Tenneco (TEN) 8-K Results of Operations and Financial Condition

Exhibit 99.1

TENNECO INC.

10-Q SEGMENT DATA

Unaudited

(Millions)

	Q1 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Reclass & Elims			Total
Revenues from external customers	$	765	$	471	$	279	$	1,515	$	323	$	210		$	88	$	621	$	—		$	—		$	2,136
Intersegment revenues		3		22		—		25		2		7			13		22		—			(47	)		—
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)		62		15		34		111		42		(6	)		13		49		(36	)		—			124
Total assets		1,352		776		636		2,764		779		448			323		1,550		—			34			4,348
	Q2 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Reclass & Elims			Total
Revenues from external customers	$	771	$	517	$	264	$	1,552	$	323	$	250		$	87	$	660	$	—		$	—		$	2,212
Intersegment revenues		3		25		—		28		2		8			12		22		—			(50	)		—
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)		66		28		40		134		48		10			14		72		(29	)		—			177
Total assets		1,353		761		600		2,714		778		433			317		1,528		—			34			4,276
	Q3 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Reclass & Elims			Total
Revenues from external customers	$	716	$	474	$	270	$	1,460	$	306	$	229		$	101	$	636	$	—		$	—		$	2,096
Intersegment revenues		4		24		1		29		2		6			12		20		—			(49	)		—
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)		44		29		38		111		37		8			18		63		(22	)		—			152
Total assets		1,390		809		622		2,821		727		478			333		1,538		—			47			4,406
	Q4 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Reclass & Elims			Total
Revenues from external customers	$	751	$	477	$	314	$	1,542	$	282	$	220		$	111	$	613	$	—		$	—		$	2,155
Intersegment revenues		3		21		2		26		3		6			11		20		—			(46	)		—
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)		53		26		43		122		30		4			20		54		(101	)		—			75
Total assets		1,356		697		679		2,732		723		488			352		1,563		—			47			4,342

We are a global manufacturer organized and manage our business along our two major product lines (clean air and ride performance) and three geographic areas (North America; Europe and South America; and Asia Pacific), resulting in six operating segments (North America Clean Air, North America Ride Performance, Europe and South America Clean Air, Europe and South America Ride Performance, Asia Pacific Clean Air and Asia Pacific Ride Performance). Within each geographical area, each operating segment manufactures and distributes either clean air or ride performance products primarily for the original equipment and aftermarket industries. Each of the six operating segments constitutes a reportable segment. Costs related to other business activities, primarily corporate headquarter functions, are disclosed separately from the six operating segments as “Other.” We evaluate segment performance based primarily on earnings before interest expense, income taxes, and noncontrolling interests. Products are transferred between segments and geographic areas on a basis intended to reflect as nearly as possible the “market value” of the products.

TENNECO INC.

10-K SEGMENT DATA

Unaudited

(Millions)

	FY 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Reclass & Elims			Total
Revenues from external customers	$	3,003	$	1,939	$	1,127	$	6,069	$	1,234	$	909		$	387	$	2,530	$	—		$	—		$	8,599
Intersegment revenues		13		92		3		108		9		27			48		84		—			(192	)		—
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)		225		98		155		478		157		16			65		238		(188	)		—			528
Total assets		1,356		697		679		2,732		723		488			352		1,563		—			47			4,342
	FY 2015
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Reclass & Elims			Total
Revenues from external customers	$	2,851	$	1,792	$	1,080	$	5,723	$	1,313	$	846		$	327	$	2,486	$	—		$	—		$	8,209
Intersegment revenues		16		100		—		116		10		30			46		86		—			(202	)		—
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)		244		49		124		417		155		(11	)		45		189		(87	)		—			519
Total assets		1,209		680		626		2,515		692		424			304		1,420		—			32			3,967
	FY 2014
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Reclass & Elims			Total
Revenues from external customers	$	2,815	$	1,930	$	1,066	$	5,811	$	1,351	$	938		$	320	$	2,609	$	—		$	—		$	8,420
Intersegment revenues		25		114		—		139		10		41			43		94		—			(233	)		—
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)		237		57		103		397		143		37			39		219		(124	)		—			492
Total assets		1,156		756		624		2,536		659		438			294		1,391		—			69			3,996

