2017 SUMMARY ANNUAL REPORT

Accelerating and Diversifying

1 TENNECO AT A GLANCE

TOP PLATFORMS (MODELS) Diversified profile across products, 7% VW MQB/PQ35 (Golf, Jetta, A3 passenger cars) 5% Ford T3/P558 HD geographic regions, applications, (Super Duty truck) 4% GM K2XX HD platforms and customers contributed (Silverado and Sierra trucks) 3% Ford T3/P552 LD to Tenneco's $9.3 billion revenue (F-150 truck) 3% Daimler MFA (A and B class passenger cars) in 2017. 3% GM D2XX/Delta (Cruze passenger car; Verano CUV) PRODUCT LINES TOP CUSTOMERS 2% GM C1XX/Lambda 70% Clean Air 14% 2% PSA Peugeot (Enclave and Acadia CUVs) 30% Ride Performance 13% Ford Motor Citroen 2% Ford C1 Company 2% (Focus passenger car; Escape and Kuga CUVs) GEOGRAPHY 8% 2% National Auto Parts 2% GM E2XX/Epsilon 47% North America (Malibu, Lacrosse and Insignia passenger cars) 6% Daimler AG Association 31% Europe 2% Jaguar PLA-D7a 5% 2% Advance Auto (XF and XS passenger cars; F-Pace CUV) 14% Parts 5% 4% South America 2% Land Rover PLA-D7u Automobiles 1% Beijing Automotive (Range Rover; RR Sport and Discovery CUVs) 4% Rest of World 4% SAIC Motor 1% BMW 2% Daimler MRA (E and C class passenger cars) PRODUCT APPLICATIONS 4% First Auto Works 1% O’Reilly Auto Parts (Value add revenue) 1% MC-M Toyota Motor 1% Geely Automobile 49% Clean Air LV 3% (Rav 4 and RX CUVs; Sienna MPV) 3% / 1% Chang’an 1% GM 31XX/32XX LD 22% Ride Performance LV Automotive Caterpillar (Colorado and Canyon trucks) 11% CTOH 3% 1% VW PQ25/26 18% Aftermarket (Polo and Jetta passenger cars) 2 FINANCIAL SUMMARY

FINANCIAL HIGHLIGHTS

($ in millions except share and per share data) 2012 2013 2014 2015 2016 2017 Net sales and operating revenues $7,320 $7,924 $8,381 $8,181 $8,599 $ 9,274 Earnings before interest expense, taxes and noncontrolling interests (EBIT) $ 428 $ 422 $ 489 $ 508 $ 516 $ 417 Depreciation and amortization $ 205 $ 205 $ 208 $ 203 $ 212 $ 224 Net income attributed to Tenneco Inc. $ 275 $ 182 $ 225 $ 241 $ 356 $ 207 Earnings per diluted share $ 4.50 $ 2.96 $ 3.64 $ 4.01 $ 6.31 $ 3.91 Cash flow from operations $ 365 $ 533 $ 379 $ 528 $ 484 $ 629 Capital expenditures $ 263 $ 254 $ 317 $ 295 $ 343 $ 385 Average diluted shares outstanding 61,083,510 61,594,062 61,782,508 60,193,150 56,407,436 53,026,911 Total debt $ 1,165 $1,089 $ 1,115 $1,210 $ 1,384 $ 1,441 Total cash $ 223 $ 280 $ 285 $ 288 $ 349 $ 318 Debt net of cash balances1 $ 942 $ 809 $ 830 $ 922 $ 1,035 $ 1,123

REVENUE 17 $9,274 ($ in millions) 16 $8,599 15 $8,181 14 $8,381 13 $7,924 12 $7,320

ADJUSTED EBIT 2 17 $647 ($ in millions) 16 $624 15 $575 14 $574 1 We present debt net of cash 13 $500 balances because management 12 $443 believes it is a useful measure of our credit position. The calculation is limited in that we may not always 17 $1,123 NET DEBT be able to use cash to repay debt Debt net of cash balances1 16 $1,035 on a dollar-per-dollar basis. ($ in millions) 15 $922 2 See page 21 for reconciliations of 14 $830 Generally Accepted Accounting 13 $809 Principles (GAAP) to non-GAAP 12 $942 financial measures. 1 Accelerating and Diversifying

2 TO OUR SHAREHOLDERS

In 2017, we made significant progress toward our strategic goals, which led to another strong year for Tenneco with top line growth, higher earnings and improved cash flow. Our results for the year included record revenue of $9.3 billion, up seven percent in constant currency, outperforming industry production by five percentage points, with solid growth in both product lines.

