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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Tenneco Inc | NYSE:TEN | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 19.99 | 0 | 01:00:00 |
LAKE FOREST, Ill., May 8, 2020 /PRNewswire/ -- Tenneco (NYSE: TEN) reported first quarter 2020 revenue of $3.8 billion, versus $4.5 billion a year ago. Excluding unfavorable currency of $97M, total revenue decreased 12% versus last year, while light vehicle industry production* declined 23% in the quarter. Value-add revenue for the first quarter was $3.1 billion. The Company estimates the COVID-19 crisis represented approximately a $340 million negative impact on first quarter value-add revenue.
Including non-cash impairments of $854 million, $737 million after tax, the Company reported a net loss for first quarter 2020 of $839 million, or $(10.34) per diluted share, compared with a first quarter net loss of $117 million, or $(1.44) per diluted share in 2019. First quarter EBIT (earnings before interest, taxes and noncontrolling interests) was a loss of $845 million, versus a loss of $24 million last year. EBIT as a percent of revenue was -22.0% versus -0.5% last year.
First quarter 2020 adjusted net loss was $26 million, or $(0.31) per diluted share, compared with income of $42 million, or 52-cents per diluted share last year. First quarter adjusted EBITDA was $239 million versus $327 million last year. Adjusted EBITDA as a percent of value-add revenue was 7.6% versus 8.7% last year. Cash flow used in operations was $152 million, on par with last year despite the COVID-19 driven impact of lower earnings.
"Tenneco responded quickly to the COVID-19 crisis to protect our team members' health and safety while taking aggressive actions to mitigate the financial impact of the pandemic on the company," said Brian Kesseler, Tenneco's Chief Executive Officer. "We expanded on the structural cost reductions introduced last quarter, and implemented a range of temporary cost reductions including plant closures, deferment of discretionary spending and the reduction of capital expenditures. We have amended the terms of the company's debt covenants to help us navigate the COVID-19-driven economic downturn, and adopted a shareholder rights plan to help protect the availability of Tenneco's tax assets."
Liquidity Update
As of March 31, 2020, Tenneco had liquidity of $1.57 billion, comprised of $770 million cash and $800 million undrawn on the Company's revolving credit facility. The Company has acted to further bolster its liquidity position by drawing the remaining amount available under this revolving facility. Based on available industry forecasts and Company estimates, the Company believes it has adequate liquidity to weather the current downturn.
Operations Update
Throughout the Company's operations, incremental health and safety precautions have been implemented, including rigorous cleaning and sanitation protocols, wellness checks for team members and changes within facilities to comply with social distancing requirements. In China, all of the Company's production facilities, distribution centers and offices are now open and operating at near pre-crisis levels. As of the first week of May, approximately 75% of the Company's plants and distribution centers worldwide are operating at various levels of production, up from a low of 47% during the first week of April.
"I appreciate the extraordinary effort made by our team members and their families, including helping the company safely maintain operations during the crisis to provide products and services that are considered vital to public security, health and safety," Kesseler added. "Our focus continues to be on protecting the wellbeing of our team members as we prepare to support our customers in the restart of production globally. In every part of our business, we've implemented enhanced operating protocols that will support a safe and efficient ramp up of our operations as customer demand grows."
Outlook
Tenneco continues to monitor the effects of the COVID-19 pandemic, which is impacting the global automotive industry. Due to uncertainty related to the crisis, the Company is not providing financial guidance for the balance of 2020 at this time.
In response to the lower demand environment related to the COVID-19 crisis, Tenneco will implement additional structural cost reductions expected to achieve an incremental $65 million in annual run rate cost savings by the end of 2020.
Recently, the Company also implemented a number of temporary cost reductions and actions to further mitigate the COVID-19 –related profit pressures and optimize cash performance. These actions include temporarily suspending or reducing operations, salary reductions and furloughs, reducing capital spending and lowering the Board of Director's retainer fees.
*Source: IHS Markit April V2 2020 global light vehicle production forecast. |
Attachment 1
Statements of Income (Loss) – 3 months
Balance Sheets
Statements of Cash Flows – 3 Months
Attachment 2
Reconciliation of GAAP to Non-GAAP Earnings Measures – 3 Months
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures – 3 Months
Reconciliation of Non-GAAP Measures – Debt Net of Cash/Adjusted LTM and pro forma adjusted LTM EBITDA including noncontrolling interests
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures – Original Equipment and Aftermarket Revenue – 3 Months
Reconciliation of GAAP Revenue and Earnings to Non-GAAP Revenue and Earnings Measures – 3 Months
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures – Original Equipment Commercial Truck, Off-Highway, Industrial and other revenues – quarterly
CONFERENCE CALL
The company will host a webcast conference call on Friday, May 8, 2020 at 9:30 a.m. ET. The purpose of the call is to discuss the company's financial results for the first quarter and full year 2020, as well as to provide other information regarding matters that may impact the company's outlook. For a "listen only" broadcast and access to the presentation materials, go to the company's website www.investors.tenneco.com. To participate by telephone, please dial: 1-833-366-1121 (domestic) or 1-412-902-6733 (international), using the passcode "Tenneco Inc." A call playback will be available for one week, starting approximately one hour after the conclusion of the call. To connect, please dial 1-877-344-7529 (domestic), 1-412-317-0088 (international), 855-669-9658 (Canada), using the replay access code 10138628.
About Tenneco
Headquartered in Lake Forest, Illinois, Tenneco is one of the world's leading designers, manufacturers and marketers of Aftermarket, Ride Performance, Clean Air and Powertrain products and technology solutions for diversified markets, including light vehicle, commercial truck, off-highway, industrial and the aftermarket, with 2019 revenues of $17.45 billion and approximately 78,000 employees worldwide. On October 1, 2018, Tenneco completed the acquisition of Federal-Mogul, a leading global supplier to original equipment manufacturers and the aftermarket. In the future, the company expects to separate its divisions to form two new, independent companies: DRiV, an Aftermarket and Ride Performance company, and New Tenneco, a Powertrain Technology company.
