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Tenneco Announces Reporting Segment Changes

LAKE FOREST, Ill.--(BUSINESS WIRE)--

Tenneco Inc. (TEN) announced today a change in the company’s financial reporting segments as noted in the attachments. The company will now report results in three segments, Clean Air, Ride Performance and Aftermarket. The attachments include 2015, 2016, and 2017 results aligned with these new reporting segments.

About Tenneco

Tenneco is a $9.3 billion global manufacturing company with headquarters in Lake Forest, Illinois and approximately 32,000 employees worldwide. Tenneco is one of the world’s largest designers, manufacturers and marketers of ride performance and clean air products and systems for automotive and commercial vehicle original equipment markets and the aftermarket. Tenneco’s principal brand names are Monroe®, Walker®, XNOx™ and Clevite®Elastomers.

           
TENNECO INC.

SUPPLEMENTAL SEGMENT DATA

Unaudited
(Millions)
 
Q1 2017
Global Segments
OE Ride Reclass &
OE Clean Air Performance Aftermarket Total Other Elims Total
 
Revenues from external customers $ 1,555 $ 428 $ 309 $ 2,292 $ - $ - $ 2,292
Intersegment revenues 25 15 11 51 - (51 ) $ -
EBIT, Earnings before interest expense, income taxes and noncontrolling interests 94 27 42 163 (42 ) - $ 121
Total assets 2,809 1,013 785 4,607 - 35 $ 4,642
 
Q2 2017
Global Segments
OE Ride Reclass &
OE Clean Air Performance Aftermarket Total Other Elims Total
 
Revenues from external customers $ 1,539 $ 442 $ 336 $ 2,317 $ - $ - $ 2,317
Intersegment revenues 17 13 10 40 - (40 ) $ -
EBIT, Earnings before interest expense, income taxes and noncontrolling interests 106 18 54 178 (151 ) - $ 27
Total assets 2,907 1,075 872 4,854 - 27 $ 4,881
 
Q3 2017
Global Segments
OE Ride Reclass &
OE Clean Air Performance Aftermarket Total Other Elims Total
 
Revenues from external customers $ 1,495 $ 457 $ 322 $ 2,274 $ - $ - $ 2,274
Intersegment revenues 12 15 9 36 - (36 ) $ -
EBIT, Earnings before interest expense, income taxes and noncontrolling interests 100 7 50 157 (23 ) - $ 134
Total assets 2,922 1,102 852 4,876 - 59 $ 4,935
 
Q4 2017
Global Segments
OE Ride Reclass &
OE Clean Air Performance Aftermarket Total Other Elims Total
 
Revenues from external customers $ 1,627 $ 480 $ 284 $ 2,391 $ - $ - $ 2,391
Intersegment revenues 11 17 10 38 - (38 ) $ -
EBIT, Earnings before interest expense, income taxes and noncontrolling interests 121 9 32 162 (27 ) - $ 135
Total assets 2,812 1,155 812 4,779 - 63 $ 4,842
 
 
We are a global manufacturer organized and manage our business along our three segments (Global OE Clean Air, Global OE Ride Performance and Global Aftermarket). The reporting segments are aligned with key growth strategies. Costs related to other business activities, primarily corporate headquarter functions, are disclosed separately from the three operating segments as "Other." We evaluate segment performance based primarily on earnings before interest expense, income taxes, and noncontrolling interests. Products are transferred between segments and geographic areas on a basis intended to reflect as nearly as possible the “market value” of the products.
 
             
TENNECO INC.

SUPPLEMENTAL SEGMENT DATA

Unaudited
(Millions)
 
FY 2017
Global Segments
OE Ride Reclass &
OE Clean Air Performance Aftermarket Total Other Elims Total
 
Revenues from external customers $ 6,216 $ 1,807 $ 1,251 $ 9,274 $ - $ - $ 9,274
Intersegment revenues 65 60 40 165 - (165 ) $ -
EBIT, Earnings before interest expense, income taxes and noncontrolling interests 421 61 178 660 (243 ) - $ 417
Total assets 2,812 1,155 812 4,779 - 63 $ 4,842
 
FY 2016
Global Segments
OE Ride Reclass &
OE Clean Air Performance Aftermarket Total Other Elims Total
 
Revenues from external customers $ 5,764 $ 1,593 $ 1,242 $ 8,599 $ - $ - $ 8,599
Intersegment revenues 108 47 37 192 - (192 ) $ -
EBIT, Earnings before interest expense, income taxes and noncontrolling interests 432 97 191 720 (204 ) - $ 516
Total assets 2,559 959 781 4,299 - 47 $ 4,346
 
FY 2015
Global Segments
OE Ride Reclass &
OE Clean Air Performance Aftermarket Total Other Elims Total
 
