5137-CORP-9/10 ( 1) 1 SAFE HARBOR
The foregoing 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. Such risks and uncertainties include, but are not limited to, the following: (i) the general political, economic and competitive conditions in markets and countries where the company operates, including currency fluctuations; (ii) governmental actions, including the ability to receive regulatory approvals and the timing of such approvals; (iii) changes in capital availability or costs, including increases in the company’s costs of borrowing, the amount of the company’s debt, the ability of the company to access capital markets and the credit ratings of the company’s debt; (iv) changes in consumer preferences and changes in automotive manufacturers’ production rates and their actual and forecasted requirements for the company’s products; (v) the overall highly competitive and cyclical nature of the automotive parts industry; (vi) the company’s ability to realize the sales represented by its book of business which is based on a number of factors, including, but not limited to, the original equip - ment manufacturers’ programs that have been formally awarded as well as programs where the company is highly confident that it will be awarded business based on informal customer indications, the company’s status as a supplier on the existing program, and the relationship with the customer, and anticipated pricing for the applicable program over its life; (vii) the cyclical nature of the global vehicular industry, including the performance of the global aftermarket sector; (viii) the cost and outcome of existing and any future legal proceedings, and compliance with changes in regulations; (ix) workforce factors such as strikes or labor interruptions; (x) increases in the costs of raw materials and our ability to procure needed goods and services; (xi) the company’s continued success in cost reduction and cash manage - ment programs; (xii) the company’s ability to develop and profitably commercialize new products and technologies, and the acceptance of such new products and technologies by the company’s customers and the market; (xiii) changes in the distribution channels for the company’s aftermarket products, further consolidations among automotive parts customers and suppliers, and product warranty costs; (xiv) changes by the Financing Accounting Standards Board or other accounting regulatory bodies of authoritative generally accepted accounting principles or policies; (xv) changes in accouting estimates and assumptions, potential impairment of our long-lived assets and goodwill and volatility in our effective tax rate; (xvi) acts of war, riots or terrorism, including, but not limited to the events taking place in the Middle East; and (xvii) the timing and occurrence (or non-occurrence) of transactions and events which may be subject to circumstances beyond the control of the company.
5137-CORP-9/10 ( 2) 2 GLOBAL SUPPLIER OF EMISSION AND RIDE CONTROL SYSTEMS
Revenues (Millions) $4,649 $5,9 16
5137-CORP-9/10 ( 3) 3 TENNECO STRENGTHS
- Customers - Markets - Geographies - Products
- Solutions to meet emissions regulations - Vehicle ride & handling performance
- Executing with discipline - Continuous cost reductions and competitive advantage improvements
- Strong alignment globally - Talented and dedicated - Passion for winning
5137-CORP-9/10 ( 4) 4 TENNECO GLOBAL FOOTPRINT
5137-CORP-9/10 ( 5) 5 GLOBAL ENGINEERING NETWORK
5137-CORP-9/10 ( 6) 6 2010-2011 COMMERCIAL VEHICLE BUSINESS GROWTH
Launching programs with 11 commercial vehicle customers from the end of 2009 through 2 011 to meet new diesel emissions requirements – Deutz – China National Heavy Duty Truck Company – Caterpillar/Perkins – Shanghai Diesel Engine Company – John Deere – Weichai Power – Navistar – Three others to be announced – FAW Supply ride control components to a number of commercial vehicle customers including – Volvo Global Trucks – Paccar – Scania – John Deere – Iveco – AM General – Navistar
Percent of Tenneco OE revenue generated by commercial vehicle business
* See slide 23 for a discussion of key assumptions on which our revenue projections are based. 5137-CORP-9/10 ( 7) 7 STRATEGIC INITIATIVES
• Emission control technologies to meet emissions regulations • Adjacent markets for new revenue opportunities • Advanced technology for improved ride performance • BRIC+T markets for rapid growth • Enhance customer mix • Leverage aftermarket premium brands and distribution strength
• Low-cost country strategy • Continuously improve productivity and shrink asset base with Lea n/ Six Sigma • Optimize global footprint
