LAKE FOREST, Ill., Aug. 5, 2021 /PRNewswire/ -- Tenneco (NYSE:
TEN) today announced results for the second quarter ended
June 30, 2021, including the
following:
- Higher total revenue, up 74% year-over-year to $4.6 billion. Value-add revenue increased to
$3.5 billion, 68% higher versus
second quarter 2020, excluding positive currency impact of
$117 million.
- The Company reported a net loss of $10
million, or $(0.12) per
diluted share, versus a net loss of $350
million or $(4.30) per diluted
share in the second quarter 2020. This quarter's net loss was
primarily due to one-time charges related to the Accelerate+
structural cost improvement program.
- Adjusted net income for the quarter was $69 million, or $0.84 per diluted share, an improvement of
$244 million, or $2.99 per diluted share, as compared to prior
year.
- EBIT* jumped to $127 million,
compared to a loss of $375 million in
second quarter 2020. EBIT as a percent of revenue increased to 2.8%
versus -14.2% in the prior year.
- Adjusted EBITDA** climbed to $356
million, compared to $8
million in second quarter 2020. Adjusted EBITDA as a percent
of value-add revenue improved to 10.2%, versus 0.4% last year.
- Stronger first half 2021 cash flow and higher earnings resulted
in a 1.4x improvement in the Company's net leverage ratio***
compared to December 31, 2020.
With strong execution on year-over-year revenue growth, Tenneco
delivered margin expansion and higher cash flow in Q2
"Solid operational performance on higher revenue and structural
cost savings from the Accelerate+ program drove margin expansion
and cash generation," said Brian
Kesseler, Tenneco CEO. "The global Tenneco team remained
focused on driving operational improvements while managing through
challenging market conditions, and our cash flow conversion focus
continued to deliver net debt reduction."
Outlook
For 2021, Tenneco has updated its
full year guidance ranges, reconfirmed the midpoint of its
full-year adjusted EBITDA guidance of $1.4
billion and continues to expect its net debt to fall below
$4.2 billion at year-end.
Full Year
2021
|
|
|
Second Half
2021
|
Revenue
|
$18.3 –
18.6B
|
|
Revenue
|
$9.0 –
9.3B
|
Value-Add
Revenue
|
$13.8 –
14.1B
|
|
Value-Add
Revenue
|
$6.7 –
7.0B
|
Adjusted
EBITDA**
|
$1.36 -
1.44B
|
|
Adjusted
EBITDA**
|
$616 -
696M
|
Net Debt
(1)
|
<$4.2B
|
|
|
|
|
|
|
|
|
|
(1) Total debt net of
total cash balances.
|
* EBIT: Earnings
before interest expense, income taxes and noncontrolling
interests.
|
** Adjusted EBITDA:
Adjusted earnings before interest expense, income taxes,
noncontrolling interests, and depreciation and
amortization.
|
*** Net leverage
ratio: Ratio of debt net of total cash balances to adjusted LTM
EBITDA including noncontrolling interests.
|
"We remain committed to our strategic priorities to create
shareholder value in the near-term through net debt reduction, and
in the long-term by delivering sustained growth from prioritized
investments, particularly in the Motorparts and Performance
Solutions segments," Kesseler added. "Our global team is focused on
driving continuous improvements that keep our team members safe,
our operations productive and our customers successful."
Earnings Conference Call Details
The Company will
report its second quarter 2021 financial results before the market
opens on Thursday, August 5, 2021 and
host a webcast conference call the same day at 9:30 a.m. ET. The purpose of the call is to
discuss the Company's financial results for the second quarter
2021, as well as to provide other information regarding the
company's outlook.
A live "listen only" webcast and presentation materials will be
available on the investor section of the company's website at
https://investors.tenneco.com. An archive of the webcast will
be available approximately one hour after conclusion of the call
for one year.
Telephone participants are encouraged to pre-register for the
conference call using the following link:
https://dpregister.com/sreg/10158015/ea28a7cdc2
Callers who pre-register will be given a conference passcode and
unique PIN to gain immediate access to the call and bypass the live
operator. Participants may pre-register at any time,
including up to and after the call start time.
Those without internet access or unable to pre-register may dial
in, using the passcode "Tenneco Inc."
PARTICIPANT DIAL IN (TOLL
FREE): 1-833-366-1121
PARTICIPANT INTERNATIONAL DIAL IN: 1-412-902-6733
Attachment 1
Statements of Income (Loss) – 3
months
Statements of Income (Loss) – 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 and Earnings to Non-GAAP Revenue and
Earnings Measures – 3 and 6 Months
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures – 3 and
6 Months
Reconciliation of Non-GAAP Measures – Debt Net of Total
Cash/Adjusted LTM EBITDA including noncontrolling interests
Reconciliation of GAAP to Non-GAAP Revenue Measures – Original
Equipment, Original Equipment Service and Aftermarket Revenue – 3
and 6 Months
About Tenneco
Tenneco is one of the world's leading
designers, manufacturers and marketers of automotive products for
original equipment and aftermarket customers, with full year 2020
revenues of $15.4 billion and
approximately 73,000 team members working at more than 270 sites
worldwide. Through our four business groups, Motorparts,
Performance Solutions, Clean Air and Powertrain, Tenneco is driving
advancements in global mobility by delivering technology solutions
for diversified global markets, including light vehicle, commercial
truck, off-highway, industrial, motorsport and the aftermarket.
Visit www.tenneco.com to learn more.
Investors and others should note that Tenneco routinely posts
important information on its website and considers the Investor
section, www.investors.tenneco.com, a channel of
distribution.
About Guidance
Revenue estimates and other
forecasted information in this release are based on OE
manufacturers' programs that have been formally awarded to the
company; programs where Tenneco is highly confident that it will be
awarded business based on informal customer indications consistent
with past practices; and Tenneco's status as supplier for the
existing program and its relationship with the customer. This
information is also based on anticipated vehicle production levels
and pricing, including precious metals pricing and the impact of
material cost changes. Unless otherwise indicated, our methodology
does not attempt to forecast currency fluctuations, and
accordingly, reflects constant currency. Certain elements of the
restructuring and related expenses, legal settlements, substrate
pricing, and other unusual charges we incur from time to time
cannot be forecasted accurately. In this respect, we are not
able to forecast corresponding GAAP measures without unreasonable
efforts on account of these factors and other factors not in our
control.
Safe Harbor
This press release contains
forward-looking statements. The words "will," "would," "could,"
"expect," "anticipate," and similar expressions (and variations
thereof), identify these forward-looking statements. These
forward-looking statements are based on the current expectations of
the Company (including its subsidiaries). Because these
statements involve risks and uncertainties, actual results may
differ materially from the expectations expressed in the
forward-looking statements.
Important factors that could cause actual results to differ
materially from the expectations reflected in the forward-looking
statements include: general economic, business, market and social
conditions, including the effects of the COVID-19 pandemic; our
ability (or inability) to successfully execute cost reduction,
performance improvement and other plans, including our plans in
response to the COVID-19 pandemic and our previously announced
accelerated performance improvement plan ("Accelerate"), and to
realize the anticipated benefits from these plans; disasters, local
and global public health emergencies or other catastrophic events,
where we or our customers do business, and any resultant
disruptions; 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 comply with the covenants contained in 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; supply chain disruptions, including
constraints on steel and semiconductors and resulting increases in
costs, impacting our company, our customers or the automotive
industry; 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 continued evolution of the
automotive industry towards car and ride sharing and autonomous
vehicles; to the announced plans, in an effort to reduce greenhouse
gas emissions, of governments and vehicle manufacturers to limit
production of diesel and gasoline powered vehicles in various
national and local jurisdictions globally; 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 substantial 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; 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 on the timeline contemplated or at all); 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 or
other strategic alternative; the risk the combined company and each
separate company following a separation will underperform relative
to our expectations; the ongoing transaction costs and risk that we
may incur greater costs following a separation of the business or
other strategic alternative; and the risk a separation is
determined to be a taxable transaction.
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, 2020, and quarterly report on Form
10-Q for the quarter ended March 31, 2021.
