
|
29
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Acquisition and
expected separation costs (8)
|
6
|
|
|
0.08
|
|
|
—
|
|
|
(2)
|
|
|
8
|
|
|
8
|
|
|
19
|
|
|
0.23
|
|
|
—
|
|
|
(8)
|
|
|
27
|
|
|
27
|
|
Cost reduction
initiatives (9)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
0.02
|
|
|
—
|
|
|
(1)
|
|
|
2
|
|
|
2
|
|
Costs to achieve
synergies (10)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
0.06
|
|
|
—
|
|
|
(2)
|
|
|
7
|
|
|
7
|
|
Purchase accounting
charges (11)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
0.02
|
|
|
—
|
|
|
(2)
|
|
|
3
|
|
|
3
|
|
Process harmonization
(12)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
1
|
|
|
1
|
|
Warranty charge
(13)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
0.06
|
|
|
—
|
|
|
(2)
|
|
|
7
|
|
|
7
|
|
Net tax
adjustments
|
2
|
|
|
0.02
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(4)
|
|
|
(0.05)
|
|
|
—
|
|
|
(4)
|
|
|
—
|
|
|
—
|
|
Adjusted Net income,
EPS, NCI, Tax, EBIT, and EBITDA (4)
|
$
|
(175)
|
|
|
$
|
(2.15)
|
|
|
$
|
10
|
|
|
$
|
50
|
|
|
$
|
(149)
|
|
|
$
|
8
|
|
|
$
|
97
|
|
|
$
|
1.20
|
|
|
$
|
21
|
|
|
$
|
(48)
|
|
|
$
|
248
|
|
|
$
|
414
|
|
|
Q2 2020
|
|
Global
Segments
|
|
|
|
|
|
Clean Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net income (loss)
attributable to Tenneco Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(350)
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
(340)
|
|
Income tax (expense)
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
101
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(66)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
|
(375)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
159
|
|
Total EBITDA
including noncontrolling interests (3)
|
$
|
17
|
|
|
$
|
(62)
|
|
|
$
|
(52)
|
|
|
$
|
(70)
|
|
|
$
|
(167)
|
|
|
$
|
(49)
|
|
|
$
|
(216)
|
|
Restructuring and
related expenses(5)
|
21
|
|
|
37
|
|
|
17
|
|
|
29
|
|
|
104
|
|
|
1
|
|
|
105
|
|
Inventory
write-down(6)
|
—
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
82
|
|
Asset impairments
(7)
|
—
|
|
|
4
|
|
|
24
|
|
|
—
|
|
|
28
|
|
|
1
|
|
|
29
|
|
Acquisition and
expected separation costs (8)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
Adjusted EBITDA
(4)
|
$
|
38
|
|
|
$
|
(21)
|
|
|
$
|
71
|
|
|
$
|
(41)
|
|
|
$
|
47
|
|
|
$
|
(39)
|
|
|
$
|
8
|
|
|
Q2 2019
|
|
Global
Segments
|
|
|
|
|
|
Clean Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net income (loss)
attributable to Tenneco Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
26
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
19
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
45
|
|
Income tax (expense)
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
(14)
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(82)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
|
141
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
169
|
|
Total EBITDA
including noncontrolling interests (3)
|
$
|
152
|
|
|
$
|
100
|
|
|
$
|
110
|
|
|
$
|
26
|
|
|
$
|
388
|
|
|
$
|
(78)
|
|
|
$
|
310
|
|
Restructuring and
related expenses(5)
|
15
|
|
|
16
|
|
|
3
|
|
|
23
|
|
|
57
|
|
|
—
|
|
|
57
|
|
Acquisition and
expected separation costs (8)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
26
|
|
|
27
|
|
Cost reduction
initiatives (9)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
Costs to achieve
synergies (10)
|
—
|
|
|
2
|
|
|
4
|
|
|
(1)
|
|
|
5
|
|
|
2
|
|
|
7
|
|
Purchase accounting
charges (11)
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|
—
|
|
|
3
|
|
Process harmonization
(12)
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Warranty charge
(13)
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
Adjusted EBITDA
(4)
|
$
|
168
|
|
|
$
|
118
|
|
|
$
|
126
|
|
|
$
|
50
|
|
|
$
|
462
|
|
|
$
|
(48)
|
|
|
$
|
414
|
|
______________________________
(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) Q2 2020 includes $2 million
and Q2 2019 includes $3 million of
accelerated depreciation related to plant closures.
(6) Non-cash charge to write-down inventory to its net
realizable value.
(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.
ATTACHMENT 2
|
|
TENNECO
INC.
