LAKE FOREST, Ill.--(BUSINESS WIRE)--Tenneco Inc. (NYSE:TEN) reported second quarter net income of $63 million, or $1.02 per diluted share, compared with net income of $87 million, or $1.42 per diluted share in second quarter 2012. On an adjusted basis, net income was $68 million, or $1.10 per diluted share, versus $70 million, or $1.14 per diluted share a year ago. The decrease in net income and earnings per share was more than explained by a higher year-over-year tax rate.
Revenue
Total revenue was $2.067 billion, up 8% from prior year, driven by revenue increases in both the Clean Air and Ride Performance businesses. Clean Air revenue increased 10% to $1.406 billion, on stronger light vehicle production in North America, China and South America as well as revenue growth in both the light and commercial vehicle businesses in Europe. Ride Performance revenue rose 2% versus prior year to $661 million, largely driven by strong light vehicle production in China.
Value-add revenue (revenue excluding substrate sales) was $1.579 billion, up 6% year-over-year.
“We delivered another solid quarter with top-line growth in both product divisions driven by stronger global light vehicle production, higher commercial vehicle revenue in Europe and South America and a solid contribution from our global aftermarket business,” said Gregg Sherrill, chairman and CEO, Tenneco. “I am also pleased that we delivered record-high EBIT and adjusted EBIT. In addition, our outstanding effort in managing working capital drove our best-ever second quarter performance for generating cash from operations.”
Global OE light vehicle revenue increased 10% year-over-year to $1.483 billion with light vehicle growth in nearly all regions due to the ramp-up on new programs and leveraging higher industry production with a strong platform mix. OE commercial and specialty vehicle revenue increased 5% to $237 million in the quarter, compared with $226 million a year ago. The increase was due to commercial vehicle revenue gains in Europe and South America. Global aftermarket revenue increased 1% to $347 million.
EBIT
EBIT (earnings before interest, taxes and noncontrolling interests) was $141 million, up from $137 million in second quarter 2012. Adjusted EBIT was $148 million, up from $139 million a year ago. The year-over-year comparison includes unfavorable currency impacts of $8 million.
The adjusted EBIT improvement reflects a 15% increase in Clean Air adjusted EBIT, driven by light vehicle volumes in North America, China and South America and effective operational cost management. Ride Performance adjusted EBIT also improved year-over-year, up 4% on stronger volumes in China.
|
Adjusted second quarter 2013 and 2012 Results |
|||||||||||||||||||||||||||
| (millions except per share amounts) | Q2 2013 | Q2 2012 | |||||||||||||||||||||||||
| EBITDA* | EBIT |
Net income |
Per Share | EBITDA* | EBIT |
Net income |
Per Share | ||||||||||||||||||||
| Earnings Measures | $ | 191 | $ | 141 | $ | 63 | $ | 1.02 | $ | 187 | $ | 137 | $ | 87 | $ | 1.42 | |||||||||||
| Adjustments (reflects non-GAAP measures): | |||||||||||||||||||||||||||
| Restructuring and related expenses | 7 | 7 | 5 | 0.08 | 2 | 2 | 1 | 0.02 | |||||||||||||||||||
| Costs related to refinancing | - | - | - | - | - | - | 1 | 0.01 | |||||||||||||||||||
| Net tax adjustments | - | - | - | - | - | - | (19 | ) | (0.31 | ) | |||||||||||||||||
| Non-GAAP earnings measures | $ | 198 | $ | 148 | $ | 68 | $ | 1.10 | $ | 189 | $ | 139 | $ | 70 | $ | 1.14 | |||||||||||
* EBITDA including noncontrolling interests (EBIT before depreciation and amortization)
In addition to the items set forth above, the tables at the end of this press release reconcile GAAP to non-GAAP results.
Second Quarter 2013 adjustments:
- Restructuring and related expenses of $7 million pre-tax, or 8-cents per diluted share.
Second Quarter 2012 adjustments:
- Restructuring and related expenses of $2 million pre-tax, or 2-cents per diluted share;
- Costs related to refinancing of $1 million pre-tax or 1-cent per diluted share;
- Net tax benefits of $19 million, or 31-cents per diluted share, primarily related to U.S. taxable income with no associated tax expense due to the valuation allowance on the company’s net operating loss position.
EBIT Margin
The company’s operational performance and ability to capitalize on higher light vehicle production in key regions drove an increase in adjusted EBIT margin on value-add revenue.
Tenneco reported the following EBIT as a percent of revenue and EBIT as a percent of value-add revenue.
|
Q2 2013 |
Q2 2012 |
||||
| EBIT as a percent of revenue | 6.8% | 7.1% | |||
| EBIT as a percent of value-add revenue | 8.9% | 9.2% | |||
| Adjusted EBIT as a percent of revenue | 7.2% | 7.2% | |||
| Adjusted EBIT as a percent of value-add revenue | 9.4% | 9.3% | |||
Cash
Cash generated by operations in the quarter was $133 million, up 55% from $86 million in second quarter 2012. The record second quarter cash performance was primarily driven by working capital improvements including strong year-over-year improvement in inventories.
Capital expenditures in the second quarter were $47 million, compared with $62 million a year ago. The majority of the capital spending was to support Clean Air customer programs in North America, Europe and China.
Taxes
The tax rate in the quarter was 39%, up from 18% in the second quarter of last year. The higher rate was primarily due to the reversal of the U.S. tax net operating loss valuation allowance in the third quarter of 2012, and to an increase in unbenefitted foreign losses in certain countries.
For the remainder of the year, the company anticipates a tax rate between 36% and 38%, and 2013 cash taxes to be approximately $110 million.
Outlook
In the third quarter, IHS Automotive forecasts a 4% increase in global light vehicle production versus a year ago with both North America and China increasing 8% year-over-year. South America is expected to be even with last year and production declines of 3% are expected in Europe.
Tenneco is well-positioned to capitalize on the stronger global light vehicle production environment with an excellent platform mix, the continued ramp-up on new programs and a well-established footprint in the fastest growing markets.
In general, the global commercial vehicle market remains relatively weak. There is modest demand improvement in certain areas; however, inventory corrections are still expected to impact production levels. The company anticipates its commercial vehicle revenues for the next two quarters will be relatively flat compared with the second quarter, bringing full year revenues within the lower end of the company's previously announced range.
“While industry conditions globally are somewhat mixed, I am pleased with our performance through the first half of the year,” said Sherrill. “For the remainder of the year, our Clean Air and Ride Performance businesses are staying focused on improving operating performance and driving profitable growth. With this focus we anticipate continued improvement by capitalizing on stronger light vehicle production and our global position in the commercial vehicle market.”
Attachment 1
Statements of Income – 3 Months
Statements
of Income – 6 Months
Balance Sheets
Statements of Cash Flows –
3 Months
Statements of Cash Flows – 6 Months
Attachment 2
Reconciliation of GAAP Net Income to EBITDA
including noncontrolling interests – 3 Months
Reconciliation of
GAAP to Non-GAAP Earnings Measures – 3 Months
Reconciliation of
GAAP Net Income to EBITDA including noncontrolling interests – 6 Months
Reconciliation
of GAAP to Non-GAAP Earnings Measures – 6 Months
Reconciliation of
GAAP Revenue to Non-GAAP Revenue Measures – 3 Months
Reconciliation
of GAAP Revenue to Non-GAAP Revenue Measures – 6 Months
Reconciliation
of GAAP Revenue to Non-GAAP Revenue Measures – 3 Months and 6 Months
Reconciliation
of Non-GAAP Measures – Debt Net of Cash/Adjusted LTM EBITDA including
noncontrolling interests
Reconciliation of GAAP Revenue to Non-GAAP
Revenue Measures – Original Equipment and Aftermarket Revenue – 3 Months
and 6 Months
Reconciliation of GAAP Revenue and Earnings to
Non-GAAP Revenue and Earnings Measures – 3 Months
Reconciliation of
GAAP Revenue and Earnings to Non-GAAP Revenue and Earnings Measures – 6
Months
CONFERENCE CALL
The company will host a conference call on Monday, July 29, 2013 at 10:00 a.m. ET. The dial-in number is 888-469-2980 (domestic) or 212-547-0154 (international). The passcode is TENNECO. The call and accompanying slides will be available on the financial section of the Tenneco web site at www.tenneco.com. A recording of the call will be available one hour following completion of the call on July 29, 2013, through August 30, 2013. To access this recording, dial 888-282-0036 (domestic) or 203-369-3022 (international). The purpose of the call is to discuss the company’s operations for the quarter, as well as other matters that may impact the company’s outlook. A copy of the press release is available on the financial and news sections of the Tenneco web site.
Tenneco is a $7.4 billion global manufacturing company with headquarters in Lake Forest, Illinois and approximately 25,000 employees worldwide. Tenneco is one of the world’s largest designers, manufacturers and marketers of clean air and ride performance products and systems for automotive and commercial vehicle original equipment markets and the aftermarket. Tenneco’s principal brand names are Monroe®, Walker®, XNOx™ and Clevite®Elastomer.
