Deutsche Bank Global Auto Industry Conference/media/Files/T/Tenneco-IR/...Market Trends Global light...

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5906 CORP-1/17 (1)

Detroit, MIJanuary 11, 2017

N Y S E : T E N

Deutsche Bank Global Auto Industry Conference

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5906 CORP-1/17 (2)

Safe Harbor

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This presentation contains forward-looking statements that involve risks and uncertainties which could cause the company’s plans, actions and results to differ materially from its current expectations. The words “expect,” “estimate,” “will,” and similar expressions identify certain of these forward-looking statements. The company cautions that actual results may differ materially from those projected or implied in forward-looking statements due to a variety of factors including, but not limited to, the following: (i) general economic, business and market conditions; (ii) the company’s ability to source needed goods and services in accordance with customer demand and at competitive prices; (iii) the cost and outcome of claims, legal proceedings or investigations, including, but not limited to, those arising in connection with the ongoing global antitrust investigation, product safety or intellectual property rights; (iv) the impact of the changing laws and regulations to which we are subject, including environmental laws and regulations, pensions or other regulated activities; (v) the ability of the company to access capital markets on commercially reasonable terms; (vi) changes in consumer demand; (vii) changes in vehicle manufacturers’ production rates and their requirements for the company’s products, including with respect to any delays in the adoption of the current mandated timelines for worldwide emissions regulations; (viii) the overall highly competitive nature of the automobile and commercial vehicle parts industry, and any resultant inability to realize the sales represented by the company’s awarded book of business which is based on anticipated pricing for the applicable program over its life; (ix) the loss of any of our large original equipment manufacturer (“OEM”) customers, or the loss of market shares by these customers if we are unable to achieve increased sales to other OEMs; (x) the company’s continued success in cost reduction and cash management programs; (xi) economic, exchange rate and political conditions in the countries where we operate or sell our products; (xii) workforce factors such as strikes or labor interruptions; (xiii) increases in the costs of raw materials; (xiv) the negative impact of fuel price volatility on logistics costs and discretionary purchases of vehicles or aftermarket products, and demand for off-highway equipment; (xv) the cyclical nature of the global vehicular industry, including the performance of the global aftermarket sector and longer product lives of automobile parts; (xvi) product warranty costs; (xvii) material developments relating to our intellectual property or the failure or breach of our IT systems; (xviii) the company’s ability to develop and profitably commercialize new products and technologies; (xix) governmental actions, including the ability to receive regulatory approvals and the timing of such approvals; and (xx) the timing and occurrence (or non-occurrence) of transactions and events which may be subject to circumstances beyond the control of the company. Additional information regarding these and other risk factors and uncertainties is detailed from time to time in the company’s SEC filings, including but not limited to its annual report on Form 10-K. Unless otherwise indicated in this presentation, the forward-looking statements in this presentation are made as of the date hereof, and the company does not undertake any obligation to publicly disclose revisions or updates to any forward-looking statements.

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Attractive Current and Future Market Trends

Global light vehicle production growth

Tightening criteria pollutant regulations

Heightened focus on smooth, quiet and safe ride

High-growth markets, particularly China and India

Commercial truck and off-highway market recovery

Emerging aftermarket in high-growth markets

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XAppealing Investment Opportunity

Criteria Pollutant

Regulations

Advanced Ride Performance

Technology

Leading Aftermarket

Position

• Proven track record of growth – Revenue growth outpacing industry production

– Margin expansion

– Double-digit EPS growth

• Sustainable growth drivers – Strong global platform position

– Innovative technologies to meet tightening emissions regulations, and demands for acoustics and waste heat recovery

– Advanced suspension positioned for accelerated growth

– Global aftermarket leadership

• Capturing growth in emerging markets

• Continuing margin expansion

• Strong free cash flow generation

• Financial strength and flexibility

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CLEAN AIR RIDE PERFORMANCE

Leading Product Lines

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* Value-add Revenue is total revenue less substrate sales. See slides 39 and 40 for further explanation.

Pioneering Global Ideas for Cleaner Air and Smoother, Quieter and Safer Transportation for Light Vehicle, Commercial Truck, Off-Highway and Aftermarket Customers

† See reconciliations to U.S. GAAP at end of presentation.

201520142013201220112010

Total Revenue

Adjusted EBIT as % of Value-add Revenue*

Value-add Revenue*

Adjusted EBIT †

$ in Millions

$304$334

$381$418 $427

$228

10.6%10.2%

11.2%

9.9%

9.0%

10.8%

$3,825

$4,761 $4,926

$5,444$5,811 $5,723

$6,122∆

$3,609$3,266

$3,083

$2,541

$3,877 $3,807

201520142013201220112010

8.1%7.2%

6.2%

7.5%

9.7%9.5%$2,112

$2,444 $2,437 $2,520$2,609

$2,486

$2,725∆

Total Revenue


Adjusted EBIT †

$ in Millions

$152$176

$204

$248 $242

$159

201520142013201220112010

Total Revenue


Value-add Revenue*

Adjusted EBIT †

$ in Millions

$304$334

$381$418 $427

$228

10.6%10.2%

11.2%

9.9%

9.0%

10.8%

$3,825

$4,761 $4,926

$5,444$5,811 $5,723

$6,122∆

$3,609$3,266

$3,083

$2,541

$3,877 $3,807

201520142013201220112010

8.1%7.2%

6.2%

7.5%

9.7%9.5%$2,112

$2,444 $2,437 $2,520$2,609

$2,486

$2,725∆

Total Revenue


Adjusted EBIT †

$ in Millions

$152$176

$204

$248 $242

$159

2015 2015

Products and technologies designed to meet global emissions regulations anywhere in the world

Products and technologies that meet the increasing demand for enhanced vehicle comfort and handling

70%30%

70%30%

Δ At 2014 constant currency – see reconcilation slide 38.