RECONCILIATION OF
GAAP(1) TO NON-GAAP EARNINGS
MEASURES(2)
Unaudited
(dollars in millions,
except per share amounts)
|
|
|
Q2 2020
YTD
|
|
Q2 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
|
$
|
(1,189)
|
|
|
$
|
(14.64)
|
|
|
$
|
23
|
|
|
$
|
195
|
|
|
$
|
(1,220)
|
|
|
$
|
(890)
|
|
|
$
|
(91)
|
|
|
$
|
(1.13)
|
|
|
$
|
31
|
|
|
$
|
(14)
|
|
|
$
|
117
|
|
|
$
|
455
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
related expenses (5)
|
113
|
|
|
1.38
|
|
|
—
|
|
|
(33)
|
|
|
146
|
|
|
139
|
|
|
60
|
|
|
0.73
|
|
|
3
|
|
|
(17)
|
|
|
80
|
|
|
74
|
|
Inventory write-down
(6)
|
63
|
|
|
0.78
|
|
|
—
|
|
|
(19)
|
|
|
82
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Goodwill and
intangible impairment charge (7)
|
366
|
|
|
4.52
|
|
|
5
|
|
|
(12)
|
|
|
383
|
|
|
383
|
|
|
60
|
|
|
0.74
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
60
|
|
Asset impairments
(8)
|
393
|
|
|
4.84
|
|
|
7
|
|
|
(100)
|
|
|
500
|
|
|
500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Acquisition and
expected separation costs (9)
|
25
|
|
|
0.31
|
|
|
—
|
|
|
(8)
|
|
|
33
|
|
|
33
|
|
|
51
|
|
|
0.62
|
|
|
—
|
|
|
(16)
|
|
|
67
|
|
|
67
|
|
Cost reduction
initiatives (10)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
0.09
|
|
|
—
|
|
|
(3)
|
|
|
10
|
|
|
10
|
|
Costs to achieve
synergies (11)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
0.14
|
|
|
—
|
|
|
(3)
|
|
|
14
|
|
|
14
|
|
Purchase accounting
charges (12)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
0.44
|
|
|
—
|
|
|
(9)
|
|
|
44
|
|
|
44
|
|
Process harmonization
(13)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
0.09
|
|
|
—
|
|
|
(3)
|
|
|
10
|
|
|
10
|
|
Noncontrolling
interests adjustments (14)
|
11
|
|
|
0.14
|
|
|
(11)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Warranty charge
(15)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
0.06
|
|
|
—
|
|
|
(2)
|
|
|
7
|
|
|
7
|
|
Net tax
adjustments
|
17
|
|
|
0.20
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
(6)
|
|
|
(0.07)
|
|
|
—
|
|
|
(6)
|
|
|
—
|
|
|
—
|
|
Adjusted Net income,
EPS, NCI, Tax, EBIT, and EBITDA (4)
|
$
|
(201)
|
|
|
$
|
(2.47)
|
|
|
$
|
24
|
|
|
$
|
40
|
|
|
$
|
(76)
|
|
|
$
|
247
|
|
|
$
|
139
|
|
|
$
|
1.71
|
|
|
$
|
34
|
|
|
$
|
(73)
|
|
|
$
|
409
|
|
|
$
|
741
|
|
|
Q2 2020
YTD
|
|
Global
Segments
|
|
|
|
|
|
Clean Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net income (loss)
attributable to Tenneco
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1,189)
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
23
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,166)
|
|
Income tax (expense)
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
195
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(141)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,220)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
330
|
|
Total EBITDA
including noncontrolling interests (3)
|
$
|
116
|
|
|
$
|
(132)
|
|
|
$
|
(92)
|
|
|
$
|
(647)
|
|
|
$
|
(755)
|
|
|
$
|
(135)
|
|
|
$
|
(890)
|
|
Restructuring and
related expenses(5)
|
22
|
|
|
37
|
|
|
20
|
|
|
54
|
|
|
133
|
|
|
6
|
|
|
139
|
|
Inventory
write-down(6)
|
—
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
82
|
|
Goodwill and
intangible impairment charge (7)
|
—
|
|
|
160
|
|
|
110
|
|
|
113
|
|
|
383
|
|
|
—
|
|
|
383
|
|
Asset impairments
(8)
|
—
|
|
|
4
|
|
|
24
|
|
|
455
|
|
|
483
|
|
|
17
|
|
|
500
|
|
Acquisition and
expected separation costs (9)
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
29
|
|
|
33
|
|
Adjusted EBITDA
(4)
|
$
|
142
|
|
|
$
|
69
|
|
|
$
|
144
|
|
|
$
|
(25)
|
|
|
$
|
330
|
|
|
$
|
(83)
|
|
|
$
|
247
|
|
|
Q2 2019
YTD
|
|
Global
Segments
|
|
|
|
|
|
Clean Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net income (loss)
attributable to Tenneco Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(91)
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
31
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
(60)
|
|
Income tax (expense)
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
(14)
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(163)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
|
117
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
338
|
|
Total EBITDA
including noncontrolling interests (3)
|
$
|
283
|
|
|
$
|
213
|
|
|
$
|
155
|
|
|
$
|
(19)
|
|
|
632
|
|
|
$
|
(177)
|
|
|
$
|
455
|
|
Restructuring and
related expenses(5)
|
19
|
|
|
17
|
|
|
4
|
|
|
33
|
|
|
73
|
|
|
1
|
|
|
74
|
|
Goodwill impairment
charge (7)
|
—
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
60
|
|
|
—
|
|
|
60
|
|
Acquisition and
expected separation costs (9)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
66
|
|
|
67
|
|
Cost reduction
initiatives (10)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
Costs to achieve
synergies (11)
|
1
|
|
|
2
|
|
|
7
|
|
|
2
|
|
|
12
|
|
|
2
|
|
|
14
|
|
Purchase accounting
charges (12)
|
—
|
|
|
2
|
|
|
37
|
|
|
5
|
|
|
44
|
|
|
—
|
|
|
44
|
|
Process harmonization
(13)
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
Warranty charge
(15)
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
Adjusted EBITDA
(4)
|
$
|
308
|
|
|
$
|
234
|
|
|
$
|
216
|
|
|
$
|
81
|
|
|
$
|
839
|
|
|
$
|
(98)
|
|
|
$
|
741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
______________________________
(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) Q2 YTD 2020 includes $7
million and Q2 YTD 2019 includes $6
million of accelerated depreciation related to plant
closures.