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ REVENUE TONON-GAAP REVENUE MEASURES⁽²⁾

Unaudited

(Millions)

	Q1 2016
	Revenues		Substrate Sales		Value-add Revenues		Currency Impact on Value-add Revenues			Value-add Revenues excluding Currency
Clean Air Division
North America	$	765	$	271	$	494	$	—		$	494
Europe and South America		471		173		298		(19	)		317
Asia Pacific		279		66		213		(10	)		223
Total Clean Air Division		1,515		510		1,005		(29	)		1,034
Ride Performance Division
North America		323		—		323		(4	)		327
Europe and South America		210		—		210		(22	)		232
Asia Pacific		88		—		88		(6	)		94
Total Ride Performance Division		621		—		621		(32	)		653
Total Tenneco Inc.	$	2,136	$	510	$	1,626	$	(61	)	$	1,687
	Q2 2016
	Revenues		Substrate Sales		Value-add Revenues		Currency Impact on Value-add Revenues			Value-add Revenues excluding Currency
Clean Air Division
North America	$	771	$	273	$	498	$	(1	)	$	499
Europe and South America		517		187		330		(13	)		343
Asia Pacific		264		59		205		(11	)		216
Total Clean Air Division		1,552		519		1,033		(25	)		1,058
Ride Performance Division
North America		323		—		323		(4	)		327
Europe and South America		250		—		250		(14	)		264
Asia Pacific		87		—		87		(5	)		92
Total Ride Performance Division		660		—		660		(23	)		683
Total Tenneco Inc.	$	2,212	$	519	$	1,693	$	(48	)	$	1,741
	Q3 2016
	Revenues		Substrate Sales		Value-add Revenues		Currency Impact on Value-add Revenues			Value-add Revenues excluding Currency
Clean Air Division
North America	$	716	$	248	$	468	$	—		$	468
Europe and South America		474		177		297		(11	)		308
Asia Pacific		270		59		211		(8	)		219
Total Clean Air Division		1,460		484		976		(19	)		995
Ride Performance Division
North America		306		—		306		(2	)		308
Europe and South America		229		—		229		(6	)		235
Asia Pacific		101		—		101		(4	)		105
Total Ride Performance Division		636		—		636		(12	)		648
Total Tenneco Inc.	$	2,096	$	484	$	1,612	$	(31	)	$	1,643
	Q4 2016
	Revenues		Substrate Sales		Value-add Revenues		Currency Impact on Value-add Revenues			Value-add Revenues excluding Currency
Clean Air Division
North America	$	751	$	260	$	491	$	—		$	491
Europe and South America		477		181		296		(14	)		310
Asia Pacific		314		74		240		(15	)		255
Total Clean Air Division		1,542		515		1,027		(29	)		1,056
Ride Performance Division
North America		282		—		282		(3	)		285
Europe and South America		220		—		220		(4	)		224
Asia Pacific		111		—		111		(6	)		117
Total Ride Performance Division		613		—		613		(13	)		626
Total Tenneco Inc.	$	2,155	$	515	$	1,640	$	(42	)	$	1,682

⁽¹⁾  Generally Accepted Accounting Principles

⁽²⁾  Tenneco presents the above reconciliation of revenues in order to reflectvalue-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.

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ REVENUE TONON-GAAP REVENUE MEASURES⁽²⁾

Unaudited

(Millions)

	FY 2016
	Revenues		Substrate Sales		Value-add Revenues		Currency Impact on Value-add Revenues			Value-add Revenues excluding Currency
Clean Air Division
North America	$	3,003	$	1,052	$	1,951	$	(1	)	$	1,952
Europe and South America		1,939		718		1,221		(57	)		1,278
Asia Pacific		1,127		258		869		(44	)		913
Total Clean Air Division		6,069		2,028		4,041		(102	)		4,143
Ride Performance Division
North America		1,234		—		1,234		(13	)		1,247
Europe and South America		909		—		909		(46	)		955
Asia Pacific		387		—		387		(21	)		408
Total Ride Performance Division		2,530		—		2,530		(80	)		2,610
Total Tenneco Inc.	$	8,599	$	2,028	$	6,571	$	(182	)	$	6,753
	FY 2015
	Revenues		Substrate Sales		Value-add Revenues		Currency Impact on Value-add Revenues			Value-add Revenues excluding Currency
Clean Air Division
North America	$	2,851	$	1,007	$	1,844	$	—		$	1,844
Europe and South America		1,792		648		1,144		—			1,144
Asia Pacific		1,080		261		819		—			819
Total Clean Air Division		5,723		1,916		3,807		—			3,807
Ride Performance Division
North America		1,313		—		1,313		—			1,313
Europe and South America		846		—		846		—			846
Asia Pacific		327		—		327		—			327
Total Ride Performance Division		2,486		—		2,486		—			2,486
Total Tenneco Inc.	$	8,209	$	1,916	$	6,293	$	—		$	6,293