Revenues from external customers $ 5,377 $ 1,545 $ 1,259 $ 8,181 $ - $ - $ 8,181
Intersegment revenues 116 44 42 202 - (202 ) $ -
EBIT, Earnings before interest expense, income taxes and noncontrolling interests 371 63 174 608 (100 ) - $ 508
Total assets 2,298 756 884 3,938 - 32 $ 3,970
 
TENNECO INC.
RECONCILIATION OF GAAP (1) REVENUE TO NON-GAAP REVENUE MEASURES (2)
Unaudited
(Millions)
           
Q1 2017
Currency Value-add
Impact on Revenues
Substrate Value-add Value-add excluding
Revenues Sales Revenues Revenues Currency
 
Global OE Clean Air Division $ 1,555 $ 547 $ 1,008 $ (21 ) $ 1,029
Global OE Ride Performance Division 428 - 428 (4 ) 432
Global Aftermarket Division   309   -   309   1     308
Total Tenneco Inc. $ 2,292 $ 547 $ 1,745 $ (24 ) $ 1,769
 
Q2 2017
Currency Value-add
Impact on Revenues
Substrate Value-add Value-add excluding
Revenues Sales Revenues Revenues Currency
 
Global OE Clean Air Division $ 1,539 $ 541 $ 998 $ (11 ) $ 1,009
Global OE Ride Performance Division 442 - 442 (2 ) 444
Global Aftermarket Division   336   -   336   (1 )   337
Total Tenneco Inc. $ 2,317 $ 541 $ 1,776 $ (14 ) $ 1,790
 
Q3 2017
Currency Value-add
Impact on Revenues
Substrate Value-add Value-add excluding
Revenues Sales Revenues Revenues Currency
 
Global OE Clean Air Division $ 1,495 $ 522 $ 973 $ 27 $ 946
Global OE Ride Performance Division 457 - 457 10 447
Global Aftermarket Division   322   -   322   4     318
Total Tenneco Inc. $ 2,274 $ 522 $ 1,752 $ 41   $ 1,711
 
Q4 2017
Currency Value-add
Impact on Revenues
Substrate Value-add Value-add excluding
Revenues Sales Revenues Revenues Currency
 
Global OE Clean Air Division $ 1,627 $ 577 $ 1,050 $ 37 $ 1,013
Global OE Ride Performance Division 480 - 480 23 457
Global Aftermarket Division   284   -   284   6     278
Total Tenneco Inc. $ 2,391 $ 577 $ 1,814 $ 66   $ 1,748
 
 
(1) U.S. Generally Accepted Accounting Principles.
 
(2) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from the effects of doing business in currencies other than the U.S. dollar. Additionally, substrate sales 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 these factors. Tenneco believes investors find this information useful in understanding period to period comparisons in the company's revenues.
 
 
TENNECO INC.
RECONCILIATION OF GAAP (1) REVENUE TO NON-GAAP REVENUE MEASURES (2)
Unaudited
(Millions)
           
FY 2017
Currency Value-add
Impact on Revenues
Substrate Value-add Value-add excluding
Revenues Sales Revenues Revenues Currency
 
Global OE Clean Air Division $ 6,216 $ 2,187 $ 4,029 $ 32 $ 3,997
Global OE Ride Performance Division 1,807 - 1,807 27 1,780
Global Aftermarket Division   1,251   -   1,251   10   1,241
Total Tenneco Inc. $ 9,274 $ 2,187 $ 7,087 $ 69 $ 7,018
 
 
FY 2016
Currency Value-add
Impact on Revenues
Substrate Value-add Value-add excluding
Revenues Sales Revenues Revenues Currency
 
Global OE Clean Air Division $ 5,764 $ 2,028 $ 3,736 $ - $ 3,736
Global OE Ride Performance Division 1,593 - 1,593 - 1,593
Global Aftermarket Division   1,242   -   1,242   -   1,242
Total Tenneco Inc. $ 8,599 $ 2,028 $ 6,571 $ - $ 6,571
 
 
(1) U.S. Generally Accepted Accounting Principles.
 
(2) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from the effects of doing business in currencies other than the U.S. dollar. Additionally, substrate sales 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 these factors. Tenneco believes investors find this information useful in understanding period to period comparisons in the company's revenues.
 
 
TENNECO INC.
RECONCILIATION OF GAAP (1) REVENUE TO NON-GAAP REVENUE MEASURES (2)
Unaudited
(Millions)
           
FY 2016
Currency Value-add
Impact on Revenues
Substrate Value-add Value-add excluding
Revenues Sales Revenues Revenues Currency
 
Global OE Clean Air Division $ 5,764 $ 2,028 $ 3,736 $ (101 ) $ 3,837
Global OE Ride Performance Division 1,593 - 1,593 (44 ) 1,637
Global Aftermarket Division   1,242   -   1,242   (37 )   1,279
Total Tenneco Inc. $ 8,599 $ 2,028 $ 6,571 $ (182 ) $ 6,753
 
 
FY 2015
Currency Value-add
Impact on Revenues
Substrate Value-add Value-add excluding
Revenues Sales Revenues Revenues Currency
 
Global OE Clean Air Division $ 5,377 $ 1,888 $ 3,489 $ - $ 3,489
Global OE Ride Performance Division 1,545 - 1,545 - 1,545
Global Aftermarket Division   1,259   -   1,259   -     1,259
Total Tenneco Inc. $ 8,181 $ 1,888 $ 6,293 $ -   $ 6,293
 
(1) U.S. Generally Accepted Accounting Principles.
 
