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EXHIBIT 99.2
NEWS RELEASE [TENNECO AUTOMOTIVE LOGO]
For immediate release
Contacts: Jane Ostrander
Media Relations
847 482-5607
jane.ostrander@tenneco-automotive.com
Leslie Cleveland Hague
Investor Relations
847 482-5042
lchague@tenneco-automotive.com
TENNECO AUTOMOTIVE ANNOUNCES FOURTH QUARTER
AND FULL-YEAR 2000 RESULTS
LAKE FOREST, ILLINOIS, FEBRUARY 6, 2001 - Tenneco Automotive (NYSE: TEN) today
reported a fourth quarter 2000 loss from continuing operations of $63 million,
or $1.74 per diluted share, which includes restructuring and other charges of
$42 million after-tax, or $1.18 per share. The company had a loss from
continuing operations of $143 million, or $4.25 per diluted share, for the same
period in 1999.
Before charges, the company reported a loss from continuing operations of $21
million, or 56 cents per diluted share, compared with income of $1 million, or 5
cents per diluted share in the fourth quarter of 1999.
"Obviously, we are disappointed with our fourth quarter results. Tough industry
conditions in the auto parts sector, coupled with our highly leveraged position,
had a significant impact on our performance," said Mark P. Frissora, chairman
and CEO, Tenneco Automotive. "We have responded aggressively by implementing
global cost reduction initiatives, sharply reducing
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spending and improving productivity in the face of this industry downturn. We
will focus intensely on these efforts as we confront an equally challenging year
in 2001."
For the full year 2000, Tenneco Automotive reported a loss from continuing
operations of $41 million, or $1.18 per diluted share, compared with a loss from
continuing operations of $63 million, or $1.87 per diluted share in 1999.
Included in these results are one-time non-operational items taken in the third
quarter of 2000, and fourth quarter charges in both years related to
restructuring, as well as transaction expenses. Excluding one-time items, income
from continuing operations in 2000 was $4 million, or 10 cents per diluted
share. Excluding one-time items and assuming the company had incurred the same
level of stand-alone and interest costs in 1999 as it did in 2000, income from
continuing operations in 1999 would have been $24 million, or 74 cents per
share.
"Despite this very difficult operating environment, we reduced working capital
and capital spending, and initiated a securitization program for receivables to
bring our senior debt level down by $107 million in 2000," said Frissora. "We
also generated a $23 million improvement in EVA last year, and improved net cash
flow before financing and factoring activities by $61 million."
FOURTH QUARTER RESULTS
Tenneco Automotive reported revenue of $849 million for the fourth quarter 2000,
which includes $56 million in pass-through sales for catalytic converters.
Excluding the pass-through sales, revenue was slightly down compared with fourth
quarter 1999 revenue of $806 million.
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Reported EBITDA for the quarter was a loss of $7 million, compared with a loss
of $37 million in fourth quarter 1999. Excluding the $61 million in pre-tax
charges, EBITDA was $54 million in the quarter compared with $77 million for the
same period last year. The company also reported EBIT as a loss of $42 million,
compared with a loss of $71 million in fourth quarter 1999. Without charges,
EBIT was $19 million compared with $43 million the previous year.
North America
Revenue from the company's North American original equipment business declined,
primarily due to light vehicle production cutbacks, and continuing lower
heavy-duty ride control and elastomer volumes. North American original equipment
revenue was $322 million, including $56 million in pass-through revenue from
catalytic converter sales, compared with $301 million in revenue for the fourth
quarter of 1999, which did not include pass-through revenue for catalytic
converter sales.
Fourth quarter revenue for the North American aftermarket was $123 million,
compared with fourth quarter 1999 revenue of $138 million. Revenues were down as
a result of further deterioration in the replacement parts market.
Fourth quarter EBIT, before charges, for North American operations was $9
million, compared with $33 million, before charges, the previous year. In the
original equipment business, the decrease was largely due to light vehicle
production cutbacks, especially in December, and
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continued depressed heavy-duty ride control and elastomer volumes. On the
aftermarket side, depressed industry conditions and higher promotional expenses
impacted profitability.
