wells fargo industrial conference - tenneco/media/files/t/tenneco-ir/...vehicle parts industry, and...

NYSE: TENNew York, NYMay 9, 2017

Wells FargoIndustrial Conference

Safe HarborThis presentation contains forward-looking statements that involve risks and uncertainties which could cause the company’s plans, actionsand results to differ materially from its current expectations. The words “expect,” “estimate,” “will,” and similar expressions identify certain ofthese 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 marketconditions; (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 theongoing global antitrust investigation, product safety or intellectual property rights; (iv) the impact of the changing laws and regulations towhich we are subject, including environmental laws and regulations, pensions or other regulated activities; (v) the ability of the company toaccess 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 currentmandated timelines for worldwide emissions regulations; (viii) the overall highly competitive nature of the automobile and commercialvehicle parts industry, and any resultant inability to realize the sales represented by the company’s awarded book of business which isbased 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) thecompany’s continued success in cost reduction and cash management programs; (xi) economic, exchange rate and political conditions inthe countries where we operate or sell our products; (xii) workforce factors such as strikes or labor interruptions; (xiii) increases in the costsof raw materials; (xiv) the negative impact of fuel price volatility on logistics costs and discretionary purchases of vehicles or aftermarketproducts, and demand for off-highway equipment; (xv) the cyclical nature of the global vehicular industry, including the performance of theglobal aftermarket sector and longer product lives of automobile parts; (xvi) product warranty costs; (xvii) material developments relating toour intellectual property or the failure or breach of our IT systems; (xviii) the company’s ability to develop and profitably commercialize newproducts and technologies; (xix) governmental actions, including the ability to receive regulatory approvals and the timing of suchapprovals; and (xx) the timing and occurrence (or non-occurrence) of transactions and events which may be subject to circumstancesbeyond the control of the company. Additional information regarding these and other risk factors and uncertainties is detailed from time totime in the company’s SEC filings, including but not limited to its annual report on Form 10-K. Unless otherwise indicated in thispresentation, the forward-looking statements in this presentation are made as of the date hereof, and the company does not undertake anyobligation to publicly disclose revisions or updates to any forward-looking statements.

2

Strong Foundation Consistent Strategic Focus

3

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

Our Markets: Light Vehicle • Commercial Truck • Off-Highway / Large Engine • Aftermarket

Operations 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

Shared Values

• Accountability• Health and Safety• Innovation• Integrity• Passion and a

Sense of Urgency

STRATEGIC IMPERATIVES

PROFITABLEGROWTH

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• Perseverance• Results Oriented• Teamwork• Transparency• Trust

Appealing Investment OpportunityBuilt to Outperform

• Proven track record of growth– Revenue growth outpacing industry production– Margin expansion and double-digit EPS growth

• Diversified profile– Product lines– End markets– Customers

Accelerating Core Growth• Positive market trends in both product lines• Expansion in high growth markets• Technology and capability leadership

Consistent and Focused Strategic Objectives4

–Platforms–Geographies

Built to Outperform Proven Track Record of Growth

• Since 2006, Tenneco has delivered:– Annual revenue growth almost double industry production– Margin expansion of 370 bps– Annual adjusted EPS growth of 18%

Seven-year record of value-add adjusted EBIT margin improvement* Value-add Revenue is total revenue less substrate sales. See slide 52 for further explanation. † See reconciliations to U.S. GAAP at end of presentation. 5

Sustainable Growth Driversto Outpace Industry Production

• Strong position on light vehicle platforms globally

• Regulatory-driven Clean Air content

• Increasing demand for advanced suspension systems

• Global aftermarket leadership

6

Pioneering Global Ideas for Cleaner Air and Smoother, Quieter and Safer Transportation

* Source IHS Automotive January 2017 global light vehicles ** CAGR

Built to Outperform Margin Expansion

7

Expect continuing annual margin improvement driven by:

• Increasing content with higher technology products • Growing aftermarket • Commercial truck and off-highway

–Increasing Clean Air content in China and India as regulations tighten–Mature market recovery

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

Since 2006, Tenneco has delivered margin* expansion of 370bps• Best delivered cost

–Optimizing product designs and manufacturing processes

–Flexible global manufacturing and supply chain networks

–Continuous improvement

Built to Outperform Diversified Profile – Leading Product Lines

8† See reconciliations to U.S. GAAP at end of presentation. * Value-add Revenue is total revenue less substrate sales. See slides 53 and 54 for further explanation.