Investor inquiries:
Linae
Golla
847-482-5162
lgolla@tenneco.com
Rich Kwas
248-849-1340
rich.kwas@tenneco.com
Media inquiries:
Bill
Dawson
847-482-5807
bdawson@tenneco.com
ATTACHMENT
1
|
TENNECO
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
|
Unaudited
|
(millions, except per
share amounts)
|
|
|
Three Months Ended
June 30,
|
|
2021
|
|
2020*
|
Net sales and
operating revenues:
|
|
|
|
Motorparts
|
$
|
794
|
|
|
$
|
559
|
|
Performance
Solutions
|
715
|
|
|
378
|
|
Clean Air - Value-add
revenues
|
943
|
|
|
517
|
|
Clean Air - Substrate
sales
|
1,081
|
|
|
623
|
|
Powertrain
|
1,050
|
|
|
560
|
|
Total net sales and operating revenues
|
4,583
|
|
|
2,637
|
|
Costs and
expenses:
|
|
|
|
Cost of
sales (exclusive of depreciation and amortization)
|
3,973
|
|
|
2,498
|
|
Selling,
general, and administrative
|
269
|
|
|
195
|
|
Depreciation and amortization
|
145
|
|
|
159
|
|
Engineering, research, and development
|
73
|
|
|
55
|
|
Restructuring charges, net and asset impairments
|
27
|
|
|
121
|
|
Total costs and expenses
|
4,487
|
|
|
3,028
|
|
Other income
(expense):
|
|
|
|
Non-service pension
and postretirement benefit (costs) credits
|
3
|
|
|
1
|
|
Equity in earnings
(losses) of nonconsolidated affiliates, net of tax
|
15
|
|
|
4
|
|
Other income
(expense), net
|
13
|
|
|
11
|
|
|
31
|
|
|
16
|
|
Earnings (loss)
before interest expense, income taxes, and noncontrolling
interests
|
127
|
|
|
(375)
|
|
Interest
expense
|
(69)
|
|
|
(66)
|
|
Earnings (loss)
before income taxes and noncontrolling interests
|
58
|
|
|
(441)
|
|
Income tax (expense)
benefit
|
(41)
|
|
|
101
|
|
Net income
(loss)
|
17
|
|
|
(340)
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
27
|
|
|
10
|
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
(10)
|
|
|
$
|
(350)
|
|
|
|
|
|
Basic earnings (loss)
per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
(0.12)
|
|
|
$
|
(4.30)
|
|
Weighted average
shares outstanding
|
82.3
|
|
|
81.4
|
|
Diluted earnings
(loss) per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
(0.12)
|
|
|
$
|
(4.30)
|
|
Weighted average
shares outstanding
|
82.3
|
|
|
81.4
|
|
|
|
|
|
|
|
|
|
|
|
|
* Beginning in the
first quarter of 2021, the Company made a change to its operating
segments. This change consisted of moving a reporting unit within
the Powertrain segment to the Ride Performance segment. In
addition, with this change to its segments, Ride Performance was
renamed Performance Solutions. As such, prior period operating
segment results have been conformed to reflect the Company's
current operating
segments.
|
ATTACHMENT
1
|
TENNECO
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
|
Unaudited
|
(millions, except per
share amounts)
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020*
|
Net sales and
operating revenues:
|
|
|
|
Motorparts
|
$
|
1,513
|
|
|
$
|
1,265
|
|
Performance
Solutions
|
1,502
|
|
|
1,047
|
|
Clean Air - Value-add
revenues
|
1,979
|
|
|
1,362
|
|
Clean Air - Substrate
sales
|
2,169
|
|
|
1,323
|
|
Powertrain
|
2,151
|
|
|
1,476
|
|
Total net sales and operating revenues
|
9,314
|
|
|
6,473
|
|
Costs and
expenses:
|
|
|
|
Cost of sales
(exclusive of depreciation and amortization)
|
8,034
|
|
|
5,837
|
|
Selling, general, and
administrative
|
524
|
|
|
444
|
|
Depreciation and
amortization
|
300
|
|
|
330
|
|
Engineering, research,
and development
|
145
|
|
|
132
|
|
Restructuring charges,
net and asset impairments
|
52
|
|
|
605
|
|
Goodwill and
intangible impairment charges
|
—
|
|
|
383
|
|
Total costs and expenses
|
9,055
|
|
|
7,731
|
|
Other income
(expense):
|
|
|
|
Non-service pension
and postretirement benefit (costs) credits
|
6
|
|
|
2
|
|
Equity in earnings
(losses) of nonconsolidated affiliates, net of tax
|
37
|
|
|
17
|
|
Gain (loss) on
extinguishment of debt
|
8
|
|
|
—
|
|
Other income
(expense), net
|
21
|
|
|
19
|
|
|
72
|
|
|
38
|
|
Earnings (loss)
before interest expense, income taxes, and noncontrolling
interests
|
331
|
|
|
(1,220)
|
|
Interest
expense
|
(139)
|
|
|
(141)
|
|
Earnings (loss)
before income taxes and noncontrolling interests
|
192
|
|
|
(1,361)
|
|
Income tax (expense)
benefit
|
(88)
|
|
|
195
|
|
Net income
(loss)
|
104
|
|
|
(1,166)
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
49
|
|
|
23
|
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
55
|
|
|
$
|
(1,189)
|
|
|
|
|
|
Basic earnings (loss)
per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
0.68
|
|
|
$
|
(14.64)
|
|
Weighted average
shares outstanding
|
82.1
|
|
|
81.3
|
|
Diluted earnings
(loss) per share:
|
|
|
|
Earnings (loss) per
share
|
$
|
0.67
|
|
|
$
|
(14.64)
|
|
Weighted average
shares outstanding
|
83.1
|
|
|
81.3
|
|
|
|
|
|
|
|
|
|
|
|
|
* Beginning in the
first quarter of 2021, the Company made a change to its operating
segments. This change consisted of moving a reporting unit within
the Powertrain segment to the Ride Performance segment. In
addition, with this change to its segments, Ride Performance was
renamed Performance Solutions. As such, prior period operating
segment results have been conformed to reflect the Company's
current operating
segments.
|
ATTACHMENT
1
|
TENNECO
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
Unaudited
|
(dollars in
millions)
|
|
|
June 30,
2021
|
|
December 31,
2020
|
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
713
|
|
|
$
|
798
|
|
|
Restricted
cash
|
6
|
|
|
5
|
|
|
Receivables,
net
|
2,747
|
|
(a)
|
2,528
|
|
(a)
|
Inventories
|
1,920
|
|
|
1,743
|
|
|
Prepayments and other
current assets
|
619
|
|
|
619
|
|
|
Other noncurrent
assets
|
2,980
|
|
|
3,102
|
|
|
Property, plant, and
equipment, net
|
2,956
|
|
|
3,057
|
|
|
Total
assets
|
$
|
11,941
|
|
|
$
|
11,852
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Short-term debt,
including current maturities of long-term debt
|
$
|
126
|
|
|
$
|
162
|
|
|
Accounts
payable
|
3,101
|
|
|
2,917
|
|
|
Accrued compensation
and employee benefits
|
456
|
|
|
365
|
|
|
Accrued income
taxes
|
69
|
|
|
54
|
|
|
Accrued expenses and
other current liabilities
|
1,061
|
|
|
1,188
|
|
|
Long-term
debt
|
5,081
|
|
(b)
|
5,171
|
|
(b)
|
Deferred income
taxes
|
96
|
|
|
89
|
|
|
Pension and
postretirement benefits
|
1,057
|
|
|
1,101
|
|
|
Deferred credits and
other liabilities
|
514
|
|
|
546
|
|
|
Redeemable
noncontrolling interests
|
108
|
|
|
78
|
|
|
Total Tenneco Inc.
shareholders' equity (deficit)
|
(42)
|
|
|
(119)
|
|
|
Noncontrolling
interests
|
314
|
|
|
300
|
|
|
Total liabilities,
redeemable noncontrolling interests, and equity
|
$
|
11,941
|
|
|
$
|
11,852
|
|
|
|
June 30,
2021
|
|
December 31,
2020
|
|
(a) Accounts
receivable net of:
|
|
|
|
|
Accounts receivable
outstanding and derecognized
|
$
|
992
|
|
|
$
|
956
|
|
|
|
|
|
|
|
(b) Long-term debt
composed of:
|
|
|
|
|
Revolver
Borrowings
|
$
|
—
|
|
|
$
|
—
|
|
|
LIBOR plus 2.00% Term
Loan A due 2019 through 2023(1)
|
1,458
|
|
|
1,520
|
|
|
LIBOR plus 3.00% Term
Loan B due 2019 through 2025
|
1,609
|
|
|
1,612
|
|
|
$225 million of 5.375%
Senior Notes due 2024
|
223
|
|
|
223
|
|
|
$500 million of 5.000%
Senior Notes due 2026
|
495
|
|
|
494
|
|
|
€300 million of
Euribor plus 4.875% Euro Floating Rate Notes due
2024(2)
|
—
|
|
|
370
|
|
|
€350 million of 5.000%
Euro Fixed Rate Notes due 2024(2)
|
—
|
|
|
445
|
|
|
$500 million of
7.875% Senior Secured Notes due 2029
|
490
|
|
|
489
|
|
|
$800 million of
5.125% Senior Secured Notes due 2029(3)
|
786
|
|
|
—
|
|
|
Other debt, primarily
foreign instruments
|
27
|
|
|
23
|
|
|
|
5,088
|
|
|
5,176
|
|
|
Less: maturities
classified as current
|
7
|
|
|
5
|
|
|
Total long-term
debt
|
$
|
5,081
|
|
|
$
|
5,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The interest rate on
Term Loan A at December 31, 2020 was LIBOR plus 2.50%.
