and Non-GAAP Results - · PDF fileand Non-GAAP Results. 3. ... Asia Pacific . 1.SAIC Motor...

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This presentation contains confidential information regarding Tenneco Inc. By reviewing this information, the participants agree to treat the information confidentially, not to distribute it and not to use it for any purpose other than evaluating Tenneco Inc. as a potential supplier.

Please see the safe harbor statement and the tables that reconcile GAAP results with non-GAAP results in Tenneco’s corresponding financial results press release, which is incorporated herein by reference.

Confidentiality, Safe Harbor and Non-GAAP Results

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Product, Market and Geographic Balance

2011 Revenues – $7,205MM

2010 Revenues – $5,937MM

47%NorthAmerica

42%Europe,S. America& India

11%AsiaPacific

2011 2010

Emission Control / Ride Control 66 / 34 64 / 36

Original Equipment / Aftermarket 82 / 18 80 / 20

Global Supplier – Emission and Ride Control Systems

4

Segment

Driving balance across many dimensions

Global Supplier – Emission & Ride Control Systems

Product

End Market

2011 Revenue – $7.2 billion

5

‐

Customers - Markets- Geographies - Products

- Solutions to meet emissions regulations- Vehicle ride & handling performance

- Executing with discipline

- Strong alignment globally- Strength at all levels- Talented and dedicated- Passion for winning

• Balance

• Product Technology

• Operational Excellence

• Our People

Tenneco Strengths

6

Tenneco Strengths

- Customers - Markets- Geographies - Products

- Solutions to meet emissions regulations- Vehicle ride & handling performance

- Executing with discipline

- Strong alignment globally- Strength at all levels- Talented and dedicated- Passion for winning

• Balance

• Product Technology

• Operational Excellence

• Our People

6

HeadquartersEmission Control ManufacturingRide Control ManufacturingEmission Control EngineeringRide Control Engineering

7

Approximately 24,000 employees serving customers globally from 87 manufacturing facilities and 14 engineering and technical centers

Tenneco Global Operations

8

Product Category Region

Market Position*

Key Competitors in Market-Share Order

Emission Control

North America #1 Faurecia, Eberspächer

Europe #2 Faurecia, Eberspächer

China #2 Faurecia, Sejong Industrial

South America #3 Faurecia, Magneti Marelli

Ride Control

North America #1 ZF Sachs, Hitachi, Beijing West

Europe #1 ZF Sachs, VW Braunschweig, Beijing West

South America #2 Magneti Marelli, ZF Sachs, KYB

* Tenneco estimates for 2011

Leading OE Light Vehicle Market Positions – 2011

9* Tenneco estimates for 2011** Excludes OE Service

Product Category Region

Market Position*

Key Competitors in Market-Share Order

Original Equipment Emission Control

North America #1 Faurecia, Eberspächer

Europe #2 Faurecia, EberspächerChina #2 Faurecia, Sejong IndustrialSouth America #3 Faurecia, Magneti Marelli

Original Equipment Ride Control

North America #1 ZF Sachs, Hitachi, Beijing West

Europe #1 ZF Sachs, VW Braunschweig, Beijing West South America #2 Magneti Marelli, ZF Sachs, KYB

AftermarketEmission Control

North America #1 AP Exhaust Products, Car Sound Exhaust Systems, IMCO

Europe ** #1 Bosal, Klarius Group

AftermarketRide Control

North America #1 KYB, Ride Control LLC

Europe ** #1 KYB, ZF Sachs South America #1 Magneti Marelli, Corven, Affinia

Leading Market Positions – 2011

10

Top 20 CustomersAs a % of Total 2011 Revenues, with Geographic Distribution

%NA ESI AP

1. General Motors 18.6% 73 22 5

2. Ford Motor 14.5% 72 26 2

3. Volkswagen Group 7.9% 9 90 1

4. Daimler AG 5.8% 4 93 3

5. Toyota Motor 3.7% 77 8 15

6. SAIC Motor 2.9% – – 100

7. BMW 2.7% – 99 1

8. PSA Peugeot Citroën 2.4% – 100 –

9. Fiat-Chrysler 2.3% 92 8 –

10. Navistar 2.1% 100 – –

Balanced Customer Mix

%NA ESI AP

11. First Auto Works 1.8% – – 100

12. NAPA 1.8% 100 – –

13. Nissan Motor 1.5% 40 38 22

14. Caterpillar 1.5% 98 2 –

15. Geely Automobile 1.3% – 94 6

16. Tata Motors 1.1% – 100 –

17. Temot 1.1% – 100 –

18. Advance Auto Parts 1.1% 100 – –

19. Changan Automobile 1.0% – – 100

20. O’Reilly Automotive 0.9% 100 – –

Top 5 Customers by SegmentNorth America1.General Motors2.Ford Motor3.Toyota Motor4.Fiat-Chrysler5.Navistar