Europe
The company reported fourth quarter 2000 revenue for the European original
equipment business of $249 million, a 22 percent increase compared with fourth
quarter 1999 revenue of $204 million. Revenue would have increased by 28 percent
if exchange rates had been the same in the fourth quarter 2000 as in the fourth
quarter of 1999. The increase in revenue was the result of very strong exhaust
volumes.
Continued weakness in both ride control and exhaust product lines continued to
affect revenue from the European aftermarket business. Revenue for the fourth
quarter 2000 was $71 million, a 17 percent decline compared with $86 million in
the fourth quarter of 1999. Excluding the currency impact, revenue would have
declined by 13 percent.
European EBIT, before charges, for the fourth quarter was $5 million, even with
the previous year. The erosion in the aftermarket was offset by strong volumes
on the exhaust original equipment side of the business.
Tenneco Automotive reported fourth quarter results in other geographical areas
as follows:
Region Revenue Growth (Decline) year over year
South America $37 million 12 percent
Australia $29 million (12 percent)
Asia $18 million 64 percent
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Combined EBIT, before charges, for South America, Australia, and Asia in the
fourth quarter was $5 million, even with EBIT before charges in fourth quarter
1999. Unit volume growth in Brazil, India, and China offset the currency impact
and original equipment production cutbacks in Australia.
FULL YEAR RESULTS
For full-year 2000, the company reported an 8 percent increase in revenue to
$3.55 billion from $3.28 billion in 1999. Excluding $206 million in pass-through
sales for catalytic converters, revenue would have increased by 2 percent.
The company reported EBITDA of $271 million for 2000, compared with $292 million
in 1999. Excluding one-time items, EBITDA was $336 in 2000. Excluding one-time
items and assuming the company had incurred the same level of stand-alone costs
in 1999, EBITDA for 1999 would have been $374 million. Full-year EBIT was $120
million compared with $148 million in 1999. Excluding one-time items, 2000 EBIT
was $185 million. EBIT would have been $230 million in 1999 excluding one-time
items and assuming the company had incurred the same level of stand-alone costs.
"We are pleased with stronger performances in our European original equipment
and emerging markets businesses. Combined, we saw a 72 percent earnings
(before-interest and tax) improvement year-over-year," said Frissora.
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The attached exhibits provide additional information on Tenneco Automotive's
2000 and 1999 operating results.
The company will host a conference call on February 6, 2001 at 10:30 a.m. EST.
The dial-in number is 800-619-3527 domestic or 1-773-756-4629 international.
Passcode is Tenneco Auto. A recording of this call will be available from 1:00
p.m. EST on February 6 through February 13. To access this recording, dial
800-964-4572 domestic or 402-998-1180 international, and enter the passcode
8400. The call will also be available on the Tenneco Automotive web site at
www.tenneco-automotive.com.
Tenneco Automotive is a $3.5 billion manufacturing company headquartered in Lake
Forest, Ill., with 23,000 employees worldwide. Tenneco Automotive is one of the
world's largest producers and marketers of ride control and exhaust systems and
products, which are sold under the Monroe(R) and Walker(R) global brand names.
Among its products are Sensa-Trac(R) and Reflex(TM) shocks and struts, Rancho(R)
shock absorbers, Walker(R) Quiet-Flow(R) mufflers and DynoMax(R) performance
exhaust products, and Monroe(R) Clevite(TM) vibration control components.