About DRiV™ - the future Aftermarket and Ride Performance Company
Following the separation, DRiV will be one of the largest global multi-line, multi-brand aftermarket companies, and one of the largest global OE ride performance and braking companies. DRiV's principal product brands will feature Monroe®, Öhlins®, Walker®, Clevite®Elastomers, MOOG®, Fel-Pro®, Wagner®, Ferodo®, Champion® and others. DRiV would have 2019 revenues of $5.9 billion, with 53% of those revenues from aftermarket and 47% from original equipment customers.
About the new Tenneco - the future Powertrain Technology Company
Following the separation, the new Tenneco will be one of the world's largest pure-play powertrain companies serving OE markets worldwide with engineered solutions addressing fuel economy, power output, and criteria pollution requirements for gasoline, diesel and electrified powertrains. The new Tenneco would have 2019 revenues of $11.5 billion, serving light vehicle, commercial truck, off-highway and industrial markets.
Safe Harbor
This press release contains forward-looking statements. The words "will," "would," "could," "plan," "expect," "anticipate," "estimate," "opportunities," and similar expressions (and variations thereof), identify these forward-looking statements. These forward-looking statements are based on the current expectations of the company (including its subsidiaries). Because these statements involve risks and uncertainties, actual results may differ materially from the expectations expressed in the forward-looking statements. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include:
In addition, this release includes forward-looking statements regarding the Company's ongoing review of strategic alternatives and the planned separation of the Company into a powertrain technology company and an aftermarket and ride performance company. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include (in addition to the risks set forth above):
The risks included here are not exhaustive. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release. Additional information regarding these risk factors and uncertainties is, and will be, detailed from time to time in the company's SEC filings, including but not limited to its annual report on Form 10-K for the year ended December 31, 2019.
Investor inquiries:
Linae Golla
847-482-5162
lgolla@tenneco.com
Rich Kwas
248-849-1340
rich.kwas@tenneco.com
Media inquiries:
Bill Dawson
847-482-5807
bdawson@tenneco.com
ATTACHMENT 1 | |||||||
TENNECO INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) | |||||||
Unaudited | |||||||
(dollars in millions, except share and per share amounts) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Net sales and operating revenues: | |||||||
Clean Air - Value-add revenues | $ | 845 | $ | 1,073 | |||
Clean Air - Substrate sales | 700 | 706 | |||||
Powertrain | 997 | 1,175 | |||||
Motorparts | 706 | 797 | |||||
Ride Performance | 588 | 733 | |||||
Total net sales and operating revenues | 3,836 | 4,484 | |||||
Costs and expenses: | |||||||
Cost of sales (exclusive of depreciation and amortization) | 3,339 | 3,870 | |||||
Selling, general, and administrative | 249 | 318 | |||||
Depreciation and amortization | 171 | 169 | |||||
Engineering, research, and development | 77 | 92 | |||||
Restructuring charges and asset impairments | 484 | 16 | |||||
Goodwill and intangible impairment charge | 383 | 60 | |||||
Total costs and expenses | 4,703 | 4,525 | |||||
Other income (expense): | |||||||
Non-service pension and other postretirement benefit (costs) credits | 1 | (2) | |||||
Equity in earnings (losses) of nonconsolidated affiliates, net of tax | 13 | 16 | |||||
Other income (expense), net | 8 | 3 | |||||
22 | 17 | ||||||
Earnings (loss) before interest expense, income taxes, and noncontrolling interests | (845) | (24) | |||||
Interest expense | (75) | (81) | |||||
Earnings (loss) before income taxes and noncontrolling interests | (920) | (105) | |||||
Income tax (expense) benefit | 94 | — | |||||
Net income (loss) | (826) | (105) | |||||
Less: Net income (loss) attributable to noncontrolling interests | 13 | 12 | |||||
Net income (loss) attributable to Tenneco Inc. | $ | (839) | $ | (117) | |||
Basic earnings (loss) per share: | |||||||
Earnings (loss) per share | $ | (10.34) | $ | (1.44) | |||
Weighted average shares outstanding | 81.2 | 80.9 | |||||
Diluted earnings (loss) per share: | |||||||
Earnings (loss) per share | $ | (10.34) | $ | (1.44) | |||
Weighted average shares outstanding | 81.2 | 80.9 |
ATTACHMENT 1 | ||||||||
TENNECO INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
Unaudited | ||||||||
(dollars in millions) | ||||||||
March 31, 2020 | December 31, 2019 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 767 | $ | 564 | ||||
Restricted cash | 3 | 2 | ||||||
Receivables, net | 2,242 | (a) | 2,538 | (a) | ||||
Inventories | 2,001 | 1,999 | ||||||
Prepayments and other current assets | 623 | 632 | ||||||
Other noncurrent assets | 3,576 | 3,864 | ||||||
Property, plant and equipment, net | 3,012 | 3,627 | ||||||
Total assets | $ | 12,224 | $ | 13,226 | ||||
Liabilities and Shareholders' Equity | ||||||||
Short-term debt, including current maturities of long-term debt | $ | 175 | $ | 185 | ||||
Accounts payable | 2,443 | 2,647 | ||||||
Accrued compensation and employee benefits | 294 | 325 | ||||||
Accrued income taxes | 96 | 72 | ||||||
Accrued expenses and other current liabilities | 968 | 1,070 | ||||||
Long-term debt | 5,837 | (b) | 5,371 | (b) | ||||
Deferred income taxes | 84 | 106 | ||||||
Pension and postretirement benefits | 1,109 | 1,145 | ||||||
Deferred credits and other liabilities | 497 | 490 | ||||||