CLEAN AIR RIDE PERFORMANCEProducts 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

Built to OutperformDiversified Profile – End-Market Applications

9Manage cyclicality with balance across end-market applications

CLEAN AIR

LV83%

RIDE PERFORMANCE

LV55%

TOTAL TENNECO

Light vehicle

75%

Commercial truck and off-highway11%

Aftermarket14%

* LV segment

Built to Outperform Diversified Profile – Customers and OE Platforms

10

Strong Customer Partnerships and Platform Mix Globally

• 623 Customers– Light vehicle OEMs 32– Commercial truck OEMs 29– Off-highway & other OEMs 15– Aftermarket 426– Tenneco as Tier 2 155

• +80k Ship to locations

• 435 OE platforms– Light vehicle 238– Commercial truck 130– Off-highway & other 67

• Enabling aftermarket growth

LEADING CUSTOMERS

OEPLATFORMS

Built to Outperform Diversified Profile – Global Footprint

11

24 Countries of Operation 158 Countries ServedPowered by People

• 31,000 Team Members• 91 Manufacturing Facilities• 15 Engineering & Technology Centers

MANAGING CYCLICAL MARKETS WITH FLEXIBLE NETWORK• Demand-driven network design• Utilization-driven capacity management• Flex capacity partnerships• Manufacture where we sell

2016 Revenue

Appealing Investment Opportunity


12

0-5 yrs 5-10 yrs >10 yrs• Market Trends

– Light vehicle growth (Global) – Accelerating car parc in high growth markets (China and India) – Agriculture and construction production recovery (U.S. and Europe)

– Differentiate vehicles with ride performance – Diesel / gasoline powertrain mix (Europe)

• Regulatory Drivers – Tightening emissions regulations – criteria pollutants

– CO2 emissions

– Asia Pacific CT & OH regulations – criteria pollutants

• Technology Trends– Strong investments in ICE powertrain – Electrification – Hybrid

– BEV penetration – Autonomous driving – Mobility models

Market Landscape

13Trends Driving Current and Future Opportunities with Existing Portfolio

Ride Performance Overview

14

Conventional shocks and struts

Advanced suspension systems

NVH solutions

RIDE PERFORMANCEby the Numbers

#1Market position for ride control products

90+ million OE and AMShocks and struts sold globally in 2016

28 Manufacturing locations

10Engineering centers

572Customers served

$2.5 billion2016 Revenue

Light Vehicle

Commercial Truck

PRODUCTSCUSTOMERS SERVED

Growing demand for advanced suspension technologiesthat enhance vehicle performance

Success driven by application engineering, product leadership and global capabilities

Aftermarket

Ride Performance Core Capabilities

15

• Global product and application engineering expertise

– Ride tuning– Systems integration– Vehicle dynamics– Noise, Vibration, Harshness (NVH)– Light weighting

• Global program management

• Global integrated supply chain

• High volume manufacturing

• Continuous improvement

Tenneco Tuning Truck

Core Suspension Products

China and India light vehicle growth opportunity• Strong presence and capabilities

–5 manufacturing locations–3 technical centers

• Diverse portfolio of customers

• Optimized damper designs for fast growing segments

• Well positioned for advanced suspension products

16

By 2030: The Asia Pacific region will account for 70% of the global light

vehicle production growthMILLION SHOCKS AND STRUTS

SOLD ANNUALLY

90+

Source: IHS database

TODAY

Broad product portfolio and tuning expertise differentiate vehicle ride

NVH Solutions

• Market leading technology– NVH management– Durability and corrosion protection– Mass reduction