• Capitalize on cash flow and EVA discipline • Focus on reducing leverage • Target net deb t/adjusted EBITDA* ratio of 2.0X
* Including noncontrolling interests
5137-CORP-9/10 ( 8) 8 REGULATORY-DRIVEN GROWTH OPPORTUNITIES
CVS - Commercial Vehicle Systems * Phased in † Pending LVS - Light Vehicle Systems ** Estimated date
5137-CORP-9/10 ( 9) 9 COMMERCIAL VEHICLE TECHNOLOGIES TO MEET STRICTER EMISSION REGULATIONS
2008 20 10 20 11 20 13 20 14
Regulation EU – Euro-5 CVS U.S. (US-10 CVS) U.S. (Tier 4i ) EU Euro-6 CVS U.S. (Tier 4f ) China (Euro-4 LVS/CVS) Europe (EU Stage 3B) Europe (EU Stage 4)
Vehicles On-Road: On-Road: Off-Road: On-Road: Off-Road: medium and heavy Class 4-7 trucks Construction, farm, medium and heavy Construction, farm, duty trucks Class 8 trucks mining, forestry duty trucks mining, forestry equipment equipment
Emissions NOx NOx Diesel particulates Diesel particulates NOx
Tenneco Urea SCR, Urea SCR, DPF, DOC, DPF, DOC, Urea SCR, Technology Dosing and Dosing and T.R.U.E.-Clean ® T.R.U.E.-Clean ® NOx adsorber, injection injection, Hydrocarbon LNC, NOx adsorber Solid SCR
TEN estimates that the original equipment emission control after treatment opportunity in North America, Europe and China for on- and off-road commercial vehicles will be up to $8 billion by 2 014 5137-CORP-9/10 ( 10 ) 10 REGULATORY-DRIVEN EMISSION CONTROL PRODUCT PIPELINE
T.R.U.E.-Clean® Turnkey SCR Off-Road Diesel Fuel Vaporizer Next Stationary Multiwrap & DPF System Oxidation Generation Engine Converter Catalyst & DPF Hydrocarbon Manifold Aftertreatment Retrofit NOx Urea Injection Injector (3 layer) Gasoline Aftertreatment and Dosing Off-Road Urea Quality Particulate (Production Module Emissions Aftertreatment Hydrocarbon and PM Filter Ready) Module ECU Lean NOx Sensors Catalyst Retrofit Integrated Internet Based Locomotive Retrofit Marine Enhanced Manifold/ Aftertreatment Retrofit Data Low Aftertreatment 32 bit ECU Turbocharger Logger Backpressure Housing Valve Muffler Electronic CVS Vaporizer Exhaust Valve Solid SCR Low Pressure Gen 3 Urea SCR EGR Air Assist Dosing System
Exhaust Gas Heat Exchanger
5137-CORP-9/10 (11) 11 STRATEGIES TO LEAD THE INDUSTRY IN EMISSION CONTROL SYSTEMS
• Full suite provider of emission control systems – Hot end + dosing systems + electronics + software + OBD – Packaged and delivered as a module – EU Stage 3 to Stage 4 final with minimal to no engine modifications
• Innovative value enhancing technologies – Urea SCR System (DEF), HC-LNC, and Solid SCR – T.R.U.E .-Clea n® and DO C/DPF with HC Injection – Low pressure EGR – Vaporizer, passive and electrically actuated valves – Heat exchanger and lightweight systems
• Global applications engineering support
• Industry leading predictive and empirical design tools – CFD, thermal modeling, spray modeling, uniformity, durability
5137-CORP-9/10 ( 12 ) 12 FULL SUITE OF NO x ABATEMENT SOLUTIONS
Globally preferred Innovative alternative Proprietary high Alternative exhaust Fully variable NOx abatement NOx reduction performance NOx aftertreatment for backpressure technology for technology that aftertreatment NOx reduction for control valve light duty and functions quickly small displacement enables low onroad commercial and effectively even Utilizes no Platinum engines pressure EGR vehicles at very low Group Metals system for efficient temperatures NOx reduction
5137-CORP-9/10 ( 13 ) 13 UREA SELECTIVE CATALYTIC REDUCTION SYSTEM
Globally unique turnkey solution for NOx abatement; Combines exhaust, controls, dosing and exhaust system integration
Up to 95 % NOx reduction
Airless & return flow cooled PWM injector
Adaptable control strategy
Designed for OE and retrofit applications
Single sourcing for perfect integration
In series production since 2009
5137-CORP-9/10 ( 14 ) 14 HC-LEAN NO x CATALYST TECHNOLOGY
Collaborative effort to develop proprietary high performance NOx aftertreatment that requires no driver refilling of reductant Utilizes no platinum group metals, replaces DOC Advantages of HC-LNC Technology: - Use of existing reductant infrastructure - E85 is readily available - Lower operating cost - Resistance to thermal and sulfur aging - Improved low temperature NO x conversion - Superior cold climate performance - Reduced electrical demand - Easier packaging; shorter mixing length - Lower cost materials
Engine Evaluation Conditions: ULSD fuel, C:N = 5 (200ppm NOx), 7% H2O, 9% O2, 50 K/ hr Space Velocity. 50 hours thermally aged at 650C; E85 reductant. Developed for both on-road and non-road applications All trademarks shown are the property of their respective owners.