(6) Non-cash charge to write-down inventory to its net
realizable value.
(7) Non-cash asset impairment charge related to goodwill and
intangibles.
(8) Asset impairment charges.
(9) Costs related to acquisitions and costs related to expected
separation.
(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) Charge due to process harmonization.
(14) Amount relates to adjustments made to mark certain
redeemable noncontrolling interests to their redemption values.
(15) Charge related to warranty. Although Tenneco regularly
incurs warranty costs, this specific charge is of an unusual nature
in the period incurred.
ATTACHMENT
2
|
|
TENNECO
INC.
RECONCILIATION OF
GAAP(1) TO NON-GAAP REVENUE
MEASURES(2)
Unaudited
(dollars in millions
except percents)
|
|
|
Q2
2020
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
|
Currency Impact on
Value-add Revenues
|
|
Value-add Revenues
excluding Currency
|
Clean Air
|
$
|
1,140
|
|
|
$
|
623
|
|
|
$
|
517
|
|
|
$
|
(16)
|
|
|
$
|
533
|
|
Powertrain
|
602
|
|
|
—
|
|
|
602
|
|
|
(35)
|
|
|
637
|
|
Motorparts
|
559
|
|
|
—
|
|
|
559
|
|
|
(27)
|
|
|
586
|
|
Ride
Performance
|
336
|
|
|
—
|
|
|
336
|
|
|
(15)
|
|
|
351
|
|
Total Tenneco
Inc.
|
$
|
2,637
|
|
|
$
|
623
|
|
|
$
|
2,014
|
|
|
$
|
(93)
|
|
|
$
|
2,107
|
|
|
|
Q2
2019
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
|
Currency Impact on
Value-add Revenues
|
|
Value-add Revenues
excluding Currency
|
Clean Air
|
$
|
1,827
|
|
|
$
|
777
|
|
|
$
|
1,050
|
|
|
$
|
—
|
|
|
$
|
1,050
|
|
Powertrain
|
1,133
|
|
|
—
|
|
|
1,133
|
|
|
—
|
|
|
1,133
|
|
Motorparts
|
835
|
|
|
—
|
|
|
835
|
|
|
—
|
|
|
835
|
|
Ride
Performance
|
709
|
|
|
—
|
|
|
709
|
|
|
—
|
|
|
709
|
|
Total Tenneco
Inc.
|
$
|
4,504
|
|
|
$
|
777
|
|
|
$
|
3,727
|
|
|
$
|
—
|
|
|
$
|
3,727
|
|
|
|
Q2 2020 vs. Q2
2019 $ Change and % Change Increase (decrease)
|
|
Revenues
|
|
%
Change
|
|
Value-add Revenues
excluding Currency
|
|
%
Change
|
Clean Air
|
$
|
(687)
|
|
|
(38)
|
%
|
|
$
|
(517)
|
|
|
(49)
|
%
|
Powertrain
|
(531)
|
|
|
(47)
|
%
|
|
(496)
|
|
|
(44)
|
%
|
Motorparts
|
(276)
|
|
|
(33)
|
%
|
|
(249)
|
|
|
(30)
|
%
|
Ride
Performance
|
(373)
|
|
|
(53)
|
%
|
|
(358)
|
|
|
(50)
|
%
|
Total Tenneco
Inc.
|
$
|
(1,867)
|
|
|
(41)
|
%
|
|
$
|
(1,620)
|
|
|
(43)
|
%
|
______________________________
(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)
|
|
|
Q2 2020
YTD
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
|
Currency Impact on
Value-add Revenues
|
|
Value-add Revenues
excluding Currency
|
Clean Air
|
$
|
2,685
|
|
|
$
|
1,323
|
|
|
$
|
1,362
|
|
|
$
|
(35)
|
|
|
$
|
1,397
|
|
Powertrain
|
1,599
|
|
|
—
|
|
|
1,599
|
|
|
(61)
|
|
|
1,660
|
|
Motorparts
|
1,265
|
|
|
—
|
|
|
1,265
|
|
|
(46)
|
|
|
1,311
|
|
Ride
Performance
|
924
|
|
|
—
|
|
|
924
|
|
|
(32)
|
|
|
956
|
|
Total Tenneco
Inc.