• Opportunity to grow market presence in Europe and APAC

17

Isolation Combined with Light Weighting

Mini-shear-hub in Plastic Bracket

Original 2-hole Isolator

Light Weighting

Conventional Steel-Based

Partial Metal-to-Plastic Conversion

Manufacturing

Technical Center

Extend our NVH expertise and capabilities globally

Advanced Suspension Technology

18

• Expected to grow from 2% to more than 15% of light vehicle production by 2025 with adoption led by global OEMs

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

Install rate and content growth results in 25% revenue CAGR opportunitySource: IHS database and Tenneco analysis

RID

E PE

RFO

RM

ANC

E

More than6xAct ive Suspension

Average4xSemi-act ive Suspension

$50-$60Convent iona l Suspension

A segment F segment

Content per Vehicle

New Opportunities Autonomous Driving / Mobility Trends

Opportunities for Tenneco

• Existing portfolio of technical solutions to capture ADAS/AD trend

– Comfort / train-like ride– Improved handling– Noise, vibration, harshness reduction– Light weighting

• Continuing to invest in developing market leading products and technology

19

SAE levels of automation foron-road vehicles

Source: https://www.sae.org/misc/pdfs/automated_driving.pdf ADAS – Advanced Driver Assistance Systems AD – Automated Driving

Clean Air Overview

20

Products and systems designed to meet global emissions regulationsanywhere in the world

Success driven by regulatory expertise, product leadership and global capabilities

PRODUCTS

Catalytic converter

Gasoline Particulate Filter (GPF)

Diesel particulate filter (DPF)

XNOx® dosing system for SCR

Electronic Valve

CLEAN AIRby the Numbers

Leading market positions globally

63 Manufacturing locations

8Engineering centers

123Customers served

$6.1 billion2016 Revenue

CUSTOMERS SERVED

Light Vehicle

Commercial Truck

Off-Highway and Large Engine

Full exhaust system

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjblY3Grd7KAhVEzRQKHRsnBioQjRwIBw&url=http://www.drivingfutures.com/programs-initiatives/supply-chain/&psig=AFQjCNFEFN3kIZu8PvxoEsF-RDTR59dYuA&ust=1454683769326919

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjF_57ert7KAhXEQhQKHamABiIQjRwIBw&url=https://www.zyconmodels.com/ocart/index.php?route=information/information&information_id=10&psig=AFQjCNHfeaLZMYtQAFe1z3d9tXOuR7hhxQ&ust=1454684104196459

Clean Air Core Capabilities

• Global product and application engineering expertise

– Regulatory Expertise– Core Science Expertise– Noise, vibration and harshness– Acoustics– Light weighting– System integration

• Global program management

• Global integrated supply chain and footprint

21

Core Science Expertise

Regulatory Drivers

22

• Light Vehicle– 2017-2025 – US Tier 3– 2017-2022 – Euro 6c/6d Real Driving Emissions– 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 Low NOx regulation

• Off-Highway– 2019 – EU Stage V– TBD – US Stage V equivalent– 2019 – China CN IV**– 2019 – Brazil Stage 3B**– 2021-2022 – India BS IV**

Regulations Driving Technology Roadmap and Content Growth

Key Regulations

** Proposed or estimated date

EMIS

SION

S an

dTH

ERMA

L MGM

T

LIGHT

WEI

GHTI

NGan

dTH

ERMA

L MGM

TAC

OUST

ICS

NVH

Driver System Solution Technologies and Products

Reduce Criteria Pollutants

Advanced Aftertreatment

Improve FuelEconomy

Waste Heat Recovery

AcousticPerformance

Sound Creation,Sound

Cancellation

Noise, Vibration and Harshness

Elastomerinterfaces for

Clean Air Solutions

Regulatory DriversKey Technologies and Products

23

XNOx® Dosing System

LV Heat ExchangerCT 1 Box ATS with Rankine Evaporator

Passive Valve

Exhaust Isolator

GPF

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

Rankine Cycle PowerPack, Thermo-electric Generator, ThermoacousticConverter, Heat Exchanger, Lightweight Aftertreatment System, Electric Valve, Fabricated Manifold