Europe, South America, India1.Volkswagen Group2.Daimler AG3.General Motors4.Ford Motor5.BMW

Asia Pacific 1.SAIC Motor2.First Auto Works3.Changan Automobile4.General Motors5.Toyota Motor

NA North AmericaESI Europe, South America, IndiaAP Asia Pacific

OE CustomerAM Customer

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Top 20 CustomersAs a % of Total 2011 Revenues, with Geographic Distribution

%NA ESI AP

1. General Motors 18.6% 73 22 5

2. Ford Motor 14.5% 72 26 2

3. Volkswagen Group 7.9% 9 90 1

4. Daimler AG 5.8% 4 93 3

5. Toyota Motor 3.7% 77 8 15

6. SAIC Motor 2.9% – – 100

7. BMW 2.7% – 99 1

8. PSA Peugeot Citroën 2.4% – 100 –

9. Fiat-Chrysler 2.3% 92 8 –

10. Navistar 2.1% 100 – –

Balanced Customer Mix

%NA ESI AP

11. First Auto Works 1.8% – – 100

12. NAPA 1.8% 100 – –

13. Nissan Motor 1.5% 40 38 22

14. Caterpillar 1.5% 98 2 –

15. Geely Automobile 1.3% – 94 6

16. Tata Motors 1.1% – 100 –

17. Temot 1.1% – 100 –

18. Advance Auto Parts 1.1% 100 – –

19. Changan Automobile 1.0% – – 100

20. O’Reilly Automotive 0.9% 100 – –

NA North AmericaESI Europe, South America, IndiaAP Asia Pacific

OE CustomerAM Customer

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Diversified Light Vehicle Platform Mix

Ford P4735%EC, RC, EL

GMT9005%EC, RC, EL

GM GlobalEpsilon4%EC, RC, EL

Ford C14%EC, RC, EL

Ford P4153%EC, RC, EL

• Products on 267 platforms • Average annual platform revenue $18MM

GM THETA2%EC, RC, EL

GM Lambda2%EC, EL

GM Global Delta2%EC, RC, EL

VW PQ352%EC, RC

BMW L21%EC, RC

Top 10 LV Platformsas a Percent of Total 2011 Revenues

EC - Emission ControlRC - Ride ControlEL - Elastomers

Top 10 Platforms

30%

Full Year 2011 Financial Results

13

FY 2011 FY 2010 B/(W) % Change

Total Revenue 7,205 5,937 1,268 21%

Value-Add Revenue 5,527 4,653 874 19%

SGA&E (% of Sales) 7.8% 9.0% 1.2% 13%

Adjusted EBIT† 398 306 92 30%

Adjusted EBIT† (% of VA Revenue) 7.2% 6.6% 0.6% 9%

Adjusted EBITDA*† 605 517 88 17%

Adjusted Net Income† 163 96 67 70%

Adjusted EPS ($)† 2.66 1.57 1.09 69%

Cash Flow From Operations 245 244 1 -

Net Debt / Adjusted EBITDA*† 1.7x 1.9x 0.2x 11%

* Including noncontrolling interests.† Adjusted for restructuring activities, goodwill impairment charge, costs related to refinancing, pension charges and tax adjustments. See reconciliations to U.S. GAAP at end of presentation.

$ Millions, except as noted

Second Quarter 2012 Financial Results

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Q2 2012 Q2 2011 B/(W) % Change

Total Revenue 1,920 1,888 32 2%

Value-Add Revenue 1,491 1,453 38 3%

SGA&E (% of Sales) 7.1% 8.1% 1.0% 12%

Adjusted EBIT† 139 115 24 21%

Adjusted EBIT† (% of VA Revenue) 9.3% 7.9% 1.4% 18%

Adjusted EBITDA*† 189 169 20 12%

Adjusted Net Income† 70 50 20 40%

Adjusted EPS ($)† 1.14 0.81 0.33 41%

Cash Flow From Operations 86 67 19 28%

Net Debt / Adjusted LTM EBITDA*† 1.9x 2.0x 0.1x 5%

* Including noncontrolling interests.† Adjusted for restructuring activities, costs related to refinancing and tax adjustments. See reconciliations to U.S. GAAP at end of presentation.