|
$
|
6,473
|
|
|
$
|
1,323
|
|
|
$
|
5,150
|
|
|
$
|
(174)
|
|
|
$
|
5,324
|
|
|
|
Q2 2019
YTD
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
|
Currency Impact on
Value-add Revenues
|
|
Value-add Revenues
excluding Currency
|
Clean Air
|
$
|
3,606
|
|
|
$
|
1,483
|
|
|
$
|
2,123
|
|
|
$
|
—
|
|
|
$
|
2,123
|
|
Powertrain
|
2,308
|
|
|
—
|
|
|
2,308
|
|
|
—
|
|
|
2,308
|
|
Motorparts
|
1,632
|
|
|
—
|
|
|
1,632
|
|
|
—
|
|
|
1,632
|
|
Ride
Performance
|
1,442
|
|
|
—
|
|
|
1,442
|
|
|
—
|
|
|
1,442
|
|
Total Tenneco
Inc.
|
$
|
8,988
|
|
|
$
|
1,483
|
|
|
$
|
7,505
|
|
|
$
|
—
|
|
|
$
|
7,505
|
|
|
Q2 2020 YTD vs. Q2
2019 YTD $ Change and % Change Increase (decrease)
|
|
Revenues
|
|
%
Change
|
|
Value-add
Revenues
excluding Currency
|
|
%
Change
|
Clean Air
|
$
|
(921)
|
|
|
(26)
|
%
|
|
$
|
(726)
|
|
|
(34)
|
%
|
Powertrain
|
(709)
|
|
|
(31)
|
%
|
|
(648)
|
|
|
(28)
|
%
|
Motorparts
|
(367)
|
|
|
(22)
|
%
|
|
(321)
|
|
|
(20)
|
%
|
Ride
Performance
|
(518)
|
|
|
(36)
|
%
|
|
(486)
|
|
|
(34)
|
%
|
Total Tenneco
Inc.
|
$
|
(2,515)
|
|
|
(28)
|
%
|
|
$
|
(2,181)
|
|
|
(29)
|
%
|
______________________________
(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)
|
|
|
June 30,
2020
|
|
June 30,
2019
|
Total debt
|
$
|
6,851
|
|
|
$
|
5,678
|
|
Total cash, cash
equivalents and restricted cash (total cash)
|
1,371
|
|
|
390
|
|
Debt net of total
cash balances (1)
|
$
|
5,480
|
|
|
$
|
5,288
|
|
Adjusted LTM and Pro
forma Adjusted LTM EBITDA including noncontrolling interests
(2) (3) (5)
|
$
|
921
|
|
|
$
|
1,514
|
|
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)
|
6.0x
|
|
|
3.5x
|
|
|
Q3
2019
|
|
Q4
2019
|
|
Q1
2020
|
|
Q2
2020
|
|
Q2 2020
LTM
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
70
|
|
|
$
|
(313)
|
|
|
$
|
(839)
|
|
|
$
|
(350)
|
|
|
$
|
(1,432)
|
|
Net income (loss)
attributable to noncontrolling interests
|
8
|
|
|
75
|
|
|
13
|
|
|
10
|
|
|
106
|
|
Net income
(loss)
|
78
|
|
|
(238)
|
|
|
(826)
|
|
|
(340)
|
|
|
(1,326)
|
|
Income tax (expense)
benefit
|
9
|
|
|
(14)
|
|
|
94
|
|
|
101
|
|
|
190
|
|
Interest
expense
|
(79)
|
|
|
(80)
|
|
|
(75)
|
|
|
(66)
|
|
|
(300)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
148
|
|
|
(144)
|
|
|
(845)
|
|
|
(375)
|
|
|
(1,216)
|
|
Depreciation and
amortization
|
165
|
|
|
170
|
|
|
171
|
|
|
159
|
|
|
665
|
|
Total EBITDA
including noncontrolling interests (2)
|
$
|
313
|
|
|
$
|
26
|
|
|
$
|
(674)
|
|
|
$
|
(216)
|
|
|
$
|
(551)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring and
related expenses
|
28
|
|
|
36
|
|
|
34
|
|
|
105
|
|
|
203
|
|
Inventory write-down
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|
82
|
|
Goodwill and
intangible impairment charge (7)
|
9
|
|
|
172
|
|
|
383
|
|
|
—
|
|
|
564
|
|
Asset impairments
(8)
|
—
|
|
|
—
|
|
|
471
|
|
|
29
|
|
|
500
|
|
Acquisition and
expected separation costs (9)
|
30
|
|
|
30
|
|
|
25
|
|
|
8
|
|
|
93
|
|
Cost reduction
initiatives (10)
|
6
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Costs to achieve
synergies (11)
|
7
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
15
|
|
Purchase accounting
charges (12)
|
11
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
13
|
|
Process harmonization
(13)
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
Warranty charge
(14)
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Antitrust reserve
change in estimate (15)
|
(9)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9)
|
|
Brazil tax credit
(16)
|
(22)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22)
|
|
Out of period
adjustment (17)
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Impairment of assets
held for sale