Active Noise Cancellation, Signature Sound, Electronic Valve, Passive Valve

Exhaust System Isolator, Modular Exhaust Damper

Signature Sound

Light Vehicle Growth – Asia Pacific

• By 2030, APAC represents 70% of global unit growth and 53% of global market

• China and India increase technology needs through tightening regulations

• Clean Air global capabilities meet new regional customer needs

– Strong regional APAC presence / capabilities• 23 manufacturing locations• 4 engineering centers

– Technology transfer from proven Euro 6,VI solutions

– Low cost solutions

24

Leveraging content into high growth markets

China

NA

EU

RoW

IndiaSA

NA

EU

SAIndia

China

RoW

2030 LV Production

Daimler AGApproximately €3 billion for engine technology Mercedes-Benz invests in innovative engine solutions

Daimler website; February 11, 2016

Daimler plans to invest about 500 million euros in new engine production in Jawor.

Daimler website; October 13, 2016

Technology TrendsInvestment in LV ICE Powertrains

25Over $20 billion in announced OEM investment in ICE powertrains since 2015

Toyota In December 2016, Toyota announced an ambitious road map to new engines. Toyota will embark on a sweeping engine and drivetrain overhaul to replace at least 60% of its line up by the end of 2021, with nine new engines, four new transmissions and six new hybrid systems because they expect ICE technology to remain relevant for many more years. autonews.com

December 12, 2016

Commercial Truck and Off-Highway Growth – Asia Pacific

26

North America

South America

China226531

Americas Asia Pacific

2030 CTOH Production: 1.0MRegulated 2015: 86%Regulated 2030: 100%



1,605

EMEA

India

Japan/Korea

Commercial Truck Off-Highway & Engines

70126

733794 991 646

250

5311,189

More engines will come under regulation between today and 2030 than are regulated today

Asia Pacific accounts for +67% of global CT & OH production

by 2030

Source: Power Systems Research, Tenneco analysis

Technology TrendsPowertrains in Regulated Regions

27

Clean Air content is expected to be 25% - 30% higher in 2030, even if BEV penetration is 7x greater than projected

* IHS Automotive, Power Systems Research and Tenneco estimates

2015 2030

Light Vehicle BEVs/Fuel Cells

Regulated ICEs

123

93 118

93

CURRENT PROJECTIONS*

4% LV BEV penetration*

2030

26% LV BEV penetration

93

BEV PENETRATION SENSITIVITY ANALYSIS

123

Total regulated powertrains – light vehicle, commercial truck and off-highway* (in millions)

But … will have 25% to 30% higher regulatory content

than today

Aftermarket Overview

28

Countercyclical business with strong margins and cash flow – emerging high growth opportunities

BRANDSAFTERMARKETby the Numbers

#1 Market position for ride performance North America, Europe and South America

#1 Market position for clean airNorth America and Europe

90+ million OE and AMShocks and struts sold globally in 2016

$1.2 billion 2016 Revenue(Included in our Ride Performance and

Clean Air product lines)

PRODUCTS

Catalytic converter

Exhaust Pipes & Mufflers

Diesel Particulate Filter (DPF)

Suspension PartsShock and Struts

Aftermarket Capabilities• History of strong aftermarket,

Monroe & Walker brands are 100 years strong

• Product Lifecycle – OE AM

• Powerful brands to attract and retain customers/consumers

• Innovative and cost-effective product coverage solutions

• Distribution – cost-effective, accurate, on-time

• Marketing/selling expertise –that leverages training, tools and data

29

North America Europe

South America

#1 Ride Performance #1 Ride Performance

#1 Ride Performance

#1 Clean Air#1 Clean Air

Established Markets

Tenneco Aftermarket capabilities are second to none

Market TrendsCar Parc Growth

30

Global Vehicles in Operation (VIO)

Between 2015 and 2030, the global car parc nearly doubles

1950 1960 1970 1980 1990 2000 2010 2020 2025 2030

60 years of gradual growth

Unprecedented car parc growth over next 20 years led by China

Source: OCIA, Frost & Sullivan

Market Trends – Accelerating Car Parcin High Growth Markets Vehicle Parc Unit Growth (2015 to 2025)

