NEWS RELEASE (TENNECO AUTOMOTIVE LOGO)
For Immediate Release
Contacts: Jane Ostrander
Media Relations
847 482-5607
jane.ostrander@tenneco-automotive.com
Leslie Hunziker
Investor Relations
847 482-5042
leslie.hunziker@tenneco-automotive.com
TENNECO AUTOMOTIVE ADJUSTS THIRD QUARTER 2003 FINANCIAL RESULTS
Lake Forest, Illinois, November 13, 2003 - Tenneco Automotive (NYSE: TEN)
announced today that the company's third quarter results, as reported on October
21, 2003, understated net income by $1 million and earnings per diluted share
(EPS) by 1-cent and overstated revenue and earnings before interest and taxes
(EBIT) for the quarter by $1 million.
In filing its third quarter report on Form 10-Q today, the company reported
third quarter 2003 net income of $4 million, an increase from $3 million as
announced on October 21, 2003, and earnings per share of 10-cents, an increase
from previously reported 9-cents. The company reported third quarter revenue of
$914 million versus $915 million as previously reported, and the company's EBIT
in the quarter was $38 million, down from $39 million as originally reported.
These changes were made as a result of two adjustments. The first adjustment was
identified in Germany during a routine monthly review of vehicle platform and
customer financial performance. The revenue generated from one particular
platform was not recorded properly during a period in the quarter when the
company was transitioning its
-More-
-2-
supply of product from one facility to a newly opened manufacturing facility.
With the adjustment, European revenue for third quarter 2003 was $344 million
versus the previously reported $345 million, and European EBIT was a loss of $3
million instead of a loss of $2 million.
The second adjustment related to the write-off of debt issuance costs by the
company in connection with the refinancing of some of its debt earlier this
year. The company reported lower interest expense of $2 million following
re-examination of the calculation of the write-off.
Third quarter 2003 financial statements and reconciliations of GAAP to non-GAAP
results reflecting the adjusted results are attached.
Tenneco Automotive is a $3.5 billion manufacturing company with headquarters in
Lake Forest, Illinois and approximately 19,600 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 Monroe
Reflex(R) shocks and struts, Rancho(R) shock absorbers, Walker(R) Quiet-Flow(R)
mufflers and DynoMax(R) performance exhaust products, and Monroe(R) Clevite(R)
vibration control components.
###
ATTACHMENT 1
TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF INCOME (LOSS)
Unaudited
NINE MONTHS ENDED SEPTEMBER 30,
(Millions except share and per share amounts)
<Table>
<Caption>
2003 2002
---------- ----------
Net sales and operating revenues: $ 2,833 $ 2,613
========== ==========
Costs and Expenses
Cost of Sales (exclusive of depreciation shown below) 2,249 (a) 2,058 (d)
Engineering, Research and Development 50 49
Selling, General and Administrative 276 271 (e)
Depreciation and Amortization of Other Intangibles 120 104
---------- ----------
Total Costs and Expenses 2,695 2,482
========== ==========
Gain on sale of assets -- 11 (f)
Loss on sale of receivables (1) (2)
Other Income (Loss) (1) (2)
---------- ----------
Total Other Income (Loss) (2) 7
---------- ----------
Income before Interest Expense,
Income Taxes, and Minority Interest
North America 109 (a) 108 (d) (e)
Europe 7 (a) 15 (d) (e) (f)
Other 20 15
---------- ----------
136 138
Less:
Interest expense (net of
interest capitalized) 103 (b) 108
Income tax expense (benefit) (1)(c) 6 (g)
Minority interest 5 2
---------- ----------
Income before Cumulative Effect of
Change in Accounting Principle 29 22
---------- ----------
Cumulative Effect of Change in Accounting
Principle, net of income tax -- (218)
---------- ----------
Net income (loss) $ 29 $ (196)
========== ==========
Average common shares outstanding:
Basic 40.3 39.8
========== ==========
Diluted 41.5 41.7
========== ==========
Earnings (loss) per share of common stock:
Basic-
Before Cumulative Effect of Change in Accounting Principle $ 0.72 $ 0.56
Cumulative Effect of Change in Accounting Principle -- (5.48)
---------- ----------
$ 0.72 $ (4.92)
========== ==========
Diluted-
Before Cumulative Effect of Change in Accounting Principle $ 0.70 $ 0.53
Cumulative Effect of Change in Accounting Principle -- (5.48)
---------- ----------
$ 0.70 $ (4.95)
========== ==========
</Table>
(a) Includes restructuring and restructuring related charges of $7 million
pre-tax, $4 million after-tax or $0.11 per share. The entire charge is recorded
in cost of sales. Geographically, $3 million is recorded in North America and $4
million in Europe.
