EXHIBIT 11 TENNECO INC. AND CONSOLIDATED SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE OF COMMON STOCK (UNAUDITED) THREE MONTHS ENDED JUNE SIX MONTHS ENDED 30, JUNE 30, ----------------------- ----------------------- 1997 1996 1997 1996 ----------- ----------- ----------- ----------- (MILLIONS EXCEPT SHARE AMOUNTS) COMPUTATION FOR STATEMENTS OF INCOME Earnings Per Share (average shares outstanding): Income from continuing operations................ $ 104 $ 118 $ 180 $ 178 Income from discontinued operations, net of income tax....................... -- 43 -- 478 ----------- ----------- ----------- ----------- Net income................. 104 161 180 656 Preferred stock dividends.. -- 2 -- 5 ----------- ----------- ----------- ----------- Net income to common stock. $ 104 $ 159 $ 180 $ 651 =========== =========== =========== =========== Average shares of common stock outstanding(a)...... 169,907,499 170,264,386 170,673,360 170,351,740 =========== =========== =========== =========== Earnings per average share of common stock: Continuing operations.... $ .61 $ .70 $ 1.05 $ 1.04 Discontinued operations.. -- .23 -- 2.78 ----------- ----------- ----------- ----------- $ .61 $ .93 $ 1.05 $ 3.82 =========== =========== =========== =========== ADDITIONAL COMPUTATIONS(B) Net income to common stock, per above................... $ 104 $ 159 $ 180 $ 651 =========== =========== =========== =========== Primary Earnings Per Share (including common stock equivalents): Average shares of common stock outstanding(a)...... 169,907,499 170,264,386 170,673,360 170,351,740 Incremental common shares applicable to common stock options based on the common stock daily average market price during the period.................... 306,630 642,997 234,122 589,005 Incremental common shares applicable to performance units based upon the attainment of specified goals..................... 83,686 88,125 83,686 88,125 ----------- ----------- ----------- ----------- Average common shares, as adjusted.................. 170,297,815 170,995,508 170,991,168 171,028,870 =========== =========== =========== =========== Earnings per average share of common stock (including common stock equivalents): Continuing operations.... $ .61 $ .70 $ 1.05 $ 1.04 Discontinued operations.. -- .23 -- 2.77 ----------- ----------- ----------- ----------- $ .61 $ .93 $ 1.05 $ 3.81 =========== =========== =========== =========== Fully Diluted Earnings Per Share: Average shares of common stock outstanding(a)...... 169,907,499 170,264,386 170,673,360 170,351,740 Incremental common shares applicable to common stock options based on the more dilutive of the common stock ending or average market price during the period.................... 550,256 642,997 550,256 708,884 Incremental common shares applicable to performance units based upon the attainment of specified goals..................... 83,686 88,125 83,686 88,125 ----------- ----------- ----------- ----------- Average common shares assuming full dilution.... 170,541,441 170,995,508 171,307,302 171,148,749 =========== =========== =========== =========== Fully diluted earnings per average share, assuming conversion of all applicable securities: Continuing operations.... $ .61 $ .70 $ 1.05 $ 1.04 Discontinued operations.. -- .23 -- 2.76 ----------- ----------- ----------- ----------- $ .61 $ .93 $ 1.05 $ 3.80 =========== =========== =========== =========== - ------- NOTES: (a) In 1992, 12,000,000 shares of common stock were issued to the Tenneco Inc. Stock Employee Compensation Trust ("SECT"). Shares of common stock issued to a related trust are not considered to be outstanding in the computation of average shares of common stock until the shares are utilized to fund the obligations for which the trust was established. For the three months and six months ended June 30, 1996, the SECT utilized 2,517,180 and 3,234,436 shares, respectively. At December 31, 1996, all shares had been utilized. (b) These calculations are submitted in accordance with Securities and Exchange Commission requirements although not required by Accounting Principles Board Opinion No. 15 because they result in dilution of less than 3%.