NYSE: TEN New York, NY June 14, 2018 UBS Global Industrials & Transportation Conference
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NYSE: TENNew York, NYJune 14, 2018
UBS Global Industrials & Transportation Conference
Safe Harbor
2
This communication contains forward-looking statements. These forward-looking statements include, but are not limited to, (i) all statements, other than statements ofhistorical fact, included in this communication that address activities, events or developments that we expect or anticipate will or may occur in the future or that dependon future events and (ii) statements about our future business plans and strategy and other statements that describe Tenneco’s outlook, objectives, plans, intentions orgoals, and any discussion of future operating or financial performance. These forward-looking statements are included in various sections of this communication and thewords “may,” “will,” “should,” “could,” “expect,” “anticipate,” “estimate,” and similar expressions (and variations thereof) are intended to identify forward-lookingstatements. Forward-looking statements included in this release concern, among other things, the proposed acquisition of Federal-Mogul LLC and related separationtransactions, including the expected timing of completion of the proposed acquisition and spin-off; the benefits of the proposed acquisition and spin-off; the combinedand separated companies’ respective plans, objectives and expectations; future financial and operating results; and other statements that are not historical facts. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to materially differ from those described in the forward-lookingstatements, including the risk that the acquisition transaction may not be completed in a timely manner or at all due to a failure to satisfy certain closing conditions,including any stockholder or regulatory approval or the failure to satisfy other conditions to completion of the transaction; the occurrence of any event, change or othercircumstance that could give rise to the termination of the purchase agreement; the outcome of any legal proceeding that may be instituted against Tenneco and othersfollowing the announcement of the transactions; the combined company may not complete the separation of the Aftermarket & Ride Performance business from thePowertrain Technology business (or achieve some or all of the anticipated benefits of such a separation); the proposed transactions may have an adverse impact onexisting arrangements with Tenneco or Federal-Mogul, including those related to transition, manufacturing and supply services and tax matters; the amount of the costs,fees, expenses and charges related to the transactions may be greater than expected; the ability to retain and hire key personnel and maintain relationships withcustomers, suppliers or other business partners; the risk that the benefits of the transactions, including synergies, may not be fully realized or may take longer to realizethan expected; the risk that the transactions may not advance the combined or separated companies’ respective business strategy; the risk that the combined companymay experience difficulty integrating or separating all employees or operations; the potential diversion of Tenneco management’s attention resulting from the proposedtransactions; as well as the risk factors and cautionary statements included in Tenneco’s periodic and current reports (Forms 10-K, 10-Q and 8-K) filed from time to timewith the SEC.
In addition, please see Tenneco’s financial results press release for factors that could cause Tenneco’s future performance to vary from the expectations expressed orimplied by the forward-looking statements herein.
Forward-Looking Statements
Safe Harbor
3
Additional Information and Where to Find ItIn connection with the proposed transaction between Tenneco Inc. (the “Company”) and Federal-Mogul LLC, the Company intends to file relevant materials with the U.S.Securities and Exchange Commission (the “SEC”), including a preliminary proxy statement on Schedule 14A. Following the filing of the definitive proxy statement with theSEC, the Company will mail the definitive proxy statement and a proxy card to each stockholder entitled to vote at the special meeting relating to the proposedtransaction. This communication is not a substitute for the proxy statement or other document(s) that the Company may file with the SEC in connection with theproposed transaction. INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ CAREFULLY THE PROXY STATEMENT (INCLUDING ANY AMENDMENTSOR SUPPLEMENTS THERETO) AND OTHER DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATIONABOUT THE COMPANY, FEDERAL-MOGUL AND THE PROPOSED TRANSACTION. Investors and security holders may obtain free copies of the proxy statement and otherrelevant materials (when they become available), and any and all documents filed by the Company with the SEC may be obtained for free at the SEC’s website atwww.sec.gov. In addition, stockholders may obtain free copies of the documents filed with the SEC by the Company via the Company’s Investor Relations section of itswebsite at investors.tenneco.com or by contacting Investor Relations by directing a request to the Company, Attention: Investor Relations, 500 North Field Drive in LakeForest, Illinois 60045 or by calling (847) 482-5162.
Certain Information Regarding ParticipantsThe Company and its respective directors and executive officers may be deemed participants in the solicitation of proxies in connection with the proposed transaction.Information about the persons who may, under the rules of the SEC, be considered to be participants in the solicitation of the Company’s stockholders in connection withthe proposed transaction, and any interest they have in the proposed transaction, will be set forth in the definitive proxy statement when it is filed with the SEC.Additional information regarding these individuals is set forth in the Company’s proxy statement for its 2018 Annual Meeting of Stockholders, which was filed with theSEC on April 4, 2018, its Annual Report on Form 10-K for the fiscal year ended December 31, 2017, which was filed with the SEC on February 28, 2018, and its QuarterlyReport on Form 10-Q for the quarter ended March 31, 2018, which was filed with the SEC on May 10, 2018. You may obtain these documents (when they becomeavailable) free of charge at the SEC’s web site at www.sec.gov and from Investor Relations at the Company.
No Offers or SolicitationsThis document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in whichsuch offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall bemade except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
In addition to the foregoing, please see the Company’s financial results press release for certain factors that might cause actual results to differ materially from currentexpectations.
Transformation in the Auto Space
4
Tenneco is well-positioned to benefit from industry trends
Electrification/HybridizationAutonomous Driving Mobility Emissions RegulationsAftermarket
Accelerating Core Growth
5
Multiple growth drivers further diversify the business profile
Long-term Growth Drivers
Technology-driven Growth • Monroe® Intelligent Suspension• Noise Vibration and Harshness (NVH) Solutions
New Market Growth • China aftermarket opportunity• Opportunity to add new aftermarket product category
Content Growth • Light vehicle hybridization of the fleet• Tightening emissions regulations globally
Market Expansion Growth • Increasing number of commercial truck and off-highway
powertrains under regulation
45%
23%
20%
12%
49%
22%
18%
11%
Product ApplicationsVA Revenue
Clean Air Light VehicleRide Performance Light Vehicle
AftermarketCommercial Truck and Off-Highway
2017
2020 Projection
See appendix for key assumptions related to our revenue projections.