(b) Includes a pre-tax expense of $3 million, $2 million after-tax or $.05 per
share related to debt issuance costs that were deferred on the senior debt we
paid down with the proceeds of the $350 million bond offering.
(c) Includes a $14 million or $.36 per share tax benefit related to the
resolution of several tax issues.
(d) Includes restructuring and restructuring related charges of $6 million
pre-tax, $3 million after-tax or $0.08 per share. The entire charge is recorded
in cost of sales. Geographically, $3 million is recorded in both North America
and Europe.
(e) Includes costs associated with the amendment of the senior debt agreement of
$2 million pre-tax, $1 million after-tax or $0.03 per share. The entire charge
is recorded in SG&A. Geographically, $1 million is recorded in both North
America and Europe.
(f) Includes a gain on the sale of a UK facility of $11 million pre-tax, $5
million after-tax or $0.13 per share. Geographically, all of the gain is
recorded in Europe.
(g) Includes a $6 million or $.17 per share tax benefit related to the
resolution of several tax issues.
ATTACHMENT 1
TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF INCOME (LOSS)
Unaudited
THREE MONTHS ENDED SEPTEMBER 30,
(Millions except share and per share amounts)
<Table>
<Caption>
2003 2002
---------- ----------
Net sales and operating revenues: $ 914 $ 856
========== ==========
Costs and Expenses
Cost of Sales (exclusive of depreciation shown below) 727 (a) 675 (d)
Engineering, Research and Development 18 18
Selling, General and Administrative 91 85
Depreciation and Amortization of Other Intangibles 40 35
---------- ----------
Total Costs and Expenses 876 813
========== ----------
Loss on sale of receivables -- (1)
Other Income (Loss) -- (2)
---------- ----------
Total Other Income (Loss) -- (3)
---------- ----------
Income (Loss) before Interest Expense,
Income Taxes, and Minority Interest
North America 32 36 (d)
Europe (3)(a) (1)(d)
Other 9 5
---------- ----------
38 40
Less:
Interest expense (net of
interest capitalized) 34 (b) 36
Income tax expense (benefit) (2)(c) (2)(e)
Minority interest 2 1
---------- ----------
Net income $ 4 $ 5
========== ==========
Average common shares outstanding:
Basic 40.6 39.8
========== ==========
Diluted 42.2 42.0
========== ==========
Earnings (loss) per share of common stock:
Basic- $ 0.11 $ 0.13
========== ==========
Diluted- $ 0.10 $ 0.13
========== ==========
</Table>
(a) Includes restructuring related charges of $1 million pre-tax, $1 million
after-tax or $0.02 per share. The entire charge is recorded in cost of sales.
Geographically all of the charge is recorded in Europe.
(b) Includes a pre-tax reduction of $2 million, $1 million after-tax or $.02 per
share related to debt issuance costs that were deferred on the senior debt we
paid down with the proceeds of the $350 million bond offering.
(c) Includes a $3 million or $.09 per share tax benefit related to the
resolution of outstanding tax issues.
(d) Includes restructuring and other charges of $3 million pre-tax, $2 million
after-tax or $0.04 per share. The entire charge is recorded in cost of sales.
Geographically, $1 million is recorded in North America and $2 million in
Europe.
(e) Includes a $2 million or $.06 per share tax benefit related to a change in
the estimated effective tax rate.