3 SHAREHOLDER LETTER

Opposite page (left to right) We also achieved record earnings, with As of December 31, 2017 Ben Patel, Vice President and adjusted EBIT of $647 million, adjusted Chief Technology Officer Elizabeth Williams, Senior net income of $365 million, and diluted Vice President, Strategy and adjusted earnings per share of $6.89, which Corporate Development Brandon Smith, Senior Vice reflects a 14 percent increase. Tenneco President, General Counsel and Corporate Secretary also delivered record operating cash flow Ken Trammell, Executive Vice President and Chief Financial of $629 million, an increase of 30 percent, Officer Steve Vielmetti, Vice President, and returned $222 million to shareholders Business Management Systems in the form of share repurchases and Patrick Guo, Executive Vice President, President Clean Air dividends. Gregg Bolt, Senior Vice President, Global HR & I am very pleased to report that our global Administration Brian Kesseler, Chief Executive team is executing well and is making strong Officer Jason Hollar, Senior Vice progress toward meeting our operations President, Finance Martin Hendricks, Executive excellence goals. Vice President, President Ride Performance Rusty Patel, Senior Vice President and Chief Information Officer Jane Ostrander, Vice President, Global Communications

4 TENNECO EXECUTIVE LEADERSHIP TEAM

5 TRENDS CREATE GROWTH OPPORTUNITIES

Electrification/ Aftermarket Hybridization Evolution

Tenneco Clean Air and Autonomous Ride Performance Mobility Driving technologies positioned to capture growth

Emissions Emerging Regulations Markets

6 SHAREHOLDER LETTER

Tenneco Positioned Our leading technologies and Tenneco has a history for Growth long-term strategy will allow The automotive sector is Tenneco to capitalize on the of outpacing industry undergoing a significant significant growth prospects transformation, as disruptive ahead of us, leverage our production, driven technologies from autonomous strong foundation we have driving, new mobility trends, created over the last 10- and electrification and plus years, and focus our by capitalizing hybridization change the investments on those areas transportation landscape. that will support these on market and While views differ as to the opportunities ahead. With timing and ultimate penetration that in mind, our strategy is technology macro of these advances, we have built upon three key areas, positioned Tenneco to not only accelerating core growth trends. benefit from these trends, but through multiple drivers, to be at the forefront of the leveraging our strong technology underlying these foundation, and focusing on transformations. Further, our key priorities to drive tightening emissions standards superior execution. globally for light vehicles, Accelerating Core Growth: commercial trucks and off- Four Pillars highway equipment offer From a growth perspective, significant opportunities for us. we have four drivers that are

7 Tenneco continues to launch Monroe Intelligent Suspension platforms including 10 new programs in 2018.

8 SHAREHOLDER LETTER

critical to our success going opportunity. We are launching forward: Technology-Driven 10 new intelligent suspension Growth, New Market Growth, platforms in 2018 with Content Growth and Market additional development Expansion Growth. programs underway. An example is our CVSA2/Kinetic First, technology-driven system, which is in production growth, the cornerstone in several models of a well- of which is our OE Ride known British supercar. We are Performance product line, now working on development and specifically advanced programs with three additional suspension technologies customers to introduce this and NVH solutions. These technology on a sports car, a technologies present a very premium SUV and a battery exciting opportunity for electric vehicle. Tenneco with an expected 15% installation rate globally Second, new market by 2025 and a content growth, which is fueled multiplier of about four times by the global aftermarket, greater than a conventional particularly in China where we suspension. As a result, have tremendous potential. the content per vehicle for The China car parc is growing Tenneco goes from $50–$60 and aging, and by 2025, is to $200–$250 and translates expected to be the largest into a 25% revenue CAGR aftermarket in the world. We

9 SHAREHOLDER LETTER

are investing and leveraging one percent of the time or The China car parc is our experience from mature all of the time – the engine markets to make sure we are has to meet the emissions growing and aging, and well positioned to capture that regulations and has a need anticipated growth. for our products. From a content perspective, the hybrid Third, content growth, which by 2025, is expected content per vehicle on a Euro is driven by Tenneco’s Clean VI equivalent will be at least Air product line. Tightening to be the largest on par with a standalone emissions regulations globally internal combustion engine, in and light vehicle hybridization aftermarket in the particular for plug-in hybrids, of the fleet continue to drive which offer an opportunity for higher content on customer higher content to meet unique world. programs. While electrification packaging requirements. has captured the headlines, the reality is that hybridization Lastly, market expansion of the fleet represents a far growth, will be propelled larger percentage of the by increasingly stringent electrified vehicles expected regulations in commercial to be produced over the truck and off-highway (CTOH). next decade than full battery Between now and 2030, there electric vehicles, and hybrids will be more CTOH powertrains are a good opportunity for coming under regulation Tenneco. It does not matter than are regulated today, whether the engine is running which presents a tremendous

