SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): DECEMBER 11, 1996
TENNECO INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE 1-12387 76-0515284
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
1275 KING STREET, GREENWICH, CONNECTICUT 06831
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(Address of Principal Executive Offices) (Zip Code)
(203) 863-1000
________________________________________________________________________________
(Registrant's telephone number, including area code)
NEW TENNECO INC.
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(Former Name or Former Address, if Changed Since Last Report)
________________________________________________________________________________
Tenneco Inc., formerly known as New Tenneco Inc. (the "Registrant"), submits the
following information:
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 11, 1996, pursuant to a Distribution Agreement (the
"Distribution Agreement"), dated as of November 1, 1996, among the Registrant,
El Paso Tennessee Pipeline Co., formerly known as Tenneco Inc. ("Old Tenneco"),
and Newport News Shipbuilding Inc., formerly known as Tenneco InterAmerica Inc.
("Newport News"): (i) Old Tenneco and its subsidiaries completed various
intercompany transfers and distributions (the "Corporate Restructuring
Transactions") designed to restructure, divide and separate their then existing
businesses and assets so the assets, liabilities and operations of (A) the
automotive parts, packaging and administrative services businesses (the
"Industrial Business") are owned, directly and indirectly, by the Registrant,
and (B) the shipbuilding businesses are owned, directly and indirectly, by
Newport News; and (ii) Old Tenneco distributed (the "Distributions") pro rata to
holders of Old Tenneco's common stock, par value $5.00 per share, all of the
outstanding common stock, par value $.01 per share, of the Registrant and all of
the outstanding common stock, par value $.01 per share, of Newport News. On
December 12, 1996, pursuant to a Merger Agreement (the "Merger Agreement") dated
as of June 19, 1996, as amended, Old Tenneco, which consisted of the remaining
energy business and certain discontinued operations after the Distributions, was
merged (the "Merger") with and into an indirect subsidiary of El Paso Natural
Gas Company ("El Paso").
The Distributions and the other transactions contemplated by the
Distribution Agreement, including the realignment of consolidated cash (the
"Cash Realignment") and a realignment of consolidated debt (the "Debt
Realignment"), are more fully described in the Registrant's Registration
Statement on Form 10, as amended, as filed with Securities and Exchange
Commission (the "Form 10 Registration Statement").
ITEM 5. OTHER EVENTS.
The Registrant was incorporated in the State of Delaware in August 1996 for
the purpose of owning and operating the Industrial Business after the
consummation of the Distributions and the other transactions contemplated by the
Distribution Agreement. The Registrant was originally incorporated under the
name "New Tenneco Inc.," but changed its name to "Tenneco Inc." immediately
after the consummation of the Distributions. Pursuant to the restructuring of
Old Tenneco's indebtedness for money borrowed in connection with the
transactions contemplated by the Distribution Agreement, on December 11, 1996,
the Registrant issued debt securities in the aggregate principal amount of
approximately $1.86 billion in exchange for certain debt securities (the "Old
Tenneco Debt Securities") of Old Tenneco (the "Debt Exchange"). Upon
consummation of the Debt Exchange, Old Tenneco purchased for cash and
subsequently extinguished the Old Tenneco Debt Securities then held by the
Registrant (which cash was then distributed by the Registrant to Old Tenneco).
For additional information concerning the Distributions and the transactions
contemplated thereby, see Item 2, above. The Debt Exchange is more fully
described in the Registrant's Registration Statement on Form S-4, as amended, as
filed with the Securities and Exchange Commission.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED. The financial statements
relating to the businesses acquired required by Item 7 of Form 8-K were
previously reported in the Form 10 Registration Statement and the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1996
(the "Form 10-Q") as filed with the Securities and Exchange Commission.
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(b) PRO FORMA FINANCIAL INFORMATION.
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS OF NEW TENNECO INC.