(2) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from the effects of doing business in currencies other than the U.S. dollar. Additionally, substrate sales 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 these factors. Tenneco believes investors find this information useful in understanding period to period comparisons in the company's revenues.
 
TENNECO INC.
RECONCILIATION OF GAAP(1) TO NON-GAAP EARNINGS MEASURES(2)

Unaudited

(Millions)
         
Q1 2017
Global Segments
OE Ride
OE Clean Air Performance Aftermarket Total Other Total
EBIT $ 94 $ 27 $ 42 $ 163 $ (42 ) $ 121
Restructuring and related expenses 9 3 2 14 1 15
Pension charges / Stock vesting (3)   -   -   -   -   11     11  
Adjusted EBIT $ 103 $ 30 $ 44 $ 177 $ (30 ) $ 147  
 
Q2 2017
Global Segments
OE Ride
OE Clean Air Performance Aftermarket Total Other Total
EBIT $ 106 $ 18 $ 54 $ 178 $ (151 ) $ 27
Restructuring and related expenses 12 2 1 15 2 17
Antitrust settlement accrual (4) - - - - 132 132
Warranty settlement (5) - 7 - 7 - 7
Gain on sale of unconsolidated JV (6)   -   -   -   -   (5 )   (5 )
Adjusted EBIT $ 118 $ 27 $ 55 $ 200 $ (22 ) $ 178  
 
Q3 2017
Global Segments
OE Ride
OE Clean Air Performance Aftermarket Total Other Total
EBIT $ 100 $ 7 $ 50 $ 157 $ (23 ) $ 134
Restructuring and related expenses   4   14   2   20   -     20  
Adjusted EBIT $ 104 $ 21 $ 52 $ 177 $ (23 ) $ 154  
 
Q4 2017
Global Segments
OE Ride
OE Clean Air Performance Aftermarket Total Other Total
EBIT $ 121 $ 9 $ 32 $ 162 $ (27 ) $ 135
Restructuring and related expenses 4 10 5 19 1 20
Goodwill impairment charge (7) - 7 4 11 - 11
Pension charges (3)   -   -   -   -   2     2  
Adjusted EBIT $ 125 $ 26 $ 41 $ 192 $ (24 ) $ 168  
 
(1) U.S. 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.
 
(3) Charges related to Pension derisking and the acceleration of restricted stock vesting in accordance with the long-term incentive plan.
 
(4) Charges related to establish a reserve for settlement costs necessary to resolve the company’s antitrust matters globally.
 
(5) Warranty settlement with customer.
 
(6) Gain on sale of unconsolidated JV.
 
(7) Goodwill impairment charges recorded in Europe and South America Ride Performance Division.
...
 
TENNECO INC.
RECONCILIATION OF GAAP(1) TO NON-GAAP EARNINGS MEASURES(2)

Unaudited

(Millions)
           
FY 2017
Global Segments
OE Ride
OE Clean Air Performance Aftermarket Total Other Total
EBIT $ 421 $ 61 $ 178 $ 660 $ (243 ) $ 417
Restructuring and related expenses 29 29 10 68 4 72
Antitrust settlement accrual (3) - - - - 132 132
Warranty settlement (4) - 7 - 7 - 7
Gain on sale of unconsolidated JV (5) - - - - (5 ) (5 )
Goodwill impairment charge (6) - 7 4 11 - 11
Pension charges / Stock vesting (7)   -   -   -   -   13     13  
Adjusted EBIT $ 450 $ 104 $ 192 $ 746 $ (99 ) $ 647  
 
FY 2016
Global Segments
OE Ride
OE Clean Air Performance Aftermarket Total Other Total
EBIT $ 432 $ 97 $ 191 $ 720 $ (204 ) $ 516
Restructuring and related expenses 7 15 12 34 2 36
Pension charges (7)   -   -   -   -   72     72  
Adjusted EBIT $ 439 $ 112 $ 203 $ 754 $ (130 ) $ 624  
 
FY 2015
Global Segments
OE Ride
OE Clean Air Performance Aftermarket Total Other Total
EBIT $ 371 $ 63 $ 174 $ 608 $ (100 ) $ 508
Restructuring and related expenses 9 40 14 63 - 63
Pension charges (7)   -   -