⁽¹⁾  Generally Accepted Accounting Principles

⁽²⁾  Tenneco presents the above reconciliation of revenues in order to reflectvalue-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.

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ REVENUE TONON-GAAP REVENUE MEASURES⁽²⁾

Unaudited

(Millions)

	FY 2015
	Revenues		Substrate Sales		Value-add Revenues		Currency Impact on Value-add Revenues			Value-add Revenues excluding Currency
Clean Air Division
North America	$	2,851	$	1,007	$	1,844	$	(5	)	$	1,849
Europe and South America		1,792		648		1,144		(234	)		1,378
Asia Pacific		1,080		261		819		(30	)		849
Total Clean Air Division		5,723		1,916		3,807		(269	)		4,076
Ride Performance Division
North America		1,313		—		1,313		(29	)		1,342
Europe and South America		846		—		846		(190	)		1,036
Asia Pacific		327		—		327		(20	)		347
Total Ride Performance Division		2,486		—		2,486		(239	)		2,725
Total Tenneco Inc.	$	8,209	$	1,916	$	6,293	$	(508	)	$	6,801
	FY 2014
	Revenues		Substrate Sales		Value-add Revenues		Currency Impact on Value-add Revenues			Value-add Revenues excluding Currency
Clean Air Division
North America	$	2,815	$	1,045	$	1,770	$	—		$	1,770
Europe and South America		1,930		651		1,279		—			1,279
Asia Pacific		1,066		238		828		—			828
Total Clean Air Division		5,811		1,934		3,877		—			3,877
Ride Performance Division
North America		1,351		—		1,351		—			1,351
Europe and South America		938		—		938		—			938
Asia Pacific		320		—		320		—			320
Total Ride Performance Division		2,609		—		2,609		—			2,609
Total Tenneco Inc.	$	8,420	$	1,934	$	6,486	$	—		$	6,486

⁽¹⁾  Generally Accepted Accounting Principles

⁽²⁾  Tenneco presents the above reconciliation of revenues in order to reflectvalue-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.

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ TONON-GAAP EARNINGS MEASURES⁽²⁾

Unaudited

(Millions)

	Q1 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT	$	62	$	15	$	34	$	111	$	42	$	(6	)	$	13	$	49	$	(36	)	$	124
Restructuring and related expenses		—		—		—		—		—		14			—		14		—			14
Adjusted EBIT	$	62	$	15	$	34	$	111	$	42	$	8		$	13	$	63	$	(36	)	$	138
	Q2 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT	$	66	$	28	$	40	$	134	$	48	$	10		$	14	$	72	$	(29	)	$	177
Restructuring and related expenses		—		1		—		1		1		3			—		4		—			5
Adjusted EBIT	$	66	$	29	$	40	$	135	$	49	$	13		$	14	$	76	$	(29	)	$	182
	Q3 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT	$	44	$	29	$	38	$	111	$	37	$	8		$	18	$	63	$	(22	)	$	152
Restructuring and related expenses		—		1		1		2		5		—			—		5		—			7
Adjusted EBIT	$	44	$	30	$	39	$	113	$	42	$	8		$	18	$	68	$	(22	)	$	159
	Q4 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT	$	53	$	26	$	43	$	122	$	30	$	4		$	20	$	54	$	(101	)	$	75
Restructuring and related expenses		—		1		3		4		—		3			1		4		2			10
Pension charges(3)		—		—		—		—		—		—			—		—		72			72
Adjusted EBIT	$	53	$	27	$	46	$	126	$	30	$	7		$	21	$	58	$	(27	)	$	157

⁽¹⁾  Generally Accepted Accounting Principles

⁽²⁾  Tenneco presents the above reconciliation of GAAP tonon-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 thenon-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 andnon-GAAP earnings measures reflected above to understand and analyze the results of the business. The company believes investors find thenon-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⁾  Charges related to Pension derisking.