This press release contains forward-looking statements. Words such as "working
to improve," "will" and similar expressions identify these forward-looking
statements. These forward-looking statements are based on the current
expectations of the company (including its subsidiaries). Because these
forward-looking statements involve risks and uncertainties, the company's plans,
actions and actual results could differ materially. Among the factors that could
cause these plans, actions and results to differ materially from current
expectations are: (i) the general political, economic and competitive conditions
in markets and countries where the company and its subsidiaries operate,
including currency fluctuations and other risks associated with operating in
foreign countries; (ii) governmental actions, including the ability to receive
regulatory approvals and the timing of such approvals; (iii) changes in capital
availability or costs, including increases in the company's costs of borrowing
(i.e., interest rate increases); (iv) changes in automotive manufacturers'
production rates and their actual and forecasted requirements for the company's
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products, including the company's resultant inability to realize the sales
represented by its awarded book of business; (v) changes in consumer demand and
prices, including decreases in demand for automobiles which include the
company's products, and the potential negative impact on the company's revenues
and margins from such products; (vi) the cost of compliance with changes in
regulations, including environmental regulations; (vii) workforce factors such
as strikes or labor interruptions; (viii) material substitutions and increases
in the costs of raw materials; (ix) the company's ability to integrate
operations of acquired businesses quickly and in a cost effective manner; (x)
the company's ability to execute restructuring and other cost reduction plans
and to realize anticipated benefits from these plans; (xi) the company's ability
to develop and profitably commercialize new products and technologies, and the
acceptance of such new products and technologies by the company's customers;
(xii) further changes in the distribution channels for the company's aftermarket
products, and further consolidations among automotive parts customers and
suppliers; (xiii) changes by the Financing Accounting Standards Board or other
accounting regulatory bodies of authoritative generally accepted accounting
principles or policies; and (xiv) the timing and occurrence (or non-occurrence)
of transactions and events which may be subject to circumstances beyond the
control of the company and its subsidiaries. The company undertakes no
obligation to update any forward-looking statement to reflect events or
circumstances after the date of this press release.
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TENNECO AUTOMOTIVE INC. CONSOLIDATED
STATEMENTS OF INCOME (LOSS)
(Millions Except Per Share Amounts)
1998
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1st Q 2nd Q 3rd Q 4th Q Year
------- ------- ------- ------- -------
REVENUES
Net Sales and Operating Revenues $ 800 $ 864 $ 804 $ 769 $ 3,237
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COSTS AND EXPENSES
Cost of Sales (exclusive of depr. shown below) 574 587 570 601 2,332
Engineering, Research and Development 11 2 5 13 31
Selling, General and Administrative 103 115 115 139 472
Depreciation and Amortization 35 37 38 40 150
------- ------- ------- ------- -------
723 741 728 793 2,985
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OTHER INCOME (EXPENSE) 6 1 5 (37) (25)
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OPERATING INCOME (LOSS) 83 124 81 (61) 227
Interest Expense (net of interest capitalized) 13 17 19 20 69
Income Tax Expense (Benefit) 19 36 (7) (35) 13
Minority Interest 8 8 6 7 29
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INCOME (LOSS) FROM CONTINUING OPERATIONS 43 63 63 (53) 116
Income (Loss) from Discontinued
Operations, net of income tax 32 74 40 (7) 139
Extraordinary Loss, net of income tax - - - - -
Cumulative Effect of Changes in Accounting
Principle, net of income tax - - - - -
------- ------- ------- ------- -------
NET INCOME (LOSS) TO COMMON STOCK $ 75 $ 137 $ 103 $ (60) $ 255
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AVERAGE COMMON SHARES OUTSTANDING:
Basic 33.9 33.8 33.6 33.5 33.7
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Diluted 34.0 34.0 33.7 33.5 33.8
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EARNINGS (LOSS) PER SHARE OF COMMON STOCK:
BASIC -
Continuing Operations $ 1.26 $ 1.88 $ 1.85 $ (1.57) $ 3.45
Discontinued Operations 0.95 2.16 1.24 (0.23) 4.13
Extraordinary Loss - - - - -
Cumulative Changes in Accounting Principle - - - - -