This press release contains forward-looking statements. Words
such as “may,” “expects,” “anticipate,” ”projects,” “will,” “outlook”
and similar expressions identify forward-looking statements. These
forward-looking statements are based on the current expectations of the
company (including its subsidiaries). Because these forward-looking
statements involve risks and uncertainties, the company's plans, actions
and actual results could differ materially. Among the factors that could
cause these plans, actions and results to differ materially from current
expectations are:
(i) general economic, business and market
conditions;
(ii) the company’s ability to source and procure
needed materials, components and other products and services in
accordance with customer demand and at competitive prices;
(iii)
changes in capital availability or costs, including increases in the
company's costs of borrowing (i.e., interest rate increases), the amount
of the company's debt, the ability of the company to access capital
markets at favorable rates, and the credit ratings of the company’s debt;
(iv)
changes in consumer demand, prices and the company’s ability to have our
products included on top selling vehicles, including any shifts in
consumer preferences to lower margin vehicles, for which we may or may
not have supply arrangements;
(v) changes in automotive and
commercial vehicle manufacturers' production rates and their actual and
forecasted requirements for the company's products such as the
significant production cuts during recent years by automotive
manufacturers in response to difficult economic conditions;
(vi)
the overall highly competitive nature of the automobile and commercial
vehicle parts industries, and any resultant inability to realize the
sales represented by the company’s awarded book of business which is
based on anticipated pricing and volumes over the life of the applicable
program;
(vii) the loss of any of our large original
equipment manufacturer (“OEM”) 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
OEMs or any change in customer demand due to delays in the adoption or
enforcement of worldwide emissions regulations;
(viii)
workforce factors such as strikes or labor interruptions;
(ix)
increases in the costs of raw materials, including the company’s
ability to successfully reduce the impact of any such cost increases
through materials substitutions, cost reduction initiatives, customer
recovery and other methods;
(x) the negative impact of
higher fuel prices on transportation and logistics costs, raw material
costs and discretionary purchases of vehicles or aftermarket products;
(xi)
the cyclical nature of the global vehicular industry, including the
performance of the global aftermarket sector and longer product lives of
automobile parts;
(xii) the company's continued success in
cost reduction and cash management programs and its ability to execute
restructuring and other cost reduction plans and to realize anticipated
benefits from these plans;
(xiii) product warranty costs;
(xiv)
the cost and outcome of existing and any future legal proceedings;
(xv)
the failure or breach of our information technology systems and the
consequences that such failure or breach may have to our business;
(xvi)
economic, exchange rate and political conditions in the countries where
we operate or sell our products;
(xvii) the company's
ability to develop and profitably commercialize new products and
technologies, and the acceptance of such new products and technologies
by the company's customers and the market;
(xviii) changes
by the Financial Accounting Standards Board or other accounting
regulatory bodies to authoritative generally accepted accounting
principles or policies;
(xix) changes in accounting
estimates and assumptions, including changes based on additional
information;
(xx) governmental actions, including the
ability to receive regulatory approvals and the timing of such
approvals, as well as the impact of the enforcement of, changes to or
compliance with laws and regulations, including those pertaining to
environmental concerns, pensions or other regulated activities;
(xxi)
natural disasters, acts of war and/or terrorism and the impact of these
occurrences or acts on economic, financial, industrial and social
condition, including, without limitation, with respect to supply chains
and customer demand in the countries where the company operates; and
(xxii)
the timing and occurrence (or non-occurrence) of transactions and events
which may be subject to circumstances beyond the control of the company
and its subsidiaries.
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 detailed
from time to time in the company's SEC filings, including but not
limited to its report on Form 10-K for the year ended December 31, 2012.
| ATTACHMENT 1 | |||||||||
| TENNECO INC. AND CONSOLIDATED SUBSIDIARIES | |||||||||
| STATEMENTS OF INCOME | |||||||||
|
Unaudited |
|||||||||
| THREE MONTHS ENDED JUNE 30, | |||||||||
| (Millions except per share amounts) | |||||||||
| 2013 | 2012 | ||||||||
| Net sales and operating revenues | |||||||||
| Clean Air Division - Value-add revenues | $ | 918 | $ | 845 | |||||
| Clean Air Division - Substrate sales | 488 | 429 | |||||||
| Ride Performance Division - Value-add revenues | 661 | 646 | |||||||
| $ | 2,067 | $ | 1,920 | ||||||
| Costs and expenses | |||||||||
| Cost of sales (exclusive of depreciation and amortization shown below) | 1,736 | (a) | 1,595 | (b) | |||||
| Engineering, research and development | 33 | 28 | |||||||
| Selling, general and administrative | 106 | (a) | 109 | ||||||
| Depreciation and amortization of other intangibles | 50 | 50 | |||||||
| Total costs and expenses | 1,925 | 1,782 | |||||||
| Loss on sale of receivables | (1 | ) | (1 | ) | |||||
| Other income (expense) | - | - | |||||||
| Total other income (expense) | (1 | ) | (1 | ) | |||||
|
Earnings before interest expense, income taxes, and noncontrolling interests |
|||||||||
| Clean Air Division | 107 | (a) | 95 | (b) | |||||
| Ride Performance Division | 56 | (a) | 55 | (b) | |||||
| Other | (22 | ) | (a) | (13 | ) | ||||
| 141 | 137 | ||||||||
| Interest expense (net of interest capitalized) | 20 | 21 | (c) | ||||||
| Earnings before income taxes and noncontrolling interests | 121 | 116 | |||||||
| Income tax expense | 47 | 21 | (d) | ||||||
| Net income | 74 | 95 | |||||||
| Less: Net income attributable to noncontrolling interests | 11 | 8 | |||||||
| Net income attributable to Tenneco Inc. | $ | 63 | $ | 87 | |||||
| Weighted average common shares outstanding: | |||||||||
| Basic | 60.5 | 60.0 | |||||||
| Diluted | 61.6 | 61.3 | |||||||
| Earnings per share of common stock: | |||||||||
| Basic | $ | 1.04 | $ | 1.45 | |||||
| Diluted | $ | 1.02 | $ | 1.42 | |||||
(a) Includes restructuring and related charges of $7 million pre-tax, $5 million after tax or $0.08 per diluted share. Of the adjustment, $4 million is recorded in cost of sales and $3 million is recorded in selling, general and administrative expenses. $3 million is recorded in the Clean Air Division, $2 million is recorded in the Ride Performance Division and $2 million is recorded in Other.
(b) Includes restructuring and related charges of $2 million pre-tax, $1 million after tax or $0.02 per diluted share, which is recorded in cost of sales. $1 million is recorded in the Clean Air Division and $1 million is recorded in the Ride Performance Division.
(c) Includes pre-tax expenses of $1 million, $1 million after tax or $0.01 per diluted share for costs related to refinancing activities.
(d) Includes net tax benefits of $19 million or $0.31 per diluted share primarily related to U.S. taxable income with no associated tax expense due to the valuation allowance on the company's net operating loss position and prior year tax adjustments, partially offset by the impact of recording a valuation allowance against the tax benefit for losses in certain foreign jurisdictions.
| ATTACHMENT 1 | |||||||||
| TENNECO INC. AND CONSOLIDATED SUBSIDIARIES | |||||||||
| STATEMENTS OF INCOME | |||||||||
|
Unaudited |
|||||||||
| SIX MONTHS ENDED JUNE 30, | |||||||||
| (Millions except per share amounts) | |||||||||
| 2013 | 2012 | ||||||||
| Net sales and operating revenues | |||||||||
| Clean Air Division - Value-add revenues | $ | 1,760 | $ | 1,674 | |||||
| Clean Air Division - Substrate sales | 942 | 885 | |||||||
| Ride Performance Division - Value-add revenues | 1,268 | 1,273 | |||||||
| $ | 3,970 | $ | 3,832 | ||||||
| Costs and expenses | |||||||||
| Cost of sales (exclusive of depreciation and amortization shown below) | 3,340 | (a) | 3,202 | (c) | |||||
| Engineering, research and development | 68 | 66 | |||||||
| Selling, general and administrative | 225 | (a) | 227 | ||||||
| Depreciation and amortization of other intangibles | 100 | 99 | |||||||
| Total costs and expenses | 3,733 | 3,594 | |||||||
| Loss on sale of receivables | (2 | ) | (2 | ) | |||||
| Other income (expense) | (1 | ) | (3 | ) | |||||
| Total other income (expense) | (3 | ) | (5 | ) | |||||
|
Earnings before interest expense, income taxes,and noncontrolling interests |
|||||||||
| Clean Air Division | 182 | (a) | 171 | (c) | |||||
| Ride Performance Division | 95 | (a) | 98 | (c) | |||||
| Other | (43 | ) | (a) | (36 | ) | ||||
| 234 | 233 | ||||||||
| Interest expense (net of interest capitalized) | 40 | 63 | (d) | ||||||
| Earnings before income taxes and noncontrolling interests | 194 | 170 | |||||||
| Income tax expense | 59 | (b) | 39 | (e) | |||||
| Net income | 135 | 131 | |||||||
| Less: Net income attributable to noncontrolling interests | 18 | 14 | |||||||
| Net income attributable to Tenneco Inc. | $ | 117 | $ | 117 | |||||
| Weighted average common shares outstanding: | |||||||||
| Basic | 60.4 | 60.1 | |||||||
| Diluted | 61.5 | 61.5 | |||||||
| Earnings per share of common stock: | |||||||||
| Basic | $ | 1.94 | $ | 1.95 | |||||
| Diluted | $ | 1.91 | $ | 1.90 | |||||
(a) Includes restructuring and related charges of $11 million pre-tax, $8 million after tax or $0.12 per diluted share. Of the adjustment, $7 million is recorded in cost of sales and $4 million is recorded in selling, general and administrative expenses. $6 million is recorded in the Clean Air Division, $3 million is recorded in the Ride Performance Division and $2 million is recorded in Other.