|
(2)
|
The Company satisfied
and discharged all of its 4.875% Euro Floating Rate Notes due 2024
and 5.000% Euro Fixed Rate Notes due 2024 on March 17,
2021.
|
(3)
|
On March 17, 2021,
the Company issued $800 million aggregate principal amount of
5.125% senior secured notes due April 15, 2029.
|
ATTACHMENT
1
|
TENNECO
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Unaudited
|
(dollars in
millions)
|
|
|
Three Months Ended
June 30,
|
|
2021
|
|
2020
|
Operating
Activities
|
|
|
|
Net income
(loss)
|
$
|
17
|
|
|
$
|
(340)
|
|
Adjustments to
reconcile net income (loss) to cash (used) provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
145
|
|
|
159
|
|
Deferred income
taxes
|
16
|
|
|
(76)
|
|
Stock-based
compensation
|
4
|
|
|
7
|
|
Restructuring charges
and asset impairments, net of cash paid
|
3
|
|
|
86
|
|
Change in pension and
other postretirement benefit plans
|
(10)
|
|
|
(7)
|
|
Equity in earnings of
nonconsolidated affiliates
|
(15)
|
|
|
(4)
|
|
Cash dividends
received from nonconsolidated affiliates
|
1
|
|
|
5
|
|
Loss (gain) on sale of
assets and other
|
2
|
|
|
(1)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables
|
(29)
|
|
|
35
|
|
Inventories
|
(73)
|
|
|
365
|
|
Payables and accrued
expenses
|
9
|
|
|
(404)
|
|
Accrued interest and
accrued income taxes
|
26
|
|
|
(46)
|
|
Other assets and
liabilities
|
(23)
|
|
|
42
|
|
Net cash (used)
provided by operating activities
|
73
|
|
|
(179)
|
|
Investing
Activities
|
|
|
|
Proceeds from sale of
assets
|
5
|
|
|
3
|
|
Proceeds from sale of
investment in nonconsolidated affiliates
|
3
|
|
|
—
|
|
Cash payments for
property, plant, and equipment
|
(90)
|
|
|
(75)
|
|
Proceeds from
deferred purchase price of factored receivables
|
139
|
|
|
35
|
|
Other
|
—
|
|
|
(1)
|
|
Net cash (used)
provided by investing activities
|
57
|
|
|
(38)
|
|
Financing
Activities
|
|
|
|
Proceeds from term
loans and notes
|
25
|
|
|
29
|
|
Repayments of term
loans and notes
|
(77)
|
|
|
(49)
|
|
Debt issuance costs
of long-term debt
|
(1)
|
|
|
(8)
|
|
Borrowings on
revolving lines of credit
|
1,494
|
|
|
1,660
|
|
Payments on revolving
lines of credit
|
(1,477)
|
|
|
(877)
|
|
Net increase
(decrease) in bank overdrafts
|
—
|
|
|
61
|
|
Distributions to
noncontrolling interest partners
|
(1)
|
|
|
—
|
|
Other
|
(22)
|
|
|
(12)
|
|
Net cash (used)
provided by financing activities
|
(59)
|
|
|
804
|
|
Effect of foreign
exchange rate changes on cash, cash equivalents, and restricted
cash
|
17
|
|
|
14
|
|
Increase (decrease)
in cash, cash equivalents, and restricted cash
|
88
|
|
|
601
|
|
Cash, cash
equivalents, and restricted cash, beginning of period
|
631
|
|
|
770
|
|
Cash, cash
equivalents, and restricted cash, end of period
|
$
|
719
|
|
|
$
|
1,371
|
|
Supplemental Cash
Flow Information
|
|
|
|
Cash paid during the
period for interest
|
$
|
35
|
|
|
$
|
56
|
|
Cash paid during the
period for income taxes, net of refunds
|
$
|
16
|
|
|
$
|
34
|
|
Lease assets obtained
in exchange for new operating lease liabilities
|
$
|
11
|
|
|
$
|
3
|
|
Non-cash inventory
charge due to aftermarket product line exit
|
$
|
44
|
|
|
$
|
82
|
|
Non-cash Investing
Activities
|
|
|
|
Period end balance of
accounts payable for property, plant, and equipment
|
$
|
86
|
|
|
$
|
86
|
|
Deferred purchase
price of receivables factored in the period
|
$
|
131
|
|
|
$
|
35
|
|
ATTACHMENT
1
|
TENNECO
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Unaudited
|
(dollars in
millions)
|
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
Operating
Activities
|
|
|
|
Net income
(loss)
|
$
|
104
|
|
|
$
|
(1,166)
|
|
Adjustments to
reconcile net income (loss) to cash (used) provided by operating
activities:
|
|
|
|
Goodwill and
intangible impairment charges
|
—
|
|
|
383
|
|
Depreciation and
amortization
|
300
|
|
|
330
|
|
Deferred income
taxes
|
12
|
|
|
(242)
|
|
Stock-based
compensation
|
9
|
|
|
9
|
|
Restructuring charges
and asset impairments, net of cash paid
|
3
|
|
|
540
|
|
Change in pension and
other postretirement benefit plans
|
(11)
|
|
|
(26)
|
|
Equity in earnings of
nonconsolidated affiliates
|
(37)
|
|
|
(17)
|
|
Cash dividends
received from nonconsolidated affiliates
|
58
|
|
|
18
|
|
Loss (gain) on sale of
assets and other
|
(7)
|
|
|
(1)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables
|
(481)
|
|
|
174
|
|
Inventories
|
(193)
|
|
|
292
|
|
Payables and accrued
expenses
|
249
|
|
|
(540)
|
|
Accrued interest and
accrued income taxes
|
34
|
|
|
(17)
|
|
Other assets and
liabilities
|
(17)
|
|
|
(68)
|
|
Net cash (used)
provided by operating activities
|
23
|
|
|
(331)
|
|
Investing
Activities
|
|
|
|
Proceeds from sale of
assets
|
12
|
|
|
5
|
|
Net proceeds from
sale of business
|
1
|
|
|
—
|
|
Proceeds from sale of
investment in nonconsolidated affiliates
|
3
|
|
|
—
|
|
Cash payments for
property, plant, and equipment
|
(185)
|
|
|
(212)
|
|
Proceeds from
deferred purchase price of factored receivables
|
254
|
|
|
91
|
|
Other
|
—
|
|
|
1
|
|
Net cash (used)
provided by investing activities
|
85
|
|
|
(115)
|
|
Financing
Activities
|
|
|
|
Proceeds from term
loans and notes
|
838
|
|
|
96
|
|
Repayments of term
loans and notes
|
(939)
|
|
|
(133)
|
|
Debt issuance costs
of long-term debt
|
(12)
|
|
|
(16)
|
|
Borrowings on
revolving lines of credit
|
2,876
|
|
|
4,821
|
|
Payments on revolving
lines of credit
|
(2,871)
|
|
|
(3,536)
|
|
Issuance (repurchase)
of common shares
|
(2)
|
|
|
(1)
|
|
Net increase
(decrease) in bank overdrafts
|
—
|
|
|
59
|
|
Distributions to
noncontrolling interest partners
|
(8)
|
|
|
(2)
|
|
Payments on
securitization programs and other
|
(71)
|
|
|
(1)
|
|
Net cash (used)
provided by financing activities
|
(189)
|
|
|
1,287
|
|
Effect of foreign
exchange rate changes on cash, cash equivalents, and restricted
cash
|
(3)
|
|
|
(36)
|
|
Increase (decrease)
in cash, cash equivalents, and restricted cash
|
(84)
|
|
|
805
|
|
Cash, cash
equivalents, and restricted cash, beginning of period
|
803
|
|
|
566
|
|
Cash, cash
equivalents, and restricted cash, end of period
|
$
|
719
|
|
|
$
|
1,371
|
|
Supplemental Cash
Flow Information
|
|
|
|
Cash paid during the
period for interest
|
$
|
100
|
|
|
$
|
123
|
|
Cash paid during the
period for income taxes, net of refunds
|
$
|
62
|
|
|
$
|
75
|
|
Lease assets obtained
in exchange for new operating lease liabilities
|
$
|
26
|
|
|
$
|
54
|
|
Non-cash inventory
charge due to aftermarket product line exit
|
$
|
44
|
|
|
$
|
82
|
|
Non-cash Investing
Activities
|
|
|
|
Period end balance of
accounts payable for property, plant, and equipment
|
$
|
86
|
|
|
$
|
86
|
|
Deferred purchase
price of receivables factored in the period
|
$
|
266
|
|
|
$
|
95
|
|
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
2021
|
|
Q2
2020
|
|
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
|
$
|
(10)
|
|
|
$
|
(0.12)
|
|
|
$
|
27
|
|
|
$
|
(41)
|
|
|
$
|
127
|
|
|
$
|
272
|
|
|
$
|
(350)
|
|
|
$
|
(4.30)
|
|
|
$
|
10
|
|
|
$
|
101
|
|
|
$
|
(375)
|
|
|
$
|
(216)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
and related
expenses (5)
|
29
|
|
|
0.35
|
|
|
—
|
|
|
(2)
|
|
|
31
|
|
|
31
|
|
|
82
|
|
|
1.00
|
|
|
—
|
|
|
(25)
|
|
|
107
|
|
|
105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory write-down
(6)
|
44
|
|
|
0.53
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
44
|
|
|
63
|
