Exhibit 99.1
TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF INCOME
Unaudited
THREE MONTHS ENDED JUNE 30,
(Millions except share and per share amounts)
2004 2003
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Net sales and operating revenues: $1,114 (a) $ 998
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Costs and Expenses
Cost of Sales (exclusive of depreciation shown below) 874 (b) 779 (e)
Engineering, Research and Development 19 13
Selling, General and Administrative 100 (c) 97
Depreciation and Amortization of Other Intangibles 44 41
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Total Costs and Expenses 1,037 930
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Loss on sale of receivables (1) (1)
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Total Other Income (Loss) (1) (1)
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Income before Interest Expense,
Income Taxes, and Minority Interest
North America 50 (a)(b)(c) 49
Europe 14 (b) 11 (e)
Other 12 7
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76 67
Less:
Interest expense (net of
interest capitalized) 34 38 (f)
Income tax expense (benefit) 10 (d) 3 (g)
Minority interest 2 2
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Net income $ 30 $ 24
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Average common shares outstanding:
Basic 41.5 40.4
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Diluted 44.2 41.3
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Earnings per share of common stock:
Basic $ 0.73 $ 0.59
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Diluted $ 0.69 $ 0.58
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(a) Includes continuing changeover costs for a new aftermarket customer acquired
in the first quarter of $2 million pre-tax, $1 million after-tax or $0.02 per
share. The entire cost is recorded in Sales. Geographically all of the charge is
recorded in North America.
(b) Includes restructuring and restructuring related charges of $5 million
pre-tax, $3 million after tax or $0.07 per share. The entire charge is recorded
in cost of sales. Geographically, $1 million is recorded in North America and $4
million in Europe.
(c) Includes consulting fees indexed to stock price of $1 million pre-tax, $1
million after-tax or $0.01 per share. The entire charge is recorded in SG&A.
Geographically the entire charge is recorded in North America.
(d) Includes a $4 million or $0.09 per share tax benefit related to the
resolution of outstanding tax issues.
(e) Includes restructuring and restructuring related charges of $1 million
pre-tax, $1 million after-tax or $0.03 per share. The entire charge is recorded
in cost of sales. Geographically all of the charge is recorded in Europe.
(f) Includes a pre-tax expense of $5 million, $3 million after-tax or $0.07 per
share related to debt issuance costs that were deferred on the senior debt we
paid down with the proceeds of the June 2003 $350 million bond offering.
(g) Includes an $8 million or $0.19 per share tax benefit related to the
resolution of outstanding tax issues.
TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF INCOME
Unaudited
SIX MONTHS ENDED JUNE 30,
(Millions except share and per share amounts)
2004 2003
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Net sales and operating revenues: $2,148 (a) $1,919
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Costs and Expenses
Cost of Sales (exclusive of depreciation shown below) 1,704 (b) 1,522 (e)
Engineering, Research and Development 36 32
Selling, General and Administrative 209 (a)(b)(c) 185
Depreciation and Amortization of Other Intangibles 89 80
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Total Costs and Expenses 2,038 1,819
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Loss on sale of receivables (1) (1)
Other Income (Loss) -- (1)
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Total Other Income (Loss) (1) (2)
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Income before Interest Expense,
Income Taxes, and Minority Interest
North America 80 (a)(b)(c) 77 (e)
Europe 11 (b)(c) 10 (e)
Other 18 (c) 11
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109 98
Less:
Interest expense (net of
interest capitalized) 69 69 (f)
Income tax expense (benefit) 9 (d) 1 (g)
Minority interest 3 3
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Net income $ 28 $ 25
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Average common shares outstanding:
Basic 41.1 40.2
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Diluted 43.8 41.1
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Earnings per share of common stock:
Basic $ 0.69 $ 0.61
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Diluted $ 0.65 $ 0.60
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(a) Includes changeover costs for a new aftermarket customer acquired in the
first quarter of $8 million pre-tax, $5 million after-tax or $0.11 per share. Of
the adjustment $6 million is recorded in Sales and $2 million is recorded in
SG&A. Geographically all of the charge is recorded in North America.