Since 2000, Tenneco has delivered:• Value-add (VA) Revenue* growth outpacing LV industry production• Margin expansion of over 300 bps• Double-digit annual adjusted EPS growth
Proven Track Record of Growth
6
Built to outperform – revenue growth and investment returns
Total Revenue $ 3.5 $ 4.4 $ 5.9 $ 8.2 $ 9.3
Substrate Sales $ 0.4 $ 0.6 $ 1.2 $ 1.9 $ 2.2
VA Revenue ($ billions)
Adjusted EBIT† as a % of VA Revenue
Leading ROIC† Performance
5-year average 22.8%
◆ Source IHS Automotive January 2018 global light vehicles
$7.1B
$6.3B
$4.7B
$3.8B$3.1B
9.1%9.1%
6.6%6.4%6.0%
* Value-add (VA) Revenue is total revenue less substrate sales. See slide 39 for further explanation. † See reconciliations to U.S. GAAP at end of presentation.
• Over past 10+ years, TEN outpaced industry production by 2x
• Expect 3x outperformance through 2020
Tenneco Revenue (billion)Industry Production◆ (million) 6%
CAGR
6%CAGR
3%CAGR
2%CAGR
Focused strategic objectives – moving faster and further to unlock value
Transaction Unlocks Significant Value
7
This acquisition builds on Tenneco’s long-term strategy:
• Positions us to realign and then separate Tenneco’s and Federal-Mogul’s lines of business, allowing them to be managed according to their unique value propositions
• Enhances our ability to serve customers in both lines
• Opens up new opportunities to drive growth with products that are complementary to Tenneco’s current product offering
• Building upon the strength, depth and industry experience of the combined teams
• Significant synergies will drive shareholder value
acquiring
Acquisition expected to close in second half of 2018; separation expected to be complete in second half of 2019
Tiger Falcon CombinedCo AM / Chassis Powertrain Tech
Creating Two Focused CompaniesAcquisition Announced April 10, 2018
8
Realignment and separation to unlock significant shareholder value
Transformational acquisition of Federal-Mogul and planned separation into two focused, industry-leading, publicly traded companies
• Definitive agreement to acquire Federal-Mogul’s Motorparts and Powertrain businesses for $5.4B (EV/2017 EBITDA 7.2x / 5.4x2 with synergies)• Intention to create two independent, publicly traded companies• Value accretive with total annual run-rate earnings synergies of at least $200M and one time working capital synergies of at least $250M
expected within 24 months after closing
Current State Post Acquisition Post Separation
RP
CA
Motorparts
PowertrainCA
Powertrain
Motorparts
RP
CA
Powertrain
Motorparts
RPPowertrain: $4.5BMotorparts: $3.3B
Federal-Mogul 2017 Revenues
Clean Air (CA): $6.2B 1
Ride Performance (RP): $3.1B 1
Tenneco 2017 Revenues
2 0 1 7 P R O F O R M A R E V E N U E
Tenneco Federal-Mogul Tenneco CombinedCo AM & Ride Performance Powertrain Technology
$9.3 (VA $7.1)
$ Billions$17.1 (VA $14.9)
$10.7 (VA $8.5)
$6.4$7.8
SEPARATION EXPECTED IN SECOND HALF 2019
1. The Clean Air Aftermarket business is intended to be allocated to the Ride Performance business2. Calculation: Purchase price less working capital synergies ($250M) / Federal-Mogul EBITDA plus earnings synergies ($200M)
EXPECTED TO CLOSE IN SECOND HALF 2018
Aftermarket & Ride Performance Company
Revenue by ProductRevenue by Geography* Revenue by Customer
One of the largest global multi-line aftermarket suppliers, with an outstanding strategic position to capture Asia Pacific aftermarket growth with
a broad range of products. Strong systems capabilities will capitalize on OE market trends in mobility, electrification/autonomous driving.
