Tenneco : TITLEQ3 2022 Earnings Press Release

news release

Tenneco Reports Third Quarter 2022 Results

Company expects to close transaction with Apollo Funds in mid-November, 2022

Skokie, Illinois, October 31, 2022 - Tenneco Inc. (NYSE: TEN) today announced results for the third quarter ended September 30, 2022, including the following:

• Third quarter total revenue of $4.9 billion, up 14% year-over-year.Value-add revenue of $3.6 billion was up 17% year-over-year, excluding a negative currency impact of $214 million. The Company's OE light vehicle value-add revenue growth of 32%, excluding currency, outpaced global industry light vehicle production*, which was up 27% year-over-year. Material, energy, and freight cost recoveries contributed more than $200 million of revenue on a year-over-year basis.
• EBIT** of $129 million, compared with EBIT of $125 million in third quarter 2021. Adjusted EBITDA*** improved 8% year-over-year to $301 million, compared with $279 million last year. The increase in earnings is primarily a result of higher light vehicle volumes.
• Net loss of $44 million, or a loss of $0.53 per diluted share, compared to net earnings of $15 million, or $0.17 per diluted share, in the prior year. Third quarter 2022 adjusted net loss of $11 million, or a loss of $0.14 per diluted share, compared to prior year adjusted net income of $15 million, or $0.17 per diluted share. The year- over-year comparisons were primarily driven by higher non-operating interest and tax expenses.

"In a tough business environment, I'm proud of how Team Tenneco delivered year-over-year growth in revenue and adjusted EBITDA" said Brian Kesseler, Tenneco CEO. "Our continued focus on operational excellence, cash generation, and cost control actions also helped us deliver both significant sequential margin improvement across all business groups, and lower net debt."

As previously disclosed, all conditions to closing with respect to antitrust and/or foreign direct investment laws under Tenneco's merger agreement with certain affiliates of Apollo Global Management, Inc. have been satisfied or waived in accordance with the terms and conditions of the merger agreement. The Company expects to complete the transaction in mid-November 2022. In light of this, Tenneco will not conduct a conference call or give forward- looking guidance.

• Source: S&P Global Mobility (formerly IHS Markit) October 2022 global light vehicle production forecast.
• EBIT: Earnings before interest expense, income taxes and noncontrolling interests.
• Adjusted EBITDA: Adjusted earnings before interest expense, income taxes, noncontrolling interests, and depreciation and amortization.

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Attachment 1

Statements of Income (Loss) - 3 months

Statements of Income (Loss) - 9 months

Balance Sheets

Statements of Cash Flows - 3 Months

Statements of Cash Flows - 9 Months

Attachment 2

Reconciliation of GAAP to Non-GAAP Earnings Measures - 3 and 9 Months

Reconciliation of GAAP Revenue and Earnings to Non-GAAP Revenue and Earnings Measures - 3 and 9 Months Reconciliation of GAAP to Non-GAAP Revenue Measures - 3 and 9 Months

Reconciliation of Non-GAAP Measures - Debt Net of Total Cash/Adjusted LTM EBITDA including noncontrolling interests

Reconciliation of GAAP to Non-GAAP Revenue Measures - Original Equipment, Original Equipment Service and Aftermarket Revenue - 3 and 9 Months

Reconciliation of GAAP to Non-GAAP Cash Flow Measures - 3 and 9 Months

About Tenneco

Tenneco is one of the world's leading designers, manufacturers, and marketers of automotive products for original equipment and aftermarket customers, with full year 2021 revenues of $18 billion and approximately 71,000 team members working at more than 260 sites worldwide. Through our four business groups, Motorparts, Performance Solutions, Clean Air and Powertrain, Tenneco is driving advancements in global mobility by delivering technology solutions for diversified global markets, including light vehicle, commercial truck, off-highway, industrial, motorsport and the aftermarket.

Visit www.tenneco.com to learn more.

Investors and others should note that Tenneco routinely posts important information on its website and considers the Investor section, www.investors.tenneco.com, a channel of distribution.