(b) Includes restructuring and restructuring related charges of $10 million
pre-tax, $6 million after tax or $0.14 per share. Of the adjustment $2 million
is recorded in SG&A and the remaining $8 million is in cost of sales.
Geographically, $3 million is recorded in North America and $7 million in
Europe.
(c) Includes consulting fees indexed to stock price of $4 million pre-tax, $3
million after-tax or $0.06 per share. The entire charge is recorded in SG&A.
Geographically $2 million of the charge is recorded in North America, $1 million
in Europe and $1 million in Other.
(d) Includes a $5 million or $0.11 per share tax benefit related to the
resolution of outstanding tax issues.
(e) Includes restructuring and restructuring related charges of $6 million
pre-tax, $3 million after-tax or $0.09 per share. The entire charge is recorded
in cost of sales. Geographically, $3 million is recorded in North America and $3
million in Europe.
(f) Includes a pre-tax expense of $5 million, $3 million after-tax or $0.07 per
share related to debt issuance costs that were deferred on the senior debt we
paid down with the proceeds of the June 2003 $350 million bond offering.
(g) Includes an $11 million or $0.26 per share tax benefit related to the
resolution of outstanding tax issues.
TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES
BALANCE SHEET
(Unaudited)
(Millions)
June 30, December 31,
2004 2003
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Assets
Cash and Cash Equivalents $ 166 $ 145
Receivables, Net 550 442
Inventories 352 343
Other Current Assets 202 175
Investments and Other Assets 594 579
Plant, Property, and Equipment, Net 1,059 1,111
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Total Assets $2,923 $2,795
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Liabilities and Shareholders' Equity
Short-Term Debt $ 20 $ 20
Accounts Payable 669 621
Accrued Taxes 30 19
Accrued Interest 39 42
Other Current Liabilities 239 191
Long-Term Debt 1,399 1,410
Deferred Income Taxes 124 119
Deferred Credits and Other Liabilities 307 292
Minority Interest 23 23
Total Shareholders' Equity 73 58
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Total Liabilities and Shareholders' Equity $2,923 $2,795
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TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENT OF CASH FLOWS
(UNAUDITED)
(Millions)
SIX MONTHS ENDED
JUNE 30,
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2004 2003
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Operating activities:
Net income $ 28 $ 25
Adjustments to reconcile income
to net cash provided by operating activities -
Depreciation and amortization 89 80
Deferred income taxes (5) (10)
Changes in components of working capital -
(Inc.)/dec. in receivables (113) (87)
(Inc.)/dec. in inventories (16) 24
(Inc.)/dec. in prepayments and other current assets (27) (1)
Inc./(dec.) in payables 60 30
Inc./(dec.) in taxes accrued 13 (19)
Inc./(dec.) in interest accrued (2) (5)
Inc./(dec.) in other current liabilities 24 (19)
Other 8 10
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Net cash provided by operating activities 59 28
Investing activities:
Net proceeds from sale of assets 11 3
Expenditures for plant, property & equipment (54) (54)
Investments and other (2) (2)
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Net cash used by investing activities (45) (53)
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Net cash provided (used) before financing activities 14 (25)
Financing activities:
Issuance of common shares 4 --
Proceeds from capital contributions -- 1
Issuance of long-term debt -- 350
Debt issuance costs on long-term debt -- (12)
Retirement of long-term debt (4) (276)
Net inc./(dec.) in short-term debt excluding current
maturities on long-term debt 1 (25)
Other 2 (1)
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Net cash provided by financing activities 3 37
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Effect of foreign exchange rate changes on cash and
temporary cash investments 4 (8)
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Inc./(dec.) in cash and temporary cash investments 21 4
Cash and temporary cash investments, January 1 145 54
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Cash and temporary cash investments, June 30 $ 166 $ 58
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Cash paid during the period for interest $ 74 $ 67
Cash paid during the period for income taxes $ 7 $ 30