$ Millions, except as noted

15

• Leading emission control technologies to meet regulations• Adjacent markets for new revenue opportunities• Advanced technology for improved ride performance• BRIC+T markets for rapid growth • Enhance customer mix • Leverage aftermarket premium brands and distribution strength

• Continuous productivity improvements with Tenneco Manufacturing System

• Standardized global processes and capabilities• Optimize global footprint• Improvements in safety and quality worldwide

• Capitalize on cash flow and EVA discipline• Focus on reducing leverage• Target net debt/adjusted mid-cycle EBITDA* ratio of 2.0X

* Including noncontrolling interests

Invest in growing markets with proprietary technologies

Advanceoperationalexcellence

Improvefinancialstrength

Strategic Initiatives

2008 2009 2010 2011 2012 2013 2014 2015 2016U.S. Locomotive &

Marine Tiers 0-2

US-10 CVS On-HighwayMotorcycle Rule Tier 2

US Off-Road Tier 4i*

Locomotive & Marine Tier 3CA CVS Retrofit*

R.I.C.E. StationaryUS revised NAAQS

US Off-Road Diesel Tier 4f*Locomotive & Marine Tier 4* CA LEV IIIUS Utility MACT

US Fed Tier 3LVS *,**

IMO Global Marine 3 NOx

EUROPE Euro-5 CVS Euro-5 LVS NL Marine OE / Retrofit PM 2.5 & NO2 limits

EU Off-Road Stage 3BEU CO2 / GHG 120g PM # LVS

Motorcycle Euro 4

Euro-6 CVSEU Sound regulation

EU Off-RoadStage 4Euro-6 LVS

Motorcycle Euro 5**

IMO Global Marine 3 NOx

CHINA Euro-3 Two-Wheel Beijing Euro-4 LVS

Beijing CVS Yellow Label

Euro-4 LVS Euro-5 LVS Euro-4 CVSBeijing Euro-5 CVS

Tier 4i Off-RoadMajor cities**

Euro-5 CVS** IMO Global Marine 3 NOx

JAPAN Cold-startrestrictions LVS

Japan-09LVS / CVS

NOx reductionsLVS

JP-13 CVS

IMO Global Marine 3 NOxJP-16 CVS*

BRAZIL US Tier 2 LVS*Motorcycle Rule*

Euro-5 CVS Euro-6 CVS**

RUSSIA Euro-3 LVS Euro-4 LVS / CVS

Euro-5 LVS/CVS

INDIA Euro-4 LVSMotorcycle Rule*

Euro-4 CVS 11 Cities

Euro-5 CVS**

Stricter Emission Regulations

16

Regulatory-Driven Growth Opportunities

Global Emissions Regulation Timeline CVS - Commercial Vehicle Systems * Phased inLVS - Light Vehicle Systems ** Estimated date

17

2009 2010 2011 2012 2013 2014 2015 2016

Turnkey SCR System························Urea Injection and Dosing Module························Retrofit LocomotiveAftertreatment························

Off-Road Diesel Oxidation Catalyst & DPF························Off-Road Emissions Module························

Fuel Vaporizer······················Hydrocarbon Injector······················Fabricated Diesel Manifold······················Retrofit Marine Aftertreatment······················Electronic Exhaust Valve······················Gen 3 Urea Dosing System······················Enhanced 32 bit ECU······················

3 Layer Manifold·························Hydrocarbon Lean NOx Catalyst························Low Backpressure Valve Muffler························Air Assist Dosing System························Exhaust Gas Heat Exchanger··························CVS Vaporizer························T.R.U.E.-Clean®

Mini·························

Euro VI CVS On-Road AftertreatmentSystem·························Stationary Engine Aftertreatment··························Common Rail Urea Dosing System·························SOLID SCRTM

·························CVS Air-Assisted Dosing System·························Integrated Manifold & Turbocharger·························Tier 4 Locomotive Aftertreatment·························

Multiwrap Converter························Gasoline Particulate Filter························

Low Pressure EGR Valve························Combined DPF / SCR Catalyst························Emissions Air Pump·························Hydrocarbon Trap························

Marine SCR System······················Marine DeSOx System······················CVS Fabricated Manifold······················Fabricated EGR Cooler······················In-tank SCR Dosing Module······················Waste Heat Recovery Generator······················TENNECO Signature Sound System (TS3)························

Technology Roadmap

In production or production ready In development – production ready in 2013-2016

Regulatory-Driven Emission Control Product Pipeline

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Technologies to Meet Evolving Light Vehicle Powertrain Needs

Improving Fuel Economy

Micro, Mild, Full, Plug-in

• Catalytic converter systems• Ultra-thin substrate

converters• Semi-active muffler

valve technology• Fabricated manifolds• Lightweight mufflers

and thin-wall pipes

• Catalytic converter systems

• Ultra-thin substrate converters

• Semi-active muffler valve technology

• Fabricated manifolds• Lightweight mufflers

and thin-wall pipes• Gasoline particulate filters• Heat exchangers• HC-LNC for Lean GDI