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ TONON-GAAP EARNINGS MEASURES⁽²⁾

Unaudited

(Millions)

	FY 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT	$	225	$	98	$	155	$	478	$	157	$	16		$	65	$	238	$	(188	)	$	528
Restructuring and related expenses		—		3		4		7		6		20			1		27		2			36
Pension charges(3)		—		—		—		—		—		—			—		—		72			72
Adjusted EBIT	$	225	$	101	$	159	$	485	$	163	$	36		$	66	$	265	$	(114	)	$	636
	FY 2015
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT	$	244	$	49	$	124	$	417	$	155	$	(11	)	$	45	$	189	$	(87	)	$	519
Restructuring and related expenses		—		6		4		10		2		49			2		53		—			63
Pension charges(3)		—		—		—		—		—		—			—		—		4			4
Adjusted EBIT	$	244	$	55	$	128	$	427	$	157	$	38		$	47	$	242	$	(83	)	$	586
	FY 2014
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT	$	237	$	57	$	103	$	397	$	143	$	37		$	39	$	219	$	(124	)	$	492
Restructuring and related expenses		1		10		6		17		5		22			1		28		4			49
Pension/Postretirement charges(3)		—		—		—		—		1		—			—		1		31			32
Bad debt charge(4)		—		4		—		4		—		—			—		—		—			4
Adjusted EBIT	$	238	$	71	$	109	$	418	$	149	$	59		$	40	$	248	$	(89	)	$	577

⁽¹⁾  Generally Accepted Accounting Principles

⁽²⁾  Tenneco presents the above reconciliation of GAAP tonon-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 thenon-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 andnon-GAAP earnings measures reflected above to understand and analyze the results of the business. The company believes investors find thenon-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⁾  Charges related to Pension derisking and postretirement medicaltrue-up.

⁽⁴⁾  Charge related to the bankruptcy of an aftermarket customer in Europe.

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ REVENUE AND EARNINGS TONON-GAAP REVENUE AND EARNINGS MEASURES⁽²⁾

Unaudited

(Millions except percents)