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Pension
charges/adjustments (18)
|
—
|
|
|
(2)
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
Total Adjusted EBITDA
including noncontrolling interests (3)
|
$
|
387
|
|
|
$
|
287
|
|
|
$
|
239
|
|
|
$
|
8
|
|
|
$
|
921
|
|
|
Q3
2018*
|
|
Q4
2018
|
|
Q1
2019
|
|
Q2
2019
|
|
Q2 2019
LTM
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
57
|
|
|
$
|
(109)
|
|
|
$
|
(117)
|
|
|
$
|
26
|
|
|
$
|
(143)
|
|
Net income (loss)
attributable to noncontrolling interests
|
9
|
|
|
17
|
|
|
12
|
|
|
19
|
|
|
57
|
|
Net income
(loss)
|
66
|
|
|
(92)
|
|
|
(105)
|
|
|
45
|
|
|
(86)
|
|
Income tax (expense)
benefit
|
(22)
|
|
|
10
|
|
|
—
|
|
|
(14)
|
|
|
(26)
|
|
Interest
expense
|
(24)
|
|
|
(79)
|
|
|
(81)
|
|
|
(82)
|
|
|
(266)
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
112
|
|
|
(23)
|
|
|
(24)
|
|
|
141
|
|
|
206
|
|
Depreciation and
amortization
|
60
|
|
|
165
|
|
|
169
|
|
|
169
|
|
|
563
|
|
Total EBITDA
including noncontrolling interests (2)
|
$
|
172
|
|
|
$
|
142
|
|
|
$
|
145
|
|
|
$
|
310
|
|
|
$
|
769
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring and
related expenses
|
12
|
|
|
17
|
|
|
17
|
|
|
57
|
|
|
103
|
|
Goodwill impairment
charge (7)
|
—
|
|
|
3
|
|
|
60
|
|
|
—
|
|
|
63
|
|
Acquisition and
expected separation costs (9)
|
12
|
|
|
53
|
|
|
40
|
|
|
27
|
|
|
132
|
|
Cost reduction
initiatives (10)
|
—
|
|
|
8
|
|
|
8
|
|
|
2
|
|
|
18
|
|
Costs to achieve
synergies (11)
|
4
|
|
|
49
|
|
|
7
|
|
|
7
|
|
|
67
|
|
Purchase accounting
charges (12)
|
—
|
|
|
106
|
|
|
41
|
|
|
3
|
|
|
150
|
|
Process harmonization
(13)
|
—
|
|
|
—
|
|
|
9
|
|
|
1
|
|
|
10
|
|
Warranty charge
(14)
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
Pension
charges/adjustments (18)
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Anti-dumping duty
charge (19)
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
Litigation settlement
accrual
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
Loss on debt
modification (20)
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
Total Adjusted EBITDA
including noncontrolling interests (3)
|
$
|
210
|
|
|
$
|
407
|
|
|
$
|
327
|
|
|
$
|
414
|
|
|
$
|
1,358
|
|
|
|
|
|
|
|
|
|
|
|
Legacy Federal-Mogul
Reconciliation of Non-GAAP earnings measures
|
|
|
|
|
|
|
|
Q3
2018
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Federal-Mogul
|
$
|
35
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to noncontrolling interests
|
1
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
36
|
|
|
|
|
|
|
|
|
|
Income tax (expense)
benefit
|
(16)
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(49)
|
|
|
|
|
|
|
|
|
|
EBIT, Earnings (Loss)
before interest expense, income taxes and noncontrolling
interests
|
101
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
99
|
|
|
|
|
|
|
|
|
|
Total EBITDA
including noncontrolling interests (2)
|
$
|
200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring charges
and asset impairments, net
|
15
|
|
|
|
|
|
|
|
|
|
Gain (loss) on sale
of assets
|
(65)
|
|
|
|
|
|
|
|
|
|
Charge for
extinguishment of dissenting shareholders shares
|
5
|
|
|
|
|
|
|
|
|
|
Other
|
1
|
|
|
|
|
|
|
|
|
|
Total Adjusted EBITDA
including noncontrolling interests (3)
|
$
|
156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
2018*
|
|
Q4
2018
|
|
Q1
2019
|
|
Q2
2019
|
|
Q2 2019
LTM
|
Adjusted EBITDA and
Pro forma Adjusted EBITDA including noncontrolling interests
(2) (3) (5)
|
$
|
366
|
|
|
$
|
407
|
|
|
$
|
327
|
|
|
$
|
414
|
|
|
$
|
1,514
|
|
______________________________
* Financial results for 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 charge to write-down inventory to its net
realizable value.