The following Unaudited Pro Forma Combined Balance Sheet of New Tenneco Inc.,
referred to in this Item 7.(b). as "New Tenneco", as of
September 30, 1996 and the Unaudited Pro Forma Combined Statements of Income for
the nine months ended September 30, 1996 and the year ended December 31, 1995
have been prepared to reflect: (i) the pro forma income statement effects for
the acquisition of The Pullman Company and its Clevite Products division
("Clevite") in July 1996 and the acquisition of Amoco Foam Products Company, a
division of Amoco Chemical Company ("Amoco Foam Products"), in August 1996; (ii)
the effect on New Tenneco of the Cash Realignment and Debt Realignment; (iii)
the effect on New Tenneco of the Corporate Restructuring Transactions, and other
transactions pursuant to the provisions of the Distribution Agreement and Merger
Agreement; and (iv) the issuance of New Tenneco common stock as part of the
Distributions. The "Combined Acquisitions" caption in the Unaudited Pro Forma
Combined Statement of Income for the year ended December 31, 1995 also reflects
the pro forma results of operations of the plastics division of Mobil
Corporation ("Mobil Plastics") prior to its acquisition in November 1995.
The pro forma income statement effects for the acquisitions of Clevite and
Amoco Foam Products have been included in the accompanying Unaudited Pro Forma
Combined Statements of Income for the respective periods under the caption
"Combined Acquisitions." The Combined Acquisitions have been accounted for
under the purchase method of accounting. As such, pro forma adjustments in the
accompanying Unaudited Pro Forma Combined Statements of Income reflect
additional depreciation and amortization resulting from New Tenneco's purchase
cost.
The historical Combined Financial Statements reflect the financial position
and results of operations for the Industrial Business whose net assets were
transferred to New Tenneco pursuant to the Corporate Restructuring
Transactions, and other transactions pursuant to the provisions of the
Distribution Agreement and Merger Agreement. The accounting for the transfer
of assets and liabilities pursuant to the Corporate Restructuring Transactions
represents a reorganization of companies under common control and,
accordingly, all assets and liabilities are reflected at their historical cost
in the Combined Financial Statements of New Tenneco.
The Unaudited Pro Forma Combined Balance Sheet has been prepared as if such
transactions occurred on September 30, 1996; the Unaudited Pro Forma Combined
Statements of Income have been prepared as if such transactions occurred as of
January 1, 1995. The Unaudited Pro Forma Combined Financial Statements set
forth on the following pages are unaudited and not necessarily indicative of
the results that would have actually occurred if the transactions had been
consummated as of September 30, 1996, or January 1, 1995, or results which may
be attained in the future.
The pro forma adjustments, as described in the Notes to the Unaudited Pro
Forma Combined Financial Statements, are based upon available information and
upon certain assumptions that management believes are reasonable. The
Unaudited Pro Forma Combined Financial Statements should be read in
conjunction with the Combined Financial Statements of New Tenneco, and notes
thereto, and the pre-acquisition Combined Financial Statements of Mobil
Plastics, and notes thereto in the Form 10 Registration Statement and the Form
10-Q. The Clevite and Amoco Foam Products acquisitions do not meet the
Commission's criteria for inclusion of separate historical financial statements.
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NEW TENNECO INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
SEPTEMBER 30, 1996
(MILLIONS)
TRANSACTION
NEW TENNECO PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
----------- ----------- ---------
ASSETS
Current assets:
Cash and temporary cash investments....... $ 130 $ 2 (e) $ 78
(54)(f)
Receivables............................... 797 (129)(a) 878
164 (b)
(63)(c)
109 (d)
Inventories............................... 882 882
Deferred income taxes..................... 23 (9)(c) 14
Other current assets...................... 181 21 (c) 202
------ ------ ------
Total current assets..................... 2,013 41 2,054
------ ------ ------
Goodwill and intangibles.................... 1,334 1,334
Other assets and deferred charges........... 893 6 (c) 899
Net property, plant and equipment........... 3,099 39 (c) 3,138
------ ------ ------
Total assets............................. $7,339 $ 86 $7,425
====== ====== ======
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt........................... $ 916 $ (658)(g) $ 258
Payables.................................. 661 (50)(a) 616
2 (b)
3 (c)
Other current liabilities................. 613 6 (c) 619
------ ------ ------
Total current liabilities................ 2,190 (697) 1,493
------ ------ ------
Long-term debt.............................. 1,531 527 (g) 2,058
Deferred income taxes....................... 450 14 (b) 464
Other liabilities and deferred credits...... 402 2 (e) 404
------ ------ ------
4,573 (154) 4,419
------ ------ ------
Minority interest........................... 300 300
------ ------ ------
Equity:
Combined equity........................... 2,466 (79)(a) --
148 (b)
(15)(c)
109 (d)
(54)(f)
131 (g)
(2,706)(h)
Common stock.............................. -- 2 (h) 2
Paid-in capital........................... -- 2,704 (h) 2,704
Retained earnings......................... -- -- (h) --
------ ------ ------
Total liabilities and shareowners'
equity................................. $7,339 $ 86 $7,425
====== ====== ======
See the accompanying Notes to Unaudited Pro Forma Combined Financial
Statements.