	Q1 2016
	Clean Air Division												Ride Performance Division
	North America			Europe & South America			Asia Pacific			Total			North America			Europe & South America			Asia Pacific			Total			Other			Total
Net sales and operating revenues	$	765		$	471		$	279		$	1,515		$	323		$	210		$	88		$	621		$	—		$	2,136
Less: Substrate sales		271			173			66			510			—			—			—			—			—			510
Value-add revenues	$	494		$	298		$	213		$	1,005		$	323		$	210		$	88		$	621		$	—		$	1,626
EBIT	$	62		$	15		$	34		$	111		$	42		$	(6	)	$	13		$	49		$	(36	)	$	124
EBIT as a % of revenue		8.1	%		3.2	%		12.2	%		7.3	%		13.0	%		-2.9	%		14.8	%		7.9	%					5.8	%
EBIT as a % ofvalue-add revenue		12.6	%		5.0	%		16.0	%		11.0	%		13.0	%		-2.9	%		14.8	%		7.9	%					7.6	%
Adjusted EBIT	$	62		$	15		$	34		$	111		$	42		$	8		$	13		$	63		$	(36	)	$	138
Adjusted EBIT as a % of revenue		8.1	%		3.2	%		12.2	%		7.3	%		13.0	%		3.8	%		14.8	%		10.1	%					6.5	%
Adjusted EBIT as a % ofvalue-add revenue		12.6	%		5.0	%		16.0	%		11.0	%		13.0	%		3.8	%		14.8	%		10.1	%					8.5	%
	Q2 2016
	Clean Air Division												Ride Performance Division
	North America			Europe & South America			Asia Pacific			Total			North America			Europe & South America			Asia Pacific			Total			Other			Total
Net sales and operating revenues	$	771		$	517		$	264		$	1,552		$	323		$	250		$	87		$	660		$	—		$	2,212
Less: Substrate sales		273			187			59			519			—			—			—			—			—			519
Value-add revenues	$	498		$	330		$	205		$	1,033		$	323		$	250		$	87		$	660		$	—		$	1,693
EBIT	$	66		$	28		$	40		$	134		$	48		$	10		$	14		$	72		$	(29	)	$	177
EBIT as a % of revenue		8.6	%		5.4	%		15.2	%		8.6	%		14.9	%		4.0	%		16.1	%		10.9	%					8.0	%
EBIT as a % ofvalue-add revenue		13.3	%		8.5	%		19.5	%		13.0	%		14.9	%		4.0	%		16.1	%		10.9	%					10.5	%
Adjusted EBIT	$	66		$	29		$	40		$	135		$	49		$	13		$	14		$	76		$	(29	)	$	182
Adjusted EBIT as a % of revenue		8.6	%		5.6	%		15.2	%		8.7	%		15.2	%		5.2	%		16.1	%		11.5	%					8.2	%
Adjusted EBIT as a % ofvalue-add revenue		13.3	%		8.8	%		19.5	%		13.1	%		15.2	%		5.2	%		16.1	%		11.5	%					10.8	%
	Q3 2016
	Clean Air Division												Ride Performance Division
	North America			Europe & South America			Asia Pacific			Total			North America			Europe & South America			Asia Pacific			Total			Other			Total
Net sales and operating revenues	$	716		$	474		$	270		$	1,460		$	306		$	229		$	101		$	636		$	—		$	2,096
Less: Substrate sales		248			177			59			484			—			—			—			—			—			484
Value-add revenues	$	468		$	297		$	211		$	976		$	306		$	229		$	101		$	636		$	—		$	1,612
EBIT	$	44		$	29		$	38		$	111		$	37		$	8		$	18		$	63		$	(22	)	$	152
EBIT as a % of revenue		6.1	%		6.1	%		14.1	%		7.6	%		12.1	%		3.5	%		17.8	%		9.9	%					7.3	%
EBIT as a % ofvalue-add revenue		9.4	%		9.8	%		18.0	%		11.4	%		12.1	%		3.5	%		17.8	%		9.9	%					9.4	%
Adjusted EBIT	$	44		$	30		$	39		$	113		$	42		$	8		$	18		$	68		$	(22	)	$	159
Adjusted EBIT as a % of revenue		6.1	%		6.3	%		14.4	%		7.7	%		13.7	%		3.5	%		17.8	%		10.7	%					7.6	%
Adjusted EBIT as a % ofvalue-add revenue		9.4	%		10.1	%		18.5	%		11.6	%		13.7	%		3.5	%		17.8	%		10.7	%					9.9	%
	Q4 2016
	Clean Air Division												Ride Performance Division
	North America			Europe & South America			Asia Pacific			Total			North America			Europe & South America			Asia Pacific			Total			Other			Total
Net sales and operating revenues	$	751		$	477		$	314		$	1,542		$	282		$	220		$	111		$	613		$	—		$	2,155
Less: Substrate sales		260			181			74			515			—			—			—			—			—			515
Value-add revenues	$	491		$	296		$	240		$	1,027		$	282		$	220		$	111		$	613		$	—		$	1,640
EBIT	$	53		$	26		$	43		$	122		$	30		$	4		$	20		$	54		$	(101	)	$	75
EBIT as a % of revenue		7.1	%		5.5	%		13.7	%		7.9	%		10.6	%		1.8	%		18.0	%		8.8	%					3.5	%
EBIT as a % ofvalue-add revenue		10.8	%		8.8	%		17.9	%		11.9	%		10.6	%		1.8	%		18.0	%		8.8	%					4.6	%
Adjusted EBIT	$	53		$	27		$	46		$	126		$	30		$	7		$	21		$	58		$	(27	)	$	157
Adjusted EBIT as a % of revenue		7.1	%		5.7	%		14.6	%		8.2	%		10.6	%		3.2	%		18.9	%		9.5	%					7.3	%
Adjusted EBIT as a % ofvalue-add revenue		10.8	%		9.1	%		19.2	%		12.3	%		10.6	%		3.2	%		18.9	%		9.5	%					9.6	%

⁽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 andvalue-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 ofvalue-add revenue assists investors in evaluating our company’s operational performance without the impact of such substrate sales.