|
|
0.78
|
|
|
—
|
|
|
(19)
|
|
|
82
|
|
|
82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairments
(7)
|
4
|
|
|
0.05
|
|
|
—
|
|
|
1
|
|
|
3
|
|
|
3
|
|
|
22
|
|
|
0.27
|
|
|
—
|
|
|
(7)
|
|
|
29
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other costs
(including strategic and
transaction related) (8)
|
5
|
|
|
0.06
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
6
|
|
|
0.08
|
|
|
—
|
|
|
(2)
|
|
|
8
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of
unconsolidated JV affiliate
|
1
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tax
adjustments
|
(4)
|
|
|
(0.04)
|
|
|
—
|
|
|
(4)
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
0.02
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
income, EPS,
NCI, Tax, EBIT, and
EBITDA (4)
|
$
|
69
|
|
|
$
|
0.84
|
|
|
$
|
27
|
|
|
$
|
(46)
|
|
|
$
|
211
|
|
|
$
|
356
|
|
|
$
|
(175)
|
|
|
$
|
(2.15)
|
|
|
$
|
10
|
|
|
$
|
50
|
|
|
$
|
(149)
|
|
|
$
|
8
|
|
|
Q2
2021
|
|
Global
Segments
|
|
|
|
|
|
Motorparts
|
|
Performance
Solutions
|
|
Clean
Air
|
|
Powertrain
|
|
Total
|
|
Corporate
|
|
Total
|
Net income (loss)
attributable to Tenneco Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(10)
|
|
Net income (loss)
attributable to noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
17
|
|
Income tax (expense)
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
(41)
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(69)
|
|
EBIT, Earnings (Loss)
before interest expense,
income taxes and noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
127
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
145
|
|
Total EBITDA
including noncontrolling interests (3)
|
$
|
67
|
|
|
$
|
32
|
|
|
$
|
143
|
|
|
$
|
94
|
|
|
$
|
336
|
|
|
$
|
(64)
|
|
|
$
|
272
|
|
Restructuring and
related expenses (5)
|
6
|
|
|
9
|
|
|
2
|
|
|
8
|
|
|
25
|
|
|
6
|
|
|
31
|
|
Inventory write-down
(6)
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
44
|
|
Asset impairments
(7)
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
3
|
|
Loss on sale of
unconsolidated JV affiliate
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Other costs (including
strategic and transaction
related) (8)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
4
|
|
|
5
|
|
Adjusted EBITDA
(4)
|
$
|
118
|
|
|
$
|
42
|
|
|
$
|
146
|
|
|
$
|
102
|
|
|
$
|
408
|
|
|
$
|
(52)
|
|
|
$
|
356
|
|
|
Q2
2020*
|
|
Global
Segments
|
|
|
|
|
|
Motorparts
|
|
Performance
Solutions
|
|
Clean
Air
|
|
Powertrain
|
|
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)
|
$
|
(52)
|
|
|
$
|
(63)
|
|
|
$
|
17
|
|
|
$
|
(69)
|
|
|
$
|
(167)
|
|
|
$
|
(49)
|
|
|
$
|
(216)
|
|
Restructuring and
related expenses (5)
|
17
|
|
|
29
|
|
|
21
|
|
|
37
|
|
|
104
|
|
|
1
|
|
|
105
|
|
Inventory write-down
(6)
|
82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
82
|
|
Asset impairments
(7)
|
24
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
28
|
|
|
1
|
|
|
29
|
|
Other costs (including
strategic and transaction
related) (8)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
Adjusted EBITDA
(4)
|
$
|
71
|
|
|
$
|
(34)
|
|
|
$
|
38
|
|
|
$
|
(28)
|
|
|
$
|
47
|
|
|
$
|
(39)
|
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Beginning in the
first quarter of 2021, the Company made a change to its operating
segments. This change consisted of moving a reporting unit within
the Powertrain segment to the Ride Performance segment. In
addition, with this change to its segments, Ride Performance was
renamed Performance Solutions. As such, prior period operating
segment results have been conformed to reflect the Company's
current operating
segments.
|
|
(1) U.S. Generally
Accepted Accounting Principles.
|
|
(2) Tenneco presents
the above reconciliation of GAAP to non-GAAP earnings measures
primarily to reflect the results in a manner that allows a better
understanding of the results of operational activities separate
from the financial impact of decisions made for the long-term
benefit of the company and other items impacting comparability
between the periods. Adjustments similar to the ones reflected
above have been recorded in earlier periods, and similar types of
adjustments can reasonably be expected to be recorded in future
periods. Using only the non-GAAP earnings measures to analyze
earnings would have material limitations because its calculation is
based on the subjective determinations of management regarding the
nature and classification of events and circumstances that
investors may find material. Management compensates for these
limitations by utilizing both GAAP and non-GAAP earnings measures
reflected above to understand and analyze the results of the
business. The company believes investors find the non-GAAP
information helpful in understanding the ongoing performance of
operations separate from items that may have a disproportionate
positive or negative impact on the company's financial results in
any particular period.
|
|
(3) EBITDA including
noncontrolling interests represents income before interest expense,
income taxes, noncontrolling interests and depreciation and
amortization. EBITDA including noncontrolling interests is
not a calculation based upon GAAP. The amounts included in
the EBITDA including noncontrolling interests calculation, however,
are derived from amounts included in the historical statements of
income data. In addition, EBITDA including noncontrolling
interests should not be considered as an alternative to net income
attributable to Tenneco Inc. or operating income as an indicator of
the company's operating performance, or as an alternative to
operating cash flows as a measure of liquidity. Tenneco has
presented EBITDA including noncontrolling interests because it
regularly reviews EBITDA including noncontrolling interests as a
measure of the company's performance. In addition, Tenneco
believes its investors utilize and analyze the company's EBITDA
including noncontrolling interests for similar purposes.
Tenneco also believes EBITDA including noncontrolling interests
assists investors in comparing a company's performance on a
consistent basis without regard to depreciation and amortization,
which can vary significantly depending upon many factors.
However, the EBITDA including noncontrolling interests measure
presented may not always be comparable to similarly titled measures
reported by other companies due to differences in the components of
the calculation.
|
|
(4) Adjusted results
are presented in order to reflect the results in a manner that
allows a better understanding of operational activities separate
from the financial impact of decisions made for the long term
benefit of the company and other items impacting comparability
between periods. Similar adjustments have been recorded in
earlier periods and similar types of adjustments can reasonably be
expected to be recorded in future periods. The company
believes investors find the non-GAAP information helpful in
understanding the ongoing performance of operations separate from
items that may have a disproportionate positive or negative impact
on the company's financial results in any particular
period.
|
|
(5) Q2 2020 includes
$2 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) Amounts in Q2
2020 included costs related to the acquisitions and expected
separation.
|
ATTACHMENT 2
|
TENNECO
INC.