(b) Includes net tax benefits of $13 million or $0.20 per diluted share for tax adjustments to prior year estimates, primarily related to recognizing a U.S. tax benefit for foreign taxes.
(c) Includes restructuring and related charges of $3 million pre-tax, $2 million after tax or $0.04 per diluted share, which is recorded in cost of sales. $1 million is recorded in the Clean Air Division and $2 million is recorded in the Ride Performance Division.
(d) Includes pre-tax expenses of $18 million, $12 million after tax or $0.19 per share for costs related to refinancing activities.
(e) Includes net tax benefits of $20 million or $0.33 per diluted share primarily related to U.S. taxable income with no associated tax expense due to the valuation allowance on the company's net operating loss position and prior year tax adjustments, partially offset by the impact of recording a valuation allowance against the tax benefit for losses in certain foreign jurisdictions.
| ATTACHMENT 1 | |||||||||
| TENNECO INC. AND CONSOLIDATED SUBSIDIARIES | |||||||||
| BALANCE SHEETS | |||||||||
| (Unaudited) | |||||||||
| (Millions) | |||||||||
| June 30, 2013 | December 31, 2012 | ||||||||
| Assets | |||||||||
| Cash and cash equivalents | $ | 235 | $ | 223 | |||||
| Restricted cash | 5 | - | |||||||
| Receivables, net | 1,218 | (a) | 986 | (a) | |||||
| Inventories | 669 | 667 | |||||||
| Other current assets | 320 | 248 | |||||||
| Investments and other assets | 382 | 362 | |||||||
| Plant, property, and equipment, net | 1,110 | 1,122 | |||||||
| Total assets | $ | 3,939 | $ | 3,608 | |||||
| Liabilities and Shareholders' Equity | |||||||||
| Short-term debt | $ | 120 | $ | 113 | |||||
| Accounts payable | 1,339 | 1,186 | |||||||
| Accrued taxes | 36 | 50 | |||||||
| Accrued interest | 9 | 10 | |||||||
| Other current liabilities | 290 | 290 | |||||||
| Long-term debt | 1,158 | (b) | 1,067 | (b) | |||||
| Deferred income taxes | 26 | 27 | |||||||
| Deferred credits and other liabilities | 568 | 559 | |||||||
| Redeemable noncontrolling interests | 13 | 15 | |||||||
| Tenneco Inc. shareholders' equity | 339 | 246 | |||||||
| Noncontrolling interests | 41 | 45 | |||||||
|
Total liabilities, redeemable noncontrolling interests and shareholders' equity |
$ | 3,939 | $ | 3,608 | |||||
| June 30, 2013 | December 31, 2012 | ||||||||
| (a) | Accounts Receivables net of: | ||||||||
| Europe - Accounts receivables securitization programs | $ | 151 | $ | 94 | |||||
| June 30, 2013 | December 31, 2012 | ||||||||
| (b) | Long term debt composed of: | ||||||||
| Borrowings against revolving credit facilities | $ | 190 | $ | 92 | |||||
| Term loan A (Due 2017) | 234 | 241 | |||||||
| 7.75% senior notes (Due 2018) | 225 | 225 | |||||||
| 6.875% senior notes (Due 2020) | 500 | 500 | |||||||
| Other long term debt | 9 | 9 | |||||||
| $ | 1,158 | $ | 1,067 | ||||||
| ATTACHMENT 1 | ||||||||
| Tenneco Inc. and Consolidated Subsidiaries | ||||||||
| Statements of Cash Flows | ||||||||
| (Unaudited) | ||||||||
| (Millions) | ||||||||
| Three Months Ended | ||||||||
| June 30, | ||||||||
| 2013 | 2012 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 74 | $ | 95 | ||||
| Adjustments to reconcile net income | ||||||||
| to net cash provided by operating activities - | ||||||||
| Depreciation and amortization of other intangibles | 50 | 50 | ||||||
| Stock-based compensation | 2 | 3 | ||||||
| Deferred income taxes | 21 | (2 | ) | |||||
| Loss on sale of assets | 2 | 1 | ||||||
| Changes in components of working capital- | ||||||||
| (Inc.)/dec. in receivables | (77 | ) | (31 | ) | ||||
| (Inc.)/dec. in inventories | 22 | (7 | ) | |||||
| (Inc.)/dec. in prepayments and other current assets | (32 | ) | (23 | ) | ||||
| Inc./(dec.) in payables | 72 | (2 | ) | |||||
| Inc./(dec.) in accrued taxes | (8 | ) | 17 | |||||
| Inc./(dec.) in accrued interest | (4 | ) | (4 | ) | ||||
| Inc./(dec.) in other current liabilities | 15 | 2 | ||||||
| Changes in long-term assets | 3 | 1 | ||||||
| Changes in long-term liabilities | (10 | ) | (17 | ) | ||||
| Other | 3 | 3 | ||||||
| Net cash provided by operating activities | 133 | 86 | ||||||
| Investing activities: | ||||||||
| Cash payments for plant, property & equipment | (54 | ) | (60 | ) | ||||
| Cash payments for software-related intangible assets | (6 | ) | (3 | ) | ||||
| Change in restricted cash | 4 | - | ||||||
| Net cash used by investing activities | (56 | ) | (63 | ) | ||||
| Financing activities: | ||||||||
| Issuance of common shares | 12 | - | ||||||
| Purchase of common stock under the share repurchase program | (2 | ) | (18 | ) | ||||
| Debt issuance costs on long-term debt | - | (1 | ) | |||||
| Retirement of long-term debt | (3 | ) | (22 | ) | ||||
| Net inc./(dec.) in bank overdrafts | 44 | (2 | ) | |||||
|
Net inc./(dec.) in revolver borrowings and short-term debt excluding current maturities on long-term debt and short-term borrowings secured by accounts receivable |
(84 | ) | 3 | |||||
| Net inc./(dec.) in short-term debt secured by accounts receivable | - | 30 | ||||||
| Capital contribution from noncontrolling interest partner | - | 1 | ||||||
| Distribution to noncontrolling interest partners | (23 | ) | (18 | ) | ||||
| Net cash used by financing activities | (56 | ) | (27 | ) | ||||
|
Effect of foreign exchange rate changes on cash and cash equivalents |
(19 | ) | (8 | ) | ||||
| Increase (Decrease) in cash and cash equivalents | 2 | (12 | ) | |||||
| Cash and cash equivalents, April 1 | 233 | 193 | ||||||
| Cash and cash equivalents, June 30 | $ | 235 | $ | 181 | ||||
| Supplemental Cash Flow Information | ||||||||
| Cash paid during the period for interest (net of interest capitalized) | $ | 23 | $ | 24 | ||||
| Cash paid during the period for income taxes (net of refunds) | 46 | 19 | ||||||
|
Non-cash Investing and Financing Activities |
||||||||
|
Period ended balance of payables for plant, property, and equipment |
$ | 24 | $ | 30 | ||||
| ATTACHMENT 1 | ||||||||
| Tenneco Inc. and Consolidated Subsidiaries | ||||||||
| Statements of Cash Flows | ||||||||
| (Unaudited) | ||||||||
| (Millions) | ||||||||
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2013 | 2012 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 135 | $ | 131 | ||||
|
Adjustments to reconcile net income to net cash provided by operating activities - |
||||||||
| Depreciation and amortization of other intangibles | 100 | 99 | ||||||
| Stock-based compensation | 7 | 7 | ||||||
| Deferred income taxes | 16 | (7 | ) | |||||
| Loss on sale of assets | 2 | 2 | ||||||
| Changes in components of working capital- | ||||||||
| (Inc.)/dec. in receivables | (253 | ) | (212 | ) | ||||
| (Inc.)/dec. in inventories | (18 | ) | (83 | ) | ||||
| (Inc.)/dec. in prepayments and other current assets | (81 | ) | (39 | ) | ||||
| Inc./(dec.) in payables | 149 | 86 | ||||||
| Inc./(dec.) in accrued taxes | (13 | ) | 18 | |||||
| Inc./(dec.) in accrued interest | - | (4 | ) | |||||
| Inc./(dec.) in other current liabilities | 7 | 15 | ||||||
| Changes in long-term assets | 3 | 9 | ||||||
| Changes in long-term liabilities | (20 | ) | (22 | ) | ||||
| Other | 7 | 1 | ||||||
| Net cash provided by operating activities | 41 | 1 | ||||||
| Investing activities: | ||||||||
| Proceeds from sale of assets | 2 | 1 | ||||||
| Cash payments for plant, property & equipment | (124 | ) | (125 | ) | ||||
| Cash payments for software-related intangible assets | (12 | ) | (7 | ) | ||||
| Change in restricted cash | (5 | ) | - | |||||
| Net cash used by investing activities | (139 | ) | (131 | ) | ||||
| Financing activities: | ||||||||
| Issuance of common shares | 13 | - | ||||||
| Purchase of common stock under the share repurchase program | (2 | ) | (18 | ) | ||||
| Issuance of long-term debt | - | 250 | ||||||
| Debt issuance costs on long-term debt | - | (13 | ) | |||||
| Retirement of long-term debt | (8 | ) | (403 | ) | ||||
| Net inc./(dec.) in bank overdrafts | 35 | - | ||||||
|