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Global Manufacturing and Engineering Footprint

Serving our customers with a global network of strong capabilities

• 93 manufacturing facilities • 15 engineering & technical centers

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Engineering Centers

Engineering Centers

Engineering Centers

Engineering Centers

HeadquartersClean Air ManufacturingRide Performance ManufacturingEngineering Center

Engineering CentersEngineering CentersGrass Lake, Michigan Monroe, Michigan Milan, Ohio

Grass Lake, Michigan Monroe, Michigan Milan, Ohio

St. Truiden, Belgium Edenkoben, Germany Gliwice, Poland Rybnik, Poland Ermua, Spain

Cotia, Brazil Mogi Mirim, Brazil

Kunshan, China Shanghai, China Yokohama, Japan

Adelaide, Australia Sydney, Australia

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NA51% ESI

34%

AP15%

LV73% CTOH

12%AM15%

NA51% ESI

34%

AP15%

LV73% CTOH

12%AM15%

51% North America34% Europe, South America & India15% Asia Pacific

Applications Geographies

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Diversified Business in Cyclical Markets

• Enhancing performance with balanced mix across: – End-market applications – Geographies – Customers – Platforms

• Countercyclical aftermarket business

• Enhanced financial strength – Strong balance sheet; essentially at targeted 1x net debt leverage ratio

– Improving cash flow generation

– Continuing investment in product / technology leadership

– Enhanced cost structure and operational efficiencies

– Returning cash to shareholders; $359M since beginning of 2015

Customers Platforms

Top 15Platforms

36%Others64%

Top 15Customers

74% Others26%

Top 15Platforms

36%Others64%

Top 15Customers

74% Others26%

73% Light Vehicle15% Aftermarket12% Commercial Truck, Off-Highway

• No customer greater than 15% of revenue

• Balanced customer mix (see slide 24)

• On more than 340 platforms

• Average annual platform revenue $20M

• Robust platform mix (see slide 25)

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Strong Foundation for Continued Growth

* Value-add Revenue is total revenue less substrate sales. See slide 37 for further explanation. Δ At 2014 constant currency – see reconciliation slide 38.† See reconciliations to U.S. GAAP at end of presentation.

Six-year record of value-add adjusted EBIT margin improvement2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

8.2%7.8%

7.2%6.6%

3.2%3.6%

6.3%

8.9%9.3%

6.0%

9.6%∆

$158

$282

$118

$398

$306

$443$502

$577

$225

$586$650∆$4,331

$3,978

$2,919

$3,825

$4,761$4,926

$5,444

$5,811

$2,976

$5,723

$1,853$1,938

$1,730

$2,112

$2,444$2,437

$2,520

$2,609

$1,706

$2,486

$4,682

$6,184$5,916

$4,649

$5,937

$7,205$7,363

$7,964

$8,420$8,209

$8,847∆

Ride Performance Revenue Clean Air RevenueAdjusted EBIT †

$ in Millions

Adjusted EBIT † as % of Value-add Revenue*

• Since 2006, Tenneco has delivered: – Annual revenue growth double industry production – Margin expansion of 330 bps – Annual adjusted EPS growth of 17%

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XStructural Growth Drivers to Outpace Industry Production

2006 2015

$4.7B

$8.2B

66.8MVehicles

88.7MVehicles

6.4%**

3.2% **

Tenneco Revenue vs. Industry Production*

Tenneco Revenue ($ billions) Industry Production* (million vehicles)

* Source: IHS Automotive December 2016 global light vehicle production. ** CAGR

• Outstanding light vehicle platform position

• Regulatory-driven Clean Air content growth

• Innovative advanced suspension systems

• Leadership in global aftermarket

Tenneco revenue outpacing industry production

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Clean Air: Regulatory-driven Content Growth

Key Technologies and Products

Criteria PollutantReduction

Advanced Aftertreatment Solutions – CO, HC, NOx, PM, PN

Dosing System, Advanced Mixing, Thermal Unit, Selective Catalytic Reduction, Ammonia Generator, Gasoline and Diesel Particulate Filter, Catalytic Converter

Fuel Economy /CO2 Reduction Energy Recovery, Lightweighting

Rankine Cycle PowerPack, Thermoelectric Generator, Thermoacoustic Converter, Heat Exchanger, Lightweight Aftertreatment System, Electric Valve, Fabricated Manifold

Acoustics Noise Reduction, Sound Quality Active Noise Cancellation, Signature Sound Creation, Electronic Valve, Passive Valve

Noise, Vibration and Harshness NVH Solutions Provider Exhaust System Isolator, Modular Exhaust Damper