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NEW TENNECO INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(MILLIONS EXCEPT PER SHARE AMOUNTS)
COMBINED ACQUISITIONS
-----------------------
POST-
NEW ACQUISITIONS TRANSACTION
TENNECO PRO FORMA PRO FORMA PRO FORMA
HISTORICAL HISTORICAL* ADJUSTMENTS COMBINED ADJUSTMENTS PRO FORMA
---------- ----------- ----------- ------------ ----------- -----------
Net Sales and Operating
Revenues............... $ 4,886 $272 $ $5,158 $ $ 5,158
Other Income, Net....... 111 -- 111 111
Costs and Expenses...... 4,412 232 10 (i) 4,654 4,654
------- ---- ------- ------ ------- -----------
Income Before Interest
Expense,
Income Taxes and
Minority Interest...... 585 40 (10) 615 615
Interest Expense........ 145 12 8 (i) 165 (33)(j) 132
Income Tax Expense...... 171 8 (2)(i) 177 13 (j) 190
Minority Interest....... 15 -- 15 15
------- ---- ------- ------ ------- -----------
Income From Continuing
Operations............. $ 254 $ 20 $ (16) $ 258 $ 20 $ 278
======= ==== ======= ====== ======= ===========
Average number of common
shares outstanding..... 170,418,046
===========
Income from continuing
operations per share... $ 1.63
===========
- --------
* Certain amounts have been reclassified to conform to New Tenneco's
classification.
See the accompanying Notes to Unaudited Pro Forma Combined Financial
Statements.
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NEW TENNECO INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995
(MILLIONS EXCEPT PER SHARE AMOUNTS)
COMBINED ACQUISITIONS
-----------------------
POST-
NEW ACQUISITIONS TRANSACTION
TENNECO PRO FORMA PRO FORMA PRO FORMA
HISTORICAL HISTORICAL* ADJUSTMENTS COMBINED ADJUSTMENTS PRO FORMA
---------- ----------- ----------- ------------ ----------- -----------
Net Sales and Operating
Revenues............... $5,221 $2,035 $ $7,256 $ $ 7,256
Other Income, Net....... 39 6 45 45
Costs and Expenses...... 4,588 1,888 17 (i) 6,493 6,493
------ ------ ---- ------ -------- -----------
Income Before Interest
Expense,
Income Taxes and
Minority Interest...... 672 153 (17) 808 808
Interest Expense........ 160 126 5 (i) 291 (115)(j) 176
Income Tax Expense...... 231 19 (9)(i) 241 46 (j) 287
Minority Interest....... 23 -- 23 23
------ ------ ---- ------ -------- -----------
Income From Continuing
Operations............. $ 258 $ 8 $(13) $ 253 $ 69 $ 322
====== ====== ==== ====== ======== ===========
Average number of common
shares outstanding..... 173,995,941
===========
Income from continuing
operations per share... $ 1.85
===========
- --------
* Certain amounts have been reclassified to conform to New Tenneco's
classification.
See the accompanying Notes to Unaudited Pro Forma Combined Financial
Statements.
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NEW TENNECO INC.
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(a) To reflect the settlement or capitalization of intercompany accounts
receivable and payable with Old Tenneco affiliates pursuant to the Corporate
Restructuring Transactions.