31

Established Markets High-Growth Markets

328Average age

8.5 years

59

2

6

8

4

North America

South America

EuropeChina

India

ROW

Light VehicleCommercial Truck

Light Vehicle Parc: 455M10-year CAGR: 2%CTOH Vehicle Parc: 20M10-year CAGR: 4%


Light Vehicle Parc: 835

1

Source: Frost & Sullivan 2015, IHS Worldview May 2016

4247

421

3

2025 2025 2025

China’s car parc will grow by 328M vehicles over next 10 years


Branded Installer Installer Seminars

China: Brand, Product and Market Coverage

• Brand building - underway

• Product coverage - by 2019

• Channel Relationships - underway

• Outlet Coverage - underway

• Footprint - underway

32

Mobile APP Advertising Campaigns

Events

MobileApp AD

Event

Branded Installer Seminar

3949

5973

1416

24

33

4

5

6

8

2015 2020 2025 2030

Global Market Opportunity$114B Opportunity in 2030

33Source: IHS database; Power Systems Research, Tenneco analysis

Revenue in $B

Global Opportunity CAGR of 5% through 2030, 2.5x Faster than LV Production CAGR of 1.8%

$57

$70

$89

$114

AftermarketRide PerformanceClean Air

Global Markets 4% 5% 5%

IHS LV Production 2% 2% 2%5yr C

AGR

1.8% LV Production

CAGR

Key TakeawaysBuilt to Outperform • Accelerating Core Growth • Focused Strategic Objectives

34

RIDE PERFORMANCE• Core Suspension Growth – driven by APAC LV production• NVH Elastomers – extend expertise and capabilities globally • Advanced Suspension Technology – Install rate and

content growth drives 25% revenue CAGR opportunity

CLEAN AIR• Continued tightening emissions regulations• Over $20 billion in announced global OEM investment

in ICE powertrains in past 2 years• Commercial truck and off-highway – more engines will come

under regulation by 2030 than are regulated today

AFTERMARKET• Proven market leader in North America and Europe• Global vehicles in operation nearly doubles by 2030• Mobility models – higher vehicle utilization drives

increased replacement rate

Focused Strategic Objectives

• Continue outpacing industry production by 3% to 5+%

• Invest in technologies aligned with market trends

• Grow Aftermarket revenue mix

• Continue to drive margin expansion

• Maintain and build financial strength and maximize flexibility

35

Balance Sheet Strength

36

Since 2011, repurchased 10.4 million shares for $521 million

TEN averaged 5.4% over the past 9 years Capex range of 3.5% - 4.0%

Leverage Ratio(Net Debt / Adjusted EBITDA*)

Capital Expendituresas a % of Revenue

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

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

Target leverage of around 1x:• Provides financial flexibility

• Stable balance sheet for business cycles

• Opportunity for deploying capital to accelerate growth and shareholder returns

✔ 1. Fund organic growth

Capital Allocation Priorities to Drive Shareholder Value

37

✔ 2. Activities to improve cost competitiveness

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

Well-positioned with flexibility to pursue strategic opportunities and capital returns to shareholders

4. Strategic opportunities• Technology – urea dosing and injection capabilities; digital valve technology

• Customer – regional players with specific target customers

• Geographic – expand NVH elastomer global reach; accelerate Aftermarket growth in China

• Aftermarket growth – increase Aftermarket revenue mix; enhance product portfolio

4. Strategic opportunities 5. Capital returns to shareholders

• Technology

• Customer

• Geographic

• Aftermarket growth

• Initiated quarterly dividend for sustainable returns

• $400M repurchase program over next 3 years out of free cash flow

What It Means to Tenneco

38Source: IHS database; Power Systems Research, Tenneco analysis

Growth Trajectory

Long-term growth outpacing industry production

• Short- and mid-term growth in all areas• Mid-term to long-term accelerating growth in

Ride Performance and Aftermarket • Long-term, moderating growth in Clean Air

Current View Long-term View

Aftermarket

Ride Performance (OE)

Clean Air (OE)