Key Regulations• Light Vehicle – 2017 - US Tier 3 and Euro 6c/6d RDE – 2019 - China CN 6a – 2020 - India BS 6 (skipping BS 5)

• Commercial Truck – 2019 - China CN VI – 2020 - India BS VI (skipping BS V) – 2023 - CARB / 2024 EPA Low NOx regulation**

(90% further reduction)

• Off-Highway – 2019 - EU Stage VSee slide 26

Regulations Driving Technology Roadmap

** Proposed or estimated date

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U.S. Fed Tier 3 Fleet Average (NMOG + NOx)

Euro-6c / 6d Real Driving Emissions (RDE)Particulate Number and Conformity Factor

Additional content required• Combined NOx+NMOG reduction of 80%-91%

• Significantly improved cold start emissions

• Same tailpipe limits for diesel and gasoline light vehicles

Additional content required• Particulate number (PN) requirement

• RDE test cycles requiring more efficient systems and improved transient emissions performance

• Improved on-board diagnostics (OBD-II)

$72 / vehicle = EPA cost estimate Estimated $1.4 billion annualized

additional available market by 2025

Tenneco estimates similar cost impact as U.S. Fed Tier 3

mg/mi per FTP

Parti

cula

te n

umbe

r PNx

10^

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Conf

orm

ity fa

ctor

Clean Air: New Light Vehicle Regulations Adding Content

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XClean Air: Strong Powertrain Position

• Essentially all of the projected powertrain applications in 2027 require emissions solutions offered by Tenneco (growth estimates for BEV vary widely)

• Higher content with fully implemented US Tier 3 and Euro-6d RDE regulations

• Content on hybrids similar to full internal combustion engines; driven by engine horsepower

• Tightening regulations in emerging markets are catching up to developed markets

Diesel13%

Diesel hybrid5%PFI gasoline

21%*

GDI hybrid23%

GDI gasoline29%*

PFI hybrid6%

Fuel cell & electric

3%

Alternative fuels0%

2027

* Includes Start/Stop ICE

113 million vehicles in 2027

IHS 10-Year Projections (Dec. 2016)

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Ride Performance: Differentiating Vehicle Performance

• Advanced technology growth driven by: – Increasing consumer expectations around vehicle comfort, safety, stability and control

– Demand for fuel economy and associated vehicle weight reduction strategies

– OEM desire for innovative products to differentiate vehicles

• Conventional shock and strut growth in emerging markets

• Aftermarket growth, particularly in China and India

• Noise, vibration and harshness solutions

• Leverage leading global market share with product cost leadership

AdvancedTechnology

ProductCost

Leadership

SuperiorFunctionality

Innovation and Technology Driving Growth

See slide 30

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MONROE® Intelligent Suspension Comprehensive portfolio of advanced technologies

Act ive Suspension

Content per Vehicle

More than 6x

Average 4x

$50-$60Passive Suspension

• Advanced suspension is expected to grow from 2% to more than 15% of the light vehicle market by 2025, with adoption led by global OEMs

• With higher content, advanced suspension represents more than 40% of available market revenue by 2025

A segment F segment

Semi-act ive Suspension

RID

E P

ERFO

RM

AN

CE

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• Powerful global brands supported by strong marketing and distribution • Stable, countercyclical business with strong margins and cash flow

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®

Global Aftermarket Leadership

North America

South America

Europe

China

Established Markets High-Growth Markets

India

#1 Ride Performance

#1 Clean Air

#1 Ride Performance

#1 Ride Performance

#1 Clean Air

Leveraging knowledge and capabilities as car parc grows in high-growth markets

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2025 Vehicle Parc

Source: Frost & Sullivan 2015, IHS Worldview May 2016

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XAftermarket Opportunity in High-Growth Markets

347Average age 10.9 years

108

337Average age

9.3 years484

Average age 8.5 years

83

2689

11 12

12

6

3

Light Vehicle

Commercial Truck

North America

South America

EuropeChina

Established Markets High-Growth Markets

India

ASEAN

Light Vehicle Parc: 455M10-year CAGR: 2%

CTOH Vehicle Parc: 20M10-year CAGR: 4%





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Clear Roadmap for Continued Success

A COMMON FOUNDATION

CLEAN AIR• Global regulatory expertise• Foundation in core sciences• Total systems integration• Cost-effective global market solutions - Light vehicle - Commercial vehicle - Large engines• China specific solutions• Large platform lifecycle services

RIDE PERFORMANCE• Product cost leadership

• Superior functionality

• Advanced technology

• Vehicle dynamics / integrated systems expertise

• NVH solutions provider

• Leading aftermarket brands

Healthier Lives Superior Driving Experience

A COMMON FOUNDATION

Operational Excellence

Financial Strength

• Safety and quality• Manufacturing optimization• Global business processes/ capabilities• Optimized global footprint• Strategic supplier partnerships

• Earnings growth

• Cash flow

• EVA

• Balance sheet strength

PROFITABLE GROWTH

Shared Values

• Accountability• Health & Safety• Innovation• Integrity• Passion and a Sense of Urgency

• Perseverance

• Results Oriented

• Teamwork

• Transparency

• Trust

STRATEGIC IMPERATIVES

Our Commitments: Customers’ Success • Shareholder Value • Employee Engagement • Sustainability

Our Markets: Light Vehicle • Commercial Vehicle • Aftermarket • Locomotive • Marine • Stationary

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Revenue Outlook

+5%

2016 2017

Total Revenue

Total Revenue

+1%*

+4%

LV IndustryProduction

OrganicGrowth

2017 Currency Sensitivity

2018-2019 Revenue Outlook Expect to outpace industry production by 3%-5%

• Outstanding platform position

• Tightening criteria pollutant emissions regulations

• Increasing demand for advanced suspension systems

• Global aftermarket leadership

Impact vs. 2016 Euro/USD RMB/USD Real/USD

– 1.10 0.150 0.291

(2.5%) 1.05 0.143 0.278

(5.0%) 1.00 0.136 0.265

* IHS Automotive December 2016 global light vehicle production.