Redeemable noncontrolling interests | 72 | 196 | ||||||
Tenneco Inc. shareholders' equity | 384 | 1,425 | ||||||
Noncontrolling interests | 265 | 194 | ||||||
Total liabilities, redeemable noncontrolling interests, and equity | $ | 12,224 | $ | 13,226 | ||||
March 31, 2020 | December 31, 2019 | |||||||
(a) Accounts receivable net of: | ||||||||
Accounts receivable outstanding and derecognized | $ | 1,061 | $ | 1,037 | ||||
(b) Long-term debt composed of: | ||||||||
Revolver Borrowings | $ | 700 | $ | 183 | ||||
LIBOR plus 1.75% Term Loan A due 2019 through 2023 | 1,584 | 1,608 | ||||||
LIBOR plus 3.00% Term Loan B due 2019 through 2025 | 1,619 | 1,623 | ||||||
$225 million of 5.375% Senior Notes due 2024 | 222 | 222 | ||||||
$500 million of 5.000% Senior Notes due 2026 | 494 | 494 | ||||||
€415 million 4.875% Euro Fixed Rate Notes due 2022 | 470 | 479 | ||||||
€300 million of Euribor plus 4.875% Euro Floating Rate Notes due 2024 | 334 | 340 | ||||||
€350 million of 5.000% Euro Fixed Rate Notes due 2024 | 405 | 413 | ||||||
Other Debt, primarily foreign instruments | 12 | 13 | ||||||
5,840 | 5,375 | |||||||
Less: maturities classified as current | 3 | 4 | ||||||
Total long-term debt | $ | 5,837 | $ | 5,371 |
ATTACHMENT 1 | |||||||
TENNECO INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
Unaudited | |||||||
(dollars in millions) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Operating Activities | |||||||
Net income (loss) | $ | (826) | $ | (105) | |||
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities: | |||||||
Goodwill and intangible impairment charge | 383 | 60 | |||||
Depreciation and amortization | 171 | 169 | |||||
Deferred income taxes | (166) | (8) | |||||
Stock-based compensation | 2 | 7 | |||||
Restructuring charges and asset impairments, net of cash paid | 454 | (14) | |||||
Change in pension and other postretirement benefit plans | (19) | (17) | |||||
Equity in earnings of nonconsolidated affiliates | (13) | (16) | |||||
Cash dividends received from nonconsolidated affiliates | 13 | 15 | |||||
Changes in operating assets and liabilities: | |||||||
Receivables | 139 | (312) | |||||
Inventories | (73) | 11 | |||||
Payables and accrued expenses | (136) | 157 | |||||
Accrued interest and income taxes | 29 | (38) | |||||
Other assets and liabilities | (110) | (59) | |||||
Net cash (used) provided by operating activities | (152) | (150) | |||||
Investing Activities | |||||||
Acquisitions, net of cash acquired | — | (158) | |||||
Proceeds from sale of assets | 2 | 1 | |||||
Net proceeds from sale of business | — | 22 | |||||
Cash payments for property, plant and equipment | (137) | (210) | |||||
Proceeds from deferred purchase price of factored receivables | 56 | 60 | |||||
Other | 2 | 2 | |||||
Net cash (used) provided by investing activities | (77) | (283) | |||||
Financing Activities | |||||||
Proceeds from term loans and notes | 67 | 28 | |||||
Repayments of term loans and notes | (84) | (64) | |||||
Debt issuance costs of long-term debt | (8) | — | |||||
Borrowings on revolving lines of credit | 3,161 | 2,119 | |||||
Payments on revolving lines of credit | (2,659) | (1,981) | |||||
Issuance of common shares | (1) | (2) | |||||
Cash dividends | — | (20) | |||||
Net increase (decrease) in bank overdrafts | (2) | (1) | |||||
Other | 11 | (3) | |||||
Distributions to noncontrolling interest partners | (2) | (1) | |||||
Net cash (used) provided by financing activities | 483 | 75 | |||||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (50) | 19 | |||||
Increase (decrease) in cash, cash equivalents and restricted cash | 204 | (339) | |||||
Cash, cash equivalents and restricted cash, beginning of period | 566 | 702 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 770 | $ | 363 | |||
Supplemental Cash Flow Information | |||||||
Cash paid during the period for interest | $ | 67 | $ | 74 | |||
Cash paid during the period for income taxes, net of refunds | $ | 41 | $ | 43 | |||
Lease assets obtained in exchange for new operating lease liabilities | $ | 51 | $ | 19 | |||
Non-cash Investing and Financing Activities | |||||||
Period end balance of trade payables for property, plant and equipment | $ | 96 | $ | 101 | |||
Deferred purchase price of receivables factored in the period | $ | 60 | $ | 58 |
ATTACHMENT 2 | |||||||||||||||||||||||||||||||||||||||||||||||
TENNECO INC. | |||||||||||||||||||||||||||||||||||||||||||||||
RECONCILIATION OF GAAP(1) TO NON-GAAP EARNINGS MEASURES(2) | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
Q1 2020 | Q1 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to Tenneco Inc. | Per Share | Net income (loss) attributable to noncontrolling interests | Income tax (expense) benefit | EBIT | EBITDA (3) | Net income (loss) attributable to Tenneco Inc. | Per Share | Net income (loss) attributable to noncontrolling interests | Income tax (expense) benefit | EBIT | EBITDA (3) | ||||||||||||||||||||||||||||||||||||
Earnings (Loss) Measures | $ | (839) | $ | (10.34) | $ | 13 | $ | 94 | $ | (845) | $ | (674) | $ | (117) | $ | (1.44) | $ | 12 | $ | — | $ | (24) | $ | 145 | |||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and related expenses (5) | 31 | 0.38 | — | (8) | 39 | 34 | 16 | 0.19 | 1 | (3) | 20 | 17 | |||||||||||||||||||||||||||||||||||
Goodwill and intangible impairment charge (6) | 366 | 4.52 | 5 | (12) | 383 | 383 | 60 | 0.74 | — | — | 60 | 60 | |||||||||||||||||||||||||||||||||||
Asset impairments (7) | 371 | 4.57 | 7 | (93) | 471 | 471 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Acquisition and expected separation costs (8) | 19 | 0.23 | — | (6) | 25 | 25 | 32 | 0.39 | — | (8) | 40 | 40 | |||||||||||||||||||||||||||||||||||