------- ------- ------- ------- -------
$ 2.21 $ 4.04 $ 3.09 $ (1.80) $ 7.58
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DILUTED -
Continuing Operations $ 1.26 $ 1.88 $ 1.84 $ (1.57) $ 3.44
Discontinued Operations 0.94 2.15 1.24 (0.23) 4.12
Extraordinary Loss - - - - -
Cumulative Changes in Accounting Principle - - - - -
------- ------- ------- ------- -------
$ 2.20 $ 4.03 $ 3.08 $ (1.80) $ 7.56
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1999
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1st Q 2nd Q 3rd Q 4th Q Year
------- ------- ------- ------- -------
REVENUES
Net Sales and Operating Revenues $ 789 $ 868 $ 816 $ 806 $ 3,279
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COSTS AND EXPENSES
Cost of Sales (exclusive of depr. shown below) 585 627 600 615 2,427
Engineering, Research and Development 11 16 12 13 52
Selling, General and Administrative 105 98 100 218 521
Depreciation and Amortization 35 36 39 34 144
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736 777 751 880 3,144
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OTHER INCOME (EXPENSE) 2 6 2 3 13
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OPERATING INCOME (LOSS) 55 97 67 (71) 148
Interest Expense (net of interest capitalized) 19 23 16 48 106
Income Tax Expense (Benefit) 14 30 16 22 82
Minority Interest 6 7 8 2 23
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INCOME (LOSS) FROM CONTINUING OPERATIONS 16 37 27 (143) (63)
Income (Loss) from Discontinued
Operations, net of income tax (166) 55 12 (109) (208)
Extraordinary Loss, net of income tax (7) - - (11) (18)
Cumulative Effect of Changes in Accounting
Principle, net of income tax (134) - - - (134)
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NET INCOME (LOSS) TO COMMON STOCK $ (291) $ 92 $ 39 $ (263) $ (423)
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AVERAGE COMMON SHARES OUTSTANDING:
Basic 33.3 33.4 33.5 33.6 33.5
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Diluted 33.4 33.5 33.5 33.8 33.7
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EARNINGS (LOSS) PER SHARE OF COMMON STOCK:
BASIC -
Continuing Operations $ 0.47 $ 1.07 $ 0.86 $ (4.25) $ (1.87)
Discontinued Operations (4.99) 1.67 0.32 (3.24) (6.23)
Extraordinary Loss (0.20) - - (0.34) (0.55)
Cumulative Changes in Accounting Principle (4.00) - - - (3.99)
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$ (8.72) $ 2.74 $ 1.18 $ (7.83) $(12.64)
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DILUTED -
Continuing Operations $ 0.47 $ 1.06 $ 0.86 $ (4.25) $ (1.87)
Discontinued Operations (4.99) 1.67 0.32 (3.24) (6.23)
Extraordinary Loss (0.20) - - (0.34) (0.55)
Cumulative Changes in Accounting Principle (4.00) - - - (3.99)
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$ (8.72) $ 2.73 $ 1.18 $ (7.83) $(12.64)
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2000
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1st Q 2nd Q 3rd Q 4th Q Year
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REVENUES
Net Sales and Operating Revenues $ 882 $ 948 $ 870 $ 849 $ 3,549
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COSTS AND EXPENSES
Cost of Sales (exclusive of depr. shown below) 672 712 678 704 2,766
Engineering, Research and Development 15 15 14 14 58
Selling, General and Administrative 110 117 89 143 459
Depreciation and Amortization 39 37 40 35 151
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836 881 821 896 3,434
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OTHER INCOME (EXPENSE) 1 1 (2) 5 5
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OPERATING INCOME (LOSS) 47 68 47 (42) 120
Interest Expense (net of interest capitalized) 45 48 46 47 186
Income Tax Expense (Benefit) (1) 5 (5) (26) (27)
Minority Interest 2 - - - 2
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INCOME (LOSS) FROM CONTINUING OPERATIONS 1 15 6 (63) (41)
Income (Loss) from Discontinued
Operations, net of income tax - - - - -
Extraordinary Loss, net of income tax - - (1) - (1)
Cumulative Effect of Changes in Accounting
Principle, net of income tax - - - - -
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NET INCOME (LOSS) TO COMMON STOCK $ 1 $ 15 $ 5 $ (63) $ (42)
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AVERAGE COMMON SHARES OUTSTANDING:
Basic 33.7 34.4 35.1 35.7 34.7
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Diluted 33.9 34.6 35.2 35.9 34.9
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EARNINGS (LOSS) PER SHARE OF COMMON STOCK:
BASIC -
Continuing Operations $ 0.03 $ 0.42 $ 0.17 $ (1.74) $ (1.18)
Discontinued Operations - - - - -
Extraordinary Loss - - (0.01) - (0.02)
Cumulative Changes in Accounting Principle - - - - -
------- ------- ------- ------- -------
$ 0.03 $ 0.42 $ 0.16 $ (1.74) $ (1.20)