Appealing Investment OpportunityBuilt to Outperform

• Proven track record of growth– Revenue growth outpacing industry production– Margin expansion and double-digit EPS growth

• Diversified profile– Product lines– End markets– Customers


Consistent and Focused Strategic Objectives39

–Platforms–Geographies

Up to 2012 2013 2014 2015 2016 2017 2018 2019 2020 & laterU.S., Canada& Mexico

• Tier 4i Off-Hwy(2011)

• CARB CTrkRetrofit* (2012)

• Mex Euro 4 LV orEPA Tier 2 Bin 10

• RICE Stationary

• US revised NAAQS

• Tier 4f* Off-Hwy• Marine Tier 4f*• CARB Off-Hwy

Large Fleets*• US Utility MACT

• CARB LEV III*• Tier 4

Locomotive

• NSPS Stationary NOx*

• CARB Off-HwyMedium Fleets*

• Tier 3 LV Pass Cars*

• Tier 3 Light Truck*• Mex Tier 2 LV

(full impl.)**• Mex EPA2007

or EU-V CTrk**

• CARB Off-HwySmall Fleets*

• Tier 4f Off-Hwy***

• CARB CTrk Low NOx (2023)**

• EPA CTrk Low NOx(2024)**

• Mex Tier 3 LV** (2025)• Mex EPA2010 or

EU-VI CTrk** (2020)

Europe • EU Off-HwyStage 3B* (2011)

• EU CO2 /GHG 120g& PM # LV (2011)

• EU Sound regulation

• EU-VI CTrk

• Euro-6b LV• EU Off-Hwy

Stage 4*

• Euro-6c LV (no RDE)• EU-6d TEMP

LV RDE CF2.1* (2017-2018)

• EU VI D CTrkIn-service conformity

• EU Stage VOff-Hwy

• EU-6d LV RDECF1.5* (2020-1)

China • China 5 LV* (Major Cities) (2012)

• China IV CTrk*National (MEP)

• Beijing V CTrk• Beijing 4

Off-Hwy• China 3

Off-Hwy

• China 5 LV (Eastern Provinces)

• China 5 LV National Sl*

• China V CTrk*,**

• China 5 LV National Cl*

• China 6a LV*,**National

• China VI CTrk*,**• China 4 Off-Hwy*,**• Stage 4*

Locomotive**

• China 6b LV*,** National (2023)

Japan • JC08 (2009) • JP-13 CTrk • Off-Hwy Tier 4B

• JP-16 CTrk* • WLTP LV

SouthAmerica

• Peru EU-3 LV• EC, UR, VEN

EU-1 LV• Brazil EU-V CTrk

(2012)

• Chile EU-5 LV• Colombia

EU-4 LV• Brazil Proconve

L-6 LV

• ArgentinaEU-5 LV

• Brazil Stage 3A Off-Hwy (construction)

• Brazil Stage 3A Off-Hwy (farming)

• Brazil EU-VI CTrk**

• Brazil Stage3B** Off-Hwy

• Brazil ProconveL-7 LV**(2026)

Russia • EU-4 LV• EU-IV CTrk

• EU-5 LV • EU-V CTrk

India • BS-4 LV/CTrk(13 Cities) (2011)

• BS-IIIA Off-Hwy(2011)

• BS-IV CTrk*(50 Cities)

• BS-4 LV• BS-IV CTrk

• BS-6 LV (2020)• BS-VI CTrk (2020)• BS-IV* Off-Hwy

(2022)**

GlobalTreaty

• Marine Annex VI Tier III NOx

• Marine Annex VI Tier III SOx

Global Emissions Regulations

41

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

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

Clean Air: New Light Vehicle Regulations Adding Content

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 estimateEstimated $1.4 billion annualized

additional available market by 2025

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

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

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

42

Commercial Truck and Off-Highway Diesel Aftertreatment Customers

43

Europe

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

Commercial Truck• Daimler Trucks• Scania• Customer B

India

North AmericaTruck• Chrysler (LV 3/4 ton +) • GM (LV 3/4 ton +)• Ford (LV 3/4 ton +,