Cost reduction initiatives (9) | — | — | — | — | — | — | 6 | 0.07 | — | (2) | 8 | 8 | |||||||||||||||||||||||||||||||||||
Costs to achieve synergies (10) | — | — | — | — | — | — | 6 | 0.08 | — | (1) | 7 | 7 | |||||||||||||||||||||||||||||||||||
Purchase accounting charges (11) | — | — | — | — | — | — | 34 | 0.42 | — | (7) | 41 | 41 | |||||||||||||||||||||||||||||||||||
Process harmonization (12) | — | — | — | — | — | — | 7 | 0.09 | — | (2) | 9 | 9 | |||||||||||||||||||||||||||||||||||
Noncontrolling interests adjustments (13) | 11 | 0.14 | (11) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Net tax adjustments | 15 | 0.19 | — | 15 | — | — | (2) | (0.02) | — | (2) | — | — | |||||||||||||||||||||||||||||||||||
Adjusted Net income, EPS, NCI, Tax, EBIT, and EBITDA (4) | $ | (26) | $ | (0.31) | $ | 14 | $ | (10) | $ | 73 | $ | 239 | $ | 42 | $ | 0.52 | $ | 13 | $ | (25) | $ | 161 | $ | 327 |
Q1 2020 | |||||||||||||||||||||||||||
Global Segments | |||||||||||||||||||||||||||
Clean | Powertrain | Motorparts | Ride | Total | Corporate | Total | |||||||||||||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | (839) | |||||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | 13 | ||||||||||||||||||||||||||
Net income (loss) | (826) | ||||||||||||||||||||||||||
Income tax (expense) benefit | 94 | ||||||||||||||||||||||||||
Interest expense | (75) | ||||||||||||||||||||||||||
EBIT, Earnings (Loss) before interest expense, income taxes and noncontrolling interests | (845) | ||||||||||||||||||||||||||
Depreciation and amortization | 171 | ||||||||||||||||||||||||||
Total EBITDA including noncontrolling interests (3) | $ | 99 | $ | (70) | $ | (40) | $ | (577) | $ | (588) | $ | (86) | $ | (674) | |||||||||||||
Restructuring and related expenses(5) | 1 | — | 3 | 25 | 29 | 5 | 34 | ||||||||||||||||||||
Goodwill and intangible impairment charge (6) | — | 160 | 110 | 113 | 383 | — | 383 | ||||||||||||||||||||
Asset impairments (7) | — | — | — | 455 | 455 | 16 | 471 | ||||||||||||||||||||
Acquisition and expected separation costs (8) | 4 | — | — | — | 4 | 21 | 25 | ||||||||||||||||||||
Adjusted EBITDA (4) | $ | 104 | $ | 90 | $ | 73 | $ | 16 | $ | 283 | $ | (44) | $ | 239 | |||||||||||||
Q1 2019 | |||||||||||||||||||||||||||
Global Segments | |||||||||||||||||||||||||||
Clean | Powertrain | Motorparts | Ride | Total | Corporate | Total | |||||||||||||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | (117) | |||||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | 12 | ||||||||||||||||||||||||||
Net income (loss) | (105) | ||||||||||||||||||||||||||
Income tax (expense) benefit | — | ||||||||||||||||||||||||||
Interest expense | (81) | ||||||||||||||||||||||||||
EBIT, Earnings (Loss) before interest expense, income taxes and noncontrolling interests | (24) | ||||||||||||||||||||||||||
Depreciation and amortization | 169 | ||||||||||||||||||||||||||
Total EBITDA including noncontrolling interests (3) | $ | 131 | $ | 113 | $ | 45 | $ | (45) | $ | 244 | $ | (99) | $ | 145 | |||||||||||||
Restructuring and related expenses(5) | 4 | 1 | 1 | 10 | 16 | 1 | 17 | ||||||||||||||||||||
Cost reduction initiatives (9) | — | — | — | — | — | 8 | 8 | ||||||||||||||||||||
Acquisition and expected separation costs (8) | — | — | — | — | — | 40 | 40 | ||||||||||||||||||||
Costs to achieve synergies (10) | 1 | — | 3 | 3 | 7 | — | 7 | ||||||||||||||||||||
Purchase accounting charges (11) | — | 2 | 36 | 3 | 41 | — | 41 | ||||||||||||||||||||
Goodwill impairment charge (6) | — | — | — | 60 | 60 | — | 60 | ||||||||||||||||||||
Process harmonization (12) | 4 | — | 5 | — | 9 | — | 9 | ||||||||||||||||||||
Adjusted EBITDA (4) | $ | 140 | $ | 116 | $ | 90 | $ | 31 | $ | 377 | $ | (50) | $ | 327 |
_________________________________ |
(1) U.S. Generally Accepted Accounting Principles. |
(2) Tenneco presents the above reconciliation of GAAP to non-GAAP earnings measures primarily to reflect the results in a manner that allows a better understanding of the results of operational activities separate from the financial impact of decisions made for the long-term benefit of the company and other items impacting comparability between the periods. Adjustments similar to the ones reflected above have been recorded in earlier periods, and similar types of adjustments can reasonably be expected to be recorded in future periods. Using only the non-GAAP earnings measures to analyze earnings would have material limitations because its calculation is based on the subjective determinations of management regarding the nature and classification of events and circumstances that investors may find material. Management compensates for these limitations by utilizing both GAAP and non-GAAP earnings measures reflected above to understand and analyze the results of the business. The company believes investors find the non-GAAP information helpful in understanding the ongoing performance of operations separate from items that may have a disproportionate positive or negative impact on the company's financial results in any particular period. |
