Tenneco Inc.

Fourth Quarter and Full-Year 2008 Conference Call

February 5, 2009

Safe Harbor Statement

Please see the safe harbor statement in Tenneco’s fourth quarter and full-year 2008 financial results press release, which is incorporated herein by reference.

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AgendaGregg Sherrill, Chairman & CEO

– Strategic overview

Ken Trammell, Executive VP & CFO

– Fourth quarter 2008 results

Gregg Sherrill– Outlook

Q & A

Please see the company’s February 5, 2009, press release for reconciliation and explanation of all non-GAAP measures contained in this slide presentation

Gregg Sherrill

Ken Trammell

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LV 4Q 2008 Production Change v. 4Q 2007

North America -24.1%Europe -26.6%

- E. Europe -23.6%- W. Europe -27.8%

China -10.8%Australia - 8.3%South America -29.7%

Source: Global Insights, January 30, 2009

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Actions to address global crisisNumber 1 priority: Generating and Preserving Cash• Global restructuring - $58mm savings when fully implemented by

end of 2009– Eliminate 1,100 jobs; in addition to 1,150 already eliminated– Close three NA plants; Australia engineering facility– Suspend matching contributions to 401(k) programs– Cut IT, sales & marketing spending

• Flexing operations– Temporary hourly layoffs; salaried furloughs in NA– Eliminated all temporary positions in Europe; working with works

councils to achieve other salary cost reductions• Compensation

– Freeze 2009 salaries at 2008 levels; other salary control actions– Cut compensation on average 60% for top 50 executives

• Reducing capital expenditures and engineering investments• Generating cash flow through working capital improvements• Eliminating all discretionary spending

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New Business in 4Q’08• Joint development agreement with General Electric

– Will expand TEN’s NOx reduction technology portfolio; further strengthens position to grow in adjacent markets

– Will work will GE Transportation to further develop hydrocarbon SCR aftertreatment technology into complete diesel aftertreatment systems for locomotive and off-highway vehicle markets

– Complements TEN’s ELIM-NOx urea-based SCR aftertreatment solutions

– Includes a development contract for locomotive projects; positioned to become long-term strategic supplier of diesel aftertreatment solutions to GE Transportation

• In 4Q 2008, won new or replacement contracts for 18 different model vehicles with nine customers

• Launching product on 31 OE platforms globally in 1Q 2009

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4Q 2008 Financial Results• Revenue was $1.208 billion, down from $1.565 billion

– Impacted by OE production and aftermarket volume declines and $123mm in unfavorable currency

• EBIT was a loss of $145mm, vs. earnings of $43mm in 4Q’07– Negatively impacted by goodwill impairment charge, lower OE volumes

globally, unfavorable vehicle mix, manufacturing fixed cost absorption, lower aftermarket sales, higher restructuring costs and $21mm in currency transaction and translation losses

• Adjusted EBIT was a loss of $7mm vs. earnings of $61mm in 4Q’07• EBITDA including minority interest was a loss of $91mm vs.

earnings of $98mm in 4Q’07• Adjusted EBITDA including minority interest was $47mm vs.

$116mm in 4Q’07

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4Q 2008 Adjustments4Q 2007• Restructuring expenses of $18 million pre-tax, or 26-cents per diluted share;• A charge of $21million pre-tax, or 31-cents per diluted share for refinancing

a portion of the company’s debt;• Net tax expenses of $64 million, or $1.34 per diluted share, including $66

million in non-cash expenses to realign the European ownership structure and a net benefit of $2 million, primarily related to adjustments for prior year income tax returns.

4Q 2008• Restructuring expenses of $24 million pre-tax, or 34-cents per diluted share;• Non-cash asset impairment charges of $114 million, or $2.44 per diluted

share, related to goodwill for 1996 Clevite Industries acquisition;• Non-cash tax charges of $144 million, or $3.11 per diluted share, related to

a further increase in a valuation allowance against the company’s deferred tax assets, the impact of not benefiting U.S. tax losses, changes in foreign tax rates and other adjustments.