** Power Systems Research (PSR) January 2017 global commercial truck and bus production, PSR off-highway engine production in North America and Europe and Tenneco estimates.

See slide 31 for further key assumptions related to our revenue projections.

2017 Assumptions• Global commercial truck production +2%**

• Off-highway engine production in regulated regions +2%** (NA and Europe)

• Organic growth is net of OE price downs

2017 Revenue Outlook (in 2016 constant currency)

Expect to outpace industry production by 4%, with contributions from both product lines

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Continuing Margin Expansion

• Increasing content with higher technology products in both product lines

• Operational efficiencies, such as: – Optimizing product component design and manufacturing process complexity

– Improving design of global manufacturing and supply chain network to achieve best delivered cost

– Driving continuous improvement across every element of our business

• Commercial truck and off-highway markets, with increased benefit when markets recover

• Growing aftermarket in all regions

Expect continuing annual margin improvement driven by:

2015201420132012201120102006

8.2%7.8%

7.2%

6.6%

9.3%8.9%

6.0%

Since 2006, Tenneco has delivered margin* expansion of 330 bps

* Adjusted EBIT as a % of VA revenue. See reconciliations to U.S. GAAP at end of presentation.

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Enhancing Tenneco Financial StrengthLeverage Ratio

20152014201320122011201020092008

$263

$154

3.7%

2.5% 2.6%

$218

3.0%

$221

3.6%3.8%

$254

$118

$3173.2%

$295

3.6%

CapEx ($ Millions) CapEx as % of Revenue

20152014201320122011201020092008

5.0%5.5% 5.5%

$297$258

$325

$401

5.6%

$467

6.3%

$357

4.5%4.8%

$404 $418

5.1%

Working Capital ($ Millions) Working Capital as % of Revenue

TEN averaged 5.3% over the past 8 years

Working Capital Investment (Receivables + Inventory - Payables) as a % of Revenue

2015201420132012201120102009200820072006200520042003200220012000

4.4x4.9x

4.6x

3.8x

3.0x 3.0x 2.9x 2.4x

3.5x

3.1x

$1,492 $1,462$1,391

$1,285$1,207 $1,242

$1,183 $1,186

$1,325

$1,053$990

1.9x1.7x

$1,010$957

1.5x1.2x 1.1x

$822 $830$922

1.2x

Net Debt: Total Debt Less Cash Balances ($ Millions) Net Debt / Adjusted EBITDA* (Leverage Ratio)

– 1x target

20152014201320122011201020092008

$263

$154

3.7%

2.5% 2.6%

$218

3.0%

$221

3.6%3.8%

$254

$118

$3173.2%

$295

3.6%

CapEx ($ Millions) CapEx as % of Revenue

20152014201320122011201020092008

5.0%5.5% 5.5%

$297$258

$325

$401

5.6%

$467

6.3%

$357

4.5%4.8%

$404 $418

5.1%

Working Capital ($ Millions) Working Capital as % of Revenue

Capex range of 3.5% - 4.0%

Leverage target allows growth opportunity in a cyclical business

Capital Expenditures as a % of Revenue

Reconciliations to U.S. GAAP at end of presentation. * Including noncontrolling interests.

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Capital Allocation Priorities to Drive Shareholder Value

✓1. Fund organic growth

✓ 2. Restructuring activities to improve cost competitiveness

✓ 3. Balance sheet strength consistent with target leverage ratio of 1x

4. Strategic opportunitiesCore sciences foundation, technology, customer, geographic and aftermarket

growth opportunities

5. Capital returns to shareholdersShare repurchases and/or dividends

out of free cash flow

Total repurchases authorized of $550 million; $359 million completed through Q3’16

Since Jan. 2015, repurchased 7.0 million shares or 11% of shares outstanding

Well-positioned with options and flexibility to pursue:

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XAppealing Investment Opportunity

Criteria Pollutant

Regulations

Advanced Ride Performance

Technology

Leading Aftermarket

Position

• Proven track record of growth – Revenue growth outpacing industry production

– Margin expansion

– Double-digit EPS growth

• Sustainable growth drivers – Strong global platform position

– Innovative technologies to meet tightening emissions regulations, and demands for acoustics and waste heat recovery

– Advanced suspension positioned for accelerated growth

– Global aftermarket leadership

• Capturing growth in emerging markets

• Continuing margin expansion

• Strong free cash flow generation

• Financial strength and flexibility

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2.1%

2.0%

2.0%

1.9%

1.5%

1.3%

1.3%

1.2%

1.1%

1.0%

Balanced Customer Mix

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As a % of Total 2015 Revenue