|
RECONCILIATION OF
GAAP(1) TO NON-GAAP EARNINGS
MEASURES(2)
|
Unaudited
|
(dollars in millions,
except per share amounts)
|
|
|
Q2 2021
YTD
|
|
Q2 2020
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
|
$
|
55
|
|
|
$
|
0.67
|
|
|
$
|
49
|
|
|
$
|
(88)
|
|
|
$
|
331
|
|
|
$
|
631
|
|
|
$
|
(1,189)
|
|
|
$
|
(14.64)
|
|
|
$
|
23
|
|
|
$
|
195
|
|
|
$
|
(1,220)
|
|
|
$
|
(890)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
related
expenses (5)
|
57
|
|
|
0.67
|
|
|
—
|
|
|
(5)
|
|
|
62
|
|
|
59
|
|
|
113
|
|
|
1.38
|
|
|
—
|
|
|
(33)
|
|
|
146
|
|
|
139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory write-down
(6)
|
44
|
|
|
0.53
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
44
|
|
|
63
|
|
|
0.78
|
|
|
—
|
|
|
(19)
|
|
|
82
|
|
|
82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and
intangible
impairment charge (7)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
366
|
|
|
4.52
|
|
|
5
|
|
|
(12)
|
|
|
383
|
|
|
383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairments
(8)
|
4
|
|
|
0.05
|
|
|
—
|
|
|
1
|
|
|
3
|
|
|
3
|
|
|
393
|
|
|
4.84
|
|
|
7
|
|
|
(100)
|
|
|
500
|
|
|
500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other costs
(including
strategic and transaction
related) (9)
|
13
|
|
|
0.15
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
|
25
|
|
|
0.31
|
|
|
—
|
|
|
(8)
|
|
|
33
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of
unconsolidated JV affiliate
|
1
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of
business
|
—
|
|
|
0.01
|
|
|
—
|
|
|
(1)
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on debt
extinguishment
|
(8)
|
|
|
(0.10)
|
|
|
—
|
|
|
—
|
|
|
(8)
|
|
|
(8)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
adjustments (10)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
0.14
|
|
|
(11)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tax
adjustments
|
(7)
|
|
|
(0.08)
|
|
|
—
|
|
|
(7)
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
0.20
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net income,
EPS,
NCI, Tax, EBIT, and
EBITDA (4)
|
$
|
159
|
|
|
$
|
1.91
|
|
|
$
|
49
|
|
|
$
|
(100)
|
|
|
$
|
447
|
|
|
$
|
744
|
|
|
$
|
(201)
|
|
|
$
|
(2.47)
|
|
|
$
|
24
|
|
|
$
|
40
|
|
|
$
|
(76)
|
|
|
$
|
247
|
|
|
Q2 2021
YTD
|
|
Global
Segments
|
|
|
|
|
|
Motorparts
|
|
Performance
Solutions
|
|
Clean
Air
|
|
Powertrain
|
|
Total
|
|
Corporate
|
|
Total
|
Net income (loss)
attributable to Tenneco Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
55
|
|
Net income (loss)
attributable to noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
|
49
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
104
|
|
Income tax (expense)
benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
(88)
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(139)
|
|
EBIT, Earnings (Loss)
before interest expense,
income taxes and noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
331
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
300
|
|
Total EBITDA
including noncontrolling interests (3)
|
$
|
169
|
|
|
$
|
75
|
|
|
$
|
292
|
|
|
$
|
209
|
|
|
$
|
745
|
|
|
$
|
(114)
|
|
|
$
|
631
|
|
Restructuring and
related expenses (5)
|
8
|
|
|
13
|
|
|
11
|
|
|
19
|
|
|
51
|
|
|
8
|
|
|
59
|
|
Inventory write-down
(6)
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
44
|
|
Loss on sale of
business
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Asset impairments
(8)
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
3
|
|
Loss on sale of
unconsolidated JV affiliate
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Other costs (including
strategic and transaction
related) (9)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
Gain on debt
extinguishment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8)
|
|
|
(8)
|
|
Adjusted EBITDA
(4)
|
$
|
223
|
|
|
$
|
89
|
|
|
$
|
303
|
|
|
$
|
228
|
|
|
$
|
843
|
|
|
$
|
(99)
|
|
|
$
|
744
|
|
|
Q2 2020
YTD*
|
|
Global
Segments
|
|
|
|
|
|
Motorparts
|
|
Performance
Solutions
|
|
Clean
Air
|
|
Powertrain
|
|
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)
|
$
|
(92)
|
|
|
$
|
(737)
|
|
|
$
|
116
|
|
|
$
|
(42)
|
|
|
$
|
(755)
|
|
|
$
|
(135)
|
|
|
$
|
(890)
|
|
Restructuring and
related expenses (5)
|
20
|
|
|
54
|
|
|
22
|
|
|
37
|
|
|
133
|
|
|
6
|
|
|
139
|
|
Inventory write-down
(6)
|
82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
82
|
|
Goodwill and
intangible impairment charges (7)
|
110
|
|
|
232
|
|
|
—
|
|
|
41
|
|
|
383
|
|
|
—
|
|
|
383
|
|
Asset impairments
(8)
|
24
|
|
|
455
|
|
|
—
|
|
|
4
|
|
|
483
|
|
|
17
|
|
|
500
|
|
Other costs (including
strategic and transaction
related) (9)
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
29
|
|
|
33
|
|
Adjusted EBITDA
(4)
|
$
|
144
|
|
|
$
|
4
|
|
|
$
|
142
|
|
|
$
|
40
|
|
|
$
|
330
|
|
|
$
|
(83)
|
|
|
$
|
247
|
|
|
|
|
|
* Beginning in the
first quarter of 2021, the Company made a change to its operating
segments. This change consisted of moving a reporting unit within
the Powertrain segment to the Ride Performance segment. In
addition, with this change to its segments, Ride Performance was
renamed Performance Solutions. As such, prior period operating
segment results have been conformed to reflect the Company's
current operating
segments.
|
|
(1) U.S. Generally
Accepted Accounting Principles.
|
|
(2) Tenneco presents
the above reconciliation of GAAP to non-GAAP earnings measures
primarily to reflect the results in a manner that allows a better
understanding of the results of operational activities separate
from the financial impact of decisions made for the long-term
benefit of the company and other items impacting comparability
between the periods. Adjustments similar to the ones reflected
above have been recorded in earlier periods, and similar types of
adjustments can reasonably be expected to be recorded in future
periods. Using only the non-GAAP earnings measures to analyze
earnings would have material limitations because its calculation is
based on the subjective determinations of management regarding the
nature and classification of events and circumstances that
investors may find material. Management compensates for these
limitations by utilizing both GAAP and non-GAAP earnings measures
reflected above to understand and analyze the results of the
business. The company believes investors find the non-GAAP
information helpful in understanding the ongoing performance of
operations separate from items that may have a disproportionate
positive or negative impact on the company's financial results in
any particular period.
|
|
(3) EBITDA including
noncontrolling interests represents income before interest expense,
income taxes, noncontrolling interests and depreciation and
amortization. EBITDA including noncontrolling interests is
not a calculation based upon GAAP. The amounts included in
the EBITDA including noncontrolling interests calculation, however,
are derived from amounts included in the historical statements of
income data. In addition, EBITDA including noncontrolling
interests should not be considered as an alternative to net income
attributable to Tenneco Inc. or operating income as an indicator of
the company's operating performance, or as an alternative to
operating cash flows as a measure of liquidity. Tenneco has
presented EBITDA including noncontrolling interests because it
regularly reviews EBITDA including noncontrolling interests as a
measure of the company's performance. In addition, Tenneco
believes its investors utilize and analyze the company's EBITDA
including noncontrolling interests for similar purposes.
Tenneco also believes EBITDA including noncontrolling interests
assists investors in comparing a company's performance on a
consistent basis without regard to depreciation and amortization,
which can vary significantly depending upon many factors.
However, the EBITDA including noncontrolling interests measure
presented may not always be comparable to similarly titled measures
reported by other companies due to differences in the components of
the calculation.
|
|
(4) Adjusted results
are presented in order to reflect the results in a manner that
allows a better understanding of operational activities separate
from the financial impact of decisions made for the long term
benefit of the company and other items impacting comparability
between periods. Similar adjustments have been recorded in
earlier periods and similar types of adjustments can reasonably be
expected to be recorded in future periods. The company
believes investors find the non-GAAP information helpful in
understanding the ongoing performance of operations separate from
items that may have a disproportionate positive or negative impact
on the company's financial results in any particular
period.
|
|
(5) Q2 YTD 2021 and
Q2 YTD 2020 includes $3 million and $7 million of accelerated
depreciation related to plant closures, respectively.
|
|
(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) Amounts in Q2 YTD
2020 included costs related to the acquisitions and expected
separation.
|
|
(10) Amount related
to adjustments made to mark certain redeemable noncontrolling
interests to their redemption
values.