(3) EBITDA including noncontrolling interests represents income before interest expense, income taxes, noncontrolling interests and depreciation and amortization. EBITDA including noncontrolling interests is not a calculation based upon GAAP. The amounts included in the EBITDA including noncontrolling interests calculation, however, are derived from amounts included in the historical statements of income data. In addition, EBITDA including noncontrolling interests should not be considered as an alternative to net income attributable to Tenneco Inc. or operating income as an indicator of the company's operating performance, or as an alternative to operating cash flows as a measure of liquidity. Tenneco has presented EBITDA including noncontrolling interests because it regularly reviews EBITDA including noncontrolling interests as a measure of the company's performance. In addition, Tenneco believes its investors utilize and analyze the company's EBITDA including noncontrolling interests for similar purposes. Tenneco also believes EBITDA including noncontrolling interests assists investors in comparing a company's performance on a consistent basis without regard to depreciation and amortization, which can vary significantly depending upon many factors. However, the EBITDA including noncontrolling interests measure presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation. |
(4) Adjusted results are presented in order to reflect the results in a manner that allows a better understanding of operational activities separate from the financial impact of decisions made for the long term benefit of the company and other items impacting comparability between periods. Similar adjustments have been recorded in earlier periods and similar types of adjustments can reasonably be expected to be recorded in future periods. The company believes investors find the non-GAAP information helpful in understanding the ongoing performance of operations separate from items that may have a disproportionate positive or negative impact on the company's financial results in any particular period. |
(5) Q1 2020 includes $5 million and Q1 2019 includes $3 million of accelerated depreciation related to plant closures. |
(6) Non-cash asset impairment charge related to goodwill and intangibles. |
(7) Asset impairment charges. |
(8) Costs related to acquisitions and costs related to expected separation. |
(9) Costs related to cost reduction initiatives. |
(10) Costs to achieve synergies related to the Acquisitions. |
(11) This primarily relates to a non-cash charge to cost of sales for the amortization of the inventory fair value step-up recorded as part of the Acquisitions. |
(12) Charge due to process harmonization. |
(13) Amount relates to adjustments made to mark certain redeemable noncontrolling interests to their redemption values. |
ATTACHMENT 2 | ||||||||||||||||||||
TENNECO INC. | ||||||||||||||||||||
RECONCILIATION OF GAAP(1) TO NON-GAAP REVENUE MEASURES(2) | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
(dollars in millions except percents) | ||||||||||||||||||||
Q1 2020 | ||||||||||||||||||||
Revenues | Substrate Sales | Value-add Revenues | Currency Impact on Value-add Revenues | Value-add Revenues excluding Currency | ||||||||||||||||
Clean Air | $ | 1,545 | $ | 700 | $ | 845 | $ | (19) | $ | 864 | ||||||||||
Powertrain | 997 | — | 997 | (26) | 1,023 | |||||||||||||||
Motorparts | 706 | — | 706 | (19) | 725 | |||||||||||||||
Ride Performance | 588 | — | 588 | (17) | 605 | |||||||||||||||
Total Tenneco Inc. | $ | 3,836 | $ | 700 | $ | 3,136 | $ | (81) | $ | 3,217 | ||||||||||
Q1 2019 | ||||||||||||||||||||
Revenues | Substrate Sales | Value-add Revenues | Currency Impact on Value-add Revenues | Value-add Revenues excluding Currency | ||||||||||||||||
Clean Air | $ | 1,779 | $ | 706 | $ | 1,073 | $ | — | $ | 1,073 | ||||||||||
Powertrain | 1,175 | — | 1,175 | — | 1,175 | |||||||||||||||
Motorparts | 797 | — | 797 | — | 797 | |||||||||||||||
Ride Performance | 733 | — | 733 | — | 733 | |||||||||||||||
Total Tenneco Inc. | $ | 4,484 | $ | 706 | $ | 3,778 | $ | — | $ | 3,778 |
Q1 2020 vs. Q1 2019 $ Change and % Change Increase (decrease) | |||||||||||||
Revenues | % Change | Value-add Adjusted Revenues excluding Currency | % Change | ||||||||||
Clean Air | $ | (234) | (13) | % | $ | (209) | (19) | % | |||||
Powertrain | (178) | (15) | % | (152) | (13) | % | |||||||
Motorparts | (91) | (11) | % | (72) | (9) | % | |||||||
Ride Performance | (145) | (20) | % | (128) | (17) | % | |||||||
Total Tenneco Inc. | $ | (648) | (14) | % | $ | (561) | (15) | % |
__________________________________ |
(1) U.S. Generally Accepted Accounting Principles. |
(2) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from the effects of doing business in currencies other than the U.S. dollar. Additionally, substrate sales include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Tenneco uses this information to analyze the trend in revenues before these factors. Tenneco believes investors find this information useful in understanding period to period comparisons in the company's revenues. |
ATTACHMENT 2 | |||||||
TENNECO INC. | |||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||
Debt net of total cash / Adjusted LTM and Pro Forma Adjusted LTM EBITDA including noncontrolling interests | |||||||
Unaudited | |||||||
(dollars in millions except ratios) | |||||||
March 31, 2020 | March 31, 2019 | ||||||
Total debt | $ | 6,012 | $ | 5,576 | |||
Total cash, cash equivalents and restricted cash (total cash) | 770 | 363 | |||||
Debt net of total cash balances (1) | $ | 5,242 | $ | 5,213 | |||
Adjusted LTM and Pro forma Adjusted LTM EBITDA including noncontrolling interests (2) (3) (5) | $ | 1,327 | $ | 1,542 | |||
Ratio of debt net of total cash balances and pro forma ratio of debt net of total cash balances to adjusted LTM and proforma adjusted LTM EBITDA including noncontrolling interests (4) (5) | 4.0x | 3.4x |
Q2 2019 | Q3 2019 | Q4 2019 | Q1 2020 | Q1 2020 LTM | |||||||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | 26 | $ | 70 | $ | (313) | $ | (839) | $ | (1,056) | |||||||||
Net income (loss) attributable to noncontrolling interests | 19 | 8 | 75 | 13 | 115 | ||||||||||||||