▲

▲

▲

LV Customer Commercial Truck, AM Customer Off-Hwy & Other Customer

▲

15.2%

13.5%

7.1%

6.2%

4.8%

4.2%

4.1%

3.6%

3.6%

2.6%

▲

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Robust Platform Mix

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As a % of Total 2015 Revenue

• On more than 340 platforms • Average annual platform revenue $20 million

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Global Emissions Regulations

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* Phased in ** Proposed or Estimated date *** Some mfrs harmonizing US Tier 4f engines with Stage 5LV - Light Vehicles CTrk - Commercial Trucks Off-Hwy - Off-Highway Vehicles

China 3 Off-Hwy is equivalent to EU Stage 3AChina 4 Off-Hwy is equivalent to EU Stage 3B

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• Powertrain – GDI, Diesel, Hybrid

• Engine efficiency enhancements – boosting, variable valve timing, cylinder deactivation, idle start/stop

• Friction reduction and aerodynamic improvement

• Improved aftertreatment efficiency

• Vehicle mass reduction

• Waste heat recovery

• Catalytic and diesel oxidation converters

• Diesel particulate filters

• Selective catalytic reduction

• Urea dosing system

• Fuel vaporizers

• Gasoline particulate filters

Balance of engine, aftertreatment and fuel achieves emissions reduction

Criteria Pollutants CO2 EmissionsCO HC NOx PM PN NMOG

Since the Clean Air Act in 1968, regulators have reduced allowable levels to counter harmful

effects of by-products of carbon-based energy combustion

Reducing Emissions

Improved fuel efficiency drives CO2 emissions reduction

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Clean Air Technology Roadmap2012 2013 2014 2015 2016 2017 2018-2020 2021-2025

CriteriaPollutants

Hydrocarbon Lean NOx Catalyst (ethanol reductant)······························T.R.U.E.-Clean®

Mini······························Multiwrap Converter Mat

Euro VI CTrk On-Road Aftertreatment System································ Stationary Engine Aftertreatment································ Common Rail Urea Dosing System································ Tier 4 Locomotive Aftertreatment································ Natural Gas Aftertreatment

Gasoline Particulate Filter································Retrofit Marine Aftertreatment System································Air-Assisted Dosing System································China Low-Cost SCR System································Large 24″ Diameter SCR································XNOx Gen 3

Large Engine Turnkey SCR System······························· Large Engine Urea Dosing (<3 MW)······························ Large Engine Soot Blower

XNOx Gen 4 ······························Low Pressure EGR Valve······························Mixers for Compact Designs······························Advanced Controls for SCR Coated DPF······························Large Engine Air Assisted Lance for Urea injection

Gaseous Ammonia Generator······························High Performance SCR Mixer······························Large Engine Urea Dosing (<10 MW) ······························EURO VI+ CTrk Aftertreatment System

XNOx Next GEN·····························Active Diesel Thermal Management·····························HC-LNC (ULSD reductant)····························· Low Pressure EGR / cGPF·····························Ultra High Efficiency SCR System·····························Selective NOx Adsorber (SNA)

Low Temp deNOx Catalyst ···························Alternative SCR···························Advanced Diesel Aftertreatment Controls with OBD

Fuel Economy / Greenhouse Gases

Fabricated Manifold······························Low Backpressure Valve Muffler

Integrated Manifold & Turbocharger································ China Low-Cost Light Vehicle System································ E-Valve for Cylinder Deactivation

Waste Heat Recovery – Heat-2-Heat (HEX)

CTrk Fabricated Manifold······························Ultra Lightweight Aftertreatment System

Waste Heat Recovery – Organic Rankine Cycle······························CTrk Modular E-Valve······························Natural Gas Aftertreatment System for Methane Slip

Waste Heat Recovery – Thermoelectric Generator (TEG)···························Waste Heat Recovery – Thermoacoustic Converter (TAC)

Acoustics Low Backpressure Valve Muffler

E-Valve for Acoustics Software-based Signature Sound System································Exhaust Isolator Cartridge Mount································Mini Shear Hub Exhaust Isolator································Modular Coulomb Exhaust Damper

Next Gen Exhaust Isolators

Next Gen High Performance Acoustic Valve

Modular Acoustic E-Valve

Active Noise Cancellation

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TitleCommercial Truck and Off-Highway Diesel Aftertreatment Customers

China

Commercial Truck• China National Heavy-Duty Truck Co. • Dalian Diesel Engine Co. • FAW • JND • Shanghai Diesel Engine Co. • Weichai • YuChai

Brazil

Commercial Truck• Daimler Trucks • IVECO• MAN• MWM • Scania

Off-Highway• AGCO• Caterpillar/Perkins • Deere • Deutz • MAN • Scania

EuropeCommercial Truck• Daimler Trucks • Scania • Customer B

Off-Highway• Caterpillar/Perkins • Deere

Japan

Off-Highway• Caterpillar/Perkins – Exported from N. America

• Kubota

North AmericaTruck• Chrysler (LV 3/4 ton +) • GM (LV 3/4 ton +) • Ford (LV 3/4 ton +, CTrk Med-duty)

• Customer A (CTrk)