10 11 TENNECO PRODUCTS IN A TYPICAL HYBRID POWERTRAIN

Top Mount

Mini Shear-Hub Isolator

Controlled Torque Bushing

Exhaust Isolator

E-Valve

Aftertreatment Components DOC, DPF, SCR (diesel engine shown) Catalytic Converter (gasoline engine)

Top Mount Mounting Kit

Protection Kit

Compact Axial Hydroelastic Mount

Coil Spring

Strut Assembly

Suspension Bushing

12 SHAREHOLDER LETTER

opportunity for Tenneco. Performance, the Aftermarket PRODUCT APPLICATIONS Despite fewer units than light and Commercial Truck and Value Add Revenue vehicles, content per vehicle in Off-Highway. 12% CTOH is seven-to-nine times Built to Outperform: greater. Today, we are already Leveraging our Strong seeing the benefit from the Foundation ramp-up on Bharat Stage IV 11% Our success to date is 20% 45% Clean Air programs in , 18% 2017 a product of the strong 49% as well as incremental content foundation we have built over Actual on commercial truck programs the last decade. Today we 22% in China as tighter regulations have two industry leading are enforced. Further, we are product lines and serve light working with customers in vehicle, commercial truck 23% both countries on development and off-highway OEMs and projects to meet the next engine manufacturers and the 2020 Projection round of tightening emissions aftermarket. Our diversified regulations coming in the next profile allows us to invest Clean Air Light Vehicle few years. in growth and enhance the Ride Performance Light Vehicle These four growth drivers business for the future. Aftermarket will continue to support our We have over 600 customers Commercial Truck and Off-Highway ability to reach our 2020 around the world and expectations to diversify over 400 OE platforms in revenues outside of Clean light vehicle, commercial Air light vehicle into Ride truck and off-highway, with

13 SHAREHOLDER LETTER

92 manufacturing facilities performance level and puts us Market expansion and 15 engineering centers in the top quartile among our globally. This installed base peers. growth will be propelled and global footprint serves Focused Priorities: Ensuring as a formidable competitive Continued Performance advantage for Tenneco in the by increasingly Our focused strategy for markets we serve. growth and our strong stringent regulations in Since 2000, we have delivered foundation puts Tenneco in an revenue growth that has excellent position to continue commercial truck outpaced light vehicle industry to outpace industry production production by two times. We by three-to-five percentage believe that will continue, and points. However, we will not and off-highway. even accelerate, through 2020 stand still. Going forward, we with anticipated growth three will continue to diversify our times higher than industry portfolio and invest in new production volumes. We technologies in our existing believe Return on Invested markets and those that Capital is a good measure present strong prospects for of how well we are driving continued growth. In addition, growth while also being good we maintain an intense stewards of our investors’ focus on expanding margins money. Our five-year average and improving cash flow of 22.8% is a benchmarkable performance by harnessing

14 15 TENNECO SOLUTIONS

Monroe® Intelligent Suspension Technology-driven products meet the growing demand from manufacturers and consumers Growth for advanced suspension systems. Noise vibration and harshness (NVH) solutions are critical to electric vehicle development.

The exploding car parc growth in China, New Markets increased vehicle utilization rates driven by autonomy and shared mobility, and new distribution and ecommerce models are creating unprecedented growth opportunities in the aftermarket.

Tightening emissions regulations globally Incremental and the trend toward increased light vehicle hybridization are driving demand Content for highly-engineered, content-rich emissions control systems.

By 2030, more engines in commercial Market truck and off-highway vehicles will come under regulations than are Expansion currently regulated today. Tenneco has aftertreatment solutions for on-and off-road applications in every regulated market.