ATTACHMENT 1
TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES
BALANCE SHEET
(Unaudited)
(Millions)
<Table>
<Caption>
September 30, 2003 December 31, 2002
-------------------- --------------------
Assets
Cash and Temporary Cash Investments $ 63 $ 54
Receivables, Net 483 409
Inventories 338 352
Other Current Assets 160 151
Investments and Other Assets 538 512
Plant, Property, and Equipment, Net 1,067 1,026
-------------------- --------------------
Total Assets $ 2,649 $ 2,504
==================== ====================
Liabilities and Shareowners' Equity
Short-Term Debt $ 18 $ 228
Accounts Payable 569 505
Accrued Taxes 42 40
Accrued Interest 41 23
Other Current Liabilities 216 220
Long-Term Debt 1,386 1,217
Deferred Income Taxes 71 103
Deferred Credits and Other Liabilities 268 243
Minority Interest 21 19
Total Shareholders' Equity 17 (94)
-------------------- --------------------
Total Liabilities and Shareholders' Equity $ 2,649 $ 2,504
==================== ====================
</Table>
ATTACHMENT 1
TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES
Statement of Cash Flows
(Unaudited)
(Millions)
<Table>
<Caption>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
2003 2002
---------- ----------
Operating activities:
Net income (loss) before cumulative effect of change in accounting
principle, net of tax $ 29 $ 22
Adjustments to reconcile income (loss)
to net cash provided (used) by operating activities -
Depreciation and amortization 120 104
Deferred income taxes (17) (17)
(Gain)/loss on sale of businesses and assets, net 1 (9)
Changes in components of working capital -
(Inc.)/dec. in receivables (46) (25)
(Inc.)/dec. in inventories 43 11
(Inc.)/dec. in prepayments and other current assets 3 (20)
Inc./(dec.) in payables 31 76
Inc./(dec.) in taxes accrued (25) 3
Inc./(dec.) in interest accrued 19 14
Inc./(dec.) in other current liabilities (15) 10
Other 19 (1)
---------- ----------
Net cash provided (used) by operating activities 162 168
Investing activities:
Net proceeds from sale of assets 4 20
Expenditures for plant, property & equipment (83) (86)
Investments and other (5) 10
---------- ----------
Net cash provided (used) by investing activities (84) (56)
---------- ----------
Net Cash provided (used) before financing activities 78 112
Financing activities:
Proceeds from capital contributions 1 --
Issuance of long-term debt 350 1
Debt issuance costs on long-term debt (13) --
Retirement of long-term debt (277) (89)
Net inc./(dec.) in short-term debt excluding current
maturities on long-term debt (119) (22)
Other (1) --
---------- ----------
Net cash provided (used) by financing activities (59) (110)
---------- ----------
Effect of foreign exchange rate changes on cash and
temporary cash investments (10) (9)
---------- ----------
Inc./(dec.) in cash and temporary cash investments 9 (7)
Cash and temporary cash investments, January 1 54 53
---------- ----------
Cash and temporary cash investments, September 30 $ 63 $ 46
========== ==========
Cash paid during the period for interest $ 79 $ 94
Cash paid during the period for income taxes $ 41 $ 22
</Table>
ATTACHMENT 2
TENNECO AUTOMOTIVE
RECONCILIATION OF GAAP(1) RESULTS TO NON-GAAP RESULTS
Unaudited
<Table>
<Caption>
Q3 2003 Q3 2002
-------------------------- -------------------------
Amount Per Share Amount Per Share
---------- ---------- ---------- ----------
Net Income (GAAP measure) $ 4 $ 0.10 $ 5 $ 0.13
After tax adjustments (reflects non-GAAP measures):
Restructuring and restructuring related expenses 1 0.02 2 0.04
Tax return to accrual adjustment (3) (0.09) -- --
Debt issuance cost write off adjustment (1) (0.02) -- --
Effective tax rate change -- -- (2) (0.06)
---------- ---------- ---------- ----------
Non-GAAP earnings measure(2) $ 1 $ 0.01 $ 5 $ 0.11
========== ========== ========== ==========
</Table>
<Table>
<Caption>
Q3 2003
---------------------------------------------------------
North Rest of
America Europe World Total
---------- ---------- ---------- ----------
Net income (loss) $ 4
Minority interest 2
Income tax expense (benefit) (2)
Interest expense (net of interest capitalized) 34
----------
Income(loss) before interest expense, income taxes
and minority interest (GAAP measure) $ 32 $ (3) $ 9 38
Depreciation and amortization of other intangibles 22 15 3 40
---------- ---------- ---------- ----------
Total EBITDA(3) $ 54 $ 12 $ 12 $ 78
========== ========== ========== ==========
</Table>
<Table>
<Caption>
Q3 2002
---------------------------------------------------------
North Rest of
America Europe World Total
---------- ---------- ---------- ----------
Net income (loss) $ 5
Minority interest 1
Income tax expense (benefit) (2)
Interest expense (net of interest capitalized) 36
----------
Income(loss) before interest expense, income taxes
and minority interest (GAAP measure) $ 36 $ (1) $ 5 40
Depreciation and amortization 22 10 3 35
---------- ---------- ---------- ----------
Total EBITDA(3) $ 58 $ 9 $ 8 $ 75
========== ========== ========== ==========
</Table>
(1) Generally Accepted Accounting Principles
(2) Tenneco Automotive presents the above reconciliation of GAAP to non-GAAP