IndiaCommercial Truck• Daimler Trucks• Mahindra• MAN Trucks India (MTI)• Tata Motors• VE Commercial Vehicles• Volvo Trucks

30

2012 2013 2014 2015 2016 2017 2018 2019

Product Cost Leadership

Thin Wall Lightweight Monotube

Aluminum Dual Tube Seat Damper

Best Cost CVSA Shock

RV+ (New Global Rod-Displaced Valving)

HD LCV Strut Ultra Low CostDamper

Superior Functionality

Thin Wall Lightweight Monotube

CVS Double Path Mount (Cab Shock)································Improved Monotube (Low Temperature) ································Global Hydraulic Rebound Stop································New Double Tube Base Valve································Global BOCS Valve································Lightweight Heavy-Duty Torque Rods································Lightweight Top Mounts

Frequency Dependent Damping (FDD)* Valving System······························New CVS 45mm Shock······························Plastic Spring Seat (for Struts)······························Exhaust Isolator Cartridge Mount······························Mini Shear Hub Exhaust Isolator······························Modular Coulomb Exhaust Damper

RV+ (New Global Rod-Displaced Valving)·····························MTV+ (Improved MTV Valve)·····························Comfortmax Monotube·····························Controlled TorqueTM Spring and Shackle Bushings

Aluminum Dual Tube Automotive Damper··························HydroelasticTM Subframe Mounts·························CTrk HydroelasticTM Cab Mount·························Next Gen Exhaust Isolators

Adaptive Top Mounts····························Decoupled HydroelasticTM Mounts

Lightweight LV Elastomer NVH Solutions····························Lightweight CTrk Elastomer NVH Solutions

Advanced Technology

CVSA2/Kinetic® with hydraulic leveling····························CVSA2 External Valve····························Gen2 HydroelasticTM

Body Mount

Motorbike Electronic Shocks

Dual Valve Semi-active Damper

RC1 & RC2 (Uni- & Bi-directional ride comfort)·····························Integrated Height Valve (for Cab) ·····························Dual Mode Damper·····························Smart Damper for Aftermarket·····························NVH System Analysis Tools

Semi-active Internal Valve·························Low-Cost Load & Aero Leveling·························DRiV® Digital Valve

ACOCAR® Active Suspension System···························Smart Actuator for Passenger Car

Intelligent Suspension System with Vision····························CVSA Next Generation

Air Suspension Next Generation

* Valves purchased from Koni B.V.

Advanced Ride Performance Technology

5906 CORP-1/17 (30)

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Tenneco’s revenue outlook for 2017 is as of January 2017. Revenue assumptions are based on projected customer production schedules, IHS Automotive December 2016 forecasts, Power Systems Research January 2017 forecasts and Tenneco estimates.

Tenneco’s revenue outlook for 2018 and 2019 is as of January 2017. Revenue assumptions are based on projected customer production schedules, IHS Automotive December 2016 forecasts, Power Systems Research January 2017 forecasts and Tenneco estimates.

In addition to the information set forth on this slide and slide 18, Tenneco’s revenue outlook is 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, 2015. 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.

• 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.

Tenneco’s revenue outlook 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.

Tenneco’s Revenue Outlook

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• Use of Non-GAAP Financial InformationIn 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, Working Capital, Value-Add Revenue, Adjusted EBITDA*, Adjusted Earnings Before Interest Expense, Income Taxes and Noncontrolling Interests (“Adjusted EBIT”), and Adjusted Earnings Per Share.

Reconciliations of these non-GAAP financial measures to the comparable GAAP measure are included in this presentation.

* Including noncontrolling interests.

Financial Results Disclaimer

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2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

Net income (loss) attributable to Tenneco Inc. $ 247 $ 226 $ 183 $ 275 $ 157 $ 39 $ (73 ) $ (415 ) $ (5 ) $ 49 $ 56 $ 9 $ 25 $ (189 ) $ (131 ) $ (41 )

Cumulative effect of change in accounting principle, net of income tax - - - - - - - - - - - - - 218 - -

Net income attributable to noncontrolling interests 56 44 39 29 26 24 19 10 10 6 2 4 6 4 1 2

Income tax expense (benefit) 149 131 122 19 88 69 13 289 83 5 26 (21 ) (6 ) (6 ) 50 (27 )

Interest expense (net of interest capitalized) 67 91 80 105 108 149 133 113 164 136 133 178 146 140 170 188

EBIT, earnings before interest expense, income taxes & noncontrolling interests (GAAP measure) 519 492 424 428 379 281 92 (3 ) 252 196 217 170 171 167 90 122

Depreciation & amortization of other intangibles 203 208 205 205 207 216 221 222 205 184 177 177 163 144 153 151

EBITDA* $ 722 $ 700 $ 629 $ 633 $ 586 $ 497 $ 313 $ 219 $ 457 $ 380 $ 394 $ 347 $ 334 $ 311 $ 243 $ 273

$ Millions, Unaudited

EBITDA* represents earnings before interest expense, income taxes, noncontrolling interests 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. 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 has presented EBITDA* because it regularly reviews EBITDA* as a measure of the company’s performance. In addition, Tenneco believes that its security holders utilize and analyze its EBITDA* for similar purposes. Tenneco 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.