57% aftermarketLeading positions in established
markets – Americas & EMEA Very diversified customer base9
PRO FORMA 2017 REVENUE
$6.4B
EMEA 37%
North America
51%
Motorparts (OE) 15%
Ride Performance (OE)28%
Motorparts (AM)37%
Clean Air (AM)5%
Ride Performance (AM)15%
APAC 12% Volkswagen 7%AAP / Carquest 6%
NAPA / Alliance 6%
Ford 5%
O’Reilly 5%
General Motors 5%
Daimler 2%The Group 3%
FCA 2%
Other 56%
Pep Boys / Auto Plus 3%
* EMEA includes Tenneco South America and APAC includes Federal-Mogul South America
Products Position
• Shocks and struts• Suspension systems #1 Globally
• Steering, hubs• Driveline
#1 North America#3 EMEA
• Brake pads, shoes, linings• Rotors and drums #1 North America
• Gaskets• Seals #1 Globally
• Underhood service• Ignition #3 Globally
• Brake pads, shoes, linings #2 EMEA
• Emission control products #1 NA & EMEA
• Suspension links, bushings, mounts, exhaust isolators
• Shocks and struts#1 South America
Aftermarket & Ride PerformanceAftermarket – Well Positioned to Win in All Markets
10
Well-positioned to win in China
• Combined strong “house of brands” expected to capture growth in China‒ Shared investments in salesforce & distribution‒ Combined brand power & OE pedigree‒ Product line & coverage‒ Wear and tear products (e.g. brake pads, wipers) can
provide earlier entry into market
1950 1960 1970 1980 1990 2000 2010 2020 2025 2030
Global Vehicles in OperationUnprecedented growth expected over next 15 years led by China
Source: OCIA, Frost & Sullivan
China forecast to be largest AM market by 2025
Trends in Americas and EMEA• Vehicles in operation continue to grow and age• Vehicle miles traveled increasing in Americas• Growing demand for advanced suspension products
Aftermarket & Ride PerformanceComplete “Around the Wheel” Offering
Improved system level capability to capture intelligent suspension growth trends
Leader in shocks, struts and
NVH/elastomers
Focused on Suspension,including the
intelligent suspension portfolio
Leader in steering, suspension and
braking
Focused on Chassis and
Braking
Note: AM brands represented here; however, OE offerings are typically branded "Tenneco" or “Federal-Mogul" for respective componentsSource: Company websites
Brake pads
Upper control arm
Lower control arm
Strut assembly
Ball joint
Bushings
Inner and outer tie rods Hub assembly
Strut top mount
Linkages Brake rotors
Dampers (not shown)
Comprehensive ride performance product portfolio
11
Powertrain Technology Company
12
Revenue by End MarketRevenue by Geography* Revenue by Customer
Catalytic Converters
Full Exhaust Systems
Electronic Valve
Gasoline Particulate Filters
Pistons
System Protection
Sealing / Heat Shields
Bearings
Ignition Valves
One of the largest pure play powertrain suppliers globally positioned to capture content growth due to tightening fuel economy and criteria
pollutant regulations, light vehicle hybridization trends and commercial truck and off-highway expansion opportunities
~25% non-light vehicleLeading positions in all geographies Well represented across all global OEMs
PRO FORMA 2017REVENUE $10.7B
VA REVENUE $8.5B
EMEA 39%
APAC20%
North America
41%
Industrial9%
CTOH15%
Light Vehicle76%
Other39%
General Motors 15%
VW 10%
Ford 10%
FCA 8%Daimler 6%
Caterpillar 3%
Cummins 2%Jaguar 2%
BMW 2%Renault Nissan
3%
* EMEA includes Tenneco South America and APAC includes Federal-Mogul South America
Criteria PollutantsGreenhouse Gases / Fuel Economy FULL SYSTEM
EMISSION CONTROL
Powertrain TechnologyComplementary Portfolio Brings Unique Competitive Position
System capabilities enable better powertrain efficiency at a lower total system cost13
F-M Engine Components Tenneco Hot End Components
Delivering an optimized trade-off between fuel economy and emission control from the cylinder to the tailpipe
MANAGES:• Friction / performance• Combustion temperature• Ignition timing
MANAGES:• Conversion efficiency• Thermal management• Precious metal loading
Regulation Driven
CO PM
NOx
Powertrain Technology –Significant Ongoing Opportunity
120
100
80
60
40
20
0
97
94%
2018
94
95%
2017
91
96% 79%
15%
6%
2024
110
83%
14%
4%
2023
109
85%
3%1%
2016
90
97%
ICE1
HEV
BEV
Global light vehicle sales volume (M)
2022
105
89%
116
66%
23%
11%
2028
115
70%
21%
9%
20272021
102
92%
2020
99
93%
5%1%
2019 2030
118
61%
26%
13%
2029
114
73%
19%
8%
2026
112
76%
18%
7%
2025
111
1. Includes mild hybrid electric vehicleNote: ICE = internal combustion engine, HEV = hybrid electric vehicle, BEV = battery electric vehicleSource: BCG estimates
• ICEs are a significant portion of vehicles moving forward
• Powertrain technology components support hybridization; increased complexity and content vs. ICE
• Increasing CO2 and criteria pollutant emissions regulations provide organic growth opportunities
• Content per vehicle increases in both cylinder and aftertreatment systems
87% HEV or ICE in 2030
ICE and hybrids expected to be 85%+ of vehicle sales through 2030 14
Clean Air – Hybrid GrowthContinuing Growth in Electrified Powertrains
Program wins in hybrid electrified powertrains drive future Clean Air growth 15* Market weighted average
Average Value-Add Content EU6 Hybrid*
CPV expected to increase 30%-40% by 2025
$135 - $145
2015
$110 - $120
20252020
$155 - $165
• 2017: 17 hybrid programs in production
• 2018: 11 hybrid program launches
Secured Hybrid Program Wins• Pre-2016 28 programs• 2016 16 programs• 2017 20 programs• Q1 2018 5 programs
System DesignIncreasing space scarcity in hybrids drives higher engineering complexity and tougher packaging requirements
Nomination
2015
DriverTime
Performance
Example Gasoline System Design
High Voltage Li-Ion
BatteryHybridization
Incremental CPV
$35 - $45
Incremental CPV
10% - 15%
GPF + Resonator
GPF
Euro 6c
Significant Synergy PotentialAt Least $200M1 Earnings Synergies Expected Within 24 Months
16
In addition, one time working capital synergies expected of at least $250M
Estimated costs to achieve of ~$70 million
1. Net of estimated public company costs.
($ in millions)
Estimated costs to achieve of ~$80 million
• Separate, dedicated integration management team in place
• Complementary product portfolio reduces level of integration complexity‒ 80% - 85% of employees
unaffected by integration‒ No revenue synergies included‒ No manufacturing synergies
included (footprint/process)
• Reduction from three to two corporate structures generates majority of G&A savings
• Expect 75% synergy run rate within one year of close
Supply Chain
$35G&A and Engineering
$50
Sales and Go-To Market
$30
Aftermarket & Ride Performance
$115
Supply Chain
$40Sales, G&A and Engineering
$45
Powertrain Technology
$85
Tenneco Pro Forma Financial Overview
17
Tenneco Pro Forma Financial Overview
1. The Clean Air Aftermarket business is intended to be allocated to the Ride Performance business.2. Represents annual run rate synergies expected to be achieved within 24 months.3. Additional one time working capital synergies of at least $250M expected.