(7) Non-cash asset impairment charge related to goodwill and
intangibles.
(8) Asset impairment charges.
(9) Costs related to acquisitions and costs related to expected
separation.
(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) Charge due to process harmonization.
(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) Charges related to pension derisking and other
adjustments.
(19) Charge due to retroactive application of anti-dumping duty
on a supplier's products.
(20) Loss on debt modification.
ATTACHMENT
2
|
|
TENNECO
INC.
RECONCILIATION OF
GAAP(1) TO NON-GAAP REVENUE
MEASURES(2)
Unaudited
(dollars in
millions)
|
|
|
Q2
2020
|
|
Revenues
|
|
Currency
|
|
Revenues Excluding
Currency
|
|
Substrate Sales
Excluding Currency
|
|
Value-add Revenues
Excluding Currency
|
Original equipment
light vehicle revenues
|
$
|
1,417
|
|
|
$
|
(52)
|
|
|
$
|
1,469
|
|
|
$
|
509
|
|
|
$
|
960
|
|
Original equipment
commercial truck, off-highway, industrial and other
revenues
|
421
|
|
|
(27)
|
|
|
448
|
|
|
111
|
|
|
337
|
|
Aftermarket &
original equipment service revenues
|
799
|
|
|
(29)
|
|
|
828
|
|
|
18
|
|
|
810
|
|
Net sales and
operating revenues
|
$
|
2,637
|
|
|
$
|
(108)
|
|
|
$
|
2,745
|
|
|
$
|
638
|
|
|
$
|
2,107
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2
2019
|
|
Revenues
|
|
Currency
|
|
Revenues Excluding
Currency
|
|
Substrate Sales
Excluding Currency
|
|
Value-add Revenues
Excluding Currency
|
Original equipment
light vehicle revenues
|
$
|
2,680
|
|
|
$
|
—
|
|
|
$
|
2,680
|
|
|
$
|
654
|
|
|
$
|
2,026
|
|
Original equipment
commercial truck, off-highway, industrial and other
revenues
|
635
|
|
|
—
|
|
|
635
|
|
|
103
|
|
|
532
|
|
Aftermarket &
original equipment service revenues
|
1,189
|
|
|
—
|
|
|
1,189
|
|
|
20
|
|
|
1,169
|
|
Net sales and
operating revenues
|
$
|
4,504
|
|
|
$
|
—
|
|
|
$
|
4,504
|
|
|
$
|
777
|
|
|
$
|
3,727
|
|
|
|
Q2 2020
YTD
|
|
Revenues
|
|
Currency
|
|
Revenues Excluding
Currency
|
|
Substrate Sales
Excluding Currency
|
|
Value-add Revenues
Excluding Currency
|
Original equipment
light vehicle revenues
|
$
|
3,676
|
|
|
$
|
(99)
|
|
|
$
|
3,775
|
|
|
$
|
1,094
|
|
|
$
|
2,681
|
|
Original equipment
commercial truck, off-highway, industrial and other
revenues
|
957
|
|
|
(53)
|
|
|
1,010
|
|
|
223
|
|
|
787
|
|
Aftermarket &
original equipment service revenues
|
1,840
|
|
|
(53)
|
|
|
1,893
|
|
|
37
|
|
|
1,856
|
|
Net sales and
operating revenues
|
$
|
6,473
|
|
|
$
|
(205)
|
|
|
$
|
6,678
|
|
|
$
|
1,354
|
|
|
$
|
5,324
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2019
YTD
|
|
Revenues
|
|
Currency
|
|
Revenues Excluding
Currency
|
|
Substrate Sales
Excluding Currency
|
|
Value-add Revenues
Excluding Currency
|
Original equipment
light vehicle revenues
|
$
|
5,326
|
|
|
$
|
—
|
|
|
$
|
5,326
|
|
|
$
|
1,233
|
|
|
$
|
4,093
|
|
Original equipment
commercial truck, off-highway, industrial and other
revenues
|
1,203
|
|
|
—
|
|
|
1,203
|
|
|
209
|
|
|
994
|
|
Aftermarket &
original equipment service revenues
|
2,459
|
|
|
—
|
|
|
2,459
|
|
|
41
|
|
|
2,418
|
|
Net sales and
operating revenues
|
$
|
8,988
|
|
|
$
|
—
|
|
|
$
|
8,988
|
|
|
$
|
1,483
|
|
|
$
|
7,505
|
|