EBITDA* – Reconciliation of Non-GAAP Results

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2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

EBITDA* $ 722 $ 700 $ 629 $ 633 $ 586 $ 497 $ 313 $ 219 $ 457 $ 380 $ 394 $ 347 $ 334 $ 311 $ 243 $ 273 Adjustments (reflect non-GAAP(1) measures): Restructuring & related expenses 59 48 78 13 8 14 17 40 25 27 12 40 8 2 51 61

Environmental reserve - - - - - - 5 - - - - - - - - -

Pension/post retirement charges 4 32 - - - 6 - - - - - - - - - -

Bad debt charge - 4 - - - - - - - - - - - - - -

New aftermarket customer changeover costs - - - - - - - 7 5 6 10 8 - - - -

Pullman recoveries - - - (5 ) - - - - - - - - - - - -

Goodwill impairment - - - - 11 - - 114 - - - - - - - -

Reserve for receivables from former affiliate - - - - - - - - - 3 - - - - - -

Change to defined contribution pension plan - - - - - - - - - (7 ) - - - - - -

Consulting fees indexed to stock price - - - - - - - - - - - 4 - - - -

Gain on sale of York - - - - - - - - - - - - - (11 ) - -

Other non-operational items - - - - - - - - - - - - - 2 4 4

Adjusted EBITDA* (non-GAAP financial measure)(2)

$ 785 $ 784 $ 707 $ 641 $ 605 $ 517 $ 335 $ 380 $ 487 $ 409 $ 416 $ 399 $ 342 $ 304 $ 298 $ 338

34

(1) Generally Accepted Accounting Principles(2) Tenneco presents the above reconciliation of non-GAAP results in order to reflect the results for full years 2000 through 2015 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. * Including noncontrolling interests.


Adjusted EBITDA* –Reconciliation of Non-GAAP Results

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2015** 2014** 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

Total debt $ 1,210 $ 1,115 $ 1,102 $ 1,180 $ 1,224 $ 1,223 $ 1,220 $ 1,451 $ 1,374 $ 1,385 $ 1,383 $ 1,421 $ 1,430 $ 1,445 $ 1,515 $ 1,527

Total cash 288 285 280 223 214 233 167 126 188 202 141 214 145 54 53 35

Debt net of cash balances 922 830 822 957 1,010 990 1,053 1,325 1,186 1,183 1,242 1,207 1,285 1,391 1,462 1,492

Adjusted EBITDA* $ 785 $ 784 $ 707 $ 641 $ 605 $ 517 $ 335 $ 380

$ 487 $ 409 $ 416 $ 399 $ 342 $ 304 $ 298 $ 338

Ratio of net debt to adjusted EBITDA* 1.2x 1.1x 1.2x 1.5x 1.7x 1.9x 3.1x 3.5x 2.4x 2.9x 3.0x 3.0x 3.8x 4.6x 4.9x 4.4x

35

Note: We present debt net of cash balances because management believes it is a useful measure of our credit position and progress toward reducing leverage. The calculation is limited in that we may not always be able to use cash to repay debt on a dollar-for-dollar basis.


** In April 2015, the FASB issued Accounting Standard Update 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated liability. Tenneco adopted this standard for the first quarter of 2015 and applied retrospectively to 2014. The balance for unamortized debt issuance costs was $12 million and $14 million at December 31, 2015 and December 31, 2014, respectively.


Net Debt /Adjusted EBITDA* – Reconciliation of Non-GAAP Results

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2015 2014 2013 2012 2011 2010 2009 2008

Receivables $ 1,112 $ 1,088 $ 1,060 $ 986 $ 980 $ 826 $ 596 $ 574

Inventory 682 688 656 667 592 547 428 513

Less: Payables 1,376 1,372 1,359 1,186 1,171 1,048 766 790

Working Capital $ 418 $ 404 $ 357 $ 467 $ 401 $ 325 $ 258 $ 297

Revenue $ 8,209 $ 8,420 $ 7,964 $ 7,363 $ 7,205 $ 5,937 $ 4,649 $ 5,916

Percentage of Revenue 5.1% 4.8% 4.5% 6.3% 5.6% 5.5% 5.5% 5.0%

Tenneco presents the above reconciliation for purposes of computing working capital as a percentage of revenue. We include total receivables, inventory and payables in the calculation as these are the components of working capital that we have the most direct control over and because they are most closely related to the cash flow performance of our operations.

Working Capital as a Percentage of Revenue – Reconciliation of Non-GAAP Results

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$ Millions 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006Ride Performance revenue $ 2,486 $ 2,609 $ 2,520 $ 2,437 $ 2,444 $ 2,112 $ 1,730 $ 1,938 $ 1,853 $ 1,706

Clean Air revenue $ 5,723 $ 5,811 $ 5,444 $ 4,926 $ 4,761 $ 3,825 $ 2,919 $ 3,978 $ 4,331 $ 2,976

Total revenue $ 8,209 $ 8,420 $ 7,964 $ 7,363 $ 7,205 $ 5,937 $ 4,649 $ 5,916 $ 6,184 $ 4,682

Less: Substrate sales 1,916 1,934 1,835 1,660 1,678 1,284 966 1,492 1,673 927

Value-add revenues (1) $ 6,293 $ 6,486 $ 6,129 $ 5,703 $ 5,527 $ 4,653 $ 3,683 $ 4,424 $ 4,511 $ 3,755