Net inc./(dec.) in revolver borrowings and short-term debt excluding current maturities on long-term debt and short-term borrowings secured by accounts receivable |
107 | 236 | ||||||
| Net inc./(dec.) in short-term debt secured by accounts receivable | - | 60 | ||||||
| Capital contribution from noncontrolling interest partner | - | 1 | ||||||
| Distribution to noncontrolling interest partners | (23 | ) | (18 | ) | ||||
| Net cash provided by financing activities | 122 | 95 | ||||||
|
Effect of foreign exchange rate changes on cash and cash equivalents |
(12 | ) | 2 | |||||
| Increase (Decrease) in cash and cash equivalents | 12 | (33 | ) | |||||
| Cash and cash equivalents, January 1 | 223 | 214 | ||||||
| Cash and cash equivalents, June 30 | $ | 235 | $ | 181 | ||||
| Supplemental Cash Flow Information | ||||||||
| Cash paid during the period for interest (net of interest capitalized) | $ | 39 | $ | 59 | ||||
| Cash paid during the period for income taxes (net of refunds) | 71 | 36 | ||||||
| Non-cash Investing and Financing Activities | ||||||||
| Period ended balance of payables for plant, property, and equipment | $ | 24 | $ | 30 | ||||
|
ATTACHMENT 2 |
||||||||||||||||||||||||||||||||
| TENNECO INC. | ||||||||||||||||||||||||||||||||
| RECONCILIATION OF GAAP(1) NET INCOME TO EBITDA INCLUDING NONCONTROLLING INTERESTS (2) | ||||||||||||||||||||||||||||||||
|
Unaudited |
||||||||||||||||||||||||||||||||
| (Millions) | ||||||||||||||||||||||||||||||||
| Q2 2013 | ||||||||||||||||||||||||||||||||
| Clean Air Division | Ride Performance Division | |||||||||||||||||||||||||||||||
| North | Europe, | Asia | North | Europe, | Asia | |||||||||||||||||||||||||||
| America | SA & India | Pacific | Total | America | SA & India | Pacific | Total | Other | Total | |||||||||||||||||||||||
| Net income attributable to Tenneco Inc. | $ | 63 | ||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests | 11 | |||||||||||||||||||||||||||||||
| Net income | 74 | |||||||||||||||||||||||||||||||
| Income tax expense | 47 | |||||||||||||||||||||||||||||||
| Interest expense (net of interest capitalized) | 20 | |||||||||||||||||||||||||||||||
| EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure) | $ | 68 | $ | 18 | $ | 21 | $ | 107 | $ | 36 | $ | 14 | $ | 6 | $ | 56 | $ | (22 | ) | 141 | ||||||||||||
| Depreciation and amortization of other intangibles | 15 | 11 | 5 | 31 | 8 | 9 | 2 | 19 | - | 50 | ||||||||||||||||||||||
| Total EBITDA including noncontrolling interests (2) | $ | 83 | $ | 29 | $ | 26 | $ | 138 | $ | 44 | $ | 23 | $ | 8 | $ | 75 | $ | (22 | ) | $ | 191 | |||||||||||
| Q2 2012 | ||||||||||||||||||||||||||||||||
| Clean Air Division | Ride Performance Division | |||||||||||||||||||||||||||||||
| North | Europe, | Asia | North | Europe, | Asia | |||||||||||||||||||||||||||
| America | SA & India | Pacific | Total | America | SA & India | Pacific | Total | Other | Total | |||||||||||||||||||||||
| Net income attributable to Tenneco Inc. | $ | 87 | ||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests | 8 | |||||||||||||||||||||||||||||||
| Net income | 95 | |||||||||||||||||||||||||||||||
| Income tax expense | 21 | |||||||||||||||||||||||||||||||
| Interest expense (net of interest capitalized) | 21 | |||||||||||||||||||||||||||||||
| EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure) | $ | 57 | $ | 20 | $ | 18 | $ | 95 | $ | 37 | $ | 16 | $ | 2 | $ | 55 | $ | (13 | ) | 137 | ||||||||||||
| Depreciation and amortization of other intangibles | 15 | 10 | 5 | 30 | 8 | 10 | 2 | 20 | - | 50 | ||||||||||||||||||||||
| Total EBITDA including noncontrolling interests (2) | $ | 72 | $ | 30 | $ | 23 | $ | 125 | $ | 45 | $ | 26 | $ | 4 | $ | 75 | $ | (13 | ) | $ | 187 | |||||||||||
(1) Generally Accepted Accounting Principles
(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 generally accepted accounting principles. The amounts included in the EBITDA including noncontrolling interests calculation, however, are derived from amounts included in the historical statements of income data. In addition, EBITDA including noncontrolling interests should not be considered as an alternative to net income (loss) attributable to Tenneco Inc. or operating income as an indicator of the company's operating performance, or as an alternative to operating cash flows as a measure of liquidity. Tenneco has presented EBITDA including noncontrolling interests because it regularly reviews EBITDA including noncontrolling interests as a measure of the company's performance. In addition, Tenneco believes its investors utilize and analyze our 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.
|
ATTACHMENT 2 |
|||||||||||||||||||||||||||||||||
| TENNECO INC. | |||||||||||||||||||||||||||||||||
| RECONCILIATION OF GAAP(1) TO NON-GAAP EARNINGS MEASURES(2) | |||||||||||||||||||||||||||||||||
|
Unaudited |
|||||||||||||||||||||||||||||||||
| (Millions except per share amounts) | |||||||||||||||||||||||||||||||||
| Q2 2013 | Q2 2012 | ||||||||||||||||||||||||||||||||
|
|
EBITDA (3) | EBIT |
Net income |
Per Share | EBITDA (3) | EBIT |
Net income |
Per Share | |||||||||||||||||||||||||
| Earnings Measures | $ | 191 | $ | 141 | $ | 63 | $ | 1.02 | $ | 187 | $ | 137 | $ | 87 | $ | 1.42 | |||||||||||||||||
| Adjustments (reflect non-GAAP measures): | |||||||||||||||||||||||||||||||||
| Restructuring and related expenses | 7 | 7 | 5 | 0.08 | 2 | 2 | 1 | 0.02 | |||||||||||||||||||||||||
| Costs related to refinancing | - | - | - | - | - | - | 1 | 0.01 | |||||||||||||||||||||||||
| Net tax adjustments | - | - | - | - | - | - | (19 | ) | (0.31 | ) | |||||||||||||||||||||||
| Non-GAAP earnings measures | $ | 198 | $ | 148 | $ | 68 | $ | 1.10 | $ | 189 | $ | 139 | $ | 70 | $ | 1.14 | |||||||||||||||||
| Q2 2013 | |||||||||||||||||||||||||||||||||
| Clean Air Division | Ride Performance Division | ||||||||||||||||||||||||||||||||
| North | Europe, | Asia | North | Europe, | Asia | ||||||||||||||||||||||||||||
| America | SA & India | Pacific | Total | America | SA & India | Pacific | Total | Other | Total | ||||||||||||||||||||||||
| EBIT | $ | 68 | $ | 18 | $ | 21 | $ | 107 | $ | 36 | $ | 14 | $ | 6 | $ | 56 | $ | (22 | ) | $ | 141 | ||||||||||||
| Restructuring and related expenses | - | 3 | - | 3 | - | 1 | 1 | 2 | 2 | 7 | |||||||||||||||||||||||
| Adjusted EBIT | $ | 68 | $ | 21 | $ | 21 | $ | 110 | $ | 36 | $ | 15 | $ | 7 | $ | 58 | $ | (20 | ) | $ | 148 | ||||||||||||
| Q2 2012 | |||||||||||||||||||||||||||||||||
| Clean Air Division | Ride Performance Division | ||||||||||||||||||||||||||||||||
| North | Europe, | Asia | North | Europe, | Asia | ||||||||||||||||||||||||||||
| America | SA & India | Pacific | Total | America | SA & India | Pacific | Total | Other | Total | ||||||||||||||||||||||||
| EBIT | $ | 57 | $ | 20 | $ | 18 | $ | 95 | $ | 37 | $ | 16 | $ | 2 | $ | 55 | $ | (13 | ) | $ | 137 | ||||||||||||
| Restructuring and related expenses | - | 1 | - | 1 | - | 1 | - | 1 | - | 2 | |||||||||||||||||||||||
| Adjusted EBIT | $ | 57 | $ | 21 | $ | 18 | $ | 96 | $ | 37 | $ | 17 | $ | 2 | $ | 56 | $ | (13 | ) | $ | 139 | ||||||||||||
(1) 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 generally accepted accounting principles. The amounts included in the EBITDA including noncontrolling interests calculation, however, are derived from amounts included in the historical statements of income data. In addition, EBITDA including noncontrolling interests should not be considered as an alternative to net income (loss) attributable to Tenneco Inc. or operating income as an indicator of the company's operating performance, or as an alternative to operating cash flows as a measure of liquidity. Tenneco has presented EBITDA including noncontrolling interests because it regularly reviews EBITDA including noncontrolling interests as a measure of the company's performance. In addition, Tenneco believes its investors utilize and analyze our 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.