Pro Forma FY 2017Total
Revenue ($B)Value-add
Revenue ($B)Adjusted
EBITDA ($M)Earnings
Synergies ($M)(2)(3)EBITDA
(w/ synergies) ($M)
Ride Performance (Plus CA AM)(1) $3.1 $3.1 $335 - -
F-M Motorparts 3.3 3.3 260 - -
Aftermarket & Ride Performance Company $6.4 $6.4 $595 $115 $710
Clean Air (Less CA AM)(1) $6.2 $4.0 $533 - -
F-M Powertrain 4.5 4.5 493 - -
Powertrain Technology Company $10.7 $8.5 $1,025 $85 $1,110
Pro Forma Tenneco $17.1 $14.9 $1,620 $200 $1,820
Value-add EBITDA margin (w/ synergies) 11%
Value-add EBITDA margin (w/ synergies) 13%
Key Information Regarding Separation
Separation expected to be complete in second half of 201918
Anticipate Aftermarket & Ride Performance company will be SpinCo• As smaller of two new companies, represents lower
refinancing cost• Will enter into new financing arrangements pre-spin• Expect leverage around 3.0x at separation• Leverage goal of 1.5x to 2.0x
Anticipate Powertrain Technology company will be RemainCo• Will retain existing combined company debt structure• Expect some or all of existing Federal-Mogul bonds
to be refinanced with proceeds from Aftermarket & Ride Performance financing transactions
• Anticipate leverage around 2.3x at separation• Leverage goal of 1.0x to 1.5x
Separation expected to be complete in second half of 2019• Approximately 12 months following completion of
acquisition
• Legal, tax, financing and SEC registration determine ultimate timing
Executive management teams expected to be announced early fourth quarter of 2018
Expect combined company leverage of ~2.5x at separation
4.4x
9.9x
7.0x
0.0x
4.0x
8.0x
12.0x
16.0x
Tiger Auto AftermarketSuppliers
Powertrain SystemsSuppliers
Substantial Value Creation Opportunity
19
Separation provides investors with distinct investment opportunitiesNote: Multiples shown represent medians of respective comp sets. Auto Aftermarket Suppliers includes MPAA, DORM and SMP. Powertrain Systems Suppliers includes BWA, CMI and DLPH.
(EV / 2018E EBITDA)*
Aftermarket & Ride Performance
Comparables
Powertrain Technology
Comparables
*FactSet and Company Filings as of April 6, 2018.
Reducing multiple gap
generates value creation opportunity
Transformational Step –Compelling Strategic Rationale
20
Extends existing strategy and accelerates long-term value creation
AM & RP PT
Strategically positions each company
Increases scale and broadens portfolio for respective markets
Enhances capabilities to capture growth with focused investments
Significant synergy potential in both new companies
Provides investors with distinct investment opportunities
Extends existing strategy and accelerates long-term value creation
21
Transaction Terms• Purchase price of $5.4 billion; represents Enterprise Value / 2017 Adjusted EBITDA of 7.2x
(5.4x1 including earnings and working capital synergies)• Consideration to be funded with a combination of cash and Tenneco equity
Financing
• Fully committed debt financing in place to fund the cash portion of the transaction• Expected pro forma Net Debt / Adjusted EBITDA of approximately 3x at closing• Targeting net leverage profile of ~2.5x by the end of 2019 through profitable growth and debt
reduction funded by cash flow
Ownership
Icahn Enterprises, LP (“Seller”) to receive:‒ 5.65M Class A Voting Shares, representing 9.9% of Class A shares outstanding‒ 23.79M Class B Non-Voting Shares, together representing 36.4% of total shares outstanding
Tenneco has right to increase cash consideration by up to $400M and reduce shares delivered to Seller by up to 7.32M shares with proceeds of equity offer
‒ Net proceeds of equity offering above $54.68/share would be value accretive for existing Tenneco shareholders. If Tenneco exercises its right the Seller would own 27.4% of total shares outstanding
Other
• Seller will have one board member from close to separation and on Powertrain Technology after the separation
‒ Seller's Board representation would not transfer to the Aftermarket Ride Performance business on separation
• As part of the transaction, the Seller will enter into a customary lock-up and standstill agreement
Timeline • Expected to close by second half 2018, subject to regulatory and shareholder approvals, as well as other customary closing conditions
Key Terms of the Acquisition
221. Calculation: Purchase price less working capital synergies ($250M) / Federal-Mogul EBITDA plus earnings synergies ($200M)
Federal-Mogul Overview
23
Federal-Mogul is a leading global supplier to OEMs and the aftermarket
• Over 20 strong market-leading brands in the global vehicle aftermarket
• Sells and distributes a broad portfolio of aftermarket products globally
• Strong market position in OE braking• Operates 33 manufacturing sites in 15 countries
and 33 distribution centers in 12 countries
• One of the world’s leading powertrain component and assembly providers
• Market leading positions across product categories
• Operates 87 manufacturing sites in 19 countries
Revenue by Segment
Revenue by Geography*
Federal-Mogul
2017 Revenue: $7.8BEBITDA: $753M
Powertrain
Motorparts
APAC15%
EMEA 41%
North America
44%
Motorparts42%
Powertrain58%
* APAC includes Federal-Mogul South America
Revenue by End Market
Aftermarket 30%
Light Vehicle49%
CTOH 11%
Industrial 10%
Aftermarket & Ride Performance Company
Unique Strategic Combination
24
Creates two strong businesses with scale and strategic and financial flexibility to drive long-term value creation
Powertrain Technology Company
One of the world’s leading multi-line aftermarket and OE suppliers
• Premier aftermarket brands, broad product coverage and strong distribution
• Strong portfolio of OE braking and advanced suspension technologies and capabilities
• Outstanding strategic position to1. Improve go-to-market capabilities in Americas & EMEA2. Capture Asia Pacific aftermarket growth with a broad
range of products3. Capitalize on new OE trends in mobility and
electrification / autonomous driving
One of the largest global pure play powertrain suppliers
• Portfolio of engine-to-tailpipe products and system solutions
• Excellent position to capture content growth from:1. Demand for improved engine performance2. Tightening fuel economy and criteria pollutant
regulations3. Light vehicle hybridization trends4. Commercial truck and off-highway expansion
opportunities• Well positioned to further build out the product
portfolio in an evolving powertrain market
RIDE PERFORMANCE CLEAN AIR
$37 $74 $87 $112
$622 $699
$1,029
$2,244
$500
0
400
800
1,200
1,600
2,000
2,400
2H 2018 2019 2020 2021 2022 2023 2024 2025 2026
$mm
TLA TLBNotes due 2022 (FM) Floating Notes due 2024 (FM)Notes due 2024 (FM) Notes due 2024 (TEN)Notes due 2026 (TEN)