Safe Harbor

This press release includes forward-looking statements regarding the Agreement and Plan of Merger (the "Merger Agreement") that the Company entered into with Pegasus Holdings III, LLC (the "Parent") and Pegasus Merger Co. on February 22, 2022. Pursuant to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into Tenneco (the "Merger") with Tenneco continuing as the surviving corporation of the Merger and as a wholly owned subsidiary of Parent. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include (without limitation and in addition to the risks set forth above): the inability to consummate the Merger within the anticipated time period, or at all, due to any reason, including the failure to satisfy conditions to the consummation of the Merger; the risk that the Merger disrupts our current plans and operations or diverts management's attention from its ongoing business; the effect of the announcement of the Merger on our ability to retain and hire key personnel and maintain relationships with our customers, suppliers and others with whom we do business; the effect of the announcement of the Merger on our operating results and business generally; the amount of costs, fees and expenses related to the Merger; the risk that our stock price may decline significantly if the Merger is not consummated; the nature, cost and outcome of any litigation and other legal proceedings, including any such proceedings related to the Merger and instituted against Tenneco and others; and other risks to consummation of the proposed Merger, including the risk that the proposed Merger will not be consummated within the expected time period or at all.

If the proposed transaction is consummated, the Company's stockholders will cease to have any equity interest in the Company and will have no right to participate in its earnings and future growth. The risks included here are not exhaustive. These and other factors are identified and described in more detail in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, and quarterly reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022, as well as the Company's subsequent filings and quarterly reports, available online at

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www.sec.gov. Readers are cautioned not to place undue reliance on the Company's projections and other forward- looking statements, which speak only as of the date thereof. Except as required by applicable law, the Company undertakes no obligation to update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

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Investor inquiries:

Linae Golla

847-482-5162 [e-mail]

Rich Kwas

248-849-1340 [e-mail]

Media inquiries:

Bill Dawson

847-482-5807 [e-mail]

ATTACHMENT 1

TENNECO INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Unaudited

(millions, except per share amounts)

Three Months Ended September

30,

		2022			2021
Net sales and operating revenues:
Motorparts	$	723	$	769
Performance Solutions		849			686
Clean Air - Value-add revenues		1,040			897
Clean Air - Substrate sales		1,295			1,039
Powertrain		1,024			941
Total net sales and operating revenues		4,931			4,332
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization)		4,388			3,776
Selling, general, and administrative		219			240
Depreciation and amortization		140			147
Engineering, research, and development		71			71
Restructuring charges, net and asset impairments		3			(4)
Total costs and expenses		4,821			4,230
Other income (expense):
Non-service pension and postretirement benefit (costs) credits		3			4
Equity in earnings (losses) of nonconsolidated affiliates, net of tax		3			10
Other income (expense), net		13			9
		19			23
Earnings (loss) before interest expense, income taxes, and noncontrolling interests		129			125
Interest expense		(90)			(66)
Earnings (loss) before income taxes and noncontrolling interests		39			59
Income tax (expense) benefit		(67)			(34)
Net income (loss)		(28)			25
Less: Net income (loss) attributable to noncontrolling interests		16			10
Net income (loss) attributable to Tenneco Inc.	$	(44)	$	15
Basic earnings (loss) per share:
Earnings (loss) per share	$	(0.53)	$	0.17
Weighted average shares outstanding		83.7			82.3
Diluted earnings (loss) per share:
Earnings (loss) per share	$	(0.53)	$	0.17
Weighted average shares outstanding		83.7			84.1

ATTACHMENT 1

TENNECO INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Unaudited

(millions, except per share amounts)

Nine Months Ended September

30,

		2022			2021
Net sales and operating revenues:
Motorparts	$	2,174	$	2,282
Performance Solutions		2,433			2,188
Clean Air - Value-add revenues		3,058			2,876
Clean Air - Substrate sales		3,517			3,208
Powertrain		3,063			3,092
Total net sales and operating revenues		14,245			13,646
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization)		12,663			11,810
Selling, general, and administrative		728			764
Depreciation and amortization		429			447
Engineering, research, and development		220			216
Restructuring charges, net and asset impairments		45			48
Total costs and expenses		14,085			13,285
Other income (expense):
Non-service pension and postretirement benefit (costs) credits		9			10
Equity in earnings (losses) of nonconsolidated affiliates, net of tax		25			47
Gain (loss) on extinguishment of debt		-			8
Other income (expense), net		27			30
		61			95
Earnings (loss) before interest expense, income taxes, and noncontrolling interests		221			456
Interest expense		(232)			(205)
Earnings (loss) before income taxes and noncontrolling interests		(11)			251
Income tax (expense) benefit		(140)			(122)
Net income (loss)		(151)			129
Less: Net income (loss) attributable to noncontrolling interests		52			59
Net income (loss) attributable to Tenneco Inc.	$	(203)	$	70
Basic earnings (loss) per share:
Earnings (loss) per share	$	(2.44)	$	0.85
Weighted average shares outstanding		83.5			82.2
Diluted earnings (loss) per share:
Earnings (loss) per share	$	(2.44)	$	0.83
Weighted average shares outstanding		83.5			83.5