16 SHAREHOLDER LETTER

the earnings power within our provide us with ample flexibility achievements this year were business. to respond to strategic the result of their efforts Capital Allocation opportunities that may with an unwavering focus arise. We ended 2017 with on continuous improvement, To support our long-term a leverage ratio of 1.3x, and and grounded in our solid strategy, we approach capital since 2015, we have bought foundation of shared values. allocation from a balanced back 19% of total shares My thanks to our Board of perspective. As a management outstanding for approximately Directors and our investors for team, we have had, and we $607 million. your continuing support as we will continue to have, a very move forward on our journey. It In 2017, as an indication of disciplined capital allocation is an exciting time at Tenneco, our confidence in the long- strategy for funding our and I strongly believe our best term growth and earnings organic growth. This includes years are yet to come. funding our ongoing efforts power of the business, we to improve and reposition our began paying a quarterly businesses as necessary to dividend of $0.25 per share. remain cost competitive, and Summary Brian Kesseler selectively pursuing strategic Finally, I want our shareholders Chief Executive Officer acquisitions that can expand to know that we have a Tenneco Inc. our technologies or accelerate strong global team dedicated our growth. We also remain to meeting our customers’ disciplined regarding our expectations and driving net debt to adjusted EBITDA Tenneco’s success. Our (leverage) ratio in order to

17 2017 TENNECO TEN10 WINNERS

The TEN10 Employee Recognition Award was created in Opposite page (left to right) As of December 31, 2017 2015 to celebrate and honor Tenneco employees throughout Paul T. Stecko2, Retired Chairman the world who demonstrate one or more of our 10 Shared and Chief Executive Officer, Values as part of their daily life on the job. Our 10 individual Packaging Corporation of America Brian J. Kesseler, Chief Executive and one team winners for 2017 were selected from more Officer, Tenneco Inc. than 10,000 nominations globally. Roger B. Porter2, IBM Professor of Business and Government, Harvard University Thomas C. Freyman1, Retired Executive Vice President, Finance and Administration, Abbott Gregg M. Sherrill, Chairman of the Board, Retired Chief Executive Officer, Tenneco Inc. Jane L. Warner1, Retired Executive Vice President, Tool Works Inc. David B. Price, Jr.2, Chief Executive Officer and President, Birdet Price, LLC Dennis J. Letham1, Retired Executive Vice President and Chief Financial Officer, (left to right, top to bottom) Caoyuam Ma, Francisco Briceño, Jinghua Liang, International Inc. Wanlapha Rojanasaroch, Clara Villaescusa Miguel, Robin Carey, Denise Harl, Roger J. Wood2, Retired President Jean-Michel Laratte, Scott Rawlings, Herminio Rita and Chief Executive Officer, Dana Holding Corporation James S. Metcalf1, Retired Chairman, President and Chief Executive Officer, USG Corporation

1 Audit Committee 2 Compensation/Nominating/ Governance Committee Highlighted numbers indicate Clevite Elastomer Project Team: Joe Cerri, Rock Ding, Ken Ge, Wenhua Jiang, committee chair. Quan Liu, Kan Sun, Colin Yan, Chenyan Yang, Susie Zai, Daniel Ziehm