Strong Balance Sheet
251. Represents undiluted shares outstanding; pro forma ownership not adjusted for Tenneco’s Funding Adjustment Right.
Maturity Schedule
Pro Forma Capitalization• Committed debt financing in place• Robust liquidity over $2 billion
• Cash flow generation enables rapid deleveraging• Appropriate capital structure for each company will be
determined prior to separation
Tenneco Transaction Pro Forma($ in millions) 12/31/2017 Adjustments 12/31/2017
Cash & Equivalents $318 $460 $778Undrawn Revolver 1,356 144 1,500Liquidity $1,674 $604 $2,278
Revolving Credit Facility 244 (244) - Term Loan A 390 610 1,000 Term Loan B - 2,400 2,400 Tenneco Notes 725 - 725 Federal-Mogul Notes - 1,278 1,278 Other Debt 95 160 255 Less: Unamortized Debt Issuance Costs (13) (98) (111) Total Debt $1,441 $4,106 $5,547
Net Debt $1,123 $3,646 $4,769
Adj. EBITDA (before synergies) $868 $753 $1,620
Net Leverage 1.3x - 2.9xNet Leverage (after run rate synergies) - - 2.6x
Pro Forma Shares Outstanding
Class A Shares Outstanding 51.4 5.7 57.1Class B Shares Outstanding - 23.8 23.8Total Shares Outstanding(1) 51.4 29.4 80.9
Stronger Together – Expanded Aftermarket and Ride Performance Product Offering
Extensive portfolio of leading global and regional aftermarket brands26
Tenneco Ride Performance Federal-Mogul Motorparts
Tenneco Ride Performance
Federal-Mogul Motorparts
Legend
2
2
1 2 3 456
2
1 3
1 21 3
1 21 3
1 21 3
Key Brands Key Brands
Suspension Systems
Exhaust Systems
1
2
3
Elastomers
Chassis
Engine (Pistons, Bearings, Valves)
1 2
3
Sealing & Gaskets
4
5
Brake pads & Rotors
Ignition
6
UnderhoodServiceNot shown: wipers
Aftermarket & Ride Performance – Scale
Leading global multi-line aftermarket supplier with a broad product portfolio27
Top Global AM Supplier Benefits of Scale
• Broad product portfolio enables differentiated customer and channel support
• Cross-category sales incentives with retailers and warehouse distributors
• Scale to support investments in digital and China, and focused AM branding/marketing capabilities
• Rationalization of distribution networks for improved service at lower cost
• Best practice sharing in go-to-market, manufacturing and distribution
Source: Company estimates
~65.6
3.7 3.6
2.31.8
1.5 1.3 1.2 1.1 1.0 1.0 0.9
0
2
4
6
Bosc
h (e
st.) JCI
ZF
AM/R
ide
Perf
orm
ance
Fede
ral-M
ogul
Valv
olin
e
Mah
ler
Tige
r
KYB
SMP
SKF
Delp
hi T
ech.
Dorm
an
Aftermarket 2017 Revenues, Global ($B)
Incl
udes
ser
vice
s, d
iagn
ostic
s, e
tc.