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ REVENUE AND EARNINGS TO NON-GAAP REVENUE AND EARNINGS MEASURES⁽²⁾

Unaudited

(Millions except percents)

	FY 2016
	Clean Air Division												Ride Performance Division
	North America			Europe & South America			Asia Pacific			Total			North America			Europe & South America			Asia Pacific			Total			Other			Total
Net sales and operating revenues	$	3,003		$	1,939		$	1,127		$	6,069		$	1,234		$	909		$	387		$	2,530		$	—		$	8,599
Less: Substrate sales		1,052			718			258			2,028			—			—			—			—			—			2,028
Value-add revenues	$	1,951		$	1,221		$	869		$	4,041		$	1,234		$	909		$	387		$	2,530		$	—		$	6,571
EBIT	$	225		$	98		$	155		$	478		$	157		$	16		$	65		$	238		$	(188	)	$	528
EBIT as a % of revenue		7.5	%		5.1	%		13.8	%		7.9	%		12.7	%		1.8	%		16.8	%		9.4	%					6.1	%
EBIT as a % ofvalue-add revenue		11.5	%		8.0	%		17.8	%		11.8	%		12.7	%		1.8	%		16.8	%		9.4	%					8.0	%
Adjusted EBIT	$	225		$	101		$	159		$	485		$	163		$	36		$	66		$	265		$	(114	)	$	636
Adjusted EBIT as a % of revenue		7.5	%		5.2	%		14.1	%		8.0	%		13.2	%		4.0	%		17.1	%		10.5	%					7.4	%
Adjusted EBIT as a % ofvalue-add revenue		11.5	%		8.3	%		18.3	%		12.0	%		13.2	%		4.0	%		17.1	%		10.5	%					9.7	%
	FY 2015
	Clean Air Division												Ride Performance Division
	North America			Europe & South America			Asia Pacific			Total			North America			Europe & South America			Asia Pacific			Total			Other			Total
Net sales and operating revenues	$	2,851		$	1,792		$	1,080		$	5,723		$	1,313		$	846		$	327		$	2,486		$	—		$	8,209
Less: Substrate sales		1,007			648			261			1,916			—			—			—			—			—			1,916
Value-add revenues	$	1,844		$	1,144		$	819		$	3,807		$	1,313		$	846		$	327		$	2,486		$	—		$	6,293
EBIT	$	244		$	49		$	124		$	417		$	155		$	(11	)	$	45		$	189		$	(87	)	$	519
EBIT as a % of revenue		8.6	%		2.7	%		11.5	%		7.3	%		11.8	%		-1.3	%		13.8	%		7.6	%					6.3	%
EBIT as a % ofvalue-add revenue		13.2	%		4.3	%		15.1	%		11.0	%		11.8	%		-1.3	%		13.8	%		7.6	%					8.2	%
Adjusted EBIT	$	244		$	55		$	128		$	427		$	157		$	38		$	47		$	242		$	(83	)	$	586
Adjusted EBIT as a % of revenue		8.6	%		3.1	%		11.9	%		7.5	%		12.0	%		4.5	%		14.4	%		9.7	%					7.1	%
Adjusted EBIT as a % ofvalue-add revenue		13.2	%		4.8	%		15.6	%		11.2	%		12.0	%		4.5	%		14.4	%		9.7	%					9.3	%
	FY 2014
	Clean Air Division												Ride Performance Division
	North America			Europe & South America			Asia Pacific			Total			North America			Europe & South America			Asia Pacific			Total			Other			Total
Net sales and operating revenues	$	2,815		$	1,930		$	1,066		$	5,811		$	1,351		$	938		$	320		$	2,609		$	—		$	8,420
Less: Substrate sales		1,045			651			238			1,934			—			—			—			—			—			1,934
Value-add revenues	$	1,770		$	1,279		$	828		$	3,877		$	1,351		$	938		$	320		$	2,609		$	—		$	6,486
EBIT	$	237		$	57		$	103		$	397		$	143		$	37		$	39		$	219		$	(124	)	$	492
EBIT as a % of revenue		8.4	%		3.0	%		9.7	%	��	6.8	%		10.6	%		3.9	%		12.2	%		8.4	%					5.8	%
EBIT as a % ofvalue-add revenue		13.4	%		4.5	%		12.4	%		10.2	%		10.6	%		3.9	%		12.2	%		8.4	%					7.6	%
Adjusted EBIT	$	238		$	71		$	109		$	418		$	149		$	59		$	40		$	248		$	(89	)	$	577
Adjusted EBIT as a % of revenue		8.5	%		3.7	%		10.2	%		7.2	%		11.0	%		6.3	%		12.5	%		9.5	%					6.9	%
Adjusted EBIT as a % ofvalue-add revenue		13.4	%		5.6	%		13.2	%		10.8	%		11.0	%		6.3	%		12.5	%		9.5	%					8.9	%