5137-CORP-9/10 ( 15 ) 15 SOLID AMMONIUM CARBAMATE DOSING SYSTEM
Advantages:
Packaging – Lower volumes/mass source for NH3
– Refill at maintenance interval Storage volume required for equal ammonia capacity Lower complexity than liquid SCR – No sophisticated injector requirement – No thermolisis & hydrolysis reactions – Easier packaging; shorter mixing length Functionality at very low temperatures – Better performance for cold start response time – No freeze / thaw concerns High potential for better cost and function
In collaboration with
5137-CORP-9/10 (16) 16 THERMAL MANAGEMENT SOLUTIONS
Active heat management • HC secondary injection • Heat Exchanger to for DPF regeneration; utilizes Tenneco’s injector convert wasted energy used instead of a diesel and vaporizer technology into accessible on-board oxidation catalyst to promote reliable DPF power Works with EGR or SCR regeneration Sulfur tolerant, cost effective alternative to DOC On and off-road applications with exhaust temperatures < 300C
5137-CORP-9/10 ( 17 ) 17 RIDE CONTROL TECHNOLOGY ROADMAP
DSI Disc Multi Tunable Plastic Spring Variable Tube Lightweight FSD ENRES Spring Valve (Global Seat Thickness Damper Valving Energy Intake Valve) System Recuperation CES II Kinetic H2 Velocity TM CES Combo Progressive External Valve DRi V Upgraded Hollow Digital Valve ACOCAR CES I Piston Rod Seat Dampers Active Green Shock Lightweight System with Bio Oil CVS Active Aluminum High-Velocity Blow Off Regenerative Tube Compression Disc Spring Global Valve II Shock Damping Valve Kinetic H2 Independent Lightweight for ATV CVS Front Composite BOCS Valve Suspension Strut Lightweight CES for CVS Rod Guide Axle
5137-CORP-9/10 ( 18 ) 18 ADVANCED RIDE CONTROL TECHNOLOGIES DRIVING GROWTH
Electronic Damping for Improved Ride Performance and Safety
• Continue to win and launch • Combination of Kinetic and CES • Fully-active suspension with new CES business Kinetic ultimate comfort and excellent – Volvo V70, XC70, S80, XC60, S60, V60 handling – Independent corner control – Audi A6, Allroad – Results in a more neutral steering • Results in better body control – Ford S-Max, Galaxy, Mondeo behavior than H2CES – Mercedes C-class, E-class and other models CES – Volkswagen Passat, – Semi-active body and wheel Golf and other models hop control – Additional launches in 2 010 with – Results in a better compromise existing and two more customers between handling and comfort
5137-CORP-9/10 ( 19 ) 19 ADVANCED RIDE CONTROL TECHNOLOGIES DRIVING GROWTH
Suspension management with full suite of ride control technologies and capabilities to address noise, vibration and harshness Lightweight components – Hollow rod – Aluminum tube – Variable tube thickness – Plastic spring seat
High velocity compression damping
Market expansion – A/ B vehicle segment growth – Growing in specialty markets including two-wheel market
Elastomer growth – Integration of EC and RC capabilities; exhaust isolators – Continued growth in commercial vehicle market
5137-CORP-9/10 ( 20 ) 20 DOING BUSINESS WITH TENNECO
Full suite of advanced technologies
Full system integration, one-stop shopping
Global footprint with local engineering and manufacturing
Intense focus on high quality Six Sigma processes
Broad base of commercial and specialty vehicle customers
Experienced management team
Financially stable company
5137-CORP-9/10 (21) 21 5137-CORP-9/10 ( 22 ) 22 TENNECO’S OE REVENUE PROJECTIONS
In addition to the information set forth on slide 7, Tenneco’s OE revenue projections are based on the 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 3 1, 2009. Please see that disclosure for further information. Key additional assumptions and limitations described in that disclosure include:
• Tenneco’s revenue projections are as of February 20 10. Tenneco provides revenue projections annually and does not intend to update these projections until February 20 11 .
• 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; Tenneco’s status as supplier for the existing program and its relationship with the customer; and the actual original equipment revenues achieved by the company for each of the last several years compared to the amount of those revenues that the company estimated it would generate at the beginning of each year.
• 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, pricing and foreign currency.
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