• Catalytic converter systems

• Ultra-thin substrate converters

• Diesel aftertreatment• Semi-active muffler

valve technology• Fabricated manifolds• Lightweight mufflers

and thin-wall pipes• Heat exchangers

Gasoline Gas DirectInjection Diesel Gas & Diesel

Hybrids

• Diesel particulate filters• Diesel oxidation catalysts• Selective catalytic

reduction and HC-LNC • NOx adsorber• Fabricated manifolds• Lightweight mufflers

and thin-wall pipes• Heat exchangers• Vaporizers• Electronic valves and

piping for exhaust gas recirculation

19

Linking Regulations to Full Suite of Technologies

2011 2012 2013 2013 2014 2014 2014 2016 2016US -Tier 4i

CVS Off-roadEU Stage 3B CVS Off-road

Brazil Euro-5CVS On-road

China – Euro-4CVS On-road

EU Euro-6CVS On-road

EU Euro-6LVS

US -Tier 4fCVS Off-roadEU Stage 4

CVS Off-road

US Locomotive / Marine Tier 4

US Fed Tier 3LVS

(Estimated)

IMOGlobal Marine 3

Reduction in Diesel

ParticulatesReduction in

NOxReduction in

NOx

Reduction in Diesel

Particulates and NOx

Reduction in Particulates and NOx

Reduction in NOx

Reduction in Diesel

Particulates and NOx

Reduction in HC, NMOG and

Particulates (Non-Methane Organic Gas)

Reduction in Diesel

Particulates, NOx and SOx

Off-road Diesel Oxidation

Catalyst & DPF

Turnkey Urea SCR System with Dosing

Module


Module


ModuleFuel Vaporizer


Module

Turnkey Urea SCR System

Electronic Exhaust Valve

Marine Urea SCR System with Dosing

Module

Hydrocarbon Injector






Off-road Diesel Oxidation Catalyst

& DPF

Fabricated 3-Layer Manifold

Marine DeSOx System

Off-road Emissions

Module

Hydrocarbon Lean NOx Catalyst

CVS VaporizerT.R.U.E.-

Clean® Thermal Management

T.R.U.E.- Clean® Thermal

Management


Management


Management

Gasoline Particulate

Filter

Marine T.R.U.E.- Clean® Thermal

Management


ManagementCVS Vaporizer CVS Vaporizer

Fabricated 3-Layer Manifold

CVS Vaporizer Retrofit Aftertreatment

Emissions Air Pump

Electronic Bypass Valve

T.R.U.E.- Clean® Mini


Gasoline Particulate

Filter



Hydrocarbon Trap

SOLID SCR™ SOLID SCR™ Common Rail Urea Dosing SOLID SCR™

Modular Tier 4 Locomotive

Aftertreatment

Tenn

eco’s

Full

Suit

e of

Tec

hnolo

gies

Regu

lation

s

In production or currently ready for production In development

20

Commercial Vehicle Diesel Aftertreatment Business

North America• Caterpillar OFF-ROAD

• Deere OFF-ROAD

• Navistar ON-ROAD (4-7)

Brazil• Daimler Trucks ON-ROAD

• MAN ON-ROAD

• MWM (Navistar subsidiary) ON-ROAD

• Customer A ON-ROAD

China• China National

Heavy-Duty Truck Co. ON-ROAD

• FAW ON-ROAD

• Shanghai Diesel Engine Co. ON-ROAD

• Weichai ON-ROAD

• YuChai ON-ROAD

• Customer B ON-ROAD

South Korea• Bus manufacturer –

Exported from MWM in Brazil ON-ROAD

Japan• Caterpillar –

Exported from North America OFF-ROAD

• Customer C OFF-ROAD

30%to

35%11%

2011A 2016*

Percent ofOE revenuegenerated bycommercial vehicle& specialty business

* See slide 36 for a discussion of key assumptions on which our revenue projections are based.

India• Tata Motors ON-ROAD

Europe• Caterpillar/Perkins OFF-ROAD

• Daimler Trucks ON-ROAD

• Deere OFF-ROAD

• Deutz OFF-ROAD

• MAN OFF-ROAD

• Customer A ON-ROAD

• Customer D OFF-ROAD

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• Utilizing modular strategy to expand into locomotive diesel aftertreatment

– Bundling commercial vehicle aftertreatment components for large engines

• Began shipping prototypes to customers in 2010

• Tenneco, GE Transportation and Umicore are jointly developing Hydrocarbon LNC technology

– Tenneco awarded development contract for GE locomotive applications

– Positioned to become long-term strategic supplier to GE Transportation

• Aftertreatment systems designed for locomotive engine can be adapted for use with marine engines and stationary power

Locomotive and Marine Emission Control Opportunities

2009 2010 2011 2012 2013 2014 2015 2016Multi Tunable Valve (Global Valve)························Hollow Piston Rod························Blow Off Disc Spring Valve························BOCS Valve························

Plastic Spring Seat························ Kinetic® H2 CES† Combo························ Lightweight Aluminum Tube························

Variable TubeThickness························Velocity Progressive Seat Dampers························ High-Velocity Compression Damping························

Thin Wall Lightweight Monotube························ CES II External Valve························ Aluminum Dual Tube Seat Damper························ Kinetic® H2 CES with hydraulic leveling························