______________________________
(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)
|
|
|
Q2
2020
|
|
Global
Segments
|
|
|
|
|
|
Clean
Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
1,140
|
|
|
$
|
602
|
|
|
$
|
559
|
|
|
$
|
336
|
|
|
$
|
2,637
|
|
|
$
|
—
|
|
|
$
|
2,637
|
|
Less: Substrate
sales
|
623
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
623
|
|
|
—
|
|
|
623
|
|
Value-add
revenues
|
$
|
517
|
|
|
$
|
602
|
|
|
$
|
559
|
|
|
$
|
336
|
|
|
$
|
2,014
|
|
|
$
|
—
|
|
|
$
|
2,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
17
|
|
|
$
|
(62)
|
|
|
$
|
(52)
|
|
|
$
|
(70)
|
|
|
$
|
(167)
|
|
|
$
|
(49)
|
|
|
$
|
(216)
|
|
EBITDA as a %
of revenue
|
1.5
|
%
|
|
(10.3)
|
%
|
|
(9.3)
|
%
|
|
(20.8)
|
%
|
|
(6.3)
|
%
|
|
|
|
(8.2)
|
%
|
EBITDA as a %
of value-add revenue
|
3.3
|
%
|
`
|
(10.3)
|
%
|
|
(9.3)
|
%
|
|
(20.8)
|
%
|
|
(8.3)
|
%
|
|
|
|
(10.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
38
|
|
|
$
|
(21)
|
|
|
$
|
71
|
|
|
$
|
(41)
|
|
|
$
|
47
|
|
|
$
|
(39)
|
|
|
$
|
8
|
|
Adjusted EBITDA
as a % of revenue
|
3.3
|
%
|
|
(3.5)
|
%
|
|
12.7
|
%
|
|
(12.2)
|
%
|
|
1.8
|
%
|
|
|
|
0.3
|
%
|
Adjusted EBITDA
as a % of value-add revenue
|
7.4
|
%
|
|
(3.5)
|
%
|
|
12.7
|
%
|
|
(12.2)
|
%
|
|
2.3
|
%
|
|
|
|
0.4
|
%
|
|
Q2
2019
|
|
Global
Segments
|
|
|
|
|
|
Clean
Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
1,827
|
|
|
$
|
1,133
|
|
|
$
|
835
|
|
|
$
|
709
|
|
|
$
|
4,504
|
|
|
$
|
—
|
|
|
$
|
4,504
|
|
Less: Substrate
sales
|
777
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
777
|
|
|
—
|
|
|
777
|
|
Value-add
revenues
|
$
|
1,050
|
|
|
$
|
1,133
|
|
|
$
|
835
|
|
|
$
|
709
|
|
|
$
|
3,727
|
|
|
$
|
—
|
|
|
$
|
3,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
152
|
|
|
$
|
100
|
|
|
$
|
110
|
|
|
$
|
26
|
|
|
$
|
388
|
|
|
$
|
(78)
|
|
|
$
|
310
|
|
EBITDA as a %
of revenue
|
8.3
|
%
|
|
8.8
|
%
|
|
13.2
|
%
|
|
3.7
|
%
|
|
8.6
|
%
|
|
|
|
6.9
|
%
|
EBITDA as a %
of value-add revenue
|
14.5
|
%
|
`
|
8.8
|
%
|
|
13.2
|
%
|
|
3.7
|
%
|
|
10.4
|
%
|
|
|
|
8.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
168
|
|
|
$
|
118
|
|
|
$
|
126
|
|
|
$
|
50
|
|
|
$
|
462
|
|
|
$
|
(48)
|
|
|
$
|
414
|
|
Adjusted EBITDA
as a % of revenue
|
9.2
|
%
|
|
10.4
|
%
|
|
15.1
|
%
|
|
7.1
|
%
|
|
10.3
|
%
|
|
|
|
9.2
|
%
|
Adjusted EBITDA
as a %
of value-add revenue
|
16.0
|
%
|
|
10.4
|
%
|
|
15.1
|
%
|
|
7.1
|
%
|
|
12.4
|
%
|
|
|
|
11.1
|
%
|
______________________________
(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)
|
|
|
Q2 2020
YTD
|
|
Global
Segments
|
|
|
|
|
|
Clean
Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
2,685
|
|
|
$
|
1,599
|
|
|
$
|
1,265
|
|
|
$
|
924
|
|
|
$
|
6,473
|
|
|
$
|
—
|
|
|
$
|
6,473
|
|
Less: Substrate
sales
|
1,323
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,323
|
|
|
—
|
|
|
1,323
|
|
Value-add
revenues
|
$
|
1,362
|
|
|
$
|
1,599
|
|
|
$
|
1,265
|
|
|
$
|
924
|
|
|
$
|
5,150
|
|
|
$
|
—
|
|
|
$
|
5,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
116
|
|
|
$
|
(132)
|
|
|
$
|
(92)
|
|
|
$
|
(647)
|
|
|
$
|
(755)
|
|
|
$
|
(135)
|
|
|
$
|
(890)
|
|
EBITDA as a %
of revenue
|
4.3
|
%
|
|
(8.3)
|
%
|
|
(7.3)
|
%
|
|
(70.0)
|
%
|
|
(11.7)
|
%
|
|
|
|