EBIT $ 519 $ 492 $ 424 $ 428 $ 379 $ 281 $ 92 $ (3) $ 252 $ 196

Adjustments (reflect non-GAAP (2) measures)

Restructuring and related expenses 63 49 78 13 8 19 21 40 25 27

Pullman recoveries - - - (5) - - - - - -

Asset impairment charge - - - 7 - - - - - -

Goodwill impairment - - - - 11 - - 114 - -

Bad debt charge - 4 - - - - - - - -

Pension/post retirement charges 4 32 - - - 6 - - - (7)

Environmental reserves - - - - - - 5 - - -

New aftermarket customer changeover costs - - - - - - - 7 5 6

Reserve for receivables from former affiliate - - - - - - - - - 3

Adjusted EBIT (non-GAAP Financial Measures) (3) $ 586 $ 577 $ 502 $ 443 $ 398 $ 306 $ 118 $ 158 $ 282 $ 225

Adjusted EBIT as a % of value-add revenue (4) 9.3% 8.9% 8.2% 7.8% 7.2% 6.6% 3.2% 3.6% 6.3% 6.0%

37

Adjusted EBIT as a Percentage of Value-Add Revenue – Reconciliation of Non-GAAP Results

(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.

(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.

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X$ Millions

Adjusted EBIT as a Percentage of Value-Add Revenue – Currency Impact – Reconciliation of Non-GAAP Results

TotalRevenue

Value-add Revenue

Adjusted EBIT

Adjusted EBIT as a % of Value-add

Revenue (1)Clean Air

Total Revenue

Ride Performance

Total Revenue

Total $ 8,209 $ 6,293 $ 586 9.3% $ 5,723 $ 2,486

Currency adjustment to 2014 constant currency

(638) (508) (64) (399) (239)

Total after currency adjustment

$ 8,847 $ 6,801 $ 650 9.6% $ 6,122 $ 2,725

(1) Tenneco presents the above reconciliations in order to reflect total revenue, value-add revenue and adjusted EBIT separately from the effects of doing business in currencies other than the U.S. dollar. Presenting adjusted EBIT as a percent of value-add revenue excluding currency assists investors in evaluating the company’s operational performance.

2015

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$ Millions 2015 2014 2013 2012 2011 2010

Total revenue $ 5,723 $ 5,811 $ 5,444 $ 4,926 $ 4,761 $ 3,825

Less: Substrate sales 1,916 1,934 1,835 1,660 1,678 1,284

Value-add revenues (1) $ 3,807 $ 3,877 $ 3,609 $ 3,266 $ 3,083 $ 2,541

EBIT $ 417 $ 397 $ 370 $ 327 $ 298 $ 217


Restructuring and related expenses 10 17 11 7 5 7

Goodwill impairment - - - - 1 -

Bad debt charge - 4 - - - -

Pension/post retirement charges - - - - - 4

Adjusted EBIT (non-GAAP Financial Measures) (3) $ 427 $ 418 $ 381 $ 334 $ 304 $ 228

Adjusted EBIT as a % of value-add revenue (4) 11.2% 10.8% 10.6% 10.2% 9.9% 9.0%

39

(1) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from substrate sales. 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.



(4) Tenneco presents adjusted EBIT as a percentage of value-add revenue to assist investors in evaluating the company’s operational performance without the impact of substrate sales.

Adjusted EBIT as a Percentage of Value-Add Revenue – Clean Air Division – Reconciliation of Non-GAAP Results

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$ Millions 2015 2014 2013 2012 2011 2010

Total revenue $ 2,486 $ 2,609 $ 2,520 $ 2,437 $ 2,444 $ 2,112

Less: Substrate sales - - - - - -

Value-add revenues (1) $ 2,486 $ 2,609 $ 2,520 $ 2,437 $ 2,444 $ 2,112

EBIT $ 189 $ 219 $ 139 $ 168 $ 139 $ 145


Restructuring and related expenses 53 28 65 6 3 12

Pullman recoveries - - - (5) - -

Asset impairment charge - - - 7 - -

Goodwill impairment - - - - 10 -

Pension/post retirement charges - 1 - - - 2

Adjusted EBIT (non-GAAP Financial Measures) (3) $ 242 $ 248 $ 204 $ 176 $ 152 $ 159

Adjusted EBIT as a % of value-add revenue (4) 9.7% 9.5% 8.1% 7.2% 6.2% 7.5%

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(1) Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from substrate sales. 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.



(4) Tenneco presents adjusted EBIT as a percentage of value-add revenue to assist investors in evaluating the company’s operational performance without the impact of substrate sales.

Adjusted EBIT as a Percentage of Value-Add Revenue – Ride Performance Division – Reconciliation of Non-GAAP Results

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2015 2006

Earnings Per Share $ 4.11 $ 1.05

Adjustments (reflects non-GAAP measures):

Restructuring and related expenses 0.96 0.39

Pension/post retirement charges 0.05 (0.10)

New aftermarket customer changeover costs - 0.08

Reserve for receivables from former affiliate - 0.04

Net tax adjustments (0.25) (0.31)

Adjusted Earnings Per Share $ 4.87 $ 1.15

Adjusted Earnings Per Share – Reconciliation of Non-GAAP Results

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