FSD Valving System························CVS Double Path Mount Cab Shock························Motorbike Electronic Shock························Improved Monotube (Low Temperature) ·······················Global Hydraulic Rebound Stop·······················Green Shock with Bio-oil························DRiVTM Digital Valve·······················Global Valve II ·······················

Dual Mode Internal Valve························35mm LCV Strut························New CVS 45mm Shock························Bi-Drectional Frequency Selective Damping························ New Double Tube Base Valve························Integrated Height Valve for Cab Shocks························

Semi-active Internal Valve······················· ACOCARTM

Active System·······················Integrated CVS Regenerative Damper·······················Automotive Aluminum Dual Tube························ DRiVTM Cab Shock························

ACOCARTM

Active System with Energy Recuperation························Low Cost Auto Leveling ························

22

Ride Control Product Pipeline

Technology Roadmap

In production or production ready In development – production ready in 2013-2016† CES is a registered trademark of Öhlins Racing AB CORPORATION SWEDEN. All other trademarks, service marks and logos used herein are the trademarks, service marks, or logos of their respective owners.

23

Electronic Damping Technologies for Improved Ride Performance & Safety

European Electronic Dampers Market Evolution and Tenneco Growth (In Millions of Units)

• Continue to win and launch new CES business– In production on 33 models

with multiple customers including Volvo, Audi, Ford Europe, Mercedes/AMG, Volkswagen, BMW

– In development with 8 additional models

• Selling price is about 4-6 times price for a standard shock

• Targeting substantial portion of CES benefits for broader market

• Lower total system cost – no dedicated ECU required

• Improved packaging and reduced power consumption

• Production ready in 2013

• Fully-active suspension with ultimate comfort and excellent handling

• Awarded “Innovation of the Year” in 2012 from Vehicle Dynamics International magazine for our ACOCARTM active suspension system

• In development with a global OEM• Production ready in 2015

Continuously Controlled Electronic Suspension (CES) Kinetic® + CES (H2CES)

Actively COntrolled CAR (ACOCARTM)DRiV TM Digital Valve

IN DEVELOPMENTIN DEVELOPMENT

IN PRODUCTION IN PRODUCTION

• Combination of Kinetic® and CESKinetic® – Independent corner control with a more neutral steering behaviorCES – Semi-active body and wheel hop control with a better compromise between handling and comfort

• Debuted on the McLaren MP4-12C• Awarded “Supplier of the Year” in 2011 from Vehicle

Dynamics International magazine for our Kinetic® H2/CES semi-active suspension

• In testing and development for another manufacturer0

0.5

1

1.5

2

2.5

3

3.5

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Tenneco CES Volume

Total Semi-ActiveDamping Market

24

Advanced Ride Technologies Driving Growth

• Improves fuel economy and CO2 reduction through reduced weight

– Hollow rod– Aluminum tube– Variable tube thickness– Plastic spring seat

• In production or development with several customers, including GM, Volkswagen, Audi, Mercedes, PSA, BMW and another high performance sports car

Lightweight Components Elastomer Growth

• Highly engineered noise, vibration and harshness solutions

• Continued growth in commercial vehicle market

• Integration of EC and RC capabilities; exhaust isolators

25

Significant Growth Opportunities in BRIC+T MarketsWell-positioned with manufacturing and engineering facilities to capture growth

ChinaSince 1995

Source: IHS Automotive, January 2012

CAGR: Projected 5-year Compounded Average Growth Rate through 2016 for industry light vehicle production in the applicable country

8% CAGR

EC Plant

RC Plant

Engineering Facility

Regional Headquarters

IndiaSince 1995

9% CAGR

BrazilSince 1977

6% CAGR

ThailandSince 2001

12% CAGRRussiaSince 2003

5% CAGR

26

China Growth

Tenneco serves global OEMs as well as domestic manufacturers in China

• Emission Control– Six majority-owned JVs, including

a JV with FAW Sihuan for commercial and light vehicles

– Wholly-owned emission control manufacturing in Guangzhou

– Advanced emission control engineering center in Shanghai

• Ride Control– One majority-owned JV production facility in Beijing– Wholly-owned elastomer production facility for domestic and export business

Continued capacity expansion

China

27

Light VehicleCommercial Vehicle & Specialty (CV&S)Total OE Revenue (2014-2016)

$ in Billions

Substrate – % of Total OE Revenue 27% 28% 29% 30% 31% 32% 32%

• U.S. Tier 4i Off-road Tier 4f Off-road

Locomotive & Marine Tier 4

• Europe Stage 3B Off-road Stage 4 Off-road

Euro-6 On-road

• China Euro-4 On-road

• Brazil Euro-5 On-road

Five-Year OE Revenue Growth

Significant Commercial Vehicle Regulation Phase-in:

Total OE Revenue Projection† (as of Feb. 2012)

Q2 Status: ΔRevenue Projection

† See slide 36 for a discussion of key assumptions on which our revenue projections are based.