Batt
erie
s onl
y
Tenn
eco
Aftermarket & Ride Performance ...Providing a Platform to Capture Growth in AV Trends and Ride Differentiation
Intelligent Suspension: Reinventing the Ride of the Future28
The future of mobility is being re-engineered
TOMORROW
TODAY
Physical InfrastructureRoads and HighwaysVehicle to Infrastructure Energy
Connected5GVehicle to VehicleCybersecurity Over the air
Vision and SensingRoad Detection Sensor Fusion ADAS System AR/VR
Vehicle SystemsChassisInteriorControl Systems
Increasing demand for advanced suspension technologies to differentiate ride29Source: IHS database and Tenneco analysis
• Expect advanced suspension to grow from 2% to more than 15% of LV production by 2025, representing >40% of available market in 2025
• 25% revenue CAGR opportunity for advanced suspension growth through 2025
• Autonomous trend drives additional opportunities
RID
E P
ERFO
RM
AN
CE
More than6xAC TIVE S US PENSION
Average4xS EMI-ACTIVE S US PENSION
$50-$60CON VENTIONAL S US PENSION
A segment F segment
Content per Vehicle
Aftermarket & Ride Performance Intelligent Suspension
Stronger Together –Expanded Powertrain Product Offering
One of the largest pure powertrain suppliers with engine to tailpipe solutions, addressing both greenhouse gas and criteria pollutant emissions
30
Tenneco Clean Air Federal-Mogul Powertrain
Key Trends
Key Trends
2
4
12 34
5 6
31Catalytic Converters Full Exhaust Systems
Electronic ValveGasoline
Particulate Filters
2
3 4
1
Pistons System Protection
Sealing / Heat Shields
Bearings Ignition Valves
2 3
4 5 6
1
• Tightening emissions regulations
• Electrification / Hybridization
• Strong OEM investments in ICE powertrain
• CO2 / Fuel economy regulations
• Engine performance – downsized, higher output engines
• Strong OEM investments in ICE powertrain
65
6
Selective Catalytic Reduction
Diesel Particulate Filters
Diesel OxidationCatalyst
56
7
7
Tenneco Clean Air
Federal-Mogul Powertrain
Legend
Stronger Together – Enhanced Commercial Truck and Off Highway Product Offering
Enhanced capabilities to provide products and systems solutions for the CTOH markets31
Tenneco Clean Air Federal-Mogul Powertrain
Key TrendsKey Trends
Catalytic Converters Hydrocarbon Manifold Dosing
Diesel Particulate Filters
Gasoline Particulate Filters
2
3 4
1
Steel pistons
Systems Protection
Sealing / Heat Shields
Bearings Valves
2 3
4 5
1
• Tightening emissions regulations, especially in India and China
• More newly regulated powertrains through 2025 than regulated today
• CTOH industry consolidation• Global engine programs
• Tightening emissions regulations, especially diesel NOx emissions
• Technology: alternative fuels, dual fuel, friction reduction
• CTOH industry consolidation
• Global engine programs
5 6
MixersSelective Catalytic Reduction (SCR)
Systems
1 23 4 5
1
2
5 643
Tenneco Clean Air
Federal-Mogul Powertrain
Legend
Sample Products Description Application
CPT SpeedStart Substitute for standard alternator or starter motor in some applications
Relevant for hybrid and start/stop vehicles Recuperates kinetic energy lost during deceleration Additional CPT variant – Speedtorq – offers torque profiling
Light vehicle
COBRA • Stands for Controlled Boosting for Rapid Response Application• Type of water cooled electric supercharger• Capable of increasing air supply to internal combustion engines• Additional Cobra variant – FC – designed for fuel cell vehicles
• Industrial
TIGERS • Stands for Turbo-generator Gas Energy Recovery System• Converts exhaust gas energy into electrical energy• Key component in Clean Air’s Rankine systems and heat
exchangers designed for CTOH markets
• Commercial• Light Vehicle• Heavy duty
Controlled Power Technologies (CPT) Increases Electrification and Hybridization Systems Capability
Provides inroads into the hybrid market and powertrain efficiency technology that will enable new growth opportunities for PT Tech in the future
Recently secured a $100M OE contract launching in 2021 for development and series production of advanced starter generator systems
Source: Federal-Mogul
32
Tightening Emissions Regulations
CTOH market expands with increasing number of vehicles under regulation33
Regulatory-driven growth accelerates through the next decade
Source: PSR production forecast and Tenneco estimates
Growth of Powertrains Under Regulation
(millions) 2016 2020 2025
CT: Euro VI (equivalent) 1.1 2.2 3.2
Regulated Off-Hwy 1.1 2.1 4.3
Total 2.2 4.3 7.5
** Tenneco estimates
• Commercial Truck– 2020-21 / 2023 – China VIa/VIb** – 2020 – India BS VI (skipping BS V)– 2023-2027 – CARB & EPA Low NOx**
• Off-Highway– 2019 – EU Stage V– 2020 – China 4R (equiv. EU Stage 3B + DPF)– 2020/2024 – India BS IV/India BS V
• Light Vehicle– 2017-2025 – US Tier 3– 2017-2021 – Euro 6c/6d Real Driving Emissions– 2020/2023 – China 6a /6b**– 2020 – India BS 6 (skipping BS 5)
CAGR
13%
16%
15%
GM13.9%
Ford 13.2%
VW Group7.9%
Daimler 6.3%
Tata 5.0%FCA
5.0%SAIC 4.3%
FAW4.3%
Toyota 3.4%
Renault/Nissan3.4%
Caterpillar2.6%
PSA 2.1%
John Deere 2.0%
NAPA/Alliance 2.0%
Advance 1.8%
Beijing Automotive 1.5%
BMW 1.4%
O'Reilly 1.2%
Geely 1.2%
Chang'an 0.9%
Other16.6%
Diversified Business Profile
34
Diversified business profile enables long-term growth
As a % of 2017 Revenue
Clean Air LV
49%
Ride Performance
LV22%
Aftermarket18%
CTOH11%
North America
46%
South America4%
Europe30%
China15%
Rest of AP5%
Product Applications(VA Revenue)
Regions(VA Revenue)
2017
2017
More than 600 customers
(Total Revenue)
Diversified Profile – Robust Platform Mix
35
As a % of Total 2017 Revenue
Revenue Outlook
36Accelerating organic growth through 2020
Organic Growth 5%
2018 Revenue Outlook (in 2017 constant currency)
Expecting organic growth of 5%, outpacing industry production by 3%• Content growth in light and commercial vehicles• Continued recovery in regulated off-highway regions
* IHS Automotive December 2018 global light vehicle production and Tenneco estimates.
** Power Systems Research (PSR) January 2018 global commercial truck and bus production and Tenneco estimates.
*** Customer schedules and Tenneco estimates for off-highway engine production in North America and Europe.
See slide 38 for further key assumptions related to our revenue projections.