|
ATTACHMENT 2 |
||||||||||||||||||||||||||||||||
| TENNECO INC. | ||||||||||||||||||||||||||||||||
| RECONCILIATION OF GAAP(1) NET INCOME TO EBITDA INCLUDING NONCONTROLLING INTERESTS (2) | ||||||||||||||||||||||||||||||||
|
Unaudited |
||||||||||||||||||||||||||||||||
| (Millions) | ||||||||||||||||||||||||||||||||
| YTD 2013 | ||||||||||||||||||||||||||||||||
| Clean Air Division | Ride Performance Division | |||||||||||||||||||||||||||||||
| North | Europe, | Asia | North | Europe, | Asia | |||||||||||||||||||||||||||
| America | SA & India | Pacific | Total | America | SA & India | Pacific | Total | Other | Total | |||||||||||||||||||||||
| Net income attributable to Tenneco Inc. | $ | 117 | ||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests | 18 | |||||||||||||||||||||||||||||||
| Net income | 135 | |||||||||||||||||||||||||||||||
| Income tax expense | 59 | |||||||||||||||||||||||||||||||
| Interest expense (net of interest capitalized) | 40 | |||||||||||||||||||||||||||||||
| EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure) | $ | 117 | $ | 29 | $ | 36 | $ | 182 | $ | 61 | $ | 24 | $ | 10 | $ | 95 | $ | (43 | ) | 234 | ||||||||||||
| Depreciation and amortization of other intangibles | 30 | 21 | 10 | 61 | 16 | 19 | 4 | 39 | - | 100 | ||||||||||||||||||||||
| Total EBITDA including noncontrolling interests (2) | $ | 147 | $ | 50 | $ | 46 | $ | 243 | $ | 77 | $ | 43 | $ | 14 | $ | 134 | $ | (43 | ) | $ | 334 | |||||||||||
| YTD 2012 | ||||||||||||||||||||||||||||||||
| Clean Air Division | Ride Performance Division | |||||||||||||||||||||||||||||||
| North | Europe, | Asia | North | Europe, | Asia | |||||||||||||||||||||||||||
| America | SA & India | Pacific | Total | America | SA & India | Pacific | Total | Other | Total | |||||||||||||||||||||||
| Net income attributable to Tenneco Inc. | $ | 117 | ||||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interests | 14 | |||||||||||||||||||||||||||||||
| Net income | 131 | |||||||||||||||||||||||||||||||
| Income tax expense | 39 | |||||||||||||||||||||||||||||||
| Interest expense (net of interest capitalized) | 63 | |||||||||||||||||||||||||||||||
| EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure) | $ | 105 | $ | 36 | $ | 30 | $ | 171 | $ | 72 | $ | 26 | $ | - | $ | 98 | $ | (36 | ) | 233 | ||||||||||||
| Depreciation and amortization of other intangibles | 29 | 21 | 9 | 59 | 15 | 21 | 4 | 40 | - | 99 | ||||||||||||||||||||||
| Total EBITDA including noncontrolling interests (2) | $ | 134 | $ | 57 | $ | 39 | $ | 230 | $ | 87 | $ | 47 | $ | 4 | $ | 138 | $ | (36 | ) | $ | 332 | |||||||||||
(1) Generally Accepted Accounting Principles
(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 generally accepted accounting principles. The amounts included in the EBITDA including noncontrolling interests calculation, however, are derived from amounts included in the historical statements of income data. In addition, EBITDA including noncontrolling interests should not be considered as an alternative to net income (loss) attributable to Tenneco Inc. or operating income as an indicator of the company's operating performance, or as an alternative to operating cash flows as a measure of liquidity. Tenneco has presented EBITDA including noncontrolling interests because it regularly reviews EBITDA including noncontrolling interests as a measure of the company's performance. In addition, Tenneco believes its investors utilize and analyze our 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.
|
ATTACHMENT 2 |
|||||||||||||||||||||||||||||||||||
| TENNECO INC. | |||||||||||||||||||||||||||||||||||
| RECONCILIATION OF GAAP(1) TO NON-GAAP EARNINGS MEASURES(2) | |||||||||||||||||||||||||||||||||||
|
Unaudited |
|||||||||||||||||||||||||||||||||||
| (Millions except per share amounts) | |||||||||||||||||||||||||||||||||||
| YTD 2013 | YTD 2012 | ||||||||||||||||||||||||||||||||||
| EBITDA (3) | EBIT |
Net income |
Per Share | EBITDA (3) | EBIT |
Net income |
Per Share | ||||||||||||||||||||||||||||
| Earnings Measures | $ | 334 | $ | 234 | $ | 117 | $ | 1.91 | $ | 332 | $ | 233 | $ | 117 | $ | 1.90 | |||||||||||||||||||
| Adjustments (reflect non-GAAP measures): | |||||||||||||||||||||||||||||||||||
| Restructuring and related expenses | 11 | 11 | 8 | 0.12 | 3 | 3 | 2 | 0.04 | |||||||||||||||||||||||||||
| Costs related to refinancing | - | - | - | - | - | - | 12 | 0.19 | |||||||||||||||||||||||||||
| Net tax adjustments | - | - | (13 | ) | (0.20 | ) | - | - | (20 | ) | (0.33 | ) | |||||||||||||||||||||||
| Non-GAAP earnings measures | $ | 345 | $ | 245 | $ | 112 | $ | 1.83 | $ | 335 | $ | 236 | $ | 111 | $ | 1.80 | |||||||||||||||||||
| YTD 2013 | |||||||||||||||||||||||||||||||||||
| Clean Air Division | Ride Performance Division | ||||||||||||||||||||||||||||||||||
| North | Europe, | Asia | North | Europe, | Asia | ||||||||||||||||||||||||||||||
| America | SA & India | Pacific | Total | America | SA & India | Pacific | Total | Other | Total | ||||||||||||||||||||||||||
| EBIT | $ | 117 | $ | 29 | $ | 36 | $ | 182 | $ | 61 | $ | 24 | $ | 10 | $ | 95 | $ | (43 | ) | $ | 234 | ||||||||||||||
| Restructuring and related expenses | - | 4 | 2 | 6 | - | 2 | 1 | 3 | 2 | 11 | |||||||||||||||||||||||||
| Adjusted EBIT | $ | 117 | $ | 33 | $ | 38 | $ | 188 | $ | 61 | $ | 26 | $ | 11 | $ | 98 | $ | (41 | ) | $ | 245 | ||||||||||||||
| YTD 2012 | |||||||||||||||||||||||||||||||||||
| Clean Air Division | Ride Performance Division | ||||||||||||||||||||||||||||||||||
| North | Europe, | Asia | North | Europe, | Asia | ||||||||||||||||||||||||||||||
| America | SA & India | Pacific | Total | America | SA & India | Pacific | Total | Other | Total | ||||||||||||||||||||||||||
| EBIT | $ | 105 | $ | 36 | $ | 30 | $ | 171 | $ | 72 | $ | 26 | $ | - | $ | 98 | $ | (36 | ) | $ | 233 | ||||||||||||||
| Restructuring and related expenses | - | 1 | - | 1 | - | 2 | - | 2 | - | 3 | |||||||||||||||||||||||||
| Adjusted EBIT | $ | 105 | $ | 37 | $ | 30 | $ | 172 | $ | 72 | $ | 28 | $ | - | $ | 100 | $ | (36 | ) | $ | 236 | ||||||||||||||
(1) 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 generally accepted accounting principles. The amounts included in the EBITDA including noncontrolling interests calculation, however, are derived from amounts included in the historical statements of income data. In addition, EBITDA including noncontrolling interests should not be considered as an alternative to net income (loss) attributable to Tenneco Inc. or operating income as an indicator of the company's operating performance, or as an alternative to operating cash flows as a measure of liquidity. Tenneco has presented EBITDA including noncontrolling interests because it regularly reviews EBITDA including noncontrolling interests as a measure of the company's performance. In addition, Tenneco believes its investors utilize and analyze our 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.