Net income (loss) | 45 | 78 | (238) | (826) | (941) | ||||||||||||||
Income tax (expense) benefit | (14) | 9 | (14) | 94 | 75 | ||||||||||||||
Interest expense | (82) | (79) | (80) | (75) | (316) | ||||||||||||||
EBIT, Earnings (Loss) before interest expense, income taxes and noncontrolling interests | 141 | 148 | (144) | (845) | (700) | ||||||||||||||
Depreciation and amortization | 169 | 165 | 170 | 171 | 675 | ||||||||||||||
Total EBITDA including noncontrolling interests (2) | $ | 310 | $ | 313 | $ | 26 | $ | (674) | $ | (25) | |||||||||
Adjustments: | |||||||||||||||||||
Restructuring and related expenses | 57 | 28 | 36 | 34 | 155 | ||||||||||||||
Goodwill and intangible impairment charge (6) | — | 9 | 172 | 383 | 564 | ||||||||||||||
Asset impairments (7) | — | — | — | 471 | 471 | ||||||||||||||
Acquisition and expected separation costs (8) | 27 | 30 | 30 | 25 | 112 | ||||||||||||||
Cost reduction initiatives (9) | 2 | 6 | (1) | — | 7 | ||||||||||||||
Costs to achieve synergies (10) | 7 | 7 | 8 | — | 22 | ||||||||||||||
Purchase accounting charges (11) | 3 | 11 | 2 | — | 16 | ||||||||||||||
Process harmonization (12) | 1 | — | 16 | — | 17 | ||||||||||||||
Warranty charge (13) | 7 | 1 | — | — | 8 | ||||||||||||||
Antitrust reserve change in estimate (14) | — | (9) | — | — | (9) | ||||||||||||||
Brazil tax credit (15) | — | (22) | — | — | (22) | ||||||||||||||
Out of period adjustment (16) | — | 5 | — | — | 5 | ||||||||||||||
Impairment of assets held for sale | — | 8 | — | — | 8 | ||||||||||||||
Pension charges/adjustments (17) | — | — | (2) | — | (2) | ||||||||||||||
Total Adjusted EBITDA including noncontrolling interests (3) | $ | 414 | $ | 387 | $ | 287 | $ | 239 | $ | 1,327 | |||||||||
Q2 2018* | Q3 2018* | Q4 2018 | Q1 2019 | Q1 2019 LTM | |||||||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | 47 | $ | 57 | $ | (109) | $ | (117) | $ | (122) | |||||||||
Net income (loss) attributable to noncontrolling interests | 16 | 9 | 17 | 12 | 54 | ||||||||||||||
Net income (loss) | 63 | 66 | (92) | (105) | (68) | ||||||||||||||
Income tax (expense) benefit | (26) | (22) | 10 | — | (38) | ||||||||||||||
Interest expense | (22) | (24) | (79) | (81) | (206) | ||||||||||||||
EBIT, Earnings (Loss) before interest expense, income taxes and noncontrolling interests | 111 | 112 | (23) | (24) | 176 | ||||||||||||||
Depreciation and amortization | 60 | 60 | 165 | 169 | 454 | ||||||||||||||
Total EBITDA including noncontrolling interests (2) | $ | 171 | $ | 172 | $ | 142 | $ | 145 | $ | 630 | |||||||||
Adjustments: | |||||||||||||||||||
Restructuring and related expenses | 21 | 12 | 17 | 17 | 67 | ||||||||||||||
Goodwill impairment charge (6) | — | — | 3 | 60 | 63 | ||||||||||||||
Acquisition and expected separation costs (8) | 18 | 12 | 53 | 40 | 123 | ||||||||||||||
Cost reduction initiatives (9) | 10 | — | 8 | 8 | 26 | ||||||||||||||
Costs to achieve synergies (10) | 9 | 4 | 49 | 7 | 69 | ||||||||||||||
Purchase accounting charges (11) | — | — | 106 | 41 | 147 | ||||||||||||||
Process harmonization (12) | — | — | — | 9 | 9 | ||||||||||||||
Anti-dumping duty charge (18) | — | — | 16 | — | 16 | ||||||||||||||
Pension charges/adjustments (17) | — | — | 3 | — | 3 | ||||||||||||||
Environmental charge (19) | 4 | — | — | — | 4 | ||||||||||||||
Litigation settlement accrual | — | 10 | — | — | 10 | ||||||||||||||
Loss on debt modification (20) | — | — | 10 | — | 10 | ||||||||||||||
Total Adjusted EBITDA including noncontrolling interests (3) | $ | 233 | $ | 210 | $ | 407 | $ | 327 | $ | 1,177 | |||||||||
Legacy Federal-Mogul Reconciliation of Non-GAAP earnings measures | |||||||||||||||||||
Q2 2018 | Q3 2018 | ||||||||||||||||||
Net income (loss) attributable to Federal-Mogul | $ | 25 | $ | 35 | |||||||||||||||
Net income (loss) attributable to noncontrolling interests | 3 | 1 | |||||||||||||||||
Net income (loss) | 28 | 36 | |||||||||||||||||
Income tax (expense) benefit | (13) | (16) | |||||||||||||||||
Interest expense | (52) | (49) | |||||||||||||||||
EBIT, Earnings (Loss) before interest expense, income taxes and noncontrolling interests | 93 | 101 | |||||||||||||||||
Depreciation and amortization | 96 | 99 | |||||||||||||||||
Total EBITDA including noncontrolling interests (2) | $ | 189 | $ | 200 | |||||||||||||||
Adjustments: | |||||||||||||||||||
Restructuring charges and asset impairments, net | — | 15 | |||||||||||||||||
Transaction related costs | 13 | — | |||||||||||||||||
Cost to exit a multiemployer pension plan | 5 | — | |||||||||||||||||
Gain (loss) on sale of assets | — | (65) | |||||||||||||||||
Charge for extinguishment of dissenting shareholders shares | — | 5 | |||||||||||||||||
Other | 2 | 1 | |||||||||||||||||
Total Adjusted EBITDA including noncontrolling interests (3) | $ | 209 | $ | 156 | |||||||||||||||
Q2 2018* | Q3 2018* | Q4 2018 | Q1 2019 | Q1 2019 LTM | |||||||||||||||
Adjusted EBITDA and Pro forma Adjusted EBITDA including noncontrolling interests (2) (3) (5) | $ | 442 | $ | 366 | $ | 407 | $ | 327 | $ | 1,542 |
_______________________________ |
* Financial results for Q2 and Q3 2018 have been revised for certain immaterial adjustments as discussed in Tenneco's Form 10-K for the year ended December 31, 2018. |
(1) Tenneco presents debt net of total cash balances because management believes it is a useful measure of Tenneco's credit position and progress toward reducing leverage. The calculation is limited in that the company may not always be able to use cash to repay debt on a dollar-for-dollar basis. |