(b) To reflect the acquisition by New Tenneco of certain receivables from
Tenneco Credit Corporation, an Old Tenneco affiliate, in connection with the
Merger.
(c) To reflect the allocation between New Tenneco, Newport News and Old Tenneco
of certain corporate assets and liabilities in connection with the Corporate
Restructuring Transactions, the Distributions and the Merger.
(d) To reflect a $109 million receivable from Old Tenneco pursuant to the
Distribution Agreement and Merger Agreement for certain tax benefits to be
realized as a result of the Debt Realignment.
(e) To reflect the transfer to New Tenneco of insurance liabilities and the
related portfolio of short-term cash investments and other assets
previously held by Eastern Insurance Company Limited, an Old Tenneco
affiliate, in connection with the Corporate Restructuring Transactions and
the Merger.
(f) To reflect the cash contribution from New Tenneco to Old Tenneco pursuant to
the Cash Realignment provisions of the Distribution Agreement and Merger
Agreement.
(g) To reflect adjustments to New Tenneco's indebtedness for the pre-
Distributions restructuring and refinancing of debt pursuant to the Debt
Realignment. If the Debt Realignment had been consummated on September 30,
1996, on a pro forma basis, New Tenneco would have had total long-term
debt of $2,058 million, and short-term debt of $258 million, principally
from commercial paper borrowings. The total pro forma long-term debt
includes $1,998 million of New Tenneco public debt securities ($1,860
million aggregate principal amount) exchanged in the New Tenneco debt
exchange offers, which was recorded based on fair value, and $60 million of
other long-term debt borrowings. Tenneco incurred an extraordinary charge
as a result of the Debt Realignment of approximately $235 million after-
tax. Certain other costs were also incurred in connection with the
Corporate Restructuring Transactions and the Distributions totalling
approximately $105 million after tax. The effect on New Tenneco's debt of
these costs has been reflected in this pro forma adjustment. However, such
charges have not been reflected in the pro forma income statement.
(h) To reflect the distribution of New Tenneco common stock to the holders of
Old Tenneco common stock at an exchange ratio of one share of New Tenneco
common stock for each share of Old Tenneco common stock.
(i) To reflect additional depreciation and amortization related to the
Combined Acquisitions resulting from New Tenneco's purchase accounting
adjustments, interest expense at an assumed rate of 5.90% on the debt
issued to complete the acquisitions, and the related tax effects at an
assumed effective tax rate of 40%. The excess of New Tenneco's purchase
cost over the fair value of assets acquired and liabilities assumed is
amortized over 40 years for Clevite and 30 years for Amoco Foam Products.
(j) To reflect the adjustment to interest expense, and related tax effects at
an assumed effective tax rate of 40%, from the changes in the debt of New
Tenneco pursuant to the Debt Realignment as discussed in (g) above. For
purposes of this pro forma adjustment, the New Tenneco public debt
securities are assumed to bear interest at a weighted average annual
effective interest rate of 7.5%. In addition, the pro forma adjustment to
interest expense includes commitment fees on the unused borrowing capacity
of the New Tenneco credit facility and amortization of deferred debt
financing costs incurred in connection with the debt exchange offers and
the New Tenneco credit facility. A 1/8% change in the assumed interest
rates would change annual pro forma interest expense by approximately $2.9
million, before the effect of income taxes.
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(c) EXHIBITS. The following is filed herewith. The exhibit number
corresponds with Item 601 of Regulation S-K.
Exhibit No. Description
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2 Distribution Agreement (the "Distribution
Agreement"), dated as of November 1, 1996, by
and among the Registrant, Old Tenneco and
Newport News (incorporated herein by reference
to Exhibit 2 to the Registrant's Registration
Statement on Form 10, dated November 6, 1996,
File No. 1-12387).
2.1 Amendment No. 1 to Distribution Agreement
dated as of December 11, 1996 by and among the
Registrant, Old Tenneco and Newport News.*
-------
* Filed herewith
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TENNECO INC.
Dated: February 24, 1997 By: /s/ MARK A. McCOLLUM
____________________
Mark A. McCollum
Vice President and Controller