CTrk Med-duty)• Customer A (CTrk)

Off-Highway• Caterpillar / Perkins • Deere

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

ChinaCommercial Truck• China National

Heavy-Duty Truck Co.• Dalian Diesel Engine Co.• FAW• JND• Shanghai Diesel

Engine Co.• Weichai• YuChai

JapanOff-Highway• Caterpillar / Perkins –

Exported from N. America• Kubota

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

Balanced Customer Mix

44

As a % of Total 2016 Revenue

16.6%

13.0%

7.2%

6.4%

4.8%

4.3%

4.2%

4.0%

3.9%

2.3%

1.9%

1.7%

1.5%

1.5%

1.5%

1.5%

1.4%

1.4%

1.3%

1.0%

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

Robust Platform Mix

45

As a % of Total 2016 Revenue

Financial Results Disclaimer

46

• 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, 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.

Tenneco’s Revenue Outlook

47

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, 2016. 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.

EBITDA*–Reconciliation of Non-GAAP Results

48

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.* Including noncontrolling interests.

2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000Net income (loss) attributable to Tenneco Inc. $ 363 $ 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 tononcontrolling interests 70 56 44 39 29 26 24 19 10 10 6 2 4 6 4 1 2

Income tax expense (benefit) 3 149 131 122 19 88 69 13 289 83 5 26 (21) (6) (6) 50 (27)

Interest expense (net of interest capitalized) 92 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) 528 519 492 424 428 379 281 92 (3) 252 196 217 170 171 167 90 122

Depreciation & amortization of other intangibles 212 203 208 205 205 207 216 221 222 205 184 177 177 163 144 153 151

EBITDA* $ 740 $ 722 $ 700 $ 629 $ 633 $ 586 $ 497 $ 313 $ 219 $ 457 $ 380 $ 394 $ 347 $ 334 $ 311 $ 243 $ 273

$ Millions, Unaudited

Adjusted EBITDA*–Reconciliation of Non-GAAP Results

49

2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000EBITDA*Adjustments (reflect non-GAAP(1) measures):

$ 740 $ 722 $ 700 $ 629 $ 633 $ 586 $ 497 $ 313 $ 219 $ 457 $ 380 $ 394 $ 347 $ 334 $ 311 $ 243 $ 273

Restructuring & related expenses 32 59 48 78 13 8 14 17 40 25 27 12 40 8 2 51 61Environmental reserve - - - - - - - 5 - - - - - - - - -Pension/post retirement charges 72 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) $ 844 $ 785 $ 784 $ 707 $ 641 $ 605 $ 517 $ 335 $ 380 $ 487 $ 409 $ 416 $ 399 $ 342 $ 304 $ 298 $ 338


(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 2016 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.


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

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2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

Total debt $1,384 $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 349 288 285 280 223 214 233 167 126 188 202 141 214 145 54 53 35

Debt net of cash balances 1,035 922 830 822 957 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* $ 844 $ 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 1.2x 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

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.


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

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2016 2015 2014 2013 2012 2011 2010 2009 2008

Receivables $ 1,294 $ 1,112 $ 1,088 $ 1,060 $ 986 $ 980 $ 826 $ 596 $ 574

Inventory 730 682 688 656 667 592 547 428 513

Less: Payables 1,496 1,376 1,372 1,359 1,186 1,171 1,048 766 790

Working Capital $ 528 $ 418 $ 404 $ 357 $ 467 $ 401 $ 325 $ 258 $ 297

Revenue $ 8,599 $ 8,209 $ 8,420 $ 7,964 $ 7,363 $ 7,205 $ 5,937 $ 4,649 $ 5,916

Percentage of Revenue 6.1% 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.

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

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(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.