|
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
2021
|
|
Global
Segments
|
|
|
|
|
|
Motorparts
|
|
Performance
Solutions
|
|
Clean
Air
|
|
Powertrain
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
794
|
|
|
$
|
715
|
|
|
$
|
2,024
|
|
|
$
|
1,050
|
|
|
$
|
4,583
|
|
|
$
|
—
|
|
|
$
|
4,583
|
|
Less: Substrate
sales
|
—
|
|
|
—
|
|
|
1,081
|
|
|
—
|
|
|
1,081
|
|
|
—
|
|
|
1,081
|
|
Value-add
revenues
|
$
|
794
|
|
|
$
|
715
|
|
|
$
|
943
|
|
|
$
|
1,050
|
|
|
$
|
3,502
|
|
|
$
|
—
|
|
|
$
|
3,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
67
|
|
|
$
|
32
|
|
|
$
|
143
|
|
|
$
|
94
|
|
|
$
|
336
|
|
|
$
|
(64)
|
|
|
$
|
272
|
|
EBITDA as a %
of revenue
|
8.4
|
%
|
|
4.5
|
%
|
|
7.1
|
%
|
|
9.0
|
%
|
|
7.3
|
%
|
|
|
|
5.9
|
%
|
EBITDA as a %
of value-add
revenue
|
8.4
|
%
|
`
|
4.5
|
%
|
|
15.2
|
%
|
|
9.0
|
%
|
|
9.6
|
%
|
|
|
|
7.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
118
|
|
|
$
|
42
|
|
|
$
|
146
|
|
|
$
|
102
|
|
|
$
|
408
|
|
|
$
|
(52)
|
|
|
$
|
356
|
|
Adjusted EBITDA
as a % of
revenue
|
14.9
|
%
|
|
5.9
|
%
|
|
7.2
|
%
|
|
9.7
|
%
|
|
8.9
|
%
|
|
|
|
7.8
|
%
|
Adjusted EBITDA
as a % of
value-add revenue
|
14.9
|
%
|
|
5.9
|
%
|
|
15.5
|
%
|
|
9.7
|
%
|
|
11.7
|
%
|
|
|
|
10.2
|
%
|
|
Q2
2020
|
|
Global
Segments
|
|
|
|
|
|
Motorparts
|
|
Performance
Solutions
|
|
Clean
Air
|
|
Powertrain
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
559
|
|
|
$
|
378
|
|
|
$
|
1,140
|
|
|
$
|
560
|
|
|
$
|
2,637
|
|
|
$
|
—
|
|
|
$
|
2,637
|
|
Less: Substrate
sales
|
—
|
|
|
—
|
|
|
623
|
|
|
—
|
|
|
623
|
|
|
—
|
|
|
623
|
|
Value-add
revenues
|
$
|
559
|
|
|
$
|
378
|
|
|
$
|
517
|
|
|
$
|
560
|
|
|
$
|
2,014
|
|
|
$
|
—
|
|
|
$
|
2,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
(52)
|
|
|
$
|
(63)
|
|
|
$
|
17
|
|
|
$
|
(69)
|
|
|
$
|
(167)
|
|
|
$
|
(49)
|
|
|
$
|
(216)
|
|
EBITDA as a %
of revenue
|
(9.3)
|
%
|
|
(16.7)
|
%
|
|
1.5
|
%
|
|
(12.3)
|
%
|
|
(6.3)
|
%
|
|
|
|
(8.2)
|
%
|
EBITDA as a %
of value-add
revenue
|
(9.3)
|
%
|
|
(16.7)
|
%
|
|
3.3
|
%
|
`
|
(12.3)
|
%
|
|
(8.3)
|
%
|
|
|
|
(10.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
71
|
|
|
$
|
(34)
|
|
|
$
|
38
|
|
|
$
|
(28)
|
|
|
$
|
47
|
|
|
$
|
(39)
|
|
|
$
|
8
|
|
Adjusted EBITDA
as a % of
revenue
|
12.7
|
%
|
|
(9.0)
|
%
|
|
3.3
|
%
|
|
(5.0)
|
%
|
|
1.8
|
%
|
|
|
|
0.3
|
%
|
Adjusted EBITDA
as a % of
value-add revenue
|
12.7
|
%
|
|
(9.0)
|
%
|
|
7.4
|
%
|
|
(5.0)
|
%
|
|
2.3
|
%
|
|
|
|
0.4
|
%
|
|
Q2 2021
YTD
|
|
Global
Segments
|
|
|
|
|
|
Motorparts
|
|
Performance
Solutions
|
|
Clean
Air
|
|
Powertrain
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
1,513
|
|
|
$
|
1,502
|
|
|
$
|
4,148
|
|
|
$
|
2,151
|
|
|
$
|
9,314
|
|
|
$
|
—
|
|
|
$
|
9,314
|
|
Less: Substrate
sales
|
—
|
|
|
—
|
|
|
2,169
|
|
|
—
|
|
|
2,169
|
|
|
—
|
|
|
2,169
|
|
Value-add
revenues
|
$
|
1,513
|
|
|
$
|
1,502
|
|
|
$
|
1,979
|
|
|
$
|
2,151
|
|
|
$
|
7,145
|
|
|
$
|
—
|
|
|
$
|
7,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
169
|
|
|
$
|
75
|
|
|
$
|
292
|
|
|
$
|
209
|
|
|
$
|
745
|
|
|
$
|
(114)
|
|
|
$
|
631
|
|
EBITDA as a %
of revenue
|
11.2
|
%
|
|
5.0
|
%
|
|
7.0
|
%
|
|
9.7
|
%
|
|
8.0
|
%
|
|
|
|
6.8
|
%
|
EBITDA as a %
of value-add
revenue
|
11.2
|
%
|
`
|
5.0
|
%
|
|
14.8
|
%
|
|
9.7
|
%
|
|
10.4
|
%
|
|
|
|
8.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
223
|
|
|
$
|
89
|
|
|
$
|
303
|
|
|
$
|
228
|
|
|
$
|
843
|
|
|
$
|
(99)
|
|
|
$
|
744
|
|
Adjusted EBITDA
as a % of revenue
|
14.7
|
%
|
|
5.9
|
%
|
|
7.3
|
%
|
|
10.6
|
%
|
|
9.1
|
%
|
|
|
|
8.0
|
%
|
Adjusted EBITDA
as a % of
value-add revenue
|
14.7
|
%
|
|
5.9
|
%
|
|
15.3
|
%
|
|
10.6
|
%
|
|
11.8
|
%
|
|
|
|
10.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2020
YTD
|
|
Global
Segments
|
|
|
|
|
|
Motorparts
|
|
Performance
Solutions
|
|
Clean
Air
|
|
Powertrain
|
|
Total
|
|
Corporate
|
|
Total
|
Net sales and
operating revenues
|
$
|
1,265
|
|
|
$
|
1,047
|
|
|
$
|
2,685
|
|
|
$
|
1,476
|
|
|
$
|
6,473
|
|
|
$
|
—
|
|
|
$
|
6,473
|
|
Less: Substrate
sales
|
—
|
|
|
—
|
|
|
1,323
|
|
|
—
|
|
|
1,323
|
|
|
—
|
|
|
1,323
|
|
Value-add
revenues
|
$
|
1,265
|
|
|
$
|
1,047
|
|
|
$
|
1,362
|
|
|
$
|
1,476
|
|
|
$
|
5,150
|
|
|
$
|
—
|
|
|
$
|
5,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
|
(92)
|
|
|
$
|
(737)
|
|
|
$
|
116
|
|
|
$
|
(42)
|
|
|
$
|
(755)
|
|
|
$
|
(135)
|
|
|
$
|
(890)
|
|
EBITDA as a %
of revenue
|
(7.3)
|
%
|
|
(70.4)
|
%
|
|
4.3
|
%
|
|
(2.8)
|
%
|
|
(11.7)
|
%
|
|
|
|
(13.7)
|
%
|
EBITDA as a %
of value-add
revenue
|
(7.3)
|
%
|
`
|
(70.4)
|
%
|
|
8.5
|
%
|
|
(2.8)
|
%
|
|
(14.7)
|
%
|
|
|
|
(17.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
144
|
|
|
$
|
4
|
|
|
$
|
142
|
|
|
$
|
40
|
|
|
$
|
330
|
|
|
$
|
(83)
|
|
|
$
|
247
|
|
Adjusted EBITDA
as a % of revenue
|
11.4
|
%
|
|
0.4
|
%
|
|
5.3
|
%
|
|
2.7
|
%
|
|
5.1
|
%
|
|
|
|
3.8
|
%
|
Adjusted EBITDA
as a % of
value-add revenue
|
11.4
|
%
|
|
0.4
|
%
|
|
10.4
|
%
|
|
2.7
|
%
|
|
6.4
|
%
|
|
|
|
4.8
|
%
|
|
|
|
|
|
|
|
(1) U.S. Generally
Accepted Accounting
Principles.
|
|
(2) Tenneco presents
the above reconciliation of revenues in order to reflect EBITDA and
adjusted EBITDA as a percent of both total revenues and value-add
revenues. Substrate sales include precious metals pricing,
which may be volatile. Substrate sales occur when, at the
direction of its OE customers, Tenneco purchases catalytic
converters or components thereof from suppliers, uses them in its
manufacturing processes and sells them as part of the completed
system. While Tenneco original equipment customers assume the risk
of this volatility, it impacts reported revenue. Excluding
substrate sales removes this impact. Further, presenting
EBITDA and adjusted EBITDA as a percent of value-add revenue
assists investors in evaluating the company's operational
performance without the impact of such substrate sales. See
prior pages for a discussion of EBITDA and adjusted
EBITDA.