⁽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 andvalue-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 ofvalue-add revenue assists investors in evaluating our company’s operational performance without the impact of such substrate sales.

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ EBIT TO EBITDA INCLUDING NONCONTROLLING INTERESTS⁽²⁾

Unaudited

(Millions)

	Q1 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)	$	62	$	15	$	34	$	111	$	42	$	(6	)	$	13	$	49	$	(36	)	$	124
Depreciation and amortization of other intangibles		15		9		8		32		9		10			3		22		—			54
Total EBITDA including noncontrolling interests(2)	$	77	$	24	$	42	$	143	$	51	$	4		$	16	$	71	$	(36	)	$	178
	Q2 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)	$	66	$	28	$	40	$	134	$	48	$	10		$	14	$	72	$	(29	)	$	177
Depreciation and amortization of other intangibles		17		11		6		34		8		7			3		18		—			52
Total EBITDA including noncontrolling interests(2)	$	83	$	39	$	46	$	168	$	56	$	17		$	17	$	90	$	(29	)	$	229
	Q3 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)	$	44	$	29	$	38	$	111	$	37	$	8		$	18	$	63	$	(22	)	$	152
Depreciation and amortization of other intangibles		18		11		7		36		9		6			2		17		—			53
Total EBITDA including noncontrolling interests(2)	$	62	$	40	$	45	$	147	$	46	$	14		$	20	$	80	$	(22	)	$	205
	Q4 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)	$	53	$	26	$	43	$	122	$	30	$	4		$	20	$	54	$	(101	)	$	75
Depreciation and amortization of other intangibles		16		11		8		35		9		7			2		18		—			53
Total EBITDA including noncontrolling interests(2)	$	69	$	37	$	51	$	157	$	39	$	11		$	22	$	72	$	(101	)	$	128

⁽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.

TENNECO INC.

RECONCILIATION OF GAAP⁽¹⁾ EBIT TO EBITDA INCLUDING NONCONTROLLING INTERESTS⁽²⁾

Unaudited

(Millions)

	FY 2016
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)	$	225	$	98	$	155	$	478	$	157	$	16		$	65	$	238	$	(188	)	$	528
Depreciation and amortization of other intangibles		66		42		29		137		35		30			10		75		—			212
Total EBITDA including noncontrolling interests(2)	$	291	$	140	$	184	$	615	$	192	$	46		$	75	$	313	$	(188	)	$	740
	FY 2015
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)	$	244	$	49	$	124	$	417	$	155	$	(11	)	$	45	$	189	$	(87	)	$	519
Depreciation and amortization of other intangibles		65		39		26		130		33		31			9		73		—			203
Total EBITDA including noncontrolling interests(2)	$	309	$	88	$	150	$	547	$	188	$	20		$	54	$	262	$	(87	)	$	722
	FY 2014
	Clean Air Division								Ride Performance Division
	North America		Europe & South America		Asia Pacific		Total		North America		Europe & South America			Asia Pacific		Total		Other			Total
EBIT, Earnings before interest expense, income taxes and noncontrolling interests (GAAP measure)	$	237	$	57	$	103	$	397	$	143	$	37		$	39	$	219	$	(124	)	$	492
Depreciation and amortization of other intangibles		66		44		23		133		33		32			10		75		—			208
Total EBITDA including noncontrolling interests(2)	$	303	$	101	$	126	$	530	$	176	$	69		$	49	$	294	$	(124	)	$	700

⁽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.