results in order to reflect the results for the third quarters of 2003 and
2002 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. 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 the non-GAAP earnings measure 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 and non-GAAP
earnings measures reflected above to understand and analyze the results of
the business. The company believes investors find the non-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)EBITDA represents net income before interest expense, income taxes, minority
interest and depreciation and amortization. EBITDA is not a calculation based
upon generally accepted accounting principles. The amounts included in the
EBITDA calculation, however, are derived from amounts included in the
historical statements of income data. In addition, EBITDA should not be
considered as an alternative alternative to net income 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 Automotive has
presented EBITDA because it regularly reviews EBITDA as a measure of the
company's ability to incur and service debt. In addition, Tenneco Automotive
believes its debt holders utilize and analyze our EBITDA for similar
purposes. Tenneco Automotive also believes EBITDA 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 measure presented may not always be
comparable to similarly titled measures reported by other companies due to
differences in the components of the calculation.
ATTACHMENT 2
TENNECO AUTOMOTIVE
RECONCILIATION OF GAAP(1) RESULTS TO NON-GAAP RESULTS
Unaudited
<Table>
<Caption>
YTD 2003 YTD 2002
-------------------------- -------------------------
Amount Per Share Amount Per Share
---------- ---------- ---------- ----------
Net Income before Cumulative Effect of Change in
Accounting Principle (GAAP measure) $ 29 $ 0.70 $ 22 $ 0.53
After tax adjustments (reflects non-GAAP measures):
Restructuring and restructuring related expenses 4 0.11 3 0.08
Tax adjustments (14) (0.36) (6) (0.17)
Debt issuance cost write off 2 0.05 -- --
Gain on sale of York facility -- -- (5) (0.13)
Amendment fee -- -- 1 0.03
---------- ---------- ---------- ----------
Non-GAAP earnings measure(2) $ 21 $ 0.50 $ 15 $ 0.34
========== ========== ========== ==========
</Table>
<Table>
<Caption>
YTD 2003
--------------------------------------------------------
North Rest of
America Europe World Total
---------- ---------- ---------- ----------
Net income (loss) $ 29
Minority interest 5
Income tax expense (benefit) (1)
Interest expense (net of interest capitalized) 103
----------
Income(loss) before interest expense, income taxes
and minority interest (GAAP measure) $ 109 $ 7 $ 20 136
Depreciation and amortization of other intangibles 68 43 9 120
---------- ---------- ---------- ----------
Total EBITDA(3) $ 177 $ 50 $ 29 $ 256
========== ========== ========== ==========
</Table>
<Table>
<Caption>
YTD 2002
--------------------------------------------------------
North Rest of
America Europe World Total
---------- ---------- ---------- ----------
Net income (loss) $ (196)
Cumulative effect of change in accounting
principle, net of income tax 218
Minority interest 2
Income tax expense (benefit) 6
Interest expense (net of interest capitalized) 108
----------
Income(loss) before interest expense, income taxes
and minority interest (GAAP measure) $ 108 $ 15 $ 15 138
Depreciation and amortization 65 30 9 104
---------- ---------- ---------- ----------
Total EBITDA(3) $ 173 $ 45 $ 24 $ 242
========== ========== ========== ==========
</Table>
(1) Generally Accepted Accounting Principles
(2) Tenneco Automotive presents the above reconciliation of GAAP to non-GAAP
results in order to reflect the results for the first nine months of 2003
and 2002 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. 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 the non-GAAP earnings measure 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 and non-GAAP
earnings measures reflected above to understand and analyze the results of
the business. The company believes investors find the non-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)EBITDA represents net income before cumulative effect of change in accounting
principle, interest expense, income taxes, minority interest and depreciation
and amortization. EBITDA is not a calculation based upon generally accepted
accounting principles. The amounts included in the EBITDA calculation,
however, are derived from amounts included in the historical statements of
income data. In addition, EBITDA should not be considered as an alternative
to net income 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 Automotive has presented EBITDA because it regularly
reviews EBITDA as a measure of the company's ability to incur and service
debt. In addition, Tenneco Automotive believes its debt holders utilize and
analyze our EBITDA for similar purposes. Tenneco Automotive also believes
EBITDA 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 measure
presented may not always be comparable to similarly titled measures reported
by other companies due to differences in the components of the calculation.