* Percent of Total OE Revenue△

Based on build rates and currency exchange rates as of July 2012, as compared to Feb. 2012 assumptions

Light Vehicle Production• North America

• Europe

• South America

• China ON TRACK

Commercial Vehicle Production• North America

• Europe

• Brazil

Expect CV&S revenue closer to $900 million than original projection

Currency

2012

2012

28

Tenneco Strengths• Strong global brands• Premium products• Distribution

Growth• Maintaining premium brand position and

growing market share with core products

• Expanding core product offerings

• Leveraging brands and distribution for non-core product lines – brake pads, steering and suspension

• BRIC+T markets

Excellent Profitability and Cash Generation

Global Aftermarket

2011 Market PositionCategory Region Position* Key Competitors

Emission Control N. America #1 AP Exhaust Products, CarSound Exhaust Systems, IMCO

Europe** #1 Bosal, Klarius Group

Ride Control N. America #1 KYB, Ride Control LLC

Europe** #1 KYB, ZF Sachs

S. America #1 Magneti Marelli, Corven, Affinia

* Tenneco estimates for 2011** Excludes OE service

29

Tenneco Manufacturing System (T.M.S.)

TM

• Highly focused on global manufacturing performance– Safety – Process driven quality– Process efficiency – Inventory management

• T.M.S. University Plants in all operating regions– Structured to drive focused development of core competencies

and standardization– Leverage operational leadership and best practices

• Standardization of global processes are key to our success

– Global platform management – Industrialization of new technologies– Supplier management – Total capital efficiency

Driving Consistency Across Global Operations

Over $50 million – Process Excellence

savings in 2011 (Lean and Six Sigma)

30

Health & Safety Strategy

Key elements of Global Safety Management System• T.M.S.S. – Tenneco Machine Safeguarding Standard

– A.U.T.O. (danger zone protection)– Control reliable safety systems – All machines undergo a detailed risk assessment

• Behavioral Safety Process– Peer-to-peer observations to change at-risk behaviors

• HEC – Hazardous Energy Control– Zero tolerance for knowingly circumventing lockout and tag procedure

• Ergonomics– Applied ergo and Engineering Design Guidelines for Engineers (EDGE)

Create an Injury-free Career for All Employees

31

• Safety– Safety is our key priority globally– Total Case Rate (TCR) measures the number

of injuries per 100 workers in a year – Focus results in benchmarkable performance– Renewed focus on Behavioral Safety Initiative

• Quality– PPM measures the number of defective

Parts Per Million shipped to a customer

– Progress attributed to Business Operating System, linked tightly to the Tenneco Manufacturing System, Six Sigma, Lean tools

– Drivers include standard processes, design improvements, mistake proofing, supplier management

* Source: U.S. Bureau of Labor Statistics, NAICS code 3363 – motor vehicle parts manufacturing.

Global Total Case Rate

Global Customer PPM

99

161

62 62

17 14

86

2004 2005 2006 2007 2008 2009 2010

2.02.32.73.03.93.43.4

6.45.65.2

6.26.97.1

8.1

2004 2005 2006 2007 2008 2009 2010

Tenneco TCR U. S. Industry Average*

Continuous Improvements in Safety and Quality

32

• Advanced technology leadership

• Strong operational capabilities

• Well-positioned for emission control technology-driven growth– Content growth in established markets– Market share growth in adjacent markets – on- and off-road commercial vehicle, locomotive– Geographic growth in expanding markets with environmental mandates

• Sound business model with geographic, customer, end-market, product and platform diversification

– Leading Tier 1 OE supplier positioned on top selling platforms– No. 1 aftermarket supplier driven by leading brands

• Demonstrated commitment to balance sheet strength and financial stability

• Experienced management team

Tenneco Highlights

Tenneco’s revenue projections are as of February 2012. Tenneco provides revenue projections annually and does not otherwise intend to update these projections until February 2013.

In addition to the information set forth on this slide, slide 15 and slide 22, Tenneco’s OE revenue projections are based on the type of information set forth under “Outlook” in Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as set forth in Tenneco’s Annual Report on Form 10-K for the year ended December 31, 2011. Please see that disclosure for further information. Key additional assumptions and limitations described in that disclosure include:

• Revenue projections are based on original equipment manufacturers’ programs that have been formally awarded to the company; programs where the company is highly confident that it will be awarded business based on informal customer indications consistent with past practices; Tenneco’s status as supplier for the existing program and its relationship with the customer; and the actual original equipment revenues achieved by the company for each of the last several years compared to the amount of those revenues that the company estimated it would generate at the beginning of each year.

• Revenue projections are based on the anticipated pricing of each program over its life.

• Revenue projections assume a fixed foreign currency value. This value is used to translate foreign business to the U.S. dollar.

• Revenue projections are subject to increase or decrease due to changes in customer requirements, customer and consumer preferences, the number of vehicles actually produced by our customers, pricing and foreign currency.