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4Q 2008 Tax Adjustments (additional detail)

Tax adjustments of $144mm • $101mm impairment in carrying value of U.S. deferred

tax asset –due to production decline and accounting rules that do not consider economic recovery or give weight to future business growth

• $11mm in adjustments in deferred tax liabilities for changes in tax rates

• $20mm for impact of not recording a tax benefit for the U.S. net tax operating loss and other jurisdictions where TEN cannot record such a tax benefit

• Various tax adjustments for prior year income tax returns

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4Q 2008 North America Revenues

• OE Revenue down 16% at $498mm, down 4% excl. substrate sales and currency – Includes $32mm in revenue from Kettering, Ohio ride control operations;

passenger car business acquired in June 2008;– Reflects 4Q industry production volume declines in NA where light

vehicle production fell 24% year-over-year; impacted ride control and emission control businesses

– Volume declines on platforms like the Toyota Tundra, GM Duramax pick-up trucks, GMT900 platform, Chevrolet Trailblazer/Envoy

• Tenneco unfavorable mix: SUVs and pick-ups = 49% of sales vs. 69% in 4Q ’07– Full year 2008 SUVs and pick-ups = 54% vs. 72% in 2007

• Aftermarket revenue was $113mm, down 8% from $122mm in 4Q’07; down 6% adjusted for currency– Softer sales volumes in both ride and exhaust products, partially offset

by price increases for steel recovery

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4Q 2008 North America EBIT• EBIT was a loss of $131mm, compared with earnings of $16mm in

Q4:07• Adjusted EBIT was a loss of $8mm vs. earnings of $18mm in Q4:07

– Adjusted for Q4:08 goodwill impairment charge of $114mm and $9mm in restructuring expense; 4Q:07 included $2mm in restructuring

• $29mm of EBIT decline due to:– Lower OE production volumes– Manufacturing fixed cost absorption– Vehicle mix – Lower aftermarket sales

• Negative currency impact of $14mm related to Mexican Peso and Canadian dollar

• EBIT benefited from:– Lower SGA&E spending – New OE business launches

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4Q 2008 Europe OE Revenues

• European OE revenues down 31% to $352mm from $511mm in 4Q’07 – Industry light vehicle production fell 27% year-over-

year– Excluding substrate sales and currency, revenue

down 12% to $329mm from $373mm– Recently acquired suspension business of Gruppo

Marzocchi added $18mm in revenue

• Revenue decrease driven by decline in OE emission control sales, down 19% excluding substrate sales and currency

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4Q 2008 Europe Aftermarket Revenues

• Europe aftermarket revenue was $76mm, versus $96mm in 4Q’07

• Excluding currency, revenue was $89mm• Decline driven by lower ride control and

exhaust sales volumes in most regions• Partially offset by price increases for

higher material costs

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4Q 2008 South America and India Revenues

• Revenue declined to $72mm vs. $96mm in 4Q:07– Worsening industry conditions– Primarily driven by OE production volume

declines in Brazil and Argentina – Excluding substrate sales and currency,

revenue was down 4% to $80mm from $84mm

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4Q 2008 EBIT for Europe, South America and India

• Reported EBIT was a loss of $12mm vs. earnings of $19mm in 4Q’07

• Adjusted for restructuring ($15mm in 4Q’08 and $16mm in 4Q07), EBIT was $3mm vs. $35mm in 4Q’07

• Negative EBIT drivers:– OE production volume declines– Unfavorable mix – Lower aftermarket sales volumes– Related manufacturing fixed cost absorption

• $7mm negative currency, primarily related to transaction losses on Brazilian real and translation losses on the euro

• Partially offset by:– Reduced overhead costs and cuts in discretionary spending– Benefits from new OE business launches

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4Q 2008 Asia Pacific Results

• Revenue from Australia operations was $27mm, down 46% from $50mm in 4Q’07

• Asia revenue fell to $70mm vs. $98mm in 4Q’07– Excluding substrate sales and currency, revenue was $46mm

vs. $62mm in 4Q’07– Driven by China industry production down by 11% vs. double

digit growth in first half of ’08– Volume declines on Tenneco supplied GM and VW platforms

• Asia Pacific EBIT was a loss of $2mm vs. earnings of $8mm in Q4’07– Lower OE production volumes in China and Australia and related

manufacturing fixed cost absorption drove the decline

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4Q 2008 Gross Margin/SGA&EGross Margin• Reported 4Q gross margin decreased to 12.6% from 14.3% in Q4’07• Includes restructuring costs of $8mm in 4Q’08 and $16mm in 4Q’07• Impacted by:

– Decrease in OE volumes– Vehicle mix– Manufacturing fixed cost absorption– Negative currency impact

SGA&E • Before impact of higher year-over-year restructuring expense,

SGA&E expense down due to cuts in overhead costs and discretionary spending

• 4Q:08 SGA&E expense was $126mm or 10.4% of sales vs. $127mm or 8.1% in Q4’07

• Full-year 2008 SGA&E was 8.8% vs. 8.3% in 2007– Increase due to lower revenue and higher restructuring in 2008

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Depreciation and Amortization

• D&A was $54mm in 4Q’08, relatively even with $55mm in 4Q’07

• Full-year 2008 D&A was $222mm, vs. $205mm in 2007

• For full-year 2009, anticipate depreciation and amortization at about same level as 2008

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Interest Expense

• Q4’08 interest expense was $25mm– Included $6mm benefit from fixed to floating

interest rate swaps– Terminated swaps in fourth quarter– Collected $6mm in cash from swap counter

parties

• Full-year 2008 interest expense was $113mm

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Taxes

• Recorded $126mm tax expense in Q4’08• Cash taxes for Q4’08 were $12mm vs.

$15mm in 4Q’07• Full-year 2008 cash taxes were $62mm

vs. $60mm in 2007• For full-year 2009, expect cash taxes

between $40mm-$45mm

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Cash and Debt Position at December 31, 2008

• Consolidated debt at $1.451 billion ($1.374 billion at 12/31/07)

• Cash balances of $126 million ($188 million at 12/31/07)

• Debt net of cash balances at $1.325 billion ($1.186 billion at 12/31/07)

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Cash Generated by Operating Activities

• Cash flow from operations was $126mm in 4Q’08 v. $199mm in 4Q’07

• Year-over-year decline driven by lower production environment

• 4Q’08 cash flow of $126mm includes $115mm in cash from working capital, primarily accounts receivable collections and inventory reductions

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Working Capital

• Rapid decline in global production impacted working capital metrics in the quarter

• Days sales outstanding, excluding the impact of factoring, was 56 days at 12/31/08 vs. 53 days at 12/31/07; improved from 64 days at 9/30/08

• Inventory days on hand were 44 days vs. 36 days last year; driven by rapid production decline

• Days payable outstanding was 67 days at 12/31/08, virtually unchanged from 66 days at year-end ‘07

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Debt ComplianceSee Tenneco’s Form 10-K, Note 5 for year ended December 31, 2007, for a discussion of

the significance of the company’s senior credit facility and compliance with these covenants (page 91).

• Leverage ratio (tightest covenant)– Result: 3.66x– Test: no more than 4.25x

• Interest coverage ratio – Result: 3.64x– Test: maintain above 2.10x

• Launched the process to amend senior secured credit facility in light of difficult economic and industry conditions– Meeting with banking group later today

• Expect to complete amendment by the end of February 2009

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Factored Receivables• Extended $120mm U.S. receivable securitization

facility through March 2, 2009– Revised terms:

• Annual cost increased by about $4 million• Reduced percentage of Tenneco’s U.S. accounts receivable

that the sponsors will purchase – TEN estimates between $10 million and $30 million less

– Tenneco expects to renew for another 364 days, concurrent with completion of the senior secured credit facility amendment

• Worldwide factored receivables:– Maximum factoring allowed $250mm– $179mm as of 12/31/08– $157mm at 12/31/07

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Capital Expenditures

• Capital spending was $45mm in 4Q:08 vs. $77mm in 4Q’07

• Full-year 2008 capital spending was $221mm, up from $198mm in 2007– Preparing for new business launches and

projects in expanding markets like China, India, Russia

• Expect FY2009 capital spending to be about $160mm

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Q&A

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APPENDIX

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Pension/OPEB

*Defined benefit and enhanced defined contribution expenses.

** Does not include approximately $7mm curtailment gain due to pension freeze.

Pension 2005 2006 2007 Q4:08 2008 2009E

Expense $34 $37** $24* $6* $22* $23*

Defined Benefit Contributions $50 $42 $36 $9 $27 $24

Enhanced Benefit Contributions - - $10 $2 $10 $10

OPEB 2005 2006 2007 Q4:08 2008 2009E

Expense $11 $11 $12 $2 $10 $9

Cash Payments $11 $9 $9 $5 $9 $10

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Market Driven Growth Opportunities