|
ATTACHMENT
2
|
TENNECO
INC.
|
RECONCILIATION OF
GAAP(1) TO NON-GAAP REVENUE
MEASURES(2)
|
Unaudited
|
(dollars in millions
except percents)
|
|
|
Q2 2020 Value-
add Revenues
|
|
Currency
|
|
Volume, Mix
and Other
|
|
Q2 2021 Value-
add Revenues
|
|
% Change
increase
(decrease)
excluding
currency
|
Motorparts
|
$
|
559
|
|
|
$
|
19
|
|
|
$
|
216
|
|
|
$
|
794
|
|
|
38.6
|
%
|
Performance
Solutions
|
378
|
|
|
32
|
|
|
305
|
|
|
715
|
|
|
80.7
|
%
|
Clean Air
|
517
|
|
|
31
|
|
|
395
|
|
|
943
|
|
|
76.4
|
%
|
Powertrain
|
560
|
|
|
35
|
|
|
455
|
|
|
1,050
|
|
|
81.3
|
%
|
Total Tenneco
Inc.
|
$
|
2,014
|
|
|
$
|
117
|
|
|
$
|
1,371
|
|
|
$
|
3,502
|
|
|
68.1
|
%
|
|
Q2 2020 YTD
Value-add
Revenues
|
|
Currency
|
|
Volume, Mix
and Other
|
|
Q2 2021 YTD
Value-add
Revenues
|
|
% Change
increase
(decrease)
excluding
currency
|
Motorparts
|
$
|
1,265
|
|
|
$
|
28
|
|
|
$
|
220
|
|
|
$
|
1,513
|
|
|
17.4
|
%
|
Performance
Solutions
|
1,047
|
|
|
59
|
|
|
396
|
|
|
1,502
|
|
|
37.8
|
%
|
Clean Air
|
1,362
|
|
|
58
|
|
|
559
|
|
|
1,979
|
|
|
41.0
|
%
|
Powertrain
|
1,476
|
|
|
76
|
|
|
599
|
|
|
2,151
|
|
|
40.6
|
%
|
Total Tenneco
Inc.
|
$
|
5,150
|
|
|
$
|
221
|
|
|
$
|
1,774
|
|
|
$
|
7,145
|
|
|
34.4
|
%
|
|
|
|
|
|
(1) U.S. Generally
Accepted Accounting Principles.
|
|
(2) Tenneco presents
the above reconciliation of revenues in order to reflect value-add
revenues separately from the effects of doing business in
currencies other than the U.S. dollar. Additionally,
substrate sales include precious metals pricing, which may be
volatile. Substrate sales occur when, at the direction of its
OE customers, Tenneco purchases catalytic converters or components
thereof from suppliers, uses them in its manufacturing processes
and sells them as part of the completed system. While Tenneco
original equipment customers assume the risk of this volatility, it
impacts reported revenue. Excluding substrate sales removes
this impact. Tenneco uses this information to analyze the
trend in revenues before these factors. Tenneco believes
investors find this information useful in understanding period to
period comparisons in the company's revenues.
|
ATTACHMENT
2
|
TENNECO
INC.
|
RECONCILIATION OF
NON-GAAP MEASURES
|
Debt net of total
cash / Adjusted LTM EBITDA including noncontrolling
interests
|
Unaudited
|
(dollars in millions
except ratios)
|
|
June 30,
2021
|
|
June 30,
2020
|
Total debt
|
$
|
5,207
|
|
|
$
|
6,851
|
|
Total cash, cash
equivalents and restricted cash (total cash)
|
719
|
|
|
1,371
|
|
Debt net of total
cash balances (1)
|
$
|
4,488
|
|
|
$
|
5,480
|
|
Adjusted LTM EBITDA
including noncontrolling interests (2) (3)
|
$
|
1,542
|
|
|
$
|
921
|
|
Net leverage ratio
(4)
|
2.9x
|
|
6.0x
|
|
Q3
2020
|
|
Q4
2020
|
|
Q1
2021
|
|
Q2
2021
|
|
Q2 2021
LTM
|
Net income (loss)
attributable to Tenneco Inc.
|
$
|
(499)
|
|
|
$
|
167
|
|
|
$
|
65
|
|
|
$
|
(10)
|
|
|
$
|
(277)
|
|
Net income (loss)
attributable to noncontrolling
interests
|
19
|
|
|
19
|
|
|
22
|
|
|
27
|
|
|
87
|
|
Net income
(loss)
|
(480)
|
|
|
186
|
|
|
87
|
|
|
17
|
|
|
(190)
|
|
Income tax (expense)
benefit
|
(648)
|
|
|
(6)
|
|
|
(47)
|
|
|
(41)
|
|
|
(742)
|
|
Interest
expense
|
(68)
|
|
|
(68)
|
|
|
(70)
|
|
|
(69)
|
|
|
(275)
|
|
EBIT, Earnings (Loss)
before interest expense,
income taxes and noncontrolling interests
|
236
|
|
|
260
|
|
|
204
|
|
|
127
|
|
|
827
|
|
Depreciation and
amortization
|
151
|
|
|
158
|
|
|
155
|
|
|
145
|
|
|
609
|
|
Total EBITDA
including noncontrolling interests (2)
|
$
|
387
|
|
|
$
|
418
|
|
|
$
|
359
|
|
|
$
|
272
|
|
|
$
|
1,436
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring and
related expenses
|
24
|
|
|
6
|
|
|
28
|
|
|
31
|
|
|
89
|
|
Inventory write-down
(5)
|
(9)
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
35
|
|
Other costs
(including strategic and transaction
related) (6)
|
4
|
|
|
1
|
|
|
8
|
|
|
5
|
|
|
18
|
|
Asset impairments
(7)
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
6
|
|
Loss on sale of
unconsolidated JV affiliate
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
Antitrust reserve
change in estimate (8)
|
—
|
|
|
(11)
|
|
|
—
|
|
|
—
|
|
|
(11)
|
|
(Gain)/Loss on sale
of assets or business
|
—
|
|
|
(2)
|
|
|
1
|
|
|
—
|
|
|
(1)
|
|
Gain on
extinguishment of debt
|
—
|
|
|
(2)
|
|
|
(8)
|
|
|
—
|
|
|
(10)
|
|
OPEB curtailment
(9)
|
(21)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21)
|
|
Total Adjusted EBITDA
including noncontrolling
interests (3)
|
$
|
388
|
|
|
$
|
410
|
|
|
$
|
388
|
|
|
$
|
356
|
|
|
$
|
1,542
|
|
|
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
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|
82
|
|
Other costs
(including strategic and transaction
related) (6)
|
30
|
|
|
30
|
|
|
25
|
|
|
8
|
|
|
93
|
|
Asset impairments
(7)
|
—
|
|
|
—
|
|
|
471
|
|
|
29
|
|
|
500
|
|
Antitrust reserve
change in estimate (8)
|
(9)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9)
|
|
Goodwill and
intangible impairment charges (10)
|
9
|
|
|
172
|
|
|
383
|
|
|
—
|
|
|
564
|
|
Cost reduction
initiatives (11)
|
6
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Costs to achieve
synergies (12)
|
7
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
15
|
|
Purchase accounting
charges (13)
|
11
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
13
|
|
Process harmonization
(14)
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
Pension
charges/adjustments (15)
|
—
|
|
|
(2)
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
Warranty charge
(16)
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Brazil tax credit
(17)
|
(22)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22)
|
|
Out of period
adjustment (18)
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Impairment of assets
held for sale
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Total Adjusted EBITDA
including noncontrolling
interests (3)
|
$
|
387
|
|
|
$
|
287
|
|
|
$
|
239
|
|
|
$
|
8
|
|
|
$
|
921
|
|
|
|
|
|
|
|
|
|
|
(1) Tenneco presents
debt net of total cash balances because management believes it is a
useful measure of Tenneco's credit position and progress toward
reducing leverage. The calculation is limited in that the company
may not always be able to use cash to repay debt on a
dollar-for-dollar basis.
|
|
(2) EBITDA including
noncontrolling interests represents income before interest expense,
income taxes, noncontrolling interests and depreciation and
amortization. EBITDA including noncontrolling interests is not a
calculation based upon GAAP. The amounts included in the EBITDA
including noncontrolling interests calculation, however, are
derived from amounts included in the historical statements of
income data. In addition, EBITDA including noncontrolling interests
should not be considered as an alternative to net income
attributable to Tenneco Inc. or operating income as an indicator of
the company's operating performance, or as an alternative to
operating cash flows as a measure of liquidity. Tenneco has
presented EBITDA including noncontrolling interests because it
regularly reviews EBITDA including noncontrolling interests as a
measure of the company's performance. In addition, Tenneco believes
its investors utilize and analyze the company's EBITDA including
noncontrolling interests for similar purposes. Tenneco also
believes EBITDA including noncontrolling interests assists
investors in comparing a company's performance on a consistent
basis without regard to depreciation and amortization, which can
vary significantly depending upon many factors. However, the EBITDA
including noncontrolling interests measure presented may not always
be comparable to similarly titled measures reported by other
companies due to differences in the components of the
calculation.