APPENDIX: Tenneco OE Revenue Projections

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Assumptions:

Light Vehicle Production** (Millions)

2011A 2012 2013 2014 2015 2016

N. America 13.1 13.9 14.7 15.8 16.7 16.8Europe 20.1 18.5 19.6 20.5 22.0 22.5China 17.2 18.4 20.4 22.4 24.0 25.8S. America 4.3 4.6 5.0 5.3 5.7 5.9Worldwide 5 yr CAGR of 5% (2011-2016)

On-Road Commercial Vehicle Production△

(Thousands) (Class 4-8)

2011A 2012 2013 2014 2015 2016

N. America 416 467 512 498 483 477Europe 558 655 753 726 756 790China 1,095 1,154 1,214 1,288 1,408 1,300S. America 204 184 196 196 211 223Worldwide 5 yr CAGR of 4% (2011-2016)

Off-Road Commercial Vehicle Production△

(Thousands) (Agriculture, Construction, Mining & Forestry)

2011A 2012 2013 2014 2015 2016

U.S. (≥25 hp) 218 217 229 239 244 247Europe (≥50 hp) 426 440 458 470 467 459U.S. & Europe 5 yr CAGR of 2% (2011-2016)

Currency Assumption = $1.27/€, as of Jan. 11, 2012** IHS Automotive, Jan. 2012 △Power Systems Research, Jan. 2012

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• Use of Non-GAAP Financial InformationIn addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”) included in this presentation, the company has provided information regarding certain non-GAAP financial measures. These measures include Earnings Before Interest Expense, Income Taxes, Noncontrolling Interests and Depreciation and Amortization (“EBITDA*”), Adjusted EBITDA*, Adjusted Earnings Before Interest Expense, Income Taxes and Noncontrolling Interests (“Adjusted EBIT”), Adjusted Net Income and Adjusted Earnings Per Share.

Reconciliations of these non-GAAP financial measures to the comparable GAAP measure are included in this presentation.

* Including noncontrolling interests.

Financial Results Disclaimer

36

FY 11 FY 10

Net income attributable to Tenneco Inc. $ 157 $ 39

Net income attributable to noncontrolling interests 26 24

Net income 183 63

Income tax expense 88 69

Interest expense (net of interest capitalized) 108 149

EBIT, earnings before interest expense, income taxes and noncontrolling interests (GAAP measure) 379 281

Depreciation & amortization of other intangibles 207 216

Total EBITDA* $ 586 $ 497

EBITDA* ($ Millions)

EBITDA* represents earnings before interest expense, income taxes, noncontrolling interests and depreciation and amortization. EBITDA* is not a calculation based upon generally accepted accounting principles. The amounts included in the EBITDA* calculation, however, are derived from amounts included in the historical statements of income. In addition, EBITDA* 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* because it regularly reviews EBITDA* as a measure of the company’s performance. In addition, Tenneco believes that its security holders utilize and analyze its EBITDA* for similar purposes. Tenneco also believes EBITDA* 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* measure presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.* Including noncontrolling interests.

Reconciliation of Non-GAAP Results

37

EBITDA* EBITNet Income

Attributable to Tenneco Inc.

EPS

FY 11 FY 10 FY 11 FY 10 FY 11 FY 10 FY 11 FY 10

Financial measures $586 $497 $379 $281 $157 $39 $2.55 $0.63

Adjustments (reflect non-GAAP(1) measures):

Restructuring and related expenses 8 14 8 19 5 12 0.09 0.20

Goodwill impairment charge 11 - 11 - 7 - 0.11 -

Pension charges - 6 - 6 - 4 - 0.07

Costs related to refinancing - - - - 1 18 0.01 0.29

Tax adjustments - - - - (7) 23 (0.10) 0.38

Non-GAAP financial measures(2) $605 $517 $398 $306 $163 $96 $2.66 $1.57

(1) Generally Accepted Accounting Principles(2) Tenneco presents the above reconciliation of GAAP to non-GAAP earnings measures primarily to reflect the results of 2011 and 2010 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. 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. * Including noncontrolling interests.

$ Millions, Unaudited

Financial Accomplishments – Reconciliation of Non-GAAP Results

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FY 11 FY 10

Total revenue $ 7,205 $ 5,937

Less: Substrate sales 1,678 1,284

Value-add revenue $ 5,527 $ 4,653

Adjusted EBIT $ 398 $ 306

Adjusted EBIT as a percentage of value-add revenue(1) 7.2% 6.6%

(1) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenue. 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 adjusted EBIT as a percentage of value-add revenue assists investors in evaluating our company’s operational performance without the impact of such substrate sales.