|
ATTACHMENT 2 |
|||||||||||||||||
| TENNECO INC. | |||||||||||||||||
| RECONCILIATION OF GAAP (1) REVENUE TO NON-GAAP REVENUE MEASURES (2) | |||||||||||||||||
|
Unaudited |
|||||||||||||||||
| (Millions) | |||||||||||||||||
| Q2 2013 | |||||||||||||||||
| Currency | Value-add | ||||||||||||||||
| Impact on | Revenues | ||||||||||||||||
| Substrate | Value-add | Value-add | excluding | ||||||||||||||
| Revenues | Sales | Revenues | Revenues | Currency | |||||||||||||
| Clean Air Division | |||||||||||||||||
| North America | $ | 687 | $ | 272 | $ | 415 | $ | - | $ | 415 | |||||||
| Europe, South America & India | 516 | 184 | 332 | (4 | ) | 336 | |||||||||||
| Asia Pacific | 203 | 32 | 171 | 4 | 167 | ||||||||||||
| Total Clean Air Division | 1,406 | 488 | 918 | - | 918 | ||||||||||||
| Ride Performance Division | |||||||||||||||||
| North America | 324 | - | 324 | - | 324 | ||||||||||||
| Europe, South America & India | 281 | - | 281 | (5 | ) | 286 | |||||||||||
| Asia Pacific | 56 | - | 56 | (1 | ) | 57 | |||||||||||
| Total Ride Performance Division | 661 | - | 661 | (6 | ) | 667 | |||||||||||
| Total Tenneco Inc. | $ | 2,067 | $ | 488 | $ | 1,579 | $ | (6 | ) | $ | 1,585 | ||||||
| Q2 2012 | |||||||||||||||||
| Currency | Value-add | ||||||||||||||||
| Impact on | Revenues | ||||||||||||||||
| Substrate | Value-add | Value-add | excluding | ||||||||||||||
| Revenues | Sales | Revenues | Revenues | Currency | |||||||||||||
| Clean Air Division | |||||||||||||||||
| North America | $ | 671 | $ | 269 | $ | 402 | $ | - | $ | 402 | |||||||
| Europe, South America & India | 434 | 137 | 297 | - | 297 | ||||||||||||
| Asia Pacific | 169 | 23 | 146 | - | 146 | ||||||||||||
| Total Clean Air Division | 1,274 | 429 | 845 | - | 845 | ||||||||||||
| Ride Performance Division | |||||||||||||||||
| North America | 325 | - | 325 | - | 325 | ||||||||||||
| Europe, South America & India | 276 | - | 276 | - | 276 | ||||||||||||
| Asia Pacific | 45 | - | 45 | - | 45 | ||||||||||||
| Total Ride Performance Division | 646 | - | 646 | - | 646 | ||||||||||||
| Total Tenneco Inc. | $ | 1,920 | $ | 429 | $ | 1,491 | $ | - | $ | 1,491 | |||||||
(1) Generally Accepted Accounting Principles
(2) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from the effects of doing business in currencies other than the U.S. dollar. Additionally, substrate sales include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Tenneco uses this information to analyze the trend in revenues before these factors. Tenneco believes investors find this information useful in understanding period to period comparisons in the company's revenues.
|
ATTACHMENT 2 |
|||||||||||||||||
| TENNECO INC. | |||||||||||||||||
| RECONCILIATION OF GAAP (1) REVENUE TO NON-GAAP REVENUE MEASURES (2) | |||||||||||||||||
|
Unaudited |
|||||||||||||||||
| (Millions) | |||||||||||||||||
| YTD 2013 | |||||||||||||||||
| Currency | Value-add | ||||||||||||||||
| Impact on | Revenues | ||||||||||||||||
| Substrate | Value-add | Value-add | excluding | ||||||||||||||
| Revenues | Sales | Revenues | Revenues | Currency | |||||||||||||
| Clean Air Division | |||||||||||||||||
| North America | $ | 1,333 | $ | 532 | $ | 801 | $ | - | $ | 801 | |||||||
| Europe, South America & India | 983 | 353 | 630 | (17 | ) | 647 | |||||||||||
| Asia Pacific | 386 | 57 | 329 | 4 | 325 | ||||||||||||
| Total Clean Air Division | 2,702 | 942 | 1,760 | (13 | ) | 1,773 | |||||||||||
| Ride Performance Division | |||||||||||||||||
| North America | 631 | - | 631 | (1 | ) | 632 | |||||||||||
| Europe, South America & India | 533 | - | 533 | (19 | ) | 552 | |||||||||||
| Asia Pacific | 104 | - | 104 | (1 | ) | 105 | |||||||||||
| Total Ride Performance Division | 1,268 | - | 1,268 | (21 | ) | 1,289 | |||||||||||
| Total Tenneco Inc. | $ | 3,970 | $ | 942 | $ | 3,028 | $ | (34 | ) | $ | 3,062 | ||||||
| YTD 2012 | |||||||||||||||||
| Currency | Value-add | ||||||||||||||||
| Impact on | Revenues | ||||||||||||||||
| Substrate | Value-add | Value-add | excluding | ||||||||||||||
| Revenues | Sales | Revenues | Revenues | Currency | |||||||||||||
| Clean Air Division | |||||||||||||||||
| North America | $ | 1,340 | $ | 546 | $ | 794 | $ | - | $ | 794 | |||||||
| Europe, South America & India | 894 | 290 | 604 | - | 604 | ||||||||||||
| Asia Pacific | 325 | 49 | 276 | - | 276 | ||||||||||||
| Total Clean Air Division | 2,559 | 885 | 1,674 | - | 1,674 | ||||||||||||
| Ride Performance Division | |||||||||||||||||
| North America | 642 | - | 642 | - | 642 | ||||||||||||
| Europe, South America & India | 548 | - | 548 | - | 548 | ||||||||||||
| Asia Pacific | 83 | - | 83 | - | 83 | ||||||||||||
| Total Ride Performance Division | 1,273 | - | 1,273 | - | 1,273 | ||||||||||||
| Total Tenneco Inc. | $ | 3,832 | $ | 885 | $ | 2,947 | $ | - | $ | 2,947 | |||||||
(1) Generally Accepted Accounting Principles
(2) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from the effects of doing business in currencies other than the U.S. dollar. Additionally, substrate sales include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Tenneco uses this information to analyze the trend in revenues before these factors. Tenneco believes investors find this information useful in understanding period to period comparisons in the company's revenues.