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DILUTED -
Continuing Operations $ 0.03 $ 0.42 $ 0.16 $ (1.74) $ (1.18)
Discontinued Operations - - - - -
Extraordinary Loss - - (0.01) - (0.02)
Cumulative Changes in Accounting Principle - - - - -
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$ 0.03 $ 0.42 $ 0.15 $ (1.74) $ (1.20)
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EXTERNAL BASIS
TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENT OF CASH FLOWS
UNAUDITED
(Millions)
TWELVE MONTHS ENDED
DECEMBER 31,
--------------------
2000 1999
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Operating activities:
Income (loss) from continuing operations $ (41) $ (63)
Adjustments to reconcile income (loss) from continuing
operations to net cash provided (used) by
operating activities -
Depreciation and amortization 151 144
Deferred income taxes (43) 97
(Gain)/loss on sale of businesses and assets, net (2) 6
Changes in components of working capital -
(Inc.)/dec. in receivables 61 (151)
(Inc.)/dec. in inventories (29) (23)
(Inc.)/dec. in prepayments and other current assets (14) 14
Inc./(dec.) in payables 141 46
Inc./(dec.) in taxes accrued (4) (43)
Inc./(dec.) in interest accrued 5 (7)
Inc./(dec.) in other current liabilities (4) (11)
Other 13 (10)
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Cash provided (used) by continuing operations 234 (1)
Cash provided (used) by discontinued operations - (253)
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Net cash provided (used) by operating activities 234 (254)
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Investing activities:
Net proceeds from sale of discontinued operations - 303
Net proceeds from sale of assets 26 8
Expenditures for plant, property & equipment (146) (154)
Acquisition of businesses (5) (36)
Expenditures for plant, property & equipment-discontinued operations - (1,264)
Investments and other (32) (45)
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Net cash provided (used) by investing activities (157) (1,188)
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Net Cash provided (used) before financing activities - continuing operations 77 (228)
Financing activities:
Issuance of common and treasury shares 17 41
Proceeds from subsidiary equity issuance 1 -
Purchase of common stock - (4)
Issuance of equity securities by subsidiaries - (408)
Issuance of long-term debt 1 3,721
Retirement of long-term debt (107) (1,410)
Net inc./(dec.) in short-term debt excluding current
maturities on long-term debt (16) (294)
Dividends (common) (7) (151)
Other (12) -
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Net cash provided (used) by financing activities (123) 1,495
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Effect of foreign exchange rate changes on cash and
temporary cash investments (3) 2
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Inc./(dec.) in cash and temporary cash investments (49) 55
Cash and temporary cash investments, January 1 $ 84 $ 29
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Cash and temporary cash investments, December 31 $ 35 $ 84
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BALANCE SHEETS
(Unaudited)
(Millions)
1998 1999 2000
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Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31
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ASSETS
Receivable, Net $ 443 $ 550 $ 606 $ 680 $ 571 $ 645 $ 684 $ 584 $ 487
Inventories 414 425 401 403 412 415 391 395 422
Other Current Assets 207 138 169 133 218 191 209 228 200
Investments and Other Assets 863 748 770 740 705 697 700 721 772
Plant, Property and Equipment, net 1,093 1,046 1,049 1,055 1,037 1,013 1,004 984 1,005
Net Assets of Discontinued Operations 1,739 1,428 1,421 1,483 - - - - -
------ ------ ------ ------ ------ ------ ------ ------ ------
Total $4,759 $4,335 $4,416 $4,494 $2,943 $2,961 $2,988 $2,912 $2,886
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LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term Debt $ 304 $ 368 $ 206 $ 237 $ 56 $ 77 $ 43 $ 35 $ 92
Accounts Payable 337 344 351 365 348 383 426 436 464
Other Current Liabilities 268 237 287 286 259 254 256 269 253
Long-term Debt 671 677 832 796 1,578 1,571 1,570 1,505 1,435
Deferred Income Taxes 98 32 39 104 108 106 108 129 144
Deferred Credits and Other Liabilities 170 174 168 155 156 160 166 160 154
Minority Interest 407 407 411 411 16 17 18 15 14
Shareholders' Equity 2,504 2,096 2,122 2,140 422 393 401 363 330
------ ------ ------ ------ ------ ------ ------ ------ ------
Total $4,759 $4,335 $4,416 $4,494 $2,943 $2,961 $2,988 $2,912 $2,886
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DEBT TO CAPITALIZATION RATIO 25.1% 29.5% 29.1% 28.8% 78.9% 80.1% 79.4% 80.3% 81.6%
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