ATTACHMENT 2
TENNECO AUTOMOTIVE
RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS
Unaudited
<Table>
<Caption>
Q3 2003
--------------------------------------------------------------------------------
Pass-through Revenues
Sales Excluding
Revenues Excluding Currency
Currency Excluding Currency and Pass-through
Revenues Impact Currency Impact Sales
------------ ------------ ------------ ------------ ----------------
North America Aftermarket
Ride Control $ 78 $ -- $ 78 $ -- $ 78
Exhaust 45 -- 45 -- 45
------------ ------------ ------------ ------------ ------------
Total North America Aftermarket 123 -- 123 -- 123
North America Original Equipment
Ride Control 102 -- 102 -- 102
Exhaust 227 5 222 67 155
------------ ------------ ------------ ------------ ------------
Total North America Original Equipment 329 5 324 67 257
Total North America 452 5 447 67 380
Europe Aftermarket
Ride Control 45 7 38 -- 38
Exhaust 47 7 40 -- 40
------------ ------------ ------------ ------------ ------------
Total Europe Aftermarket 92 14 78 -- 78
Europe Original Equipment
Ride Control 65 8 57 -- 57
Exhaust 187 26 161 52 109
------------ ------------ ------------ ------------ ------------
Total Europe Original Equipment 252 34 218 52 166
Total Europe 344 48 296 52 244
Asia 42 -- 42 15 27
South America 31 2 29 4 25
Australia 45 9 36 4 32
------------ ------------ ------------ ------------ ------------
Total Rest of World 118 11 107 23 84
Total Tenneco Automotive $ 914 $ 64 $ 850 $ 142 $ 708
============ ============ ============ ============ ============
</Table>
<Table>
<Caption>
Q3 2002
--------------------------------------------------------------------------------
Pass-through Revenues
Sales Excluding
Revenues Excluding Currency
Currency Excluding Currency and Pass-through
Revenues Impact Currency Impact Sales
------------ ------------ ------------ ------------ ----------------
North America Aftermarket
Ride Control $ 80 $ -- $ 80 $ -- $ 80
Exhaust 49 -- 49 -- 49
------------ ------------ ------------ ------------ ------------
Total North America Aftermarket 129 -- 129 -- 129
North America Original Equipment
Ride Control 101 -- 101 -- 101
Exhaust 236 -- 236 74 162
------------ ------------ ------------ ------------ ------------
Total North America Original Equipment 337 -- 337 74 263
Total North America 466 -- 466 74 392
Europe Aftermarket
Ride Control 39 -- 39 -- 39
Exhaust 47 -- 47 -- 47
------------ ------------ ------------ ------------ ------------
Total Europe Aftermarket 86 -- 86 -- 86
Europe Original Equipment
Ride Control 46 -- 46 -- 46
Exhaust 173 -- 173 56 117
------------ ------------ ------------ ------------ ------------
Total Europe Original Equipment 219 -- 219 56 163
Total Europe 305 -- 305 56 249
Asia 30 -- 30 9 21
South America 24 -- 24 2 22
Australia 31 -- 31 2 29
------------ ------------ ------------ ------------ ------------
Total Rest of World 85 -- 85 13 72
Total Tenneco Automotive $ 856 $ -- $ 856 $ 143 $ 713
============ ============ ============ ============ ============
</Table>
Tenneco Automotive presents the above reconciliation of revenues in order
to reflect the trend in the company's sales, in various product lines and
geographical regions, separately from the effects of doing business in
currencies other than the U.S. dollar. Additionally, pass-through catalytic
converter sales include precious metals pricing, which may be volatile.