|
ATTACHMENT 2 |
||||||||||||||||
| TENNECO INC. | ||||||||||||||||
| RECONCILIATION OF GAAP REVENUE TO NON-GAAP REVENUE MEASURES | ||||||||||||||||
|
Unaudited |
||||||||||||||||
| (Millions except percents) | ||||||||||||||||
| Q2 2013 vs. Q2 2012 $ Change and % Change Increase (Decrease) | ||||||||||||||||
| Revenues | % Change |
Value-add |
% Change | |||||||||||||
| Clean Air Division | ||||||||||||||||
| North America | $ | 16 | 2 | % | $ | 13 | 3 | % | ||||||||
| Europe, South America & India | 82 | 19 | % | 39 | 13 | % | ||||||||||
| Asia Pacific | 34 | 20 | % | 21 | 14 | % | ||||||||||
| Total Clean Air Division | 132 | 10 | % | 73 | 9 | % | ||||||||||
| Ride Performance Division | ||||||||||||||||
| North America | (1 | ) | 0 | % | (1 | ) | 0 | % | ||||||||
| Europe, South America & India | 5 | 2 | % | 10 | 4 | % | ||||||||||
| Asia Pacific | 11 | 24 | % | 12 | 27 | % | ||||||||||
| Total Ride Performance Division | 15 | 2 | % | 21 | 3 | % | ||||||||||
| Total Tenneco Inc. | $ | 147 | 8 | % | $ | 94 | 6 | % | ||||||||
| YTD Q2 2013 vs. YTD Q2 2012 $ Change and % Change Increase (Decrease) | ||||||||||||||||
| Revenues | % Change |
Value-add |
% Change | |||||||||||||
| Clean Air Division | ||||||||||||||||
| North America | $ | (7 | ) | (1 | %) | $ | 7 | 1 | % | |||||||
| Europe, South America & India | 89 | 10 | % | 43 | 7 | % | ||||||||||
| Asia Pacific | 61 | 19 | % | 49 | 18 | % | ||||||||||
| Total Clean Air Division | 143 | 6 | % | 99 | 6 | % | ||||||||||
| Ride Performance Division | ||||||||||||||||
| North America | (11 | ) | (2 | %) | (10 | ) | (2 | %) | ||||||||
| Europe, South America & India | (15 | ) | (3 | %) | 4 | 1 | % | |||||||||
| Asia Pacific | 21 | 25 | % | 22 | 27 | % | ||||||||||
| Total Ride Performance Division | (5 | ) | 0 | % | 16 | 1 | % | |||||||||
| Total Tenneco Inc. | $ | 138 | 4 | % | $ | 115 | 4 | % | ||||||||
|
ATTACHMENT 2 |
|||||||||||||||||
| TENNECO INC. | |||||||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||
| Debt net of cash / Adjusted LTM EBITDA including noncontrolling interests | |||||||||||||||||
|
Unaudited |
|||||||||||||||||
| (Millions except ratios) | |||||||||||||||||
| Quarter Ended June 30, | |||||||||||||||||
| 2013 | 2012 | ||||||||||||||||
| Total debt | $ | 1,278 | $ | 1,366 | |||||||||||||
| Total cash | 240 | 181 | |||||||||||||||
| Debt net of cash balances (1) | $ | 1,038 | $ | 1,185 | |||||||||||||
| Adjusted LTM EBITDA including noncontrolling interests (2) (3) | $ | 651 | $ | 625 | |||||||||||||
| Ratio of debt net of cash balances to adjusted LTM EBITDA including noncontrolling interests (4) | 1.6x | 1.9x | |||||||||||||||
| Q3 12 | Q4 12 | Q1 13 | Q2 13 | Q2 13 LTM | |||||||||||||
| Net income attributable to Tenneco Inc. | $ | 125 | $ | 33 | $ | 54 | $ | 63 | $ | 275 | |||||||
| Net income attributable to noncontrolling interests | 7 | 8 | 7 | 11 | 33 | ||||||||||||
| Income tax expense (benefit) | (42 | ) | 22 | 12 | 47 | 39 | |||||||||||
| Interest expense (net of interest capitalized) | 21 | 21 | 20 | 20 | 82 | ||||||||||||
| EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure) | 111 | 84 | 93 | 141 | 429 | ||||||||||||
| Depreciation and amortization of other intangibles | 49 | 57 | 50 | 50 | 206 | ||||||||||||
| Total EBITDA including noncontrolling interests (2) | 160 | 141 | 143 | 191 | 635 | ||||||||||||
| Restructuring and related expenses | 7 | 3 | 4 | 7 | 21 | ||||||||||||
| Pullman recoveries (5) | (5 | ) | - | - | - | (5 | ) | ||||||||||
| Total Adjusted EBITDA including noncontrolling interest (3) | $ | 162 | $ | 144 | $ | 147 | $ | 198 | $ | 651 | |||||||
| Q3 11 | Q4 11 | Q1 12 | Q2 12 | Q2 12 LTM | |||||||||||||
| 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 and amortization of other intangibles | 51 | 51 | 49 | 50 | 201 | ||||||||||||
| Total EBITDA including noncontrolling interests (2) | 135 | 139 | 145 | 187 | 606 | ||||||||||||
| Restructuring and related expenses | 4 | 1 | 1 | 2 | 8 | ||||||||||||
| Goodwill impairment charge (6) | 11 | - | - | - | 11 | ||||||||||||
| Total Adjusted EBITDA including noncontrolling interest (3) | $ | 150 | $ | 140 | $ | 146 | $ | 189 | $ | 625 | |||||||
(1) Tenneco presents debt net of 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 generally accepted accounting principles. The amounts included in the EBITDA including noncontrolling interests calculation, however, are derived from amounts included in the historical statements of income data. In addition, EBITDA including noncontrolling interests should not be considered as an alternative to net income (loss) attributable to Tenneco Inc. or operating income as an indicator of the company's operating performance, or as an alternative to operating cash flows as a measure of liquidity. Tenneco has presented EBITDA including noncontrolling interests because it regularly reviews EBITDA including noncontrolling interests as a measure of the company's performance. In addition, Tenneco believes its investors utilize and analyze our EBITDA including noncontrolling interests for similar purposes. Tenneco also believes EBITDA including noncontrolling interests assists investors in comparing a company's performance on a consistent basis without regard to depreciation and amortization, which can vary significantly depending upon many factors. However, the EBITDA including noncontrolling interests measure presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.
(3) Adjusted EBITDA including noncontrolling interests is presented in order to reflect the results in a manner that allows a better understanding of operational activities separate from the financial impact of decisions made for the long term benefit of the company and other items impacting comparability between the periods. Similar adjustments to EBITDA including noncontrolling interests have been recorded in earlier periods, and similar types of adjustments can reasonably be expected to be recorded in future periods. The company believes investors find the non-GAAP information helpful in understanding the ongoing performance of operations separate from items that may have a disproportionate positive or negative impact on the company's financial results in any particular period.
(4) Tenneco presents the above reconciliation of the ratio of debt net of cash to LTM adjusted EBITDA including noncontrolling interests to show trends that investors may find useful in understanding the company's ability to service its debt. For purposes of this calculation, LTM adjusted EBITDA including noncontrolling interests is used as an indicator of the company's performance and debt net of cash is presented as an indicator of our credit position and progress toward reducing our 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 cash, EBITDA including noncontrolling interests and adjusted EBITDA including noncontrolling interests.
(5) Benefit from property recoveries related to transactions originated by the Pullman company before being acquired by Tenneco in 1996.
(6) Non-cash asset impairment charge related to goodwill for Australia.
|
ATTACHMENT 2 |
||||||||
| TENNECO INC. | ||||||||
| RECONCILIATION OF GAAP (1) REVENUE TO NON-GAAP REVENUE MEASURES | ||||||||
|
Unaudited |
||||||||
| (Millions) | ||||||||
| Three Months Ended June 30, | ||||||||
| 2013 | 2012 | |||||||
| Original equipment light vehicle revenues | $ | 1,483 | $ | 1,350 | ||||
| Original equipment commercial vehicle and specialty revenues | 237 | 226 | ||||||
| Aftermarket revenues | 347 | 344 | ||||||
| Net sales and operating revenues | $ | 2,067 | $ | 1,920 | ||||
| Six Months Ended June 30, | ||||||||
| 2013 | 2012 | |||||||
| Original equipment light vehicle revenues | $ | 2,871 | $ | 2,729 | ||||
| Original equipment commercial vehicle and specialty revenues | 450 | 448 | ||||||
| Aftermarket revenues | 649 | 655 | ||||||
| Net sales and operating revenues | $ | 3,970 | $ | 3,832 | ||||
(1) Generally Accepted Accounting Principles
|
ATTACHMENT 2 |
|||||||||||||||||||||||||||||||||||||||||