(2) EBITDA including noncontrolling interests represents income before interest expense, income taxes, noncontrolling interests and depreciation and amortization. EBITDA including noncontrolling interests is not a calculation based upon GAAP. The amounts included in the EBITDA including noncontrolling interests calculation, however, are derived from amounts included in the historical statements of income data. In addition, EBITDA including noncontrolling interests should not be considered as an alternative to net income (loss) attributable to Tenneco Inc. or operating income as an indicator of the company's operating performance, or as an alternative to operating cash flows as a measure of liquidity. Tenneco has presented EBITDA including noncontrolling interests because it regularly reviews EBITDA including noncontrolling interests as a measure of the company's performance. In addition, Tenneco believes its investors utilize and analyze the company's EBITDA including noncontrolling interests for similar purposes. Tenneco also believes EBITDA including noncontrolling interests assists investors in comparing a company's performance on a consistent basis without regard to depreciation and amortization, which can vary significantly depending upon many factors. However, the EBITDA including noncontrolling interests measure presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation. |
(3) Adjusted EBITDA including noncontrolling interests is presented in order to reflect the results in a manner that allows a better understanding of operational activities separate from the financial impact of decisions made for the long term benefit of the company and other items impacting comparability between the periods. Similar adjustments to EBITDA including noncontrolling interests have been recorded in earlier periods, and similar types of adjustments can reasonably be expected to be recorded in future periods. The company believes investors find the non-GAAP information helpful in understanding the ongoing performance of operations separate from items that may have a disproportionate positive or negative impact on the company's financial results in any particular period. |
(4) Tenneco presents the above reconciliation of the ratio of debt net of total cash to LTM Adjusted EBITDA including noncontrolling interests to show trends that investors may find useful in understanding the company's ability to service its debt. For purposes of this calculation, Adjusted LTM and Pro Forma adjusted LTM EBITDA including noncontrolling interests is used as an indicator of the company's performance and debt net of total cash is presented as an indicator of the company's credit position and progress toward reducing the company's financial leverage. This reconciliation is provided as supplemental information and not intended to replace the company's existing covenant ratios or any other financial measures that investors may find useful in describing the company's financial position. See notes (1), (2) and (3) for a description of the limitations of using debt net of total cash, EBITDA including noncontrolling interests and Adjusted EBITDA including noncontrolling interests. |
(5) Tenneco is providing Pro Forma Adjusted LTM EBITDA and the ratio of debt net of cash balances to Pro Forma Adjusted LTM EBITDA to show the company's Adjusted LTM EBITDA as if Federal-Mogul had been consolidated with Tenneco for the entirety of 2018 (and the resultant impact on the net debt ratio). Tenneco believes this supplemental information is useful to investors who are trying to understand the results of the entire enterprise, including Federal-Mogul, for 2018 and 2019 and the ability of the company to service its debt. |
(6) Non-cash asset impairment charge related to goodwill and intangibles. |
(7) Asset impairment charges. |
(8) Costs related to acquisitions and costs related to expected separation. |
(9) Costs related to cost reduction initiatives. |
(10) Costs to achieve synergies related to the Acquisitions. |
(11) This primarily relates to a non-cash charge to cost of sales for the amortization of the inventory fair value step-up recorded as part of the Acquisitions. |
(12) Charge due to process harmonization. |
(13) Charge related to warranty. Although Tenneco regularly incurs warranty costs, this specific charge is of an unusual nature in the period incurred. |
(14) Reduction in estimated antitrust accrual. |
(15) Recovery of value-added tax in a foreign jurisdiction. |
(16) Inventory losses attributable to prior periods. |
(17) Charges related to pension derisking and other adjustments. |
(18) Charge due to retroactive application of anti-dumping duty on a supplier's products. |
(19) Environmental charge related to an acquired site whereby an indemnification reverted back to the company resulting from a 2009 bankruptcy filing of Mark IV Industries. |
(20) Loss on debt modification. |
ATTACHMENT 2 | |||||||||||||||||||
TENNECO INC. | |||||||||||||||||||
RECONCILIATION OF GAAP(1) TO NON-GAAP REVENUE MEASURES(2) | |||||||||||||||||||
Unaudited | |||||||||||||||||||
(dollars in millions) | |||||||||||||||||||
Q1 2020 | |||||||||||||||||||
Revenues | Currency | Revenues Excluding Currency | Substrate Sales Excluding Currency | Value-add Revenues Excluding Currency | |||||||||||||||
Original equipment light vehicle revenues | $ | 2,394 | $ | (50) | $ | 2,444 | $ | 598 | $ | 1,846 | |||||||||
Original equipment commercial truck, off-highway, industrial and other revenues | 736 | (28) | 764 | 118 | 646 | ||||||||||||||
Aftermarket revenues | 706 | (19) | 725 | — | 725 | ||||||||||||||
Net sales and operating revenues | $ | 3,836 | $ | (97) | $ | 3,933 | $ | 716 | $ | 3,217 | |||||||||
Q1 2019 | |||||||||||||||||||
Revenues | Currency | Revenues Excluding Currency | Substrate Sales Excluding Currency | Value-add Revenues Excluding Currency | |||||||||||||||