While Tenneco Automotive's original equipment customers assume the risk of
this volatility, it impacts reported revenue. Excluding pass-through
catalytic converter sales removes this impact. Tenneco Automotive uses this
information to analyze the trend in revenues before these factors. Tenneco
Automotive believes investors find this information useful in understanding
period to period comparisons in the company's revenues.
ATTACHMENT 2
TENNECO AUTOMOTIVE
RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS
Unaudited
<Table>
<Caption>
Nine Months Ended September 30, 2003
----------------------------------------------------------------------------------
Pass-through Revenues
Sales Excluding
Revenues Excluding Currency
Currency Excluding Currency and Pass-through
Revenues Impact Currency Impact Sales
-------------- -------------- -------------- -------------- ----------------
North America Aftermarket
Ride Control $ 240 $ -- $ 240 $ -- $ 240
Exhaust 127 -- 127 -- 127
-------------- -------------- -------------- -------------- --------------
Total North America Aftermarket 367 -- 367 -- 367
North America Original Equipment
Ride Control 336 -- 336 -- 336
Exhaust 731 10 721 229 492
-------------- -------------- -------------- -------------- --------------
Total North America Original Equipment 1,067 10 1,057 229 828
Total North America 1,434 10 1,424 229 1,195
Europe Aftermarket
Ride Control 133 23 110 -- 110
Exhaust 137 23 114 -- 114
-------------- -------------- -------------- -------------- --------------
Total Europe Aftermarket 270 46 224 -- 224
Europe Original Equipment
Ride Control 186 28 158 -- 158
Exhaust 621 97 524 166 358
-------------- -------------- -------------- -------------- --------------
Total Europe Original Equipment 807 125 682 166 516
Total Europe 1,077 171 906 166 740
Asia 118 -- 118 42 76
South America 86 (7) 93 9 84
Australia 118 20 98 11 87
-------------- -------------- -------------- -------------- --------------
Total Rest of World 322 13 309 62 247
Total Tenneco Automotive $ 2,833 $ 194 $ 2,639 $ 457 $ 2,182
============== ============== ============== ============== ==============
</Table>
<Table>
<Caption>
Nine Months Ended September 30, 2002
----------------------------------------------------------------------------------
Pass-through Revenues
Sales Excluding
Revenues Excluding Currency
Currency Excluding Currency and Pass-through
Revenues Impact Currency Impact Sales
-------------- -------------- -------------- -------------- ----------------
North America Aftermarket
Ride Control $ 256 $ -- $ 256 $ -- $ 256
Exhaust 147 -- 147 -- 147
-------------- -------------- -------------- -------------- --------------
Total North America Aftermarket 403 -- 403 -- 403
North America Original Equipment
Ride Control 315 -- 315 -- 315
Exhaust 754 -- 754 249 505
-------------- -------------- -------------- -------------- --------------
Total North America Original Equipment 1,069 -- 1,069 249 820
Total North America 1,472 -- 1,472 249 1,223
Europe Aftermarket
Ride Control 111 -- 111 -- 111
Exhaust 130 -- 130 -- 130
-------------- -------------- -------------- -------------- --------------
Total Europe Aftermarket 241 -- 241 -- 241
Europe Original Equipment
Ride Control 136 -- 136 -- 136
Exhaust 521 -- 521 160 361
-------------- -------------- -------------- -------------- --------------
Total Europe Original Equipment 657 -- 657 160 497
Total Europe 898 -- 898 160 738
Asia 77 -- 77 26 51
South America 78 -- 78 7 71
Australia 88 -- 88 4 84
-------------- -------------- -------------- -------------- --------------
Total Rest of World 243 -- 243 37 206
Total Tenneco Automotive $ 2,613 $ -- $ 2,613 $ 446 $ 2,167
============== ============== ============== ============== ==============
</Table>
Tenneco Automotive presents the above reconciliation of revenues in order
to reflect the trend in the company's sales, in various product lines and
geographical regions, separately from the effects of doing business in
currencies other than the U.S. dollar. Additionally, pass-through catalytic
converter sales include precious metals pricing, which may be volatile.
While Tenneco Automotive's original equipment customers assume the risk of
this volatility, it impacts reported revenue. Excluding pass-through
catalytic converter sales removes this impact. Tenneco Automotive uses this
information to analyze the trend in revenues before these factors. Tenneco
Automotive believes investors find this information useful in understanding
period to period comparisons in the company's revenues.