Impact vs. 2017 Euro/USD RMB/USD Real/USD
+ 2.5% 1.20 0.156 0.328
- 1.14 0.149 0.313
- 2.5% 1.08 0.141 0.297
2018 Assumptions• Global light vehicle production +2%*
• Global commercial truck production about flat**
• Off-highway engine production for regulated regions expected up low double-digits***
• Organic growth is net of OE price downs
• Substrates estimated at 24% - 25% of total revenue
2018 Currency Sensitivity
Mid-term Revenue OutlookLV IndustryProduction* Outperformance
Organic Growth
2019 2% 4% - 6% 6% - 8%
2020 2% 3% - 5% 5% - 7%
2017 2018
Financial Results Disclaimer
37
Use of Non-GAAP Financial Information
In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”) included in this presentation, the company has provided information regarding certain non-GAAP financial measures. These measures include Earnings Before Interest Expense, Income Taxes, Noncontrolling Interests and Depreciation and Amortization (“EBITDA*”), Net Debt, Value-Add Revenue, Adjusted EBITDA*, Adjusted Earnings Before Interest Expense, Income Taxes and Noncontrolling Interests (“Adjusted EBIT”), Adjusted Earnings Per Share, and Return on Invested Capital. Reconciliations of these non-GAAP financial measures to the comparable GAAP measure are included in this presentation.
* Including noncontrolling interests.
Tenneco Projections
38
Tenneco’s revenue outlook for 2018 is as of January 2018. Revenue assumptions are based on projected customer production schedules, IHS Automotive January 2018 forecasts, Power Systems Research January 2018 forecasts and Tenneco estimates.
Tenneco’s revenue outlook for 2019 and 2020 is as of January 2018. Revenue assumptions are based on projected customer production schedules, IHS Automotive January 2018 forecasts, Power Systems Research January 2018 forecasts and Tenneco estimates.
In addition to the information set forth on slides 5, 6, and 36, Tenneco’s revenue projections are based on the type of information set forth under “Outlook” in Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as set forth in Tenneco’s Annual Report on Form 10-K for the year ended December 31, 2017. Please see that disclosure for further information. Key additional assumptions and limitations described in that disclosure include:
• Revenue projections are based on original equipment manufacturers’ programs that have been formally awarded to the company; programs where the company is highly confident that it will be awarded business based on informal customer indications consistent with past practices; and Tenneco’s status as supplier for the existing program and its relationship with the customer.
• Revenue projections are based on the anticipated pricing of each program over its life.
• Except as otherwise indicated, revenue projections assume a fixed foreign currency value. This value is used to translate foreign business to the U.S. dollar.
• Revenue projections are subject to increase or decrease due to changes in customer requirements, customer and consumer preferences, the number of vehicles actually produced by our customers, and pricing.
Certain elements of the restructuring and related expenses, legal settlements and other unusual charges we incur from time to time cannot be forecasted accurately. In this respect, we are not able to forecast EBIT (and the related margins) on a forward-looking basis without unreasonable efforts on account of these factors and the difficulty in predicting GAAP revenues (for purposes of a margin calculation) due to variability in production rates and volatility of precious metal pricing in the substrates that we pass through to our customers.
Tenneco’s revenue projection constitutes a forward-looking statement. We also refer you to the cautionary language regarding our forward-looking statements set forth in the Safe Harbor statement on slide 2.
Adjusted EBIT as a Percentage of Value-add Revenue –Reconciliation of Non-GAAP Results
39
(1) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from substrate sales, which include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers,Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Tenneco uses this information to analyze the trend in revenues before this factor. Tenneco believes investors find this information useful in understanding period to period comparisons in thecompany's revenues.
(2) Generally Accepted Accounting Principles.(3) Tenneco presents the above reconciliation of GAAP to non-GAAP earnings measures primarily to reflect the results 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 and other items impacting comparability between the periods. 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 measures 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.
(4) Tenneco presents adjusted EBIT as a percentage of value-add revenue to assist investors in evaluating our company’s operational performance without the impact of substrate sales.
$ Millions 2017 2015 2010 2006 2005 2000
Value-add revenue (1) $ 7,087 $ 6,293 $ 4,653 $ 3,755 $ 3,759 $ 3,127
Clean Air substrate sales $ 2,187 $ 1,888 $ 1,284 $ 927 $ 681 $ 401
Total revenue $ 9,274 $ 8,181 $ 5,937 $ 4,682 $ 4,440 $ 3,528
EBIT $ 417 $ 508 $ 281 $ 196 $ 217 $ 122
Adjustments (reflect non-GAAP (2) measures)
Restructuring and related expenses 72 63 19 27 12 61
Pension / post retirement charges 13 4 6 (7) - -
New aftermarket customer changeover costs - - - 6 10 -
Goodwill impairment 11 - - - - -
Reserve for receivables from former affiliate - - - 3 - -
Antitrust settlement accrual 132 - - - - -
Warranty settlement 7 - - - - -
Gain on sale of unconsolidated JV (5) - - - - -
Other non-operational items - - - - - 4
Adjusted EBIT (non-GAAP Financial Measures) (3) $ 647 $ 575 $ 306 $ 225 $ 239 $ 187
Adjusted EBIT as a % of value-add revenue (4) 9.1% 9.1% 6.6% 6.0% 6.4% 6.0%
Adjusted Earnings Per Share –Reconciliation of Non-GAAP Results
40
(1) Tenneco presents the above reconciliation of GAAP to non-GAAP earnings measures primarily to reflect the results 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 and other items impacting comparability between the periods. 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 measures 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.