$ Millions 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006Ride Performance revenue $ 2,530 $ 2,486 $ 2,609 $ 2,520 $ 2,437 $ 2,444 $ 2,112 $ 1,730 $ 1,938 $ 1,853 $ 1,706

Clean Air revenue $ 6,069 $ 5,723 $ 5,811 $ 5,444 $ 4,926 $ 4,761 $ 3,825 $ 2,919 $ 3,978 $ 4,331 $ 2,976

Total revenue $ 8,599 $ 8,209 $ 8,420 $ 7,964 $ 7,363 $ 7,205 $ 5,937 $ 4,649 $ 5,916 $ 6,184 $ 4,682

Less: Substrate sales 2,028 1,916 1,934 1,835 1,660 1,678 1,284 966 1,492 1,673 927Value-add revenues (1) $ 6,571 $ 6,293 $ 6,486 $ 6,129 $ 5,703 $ 5,527 $ 4,653 $ 3,683 $ 4,424 $ 4,511 $ 3,755EBIT $ 528 $ 519 $ 492 $ 424 $ 428 $ 379 $ 281 $ 92 $ (3) $ 252 $ 196Adjustments (reflect non-GAAP (2) measures)

Restructuring and related expenses 36 63 49 78 13 8 19 21 40 25 27Pullman recoveries - - - - (5) - - - - - -Asset impairment charge - - - - 7 - - - - - -Goodwill impairment - - - - - 11 - - 114 - -Bad debt charge - - 4 - - - - - - - -Pension / post retirement charges 72 4 32 - - - 6 - - - (7)Environmental reserves - - - - - - - 5 - - -New aftermarket customer changeover costs - - - - - - - - 7 5 6Reserve for receivables from former affiliate - - - - - - - - - - 3

Adjusted EBIT (non-GAAP Financial Measures) (3) $ 636 $ 586 $ 577 $ 502 $ 443 $ 398 $ 306 $ 118 $ 158 $ 282 $ 225Adjusted EBIT as a % of value-add revenue (4) 9.7% 9.3% 8.9% 8.2% 7.8% 7.2% 6.6% 3.2% 3.6% 6.3% 6.0%

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

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(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.




$ Millions 2016 2015 2014 2013 2012 2011 2010

Total revenue $ 6,069 $ 5,723 $ 5,811 $ 5,444 $ 4,926 $ 4,761 $ 3,825

Less: Substrate sales 2,028 1,916 1,934 1,835 1,660 1,678 1,284

Value-add revenues (1) $ 4,041 $ 3,807 $ 3,877 $ 3,609 $ 3,266 $ 3,083 $ 2,541

EBIT $ 478 $ 417 $ 397 $ 370 $ 327 $ 298 $ 217

Adjustments (reflect non-GAAP (2) measures)

Restructuring and related expenses 7 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) $ 485 $ 427 $ 418 $ 381 $ 334 $ 304 $ 228

Adjusted EBIT as a % of value-add revenue (4) 12.0% 11.2% 10.8% 10.6% 10.2% 9.9% 9.0%

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

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(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.




$ Millions 2016 2015 2014 2013 2012 2011 2010

Total revenue $ 2,530 $ 2,486 $ 2,609 $ 2,520 $ 2,437 $ 2,444 $ 2,112 Less: Substrate sales - - - - - - -

Value-add revenues (1) $ 2,530 $ 2,486 $ 2,609 $ 2,520 $ 2,437 $ 2,444 $ 2,112EBIT $ 238 $ 189 $ 219 $ 139 $ 168 $ 139 $ 145 Adjustments (reflect non-GAAP (2) measures)

Restructuring and related expenses 27 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) $ 265 $ 242 $ 248 $ 204 $ 176 $ 152 $ 159

Adjusted EBIT as a % of value-add revenue (4) 10.5% 9.7% 9.5% 8.1% 7.2% 6.2% 7.5%

Adjusted Earnings Per Share –Reconciliation of Non-GAAP Results

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2016 2006

Earnings Per Share $ 6.44 $ 1.05

Adjustments (reflect non-GAAP measures):

Restructuring and related expenses 0.57 0.39

Pension / post retirement charges 0.83 (0.10)

New aftermarket customer changeover costs - 0.08

Reserve for receivables from former affiliate - 0.04

Costs related to refinancing 0.27 -

Net tax adjustments (1.96) (0.31)

Adjusted Earnings Per Share $ 6.15 $ 1.15

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