|
|
(3) Adjusted EBITDA
including noncontrolling interests is presented in order to reflect
the results in a manner that allows a better understanding of
operational activities separate from the financial impact of
decisions made for the long term benefit of the company and other
items impacting comparability between the periods. Similar
adjustments to EBITDA including noncontrolling interests have been
recorded in earlier periods, and similar types of adjustments can
reasonably be expected to be recorded in future periods. The
company believes investors find the non-GAAP information helpful in
understanding the ongoing performance of operations separate from
items that may have a disproportionate positive or negative impact
on the company's financial results in any particular
period.
|
|
(4) Net leverage
ratio represents ratio of debt net of total cash balances to
adjusted LTM EBITDA including noncontrolling interests. Tenneco
presents the above reconciliation of the net leverage ratio to show
trends that investors may find useful in understanding the
company's ability to service its debt. For purposes of this
calculation, Adjusted LTM EBITDA including noncontrolling interests
is used as an indicator of the company's performance and debt net
of total cash is presented as an indicator of the company's credit
position and progress toward reducing the company's financial
leverage. This reconciliation is provided as supplemental
information and not intended to replace the company's existing
covenant ratios or any other financial measures that investors may
find useful in describing the company's financial position. See
notes (1), (2) and (3) for a description of the limitations of
using debt net of total cash, EBITDA including noncontrolling
interests and Adjusted EBITDA including noncontrolling interests.
See the company's fourth quarter earnings release dated February
24, 2021 for the calculation of net leverage ratio as of December
31, 2020.
|
|
(5) Non-cash charge
to write-down inventory in the Motorparts segment in connection
with its initiative to rationalize its supply chain and
distribution network.
|
|
(6) Amounts in prior
periods included costs related to the acquisitions and expected
separation.
|
|
(7) Asset impairment
charges.
|
|
(8) Reduction in
estimated antitrust accrual.
|
|
(9) OPEB curtailment
as a result of an amended union agreement that eliminates
healthcare benefits for future retirees.
|
|
(10) Non-cash asset
impairment charge related to goodwill and intangibles.
|
|
(11) Costs related to
cost reduction initiatives.
|
|
(12) Costs to achieve
synergies related to the Acquisitions.
|
|
(13) This primarily
relates to a non-cash charge to cost of sales for the amortization
of the inventory fair value step-up recorded as part of the
Acquisitions.
|
|
(14) Charge due to
process harmonization.
|
|
(15) Charges related
to pension derisking and other adjustments.
|
|
(16) Charge related
to warranty. Although Tenneco regularly incurs warranty costs, this
specific charge is of an unusual nature in the period
incurred.
|
|
(17) Recovery of
value-added tax in a foreign jurisdiction.
|
|
(18) Inventory losses
attributable to prior periods.
|
ATTACHMENT
2
|
TENNECO
INC.
|
RECONCILIATION OF
GAAP(1) TO NON-GAAP REVENUE
MEASURES(2)
|
Unaudited
|
(dollars in
millions)
|
|
|
Q2
2021
|
|
Original equipment
light
vehicle revenues
|
|
Original
equipment
commercial truck, off-
highway, industrial and
other revenues
|
|
Aftermarket &
original
equipment service
revenues
|
|
Total
|
Net sales and
operating revenues
|
$
|
2,601
|
|
|
$
|
788
|
|
|
$
|
1,194
|
|
|
$
|
4,583
|
|
Less: Substrate
sales
|
871
|
|
|
162
|
|
|
48
|
|
|
1,081
|
|
Value-add
revenues
|
$
|
1,730
|
|
|
$
|
626
|
|
|
$
|
1,146
|
|
|
$
|
3,502
|
|
|
|
|
|
|
|
|
|
|
Q2
2020
|
|
Original equipment
light
vehicle revenues
|
|
Original
equipment
commercial truck, off-
highway, industrial and
other revenues
|
|
Aftermarket &
original
equipment service
revenues
|
|
Total
|
Net sales and
operating revenues
|
$
|
1,429
|
|
|
$
|
407
|
|
|
$
|
801
|
|
|
$
|
2,637
|
|
Less: Substrate
sales
|
501
|
|
|
103
|
|
|
19
|
|
|
623
|
|
Value-add
revenues
|
$
|
928
|
|
|
$
|
304
|
|
|
$
|
782
|
|
|
$
|
2,014
|
|
|
|
|
|
|
|
|
|
|
Q2 2021
YTD
|
|
Original equipment
light
vehicle revenues
|
|
Original
equipment
commercial truck, off-
highway, industrial and
other revenues
|
|
Aftermarket &
original
equipment service
revenues
|
|
Total
|
Net sales and
operating revenues
|
$
|
5,506
|
|
|
$
|
1,562
|
|
|
$
|
2,246
|
|
|
$
|
9,314
|
|
Less: Substrate
sales
|
1,777
|
|
|
311
|
|
|
81
|
|
|
2,169
|
|
Value-add
revenues
|
$
|
3,729
|
|
|
$
|
1,251
|
|
|
$
|
2,165
|
|
|
$
|
7,145
|
|
|
|
|
|
|
Q2 2020
YTD
|
|
Original equipment
light
vehicle revenues
|
|
Original
equipment
commercial truck, off-
highway, industrial and
other revenues
|
|
Aftermarket &
original
equipment service
revenues
|
|
Total
|
Net sales and
operating revenues
|
$
|
3,693
|
|
|
$
|
939
|
|
|
$
|
1,841
|
|
|
$
|
6,473
|
|
Less: Substrate
sales
|
1,074
|
|
|
210
|
|
|
39
|
|
|
1,323
|
|
Value-add
revenues
|
$
|
2,619
|
|
|
$
|
729
|
|
|
$
|
1,802
|
|
|
$
|
5,150
|
|
|
Q2 2020
Value-add
Revenues
|
|
Currency
|
|
Volume,
Mix and
Other
|
|
Q2 2021
Value-add
Revenues
|
|
% Change
increase
(decrease)
excluding
currency
|
Original equipment
light vehicle revenues
|
$
|
928
|
|
|
$
|
47
|
|
|
$
|
755
|
|
|
$
|
1,730
|
|
|
81.4
|
%
|
Original equipment
commercial truck, off-highway,
industrial and other revenues
|
304
|
|
|
45
|
|
|
277
|
|
|
626
|
|
|
91.1
|
%
|
Aftermarket &
original equipment service revenues
|
782
|
|
|
25
|
|
|
339
|
|
|
1,146
|
|
|
43.4
|
%
|
Total Tenneco
Inc.
|
$
|
2,014
|
|
|
$
|
117
|
|
|
$
|
1,371
|
|
|
$
|
3,502
|
|
|
68.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2020
YTD Value-
add
Revenues
|
|
Currency
|
|
Volume,
Mix and
Other
|
|
Q2 2021
YTD Value-
add
Revenues
|
|
% Change
increase
(decrease)
excluding
currency
|
Original equipment
light vehicle revenues
|
$
|
2,619
|
|
|
$
|
125
|
|
|
$
|
985
|
|
|
$
|
3,729
|
|
|
37.6
|
%
|
Original equipment
commercial truck, off-highway,
industrial and other revenues
|
729
|
|
|
83
|
|
|
439
|
|
|
1,251
|
|
|
60.2
|
%
|
Aftermarket &
original equipment service revenues
|
1,802
|
|
|
13
|
|
|
350
|
|
|
2,165
|
|
|
19.4
|
%
|
Total Tenneco
Inc.
|
$
|
5,150
|
|
|
$
|
221
|
|
|
$
|
1,774
|
|
|
$
|
7,145
|
|
|
34.4
|
%
|
|
|
|
(1) U.S. Generally
Accepted Accounting
Principles.
|
|
(2) Tenneco presents
the above reconciliation of revenues in order to reflect value-add
revenues separately from the effects of doing business in
currencies other than the U.S. dollar. Additionally,
substrate sales include precious metals pricing, which may be
volatile. Substrate sales occur when, at the direction of its
OE customers, Tenneco purchases catalytic converters or components
thereof from suppliers, uses them in its manufacturing processes
and sells them as part of the completed system. While Tenneco
original equipment customers assume the risk of this volatility, it
impacts reported revenue. Excluding substrate sales removes
this impact. Tenneco uses this information to analyze the
trend in revenues before these factors. Tenneco believes
investors find this information useful in understanding period to
period comparisons in the company's revenues.
|
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SOURCE Tenneco Inc.