| TENNECO INC. | |||||||||||||||||||||||||||||||||||||||||
| RECONCILIATION OF GAAP (1) REVENUE AND EARNINGS TO NON-GAAP REVENUE AND EARNINGS MEASURES (2) | |||||||||||||||||||||||||||||||||||||||||
|
Unaudited |
|||||||||||||||||||||||||||||||||||||||||
| (Millions except percents) | |||||||||||||||||||||||||||||||||||||||||
| Q2 2013 | |||||||||||||||||||||||||||||||||||||||||
| Clean Air Division | Ride Performance Division | ||||||||||||||||||||||||||||||||||||||||
| North | Europe, | Asia | North | Europe, | Asia | ||||||||||||||||||||||||||||||||||||
| America | SA & India | Pacific | Total | America | SA & India | Pacific | Total | Other | Total | ||||||||||||||||||||||||||||||||
| Net sales and operating revenues | $ | 687 | $ | 516 | $ | 203 | $ | 1,406 | $ | 324 | $ | 281 | $ | 56 | $ | 661 | $ | - | $ | 2,067 | |||||||||||||||||||||
| Less: Substrate sales | 272 | 184 | 32 | 488 | - | - | - | - | - | 488 | |||||||||||||||||||||||||||||||
| Value-add revenues | $ | 415 | $ | 332 | $ | 171 | $ | 918 | $ | 324 | $ | 281 | $ | 56 | $ | 661 | $ | - | $ | 1,579 | |||||||||||||||||||||
| EBIT | $ | 68 | $ | 18 | $ | 21 | $ | 107 | $ | 36 | $ | 14 | $ | 6 | $ | 56 | $ | (22 | ) | $ | 141 | ||||||||||||||||||||
| EBIT as a % of revenue | 9.9 | % | 3.5 | % | 10.3 | % | 7.6 | % | 11.1 | % | 5.0 | % | 10.7 | % | 8.5 | % | 6.8 | % | |||||||||||||||||||||||
| EBIT as a % of value-add revenue | 16.4 | % | 5.4 | % | 12.3 | % | 11.7 | % | 11.1 | % | 5.0 | % | 10.7 | % | 8.5 | % | 8.9 | % | |||||||||||||||||||||||
| Adjusted EBIT | $ | 68 | $ | 21 | $ | 21 | $ | 110 | $ | 36 | $ | 15 | $ | 7 | $ | 58 | $ | (20 | ) | $ | 148 | ||||||||||||||||||||
| Adjusted EBIT as a % of revenue | 9.9 | % | 4.1 | % | 10.3 | % | 7.8 | % | 11.1 | % | 5.3 | % | 12.5 | % | 8.8 | % | 7.2 | % | |||||||||||||||||||||||
| Adjusted EBIT as a % of value-add revenue | 16.4 | % | 6.3 | % | 12.3 | % | 12.0 | % | 11.1 | % | 5.3 | % | 12.5 | % | 8.8 | % | 9.4 | % | |||||||||||||||||||||||
| Q2 2012 | |||||||||||||||||||||||||||||||||||||||||
| Clean Air Division | Ride Performance Division | ||||||||||||||||||||||||||||||||||||||||
| North | Europe, | Asia | North | Europe, | Asia | ||||||||||||||||||||||||||||||||||||
| America | SA & India | Pacific | Total | America | SA & India | Pacific | Total | Other | Total | ||||||||||||||||||||||||||||||||
| Net sales and operating revenues | $ | 671 | $ | 434 | $ | 169 | $ | 1,274 | $ | 325 | $ | 276 | $ | 45 | $ | 646 | $ | - | $ | 1,920 | |||||||||||||||||||||
| Less: Substrate sales | 269 | 137 | 23 | 429 | - | - | - | - | - | 429 | |||||||||||||||||||||||||||||||
| Value-add revenues | $ | 402 | $ | 297 | $ | 146 | $ | 845 | $ | 325 | $ | 276 | $ | 45 | $ | 646 | $ | - | $ | 1,491 | |||||||||||||||||||||
| EBIT | $ | 57 | $ | 20 | $ | 18 | $ | 95 | $ | 37 | $ | 16 | $ | 2 | $ | 55 | $ | (13 | ) | $ | 137 | ||||||||||||||||||||
| EBIT as a % of revenue | 8.5 | % | 4.6 | % | 10.7 | % | 7.5 | % | 11.4 | % | 5.8 | % | 4.4 | % | 8.5 | % | 7.1 | % | |||||||||||||||||||||||
| EBIT as a % of value-add revenue | 14.2 | % | 6.7 | % | 12.3 | % | 11.2 | % | 11.4 | % | 5.8 | % | 4.4 | % | 8.5 | % | 9.2 | % | |||||||||||||||||||||||
| Adjusted EBIT | $ | 57 | $ | 21 | $ | 18 | $ | 96 | $ | 37 | $ | 17 | $ | 2 | $ | 56 | $ | (13 | ) | $ | 139 | ||||||||||||||||||||
| Adjusted EBIT as a % of revenue | 8.5 | % | 4.8 | % | 10.7 | % | 7.5 | % | 11.4 | % | 6.2 | % | 4.4 | % | 8.7 | % | 7.2 | % | |||||||||||||||||||||||
| Adjusted EBIT as a % of value-add revenue | 14.2 | % | 7.1 | % | 12.3 | % | 11.4 | % | 11.4 | % | 6.2 | % | 4.4 | % | 8.7 | % | 9.3 | % | |||||||||||||||||||||||
(1) Generally Accepted Accounting Principles
(2) Tenneco presents the above reconciliation of revenues in order to reflect EBIT 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 EBIT as a percent of value-add revenue assists investors in evaluating our company's operational performance without the impact of such substrate sales.
|
ATTACHMENT 2 |
|||||||||||||||||||||||||||||||||||||||||
| TENNECO INC. | |||||||||||||||||||||||||||||||||||||||||
| RECONCILIATION OF GAAP (1) REVENUE AND EARNINGS TO NON-GAAP REVENUE AND EARNINGS MEASURES (2) | |||||||||||||||||||||||||||||||||||||||||
|
Unaudited |
|||||||||||||||||||||||||||||||||||||||||
| (Millions except percents) | |||||||||||||||||||||||||||||||||||||||||
| YTD 2013 | |||||||||||||||||||||||||||||||||||||||||
| Clean Air Division | Ride Performance Division | ||||||||||||||||||||||||||||||||||||||||
| North | Europe, | Asia | North | Europe, | Asia | ||||||||||||||||||||||||||||||||||||
| America | SA & India | Pacific | Total | America | SA & India | Pacific | Total | Other | Total | ||||||||||||||||||||||||||||||||
| Net sales and operating revenues | $ | 1,333 | $ | 983 | $ | 386 | $ | 2,702 | $ | 631 | $ | 533 | $ | 104 | $ | 1,268 | $ | - | $ | 3,970 | |||||||||||||||||||||
| Less: Substrate sales | 532 | 353 | 57 | 942 | - | - | - | - | - | 942 | |||||||||||||||||||||||||||||||
| Value-add revenues | $ | 801 | $ | 630 | $ | 329 | $ | 1,760 | $ | 631 | $ | 533 | $ | 104 | $ | 1,268 | $ | - | $ | 3,028 | |||||||||||||||||||||
| EBIT | $ | 117 | $ | 29 | $ | 36 | $ | 182 | $ | 61 | $ | 24 | $ | 10 | $ | 95 | $ | (43 | ) | $ | 234 | ||||||||||||||||||||
| EBIT as a % of revenue | 8.8 | % | 3.0 | % | 9.3 | % | 6.7 | % | 9.7 | % | 4.5 | % | 9.6 | % | 7.5 | % | 5.9 | % | |||||||||||||||||||||||
| EBIT as a % of value-add revenue | 14.6 | % | 4.6 | % | 10.9 | % | 10.3 | % | 9.7 | % | 4.5 | % | 9.6 | % | 7.5 | % | 7.7 | % | |||||||||||||||||||||||
| Adjusted EBIT | $ | 117 | $ | 33 | $ | 38 | $ | 188 | $ | 61 | $ | 26 | $ | 11 | $ | 98 | $ | (41 | ) | $ | 245 | ||||||||||||||||||||
| Adjusted EBIT as a % of revenue | 8.8 | % | 3.4 | % | 9.8 | % | 7.0 | % | 9.7 | % | 4.9 | % | 10.6 | % | 7.7 | % | 6.2 | % | |||||||||||||||||||||||
| Adjusted EBIT as a % of value-add revenue | 14.6 | % | 5.2 | % | 11.6 | % | 10.7 | % | 9.7 | % | 4.9 | % | 10.6 | % | 7.7 | % | 8.1 | % | |||||||||||||||||||||||
| YTD 2012 | |||||||||||||||||||||||||||||||||||||||||
| Clean Air Division | Ride Performance Division | ||||||||||||||||||||||||||||||||||||||||
| North | Europe, | Asia | North | Europe, | Asia | ||||||||||||||||||||||||||||||||||||
| America | SA & India | Pacific | Total | America | SA & India | Pacific | Total | Other | Total | ||||||||||||||||||||||||||||||||
| Net sales and operating revenues | $ | 1,340 | $ | 894 | $ | 325 | $ | 2,559 | $ | 642 | $ | 548 | $ | 83 | $ | 1,273 | $ | - | $ | 3,832 | |||||||||||||||||||||
| Less: Substrate sales | 546 | 290 | 49 | 885 | - | - | - | - | - | 885 | |||||||||||||||||||||||||||||||
| Value-add revenues | $ | 794 | $ | 604 | $ | 276 | $ | 1,674 | $ | 642 | $ | 548 | $ | 83 | $ | 1,273 | $ | - | $ | 2,947 | |||||||||||||||||||||
| EBIT | $ | 105 | $ | 36 | $ | 30 | $ | 171 | $ | 72 | $ | 26 | $ | - | $ | 98 | $ | (36 | ) | $ | 233 | ||||||||||||||||||||
| EBIT as a % of revenue | 7.8 | % | 4.0 | % | 9.2 | % | 6.7 | % | 11.2 | % | 4.7 | % | 0.0 | % | 7.7 | % | 6.1 | % | |||||||||||||||||||||||
| EBIT as a % of value-add revenue | 13.2 | % | 6.0 | % | 10.9 | % | 10.2 | % | 11.2 | % | 4.7 | % | 0.0 | % | 7.7 | % | 7.9 | % | |||||||||||||||||||||||
| Adjusted EBIT | $ | 105 | $ | 37 | $ | 30 | $ | 172 | $ | 72 | $ | 28 | $ | - | $ | 100 | $ | (36 | ) | $ | 236 | ||||||||||||||||||||
| Adjusted EBIT as a % of revenue | 7.8 | % | 4.1 | % | 9.2 | % | 6.7 | % | 11.2 | % | 5.1 | % | 0.0 | % | 7.9 | % | 6.2 | % | |||||||||||||||||||||||
| Adjusted EBIT as a % of value-add revenue | 13.2 | % | 6.1 | % | 10.9 | % | 10.3 | % | 11.2 | % | 5.1 | % | 0.0 | % | 7.9 | % | 8.0 | % | |||||||||||||||||||||||
(1) Generally Accepted Accounting Principles
(2) Tenneco presents the above reconciliation of revenues in order to reflect EBIT 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 EBIT as a percent of value-add revenue assists investors in evaluating our company's operational performance without the impact of such substrate sales.