Original equipment light vehicle revenues | $ | 2,792 | $ | — | $ | 2,792 | $ | 591 | $ | 2,201 | |||||||||
Original equipment commercial truck, off-highway, industrial and other revenues | 895 | — | 895 | 115 | 780 | ||||||||||||||
Aftermarket revenues | 797 | — | 797 | — | 797 | ||||||||||||||
Net sales and operating revenues | $ | 4,484 | $ | — | $ | 4,484 | $ | 706 | $ | 3,778 |
__________________________________ |
(1) U.S. Generally Accepted Accounting Principles. |
(2) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from the effects of doing business in currencies other than the U.S. dollar. Additionally, substrate sales include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Tenneco uses this information to analyze the trend in revenues before these factors. Tenneco believes investors find this information useful in understanding period to period comparisons in the company's revenues. |
ATTACHMENT 2 | |||||||||||||||||||||||||||
TENNECO INC. | |||||||||||||||||||||||||||
RECONCILIATION OF GAAP(1) REVENUE AND EARNINGS TO NON-GAAP REVENUE AND EARNINGS MEASURES(2) | |||||||||||||||||||||||||||
UNAUDITED | |||||||||||||||||||||||||||
(dollars in millions except percents) | |||||||||||||||||||||||||||
Q1 2020 | |||||||||||||||||||||||||||
Global Segments | |||||||||||||||||||||||||||
Clean Air | Powertrain | Motorparts | Ride Performance | Total | Corporate | Total | |||||||||||||||||||||
Net sales and operating revenues | $ | 1,545 | $ | 997 | $ | 706 | $ | 588 | $ | 3,836 | $ | — | $ | 3,836 | |||||||||||||
Less: Substrate sales | 700 | — | — | — | 700 | — | 700 | ||||||||||||||||||||
Value-add revenues | $ | 845 | $ | 997 | $ | 706 | $ | 588 | $ | 3,136 | $ | — | $ | 3,136 | |||||||||||||
EBITDA | $ | 99 | $ | (70) | $ | (40) | $ | (577) | $ | (588) | $ | (86) | $ | (674) | |||||||||||||
EBITDA as a % of revenue | 6.4 | % | (7.0) | % | (5.7) | % | (98.1) | % | (15.3) | % | (17.6) | % | |||||||||||||||
EBITDA as a % of value-add revenue | 11.7 | % | ` | (7.0) | % | (5.7) | % | (98.1) | % | (18.8) | % | (21.5) | % | ||||||||||||||
Adjusted EBITDA | $ | 104 | $ | 90 | $ | 73 | $ | 16 | $ | 283 | $ | (44) | $ | 239 | |||||||||||||
Adjusted EBITDA as a % of revenue | 6.7 | % | 9.0 | % | 10.3 | % | 2.7 | % | 7.4 | % | 6.2 | % | |||||||||||||||
Adjusted EBITDA as a % of value-add revenue | 12.3 | % | 9.0 | % | 10.3 | % | 2.7 | % | 9.0 | % | 7.6 | % | |||||||||||||||
Q1 2019 | |||||||||||||||||||||||||||
Global Segments | |||||||||||||||||||||||||||
Clean Air | Powertrain | Motorparts | Ride Performance | Total | Corporate | Total | |||||||||||||||||||||
Net sales and operating revenues | $ | 1,779 | $ | 1,175 | $ | 797 | $ | 733 | $ | 4,484 | $ | — | $ | 4,484 | |||||||||||||
Less: Substrate sales | 706 | — | — | — | 706 | — | 706 | ||||||||||||||||||||
Value-add revenues | $ | 1,073 | $ | 1,175 | $ | 797 | $ | 733 | $ | 3,778 | $ | — | $ | 3,778 | |||||||||||||
EBITDA | $ | 131 | $ | 113 | $ | 45 | $ | (45) | $ | 244 | $ | (99) | $ | 145 | |||||||||||||
EBITDA as a % of revenue | 7.4 | % | 9.6 | % | 5.6 | % | (6.1) | % | 5.4 | % | 3.2 | % | |||||||||||||||
EBITDA as a % of value-add revenue | 12.2 | % | ` | 9.6 | % | 5.6 | % | (6.1) | % | 6.5 | % | 3.8 | % | ||||||||||||||
Adjusted EBITDA | $ | 140 | $ | 116 | $ | 90 | $ | 31 | $ | 377 | $ | (50) | $ | 327 | |||||||||||||
Adjusted EBITDA as a % of revenue | 7.9 | % | 9.9 | % | 11.3 | % | 4.2 | % | 8.4 | % | 7.3 | % | |||||||||||||||
Adjusted EBITDA as a % of value-add revenue | 13.0 | % | 9.9 | % | 11.3 | % | 4.2 | % | 10.0 | % | 8.7 | % |
___________________________ |
(1) U.S. Generally Accepted Accounting Principles. |
(2) Tenneco presents the above reconciliation of revenues in order to reflect EBITDA and adjusted EBITDA as a percent of both total revenues and value-add revenues. Substrate sales include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Further, presenting EBITDA and adjusted EBITDA as a percent of value-add revenue assists investors in evaluating the company's operational performance without the impact of such substrate sales. See prior pages for a discussion of EBITDA and adjusted EBITDA. |
ATTACHMENT 2 | |||||||||||
TENNECO INC. | |||||||||||
RECONCILIATION OF GAAP(1) REVENUE TO NON-GAAP REVENUE MEASURES(2) | |||||||||||
Original equipment commercial truck, off-highway, industrial and other revenues | |||||||||||
Unaudited | |||||||||||
(dollars in millions) | |||||||||||
Q1 2020 | |||||||||||
Revenues | Substrate Sales | Value-add Revenues | |||||||||
Clean Air | $ | 276 | $ | 114 | $ | 162 | |||||
Powertrain | 344 | — | 344 | ||||||||
Ride Performance | 116 | — | 116 | ||||||||
Total Tenneco Inc. | $ | 736 | $ | 114 | $ | 622 | |||||
Q1 2019 | |||||||||||
Revenues | Substrate Sales | Value-add Revenues | |||||||||
Clean Air | $ | 319 | $ | 115 | $ | 204 | |||||
Powertrain | 426 | — | 426 | ||||||||
Ride Performance | 150 | — | 150 | ||||||||
Total Tenneco Inc. | $ | 895 | $ | 115 | $ | 780 |
______________________________ |
(1) U.S. Generally Accepted Accounting Principles. |
(2) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from substrate sales which include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Tenneco uses this information to analyze the trend in revenues before these factors. Tenneco believes investors find this information useful in understanding period to period comparisons in the company's revenues. |
View original content:http://www.prnewswire.com/news-releases/tenneco-reports-first-quarter-2020-results-301055375.html
SOURCE Tenneco Inc.
Copyright 2020 PR Newswire
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