(13.7)
|
%
|
EBITDA as a %
of value-add revenue
|
8.5
|
%
|
`
|
(8.3)
|
%
|
|
(7.3)
|
%
|
|
(70.0)
|
%
|
|
(14.7)
|
%
|
|
|
|
(17.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
142
|
|
|
$
|
69
|
|
|
$
|
144
|
|
|
$
|
(25)
|
|
|
330
|
|
|
$
|
(83)
|
|
|
$
|
247
|
|
Adjusted EBITDA
as a % of revenue
|
5.3
|
%
|
|
4.3
|
%
|
|
11.4
|
%
|
|
(2.7)
|
%
|
|
5.1
|
%
|
|
|
|
3.8
|
%
|
Adjusted EBITDA
as a %
of value-add revenue
|
10.4
|
%
|
|
4.3
|
%
|
|
11.4
|
%
|
|
(2.7)
|
%
|
|
6.4
|
%
|
|
|
|
4.8
|
%
|
|
Q2 2019
YTD
|
|
Global
Segments
|
|
|
|
|
|
Clean
Air
|
|
Powertrain
|
|
Motorparts
|
|
Ride
Performance
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
3,606
|
|
|
$
|
2,308
|
|
|
$
|
1,632
|
|
|
$
|
1,442
|
|
|
$
|
8,988
|
|
|
$
|
—
|
|
|
$
|
8,988
|
|
Less: Substrate
sales
|
1,483
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,483
|
|
|
—
|
|
|
1,483
|
|
Value-add
revenues
|
$
|
2,123
|
|
|
$
|
2,308
|
|
|
$
|
1,632
|
|
|
$
|
1,442
|
|
|
$
|
7,505
|
|
|
$
|
—
|
|
|
$
|
7,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
283
|
|
|
$
|
213
|
|
|
$
|
155
|
|
|
$
|
(19)
|
|
|
$
|
632
|
|
|
$
|
(177)
|
|
|
$
|
455
|
|
EBITDA as a %
of revenue
|
7.8
|
%
|
|
9.2
|
%
|
|
9.5
|
%
|
|
(1.3)
|
%
|
|
7.0
|
%
|
|
|
|
5.1
|
%
|
EBITDA as a %
of value-add revenue
|
13.3
|
%
|
`
|
9.2
|
%
|
|
9.5
|
%
|
|
(1.3)
|
%
|
|
8.4
|
%
|
|
|
|
6.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
308
|
|
|
$
|
234
|
|
|
$
|
216
|
|
|
$
|
81
|
|
|
$
|
839
|
|
|
$
|
(98)
|
|
|
$
|
741
|
|
Adjusted EBITDA
as a % of revenue
|
8.5
|
%
|
|
10.1
|
%
|
|
13.2
|
%
|
|
5.6
|
%
|
|
9.3
|
%
|
|
|
|
8.2
|
%
|
Adjusted EBITDA
as a %
of value-add revenue
|
14.5
|
%
|
|
10.1
|
%
|
|
13.2
|
%
|
|
5.6
|
%
|
|
11.2
|
%
|
|
|
|
9.9
|
%
|
______________________________
(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 TO NON-GAAP REVENUE
MEASURES(2)
Original equipment
commercial truck, off-highway, industrial and other
revenues
Unaudited
(dollars in
millions)
|
|
|
Q2
2020
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
Clean Air
|
$
|
241
|
|
|
$
|
107
|
|
|
$
|
134
|
|
Powertrain
|
137
|
|
|
—
|
|
|
137
|
|
Ride
Performance
|
43
|
|
|
—
|
|
|
43
|
|
Total Tenneco
Inc.
|
$
|
421
|
|
|
$
|
107
|
|
|
$
|
314
|
|
|
|
|
|
|
|
|
Q2
2019
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
Clean Air
|
$
|
287
|
|
|
$
|
103
|
|
|
$
|
184
|
|
Powertrain
|
261
|
|
|
—
|
|
|
261
|
|
Ride
Performance
|
87
|
|
|
—
|
|
|
87
|
|
Total Tenneco
Inc.
|
$
|
635
|
|
|
$
|
103
|
|
|
$
|
532
|
|
|
|
Q2 2020
YTD
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
Clean Air
|
$
|
505
|
|
|
$
|
216
|
|
|
$
|
289
|
|
Powertrain
|
338
|
|
|
—
|
|
|
338
|
|
Ride
Performance
|
114
|
|
|
—
|
|
|
114
|
|
Total Tenneco
Inc.
|
$
|
957
|
|
|
$
|
216
|
|
|
$
|
741
|
|
|
|
|
|
|
|
|
Q2 2019
YTD
|
|
Revenues
|
|
Substrate
Sales
|
|
Value-add
Revenues
|
Clean Air
|
$
|
589
|
|
|
$
|
209
|
|
|
$
|
380
|
|
Powertrain
|
429
|
|
|
—
|
|
|
429
|
|
Ride
Performance
|
185
|
|
|
—
|
|
|
185
|
|
Total Tenneco
Inc.
|
$
|
1,203
|
|
|
$
|
209
|
|
|
$
|
994
|
|
______________________________
(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-second-quarter-2020-results-301107130.html
SOURCE Tenneco Inc.