2017 2000
Earnings Per Share $ 3.91 $ (1.18)
Adjustments (reflect non-GAAP measures):
Restructuring and related expenses 1.12 1.21
Antitrust settlement accrual 1.61 -
Goodwill impairment 0.20 -
Warranty settlement 0.09 -
Gain on sale of unconsolidated JV (0.08) -
Pension / post retirement charges 0.17 -
Costs related to refinancing 0.02 -
Tax adjustments from US tax reform 0.28 -
Net tax adjustments (0.43) -
Other non-operational items - 0.07
Adjusted Earnings Per Share (1) $ 6.89 $ 0.10
$ Millions
2012Dec 31
2013Dec 31
2014Dec 31
2015Dec 31
2016Dec 31
2017Dec 31
Short-term Debt $ 113 $ 83 $ 60 $ 86 $ 90 $ 83
Long-term Debt 1,052 1,006 1,055 1,124 1,294 1,358
Redeemable Noncontrolling Interests 15 20 34 41 40 42
Tenneco Inc. Shareholders' Equity 246 432 495 425 573 686
Noncontrolling Interests 45 39 40 39 47 46
Invested Capital $ 1,471 $ 1,580 $ 1,684 $ 1,715 $ 2,044 $ 2,215
Average Invested Capital $ 1,526 $ 1,632 $ 1,700 $ 1,880 $ 2,130
EBIT $ 422 $ 489 $ 508 $ 516 $ 417
Adjustments (reflect non-GAAP (1) measures)(2)
Restructuring and related expenses 78 49 63 36 72
Antitrust settlement accrual - - - - 132
Goodwill impairment - - - - 11
Warranty settlement - - - - 7
Gain on sale of unconsolidated JV - - - - (5)
Bad debt charge - 4 - - -
Pension / post retirement charges / Stock vesting - 32 4 72 13
Adjusted EBIT (non-GAAP financial measure)(2) 500 574 575 624 647
Effective Tax Rate 35.7% 33.7% 32.9% 26.6% 24.5%
Tax effected Adjusted EBIT $ 321 $ 381 $ 386 $ 458 $ 488
Return on Invested Capital (ROIC)(3)
(non-GAAP financial measure)(2) 21.1% 23.3% 22.7% 24.4% 22.9%
5 year Average Invested Capital $ 1,785
5 years Average tax effected Adjusted EBIT 407
5 year Average ROIC 22.8%
Return on Invested Capital –Reconciliation of Non-GAAP Results
41
(1) Generally accepted Accounting Principles(2) Tenneco presents the above reconciliation of non-GAAP results in order to allow a better understanding of our performance.(3) We consider Return on Invested Capital (ROIC) to be a meaningful indicator of our operating performance, and we evaluate ROIC because it measures how effectively we use the capital we invest in our operations. Tenneco defines ROIC as tax effected
Adjusted EBIT divided by Average Invested Capital, which is the beginning and ending balances of debt, equity and noncontrolling interests. See the tabular calculation above.
$ Millions, Unaudited
Value-add Revenue –Reconciliation of Non-GAAP Results
42
2017
Total revenue $ 9,274
Less: Clean Air substrate sales $ 2,187
Value-add revenue (1) $ 7,087
Clean Air light vehicle value-add revenue $ 3,446
Ride Performance light vehicle value-add revenue $ 1,580
Commercial truck & off-highway value-add revenue $ 810
Aftermarket value-add revenue $ 1,251
Value-add revenue $ 7,087
(1) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from substrate sales, which include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Tenneco uses this information to analyze the trend in revenues before this factor. Tenneco believes investors find this information useful in understanding period to period comparisons in the company's revenues.
$ Millions
1. Generally Accepted Accounting Principles.2. Tenneco presents the above reconciliation of GAAP to non-GAAP earnings measures primarily to reflect the results 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 and other items impacting comparability between the periods. 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 measures 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.
Adjusted EBITDA –Reconciliation of Non-GAAP Results
43
$ Millions Year Ended December 31, 2017Tenneco Federal Mogul Pro Forma
Net Income $274 $361 $635Interest Expense 73 148 221Income Tax Expense / (Benefit) 70 (190) (120)Depreciation and Amorization 224 398 622
EBITDA $641 $717 $1,357
Adjustments (reflect non-GAAP(1) measures)Restructuring and related expenses 69 37 106Pension and post retirement charges 13 - 13Goodwill and intangible asset impairment 11 11 22Antitrust settlement accrual 132 - 132Warranty settlement 7 - 7Gain on sale of unconsolidated JV (5) - (5)Loss on debt extinguishment - 4 4Gain on sale of assets - (7) (7)Gain from termination of customer contract - (6) (6)Warranty release - (4) (4)Release of deferred purchase price payment - (3) (3)EBITDA contribution of pending asset sales - (2) (2)Other - 6 6
Adjusted EBITDA (non-GAAP Financial Measure)(2) $868 $753 $1,620
Reallocation of Clean Air Aftermarket –Reconciliation of Non-GAAP Results
1. Tenneco presents the above reconciliation of GAAP to non-GAAP earnings measures primarily to reflect the results 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 and other items impacting comparability between the periods. 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 measures 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.
44
$ Millions Year Ended December 31, 2017Clean Air Ride Performance Other Total
Total Revenue $6,517 $2,757 - $9,274Less: Clean Air Substrates (2,187) - - (2,187)
Reported Value Add Revenue $4,330 $2,757 - $7,087Less: Reallocation of Clean Air AM (302) 302 - -
Value Add Revenue (post Reallocation of Clean Air AM) $4,028 $3,059 - $7,087
Adjusted EBIT $478 $255 ($86) $647Plus: D&A 147 77 - 224Less: Restructuring adjustments included in Other segment - - (3) (3)
Adjusted EBITDA $625 $332 ($89) $868Less: Allocation of Other segment (54) (35) - (89)Less: Reallocation of Clean Air AM (38) 38 - -
Adjusted EBITDA (post Reallocation of Clean Air AM) (non-GAAP Financial Measure)(1) $533 $335 - $868
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