Adjusted EBIT as a Percentage of Value-Add Revenue – Reconciliation of Non-GAAP Results$ Millions, Unaudited

EBITDA* – Reconciliation of Non-GAAP Results

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Q3 11 Q4 11 Q1 12 Q2 12 LTM Q2 12

Net income attributable to Tenneco Inc. $ 30 $ 30 $ 30 $ 87 $ 177

Net income attributable to noncontrolling interests 6 8 6 8 28

Income tax expense 21 23 18 21 83

Interest expense (net of interest capitalized) 27 27 42 21 117

EBIT, earnings before interest expense, income taxes and noncontrolling interests (GAAP measure) 84 88 96 137 405

Depreciation & amortization of other intangibles 51 51 49 50 201

EBITDA* $ 135 $ 139 $ 145 $ 187 $ 606



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(1) Generally Accepted Accounting Principles(2) Tenneco presents the above reconciliation of GAAP to non-GAAP earnings measures primarily to reflect the results for LTM Q2 2012 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. 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. * Including noncontrolling interests.


Adjusted EBITDA*– Reconciliation of Non-GAAP Results

Q3 11 Q4 11 Q1 12 Q2 12 LTM Q2 12

EBITDA* $ 135 $ 139 $ 145 $ 187 $ 606


Restructuring and related expenses 4 1 1 2 8

Goodwill impairment charge 11 - - - 11

Adjusted EBITDA* (non-GAAP financial measure)(2) $ 150 $ 140 $ 146 $ 189 $ 625

EBITDA* – Reconciliation of Non-GAAP Results

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Q3 10 Q4 10 Q1 11 Q2 11 LTM Q2 11

Net income (loss) attributable to Tenneco Inc. $ 10 $ (18) $ 47 $ 50 $ 89

Net income attributable to noncontrolling interests 6 7 5 7 25

Income tax expense 15 24 14 30 83

Interest expense (net of interest capitalized) 36 49 28 26 139

EBIT, earnings before interest expense, income taxes and noncontrolling interests (GAAP measure) 67 62 94 113 336

Depreciation & amortization of other intangibles 55 53 51 54 213

EBITDA* $ 122 $ 115 $ 145 $ 167 $ 549



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(1) Generally Accepted Accounting Principles(2) Tenneco presents the above reconciliation of GAAP to non-GAAP earnings measures primarily to reflect the results for LTM Q2 2011 in a manner that allows a better understanding



Adjusted EBITDA*– Reconciliation of Non-GAAP Results

Q3 10 Q4 10 Q1 11 Q2 11 LTM Q2 11

EBITDA* $ 122 $ 115 $ 145 $ 167 $ 549


Restructuring and related expenses 3 4 1 2 10

Pension charges 4 2 - - 6

Adjusted EBITDA* (non-GAAP financial measure)(2) $ 129 $ 121 $ 146 $ 169 $ 565

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EBITDA* EBITNet Income

Attributable to Tenneco Inc.

EPS

Q2 12 Q2 11 Q2 12 Q2 11 Q2 12 Q2 11 Q2 12 Q2 11

Financial measures $187 $167 $137 $113 $87 $50 $1.42 $0.81


Restructuring and related expenses 2 2 2 2 1 1 0.02 0.02

Costs related to refinancing - - - - 1 - 0.01 -

Net Tax adjustments - - - - (19) (1) (0.31) (0.02)

Non-GAAP financial measures(2) $189 $169 $139 $115 $70 $50 $1.14 $0.81

(1) Generally Accepted Accounting Principles(2) Tenneco presents the above reconciliation of GAAP to non-GAAP earnings measures primarily to reflect the results of second quarter 2012 and 2011 in a manner that allows a better understanding



Financial Accomplishments – Reconciliation of Non-GAAP Results

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Q2 12 Q2 11

Total revenue $ 1,920 $ 1,888

Less: Substrate sales 429 435

Value-add revenue $ 1,491 $ 1,453

Adjusted EBIT $ 139 $ 115

Adjusted EBIT as a percentage of value-add revenue(1) 9.3% 7.9%

($ Millions, unaudited)

(1) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenue. 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 adjusted EBIT as a percentage of value-add revenue assists investors in evaluating our company’s operational performance without the impact of such substrate sales.

Adjusted EBIT as a Percentage of Value-Add Revenue – Reconciliation of Non-GAAP Results

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Note: We present debt net of cash balances because management believes it is a useful measure of our credit position and progress toward reducing leverage. The calculation is limited in that we may not always be able to use cash to repay debt on a dollar-for-dollar basis.

* Including noncontrolling interests.(1) Last 12 months calculation


Net Debt / Adjusted EBITDA*– Reconciliation of Non-GAAP Results

LTM Q2 2012

LTM Q2 2011 2011 2010

Total debt $ 1,366 $ 1,294 $ 1,224 $ 1,223

Cash and cash equivalents 181 161 214 233

Debt net of cash balances 1,185 1,133 1,010 990

Adjusted EBITDA* $ 625(1) $ 565(1) $ 605 $ 517

Ratio of net debt to adjusted EBITDA* 1.9x(1) 2.0x(1) 1.7x 1.9x

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