18 TENNECO BOARD OF DIRECTORS

19 Clean Air Manufacturing Ride Performace Manufacturing Engineering Centers

20 RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

$ Millions, Unaudited 2012 2013 2014 2015 2016 2017 $ Millions 2017 $ Millions 2017 Short-term Debt $ 113 $ 83 $ 60 $ 86 $ 90 $ 83 Total revenue $9,274 Net income $207 Long-term Debt 1,052 1,006 1,055 1,124 1,294 1,358 Less: Clean Air Noncontrolling interest 67 substrate sales 2,187 Redeemable Noncontrolling Interest 15 20 34 41 40 42 Income tax expense 70 Value-add revenue1 $ 7,087 Tenneco Inc. Shareholders’ Equity 246 432 495 425 573 696 Interest expense, net Noncontrolling Interest 45 39 40 39 47 46 Clean Air light vehicle of interest capitalized 73 value-add revenue $3,446 Invested Capital $1,471 $1,580 $1,684 $1,715 $2,044 $2,225 Depreciation and amortization Ride Performance light of other intangibles 224 Average Invested Capital $1,526 $1,632 $1,700 $1,880 $ 2,135 vehicle value-add revenue 1,580 EBITDA including EBIT $ 428 $ 422 $ 489 $ 508 $ 516 $ 417 Commercial truck & noncontrolling interest $ 641 Adjustments: off-highway value-add revenue 810 Restructuring and related expenses 13 78 49 63 36 72 Aftermarket value-add revenue 1,251 Pullman recoveries (5) – – – – – Value-add revenue $7,087 Asset Impairment charge 7 – – – – – 2017 Antitrust settlement accrual – – – – – 132 $ Millions except per share amounts Net Income3 Per Share EBIT EBITDA5 Goodwill impairment – – – – – 11 Earnings measures 207 $ 3.91 417 641 Warranty settlement – – – – – 7 Adjustments: Gain on sale of unconsolidated JV – – – – – (5) Restructuring and related expenses 59 1.12 72 69 Bad debt charge – – 4 – – – Antitrust settlement accrual 85 1.61 132 132 Pension / post retirement charges / Stock vesting – – 32 4 72 13 Goodwill impairment 11 0.20 11 11 Adjusted EBIT 443 500 574 575 624 647 Warranty settlement 5 0.09 7 7 Effective Tax Rate 35.7% 33.7% 32.9% 26.6% 24.5% Gain on sale of unconsolidated JV (4) (0.08) (5) (5) Tax effected Adjusted EBIT $ 321 $ 381 $ 386 $ 458 $ 488 Pension charges / stock vesting 9 0.17 13 13 Return on Invested Capital (ROIC)2 (non-GAAP financial measure)4 21.1% 23.3% 22.7% 24.4% 22.9% Cost related to refinancing 1 0.02 – – Tax adjustments from Tax Reform 15 0.28 – – 5 year Average Invested Capital $1,787 Net tax adjustments (23) (0.43) – – 5 years Average tax effected Adjusted EBIT 407 Adjusted Net Income, EPS, 5 year Average ROIC 22.8% EBIT and EBITDA 365 $ 6.89 647 868

1 Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from substrate sales, 4 Tenneco presents the above reconciliation of GAAP to non-GAAP earnings measures primarily to reflect the results in a which include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, manner that allows a better understanding of the results of operational activities separate from the financial impact of Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and decisions made for the long-term benefit of the company and other items impacting comparability between the periods. sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, Adjustments similar to the ones reflected above have been recorded in earlier periods, and similar types of adjustments can it impacts reported revenue. Excluding substrate sales removes this impact. Tenneco uses this information to analyze the reasonably be expected to be recorded in future periods. Using only the non-GAAP earnings measures to analyze earnings trend in revenues before this factor. Tenneco believes investors find this information useful in understanding period to period would have material limitations because its calculation is based on the subjective determinations of management regarding comparisons in the company's revenues. the nature and classification of events and circumstances that investors may find material. Management compensates for 2 We consider Return on Invested Capital (ROIC) to be a meaningful indicator of our operating performance, and we evaluate these limitations by utilizing both GAAP and non-GAAP earnings measures reflected above to understand and analyze the ROIC because it measures how effectively we use the capital we invest in our operations. Tenneco defines ROIC as tax results of the business. The company believes investors find the non-GAAP information helpful in understanding the ongoing effected Adjusted EBIT divided by Average Invested Capital, which is the beginning and ending balances of debt, equity and performance of operations separate from items that may have a disproportionate positive or negative impact on the company’s noncontrolling interests. See the tabular calculation above. financial results in any particular period. 3 Net income attributable to Tenneco Inc. 5 EBITDA including noncontrolling interests 21 Corporate Headquarters INVESTOR RELATIONS Tenneco Inc. 500 North Field Drive Stockholder Services Stock Listing Lake Forest, Illinois 60045 For stockholder services such as exchange Tenneco’s common stock is listed under 847.482.5000 of certificates, issuance of certificates, the NYSE TEN. TEN is traded www.tenneco.com lost certificates, change of address, change primarily on the Stock Exchange. NYSE: TEN in registered ownership or share balance, As of February 23, 2018, there were write, call, or e-mail the company’s approximately 14,260 stockholders of transfer agent: record of the company’s common stock, including brokers and other nominees. Equiniti Trust Company Shareowner Services Investment Inquiries 1110 Centre Point Curve Securities analysts, portfolio managers Mendota Heights, MN 55120 and representatives of financial institutions 866.839.3259 (Toll Free) seeking information about the company 651.450.4064 should contact the Investor Relations www.shareowneronline.com department: 847.482.5162.

Corporate Information Safe Harbor Statement Information about Tenneco Inc. is available Please see the Safe Harbor Statement and on the company’s website www.tenneco. Risk Factors in Item 1A in our Annual Report com, including the company’s latest on Form 10-K for the year ended December quarterly earnings press release and other 31, 2017 and in our quarterly reports on company information. Form 10-Q, as filed with the Securities and Exchange Commission.

22