5137-corp-9/10 (1) - tenneconew ces business – volvo v70, xc70, s80, xc60, s60, v60 – audi a6,...

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Page 1: 5137-CORP-9/10 (1) - Tenneconew CES business – Volvo V70, XC70, S80, XC60, S60, V60 – Audi A6, Allroad – Ford S-Max, Galaxy, Mondeo – Mercedes C-class, E-class and other models

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Page 2: 5137-CORP-9/10 (1) - Tenneconew CES business – Volvo V70, XC70, S80, XC60, S60, V60 – Audi A6, Allroad – Ford S-Max, Galaxy, Mondeo – Mercedes C-class, E-class and other models

The foregoing presentation contains forward-looking statements that involve risks and uncertainties which could cause the company’splans, actions and results to differ materially from its current expectations. Such risks and uncertainties include, but are not limited to, thefollowing: (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 thecompany’s products; (v) the overall highly competitive and cyclical nature of the automotive parts industry; (vi) the company’s ability torealize 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 beawarded business based on informal customer indications, the company’s status as a supplier on the existing program, and the relationshipwith 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, andcompliance with changes in regulations; (ix) workforce factors such as strikes or labor interruptions; (x) increases in the costs of rawmaterials 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 takingplace in the Middle East; and (xvii) the timing and occurrence (or non-occurrence) of transactionsand events which may be subject to circumstances beyond the control of the company.

SAFE HARBOR

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Page 3: 5137-CORP-9/10 (1) - Tenneconew CES business – Volvo V70, XC70, S80, XC60, S60, V60 – Audi A6, Allroad – Ford S-Max, Galaxy, Mondeo – Mercedes C-class, E-class and other models

GLOBAL SUPPLIER OF EMISSION AND RIDE CONTROL SYSTEMS

Revenues (Millions) $4,649 $5,916

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Page 4: 5137-CORP-9/10 (1) - Tenneconew CES business – Volvo V70, XC70, S80, XC60, S60, V60 – Audi A6, Allroad – Ford S-Max, Galaxy, Mondeo – Mercedes C-class, E-class and other models

- 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

TENNECO STRENGTHS

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TENNECO GLOBAL FOOTPRINT

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GLOBAL ENGINEERING NETWORK

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Page 7: 5137-CORP-9/10 (1) - Tenneconew CES business – Volvo V70, XC70, S80, XC60, S60, V60 – Audi A6, Allroad – Ford S-Max, Galaxy, Mondeo – Mercedes C-class, E-class and other models

2010-2011 COMMERCIAL VEHICLE BUSINESS GROWTH

Launching programs with 11 commercial vehicle customers from the end of 2009 through 2011 to meet new diesel emissions requirements– Deutz– Caterpillar/Perkins– John Deere– Navistar– FAW

Supply ride control components to a number of commercial vehicle customers including– Volvo Global Trucks– Scania– Iveco– Navistar

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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.

– China National Heavy Duty Truck Company– Shanghai Diesel Engine Company– Weichai Power– Three others to be announced

– Paccar– John Deere– AM General

Page 8: 5137-CORP-9/10 (1) - Tenneconew CES business – Volvo V70, XC70, S80, XC60, S60, V60 – Audi A6, Allroad – Ford S-Max, Galaxy, Mondeo – Mercedes C-class, E-class and other models

STRATEGIC INITIATIVES

* Including noncontrolling interests

• 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 Lean/Six Sigma

• Optimize global footprint

• Capitalize on cash flow and EVA discipline

• Focus on reducing leverage

• Target net debt /adjusted EBITDA* ratio of 2.0X

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REGULATORY-DRIVEN GROWTHOPPORTUNITIES

* Phased in** Estimated date

CVS - Commercial Vehicle SystemsLVS - Light Vehicle Systems

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† Pending

Page 10: 5137-CORP-9/10 (1) - Tenneconew CES business – Volvo V70, XC70, S80, XC60, S60, V60 – Audi A6, Allroad – Ford S-Max, Galaxy, Mondeo – Mercedes C-class, E-class and other models

COMMERCIAL VEHICLE TECHNOLOGIES TO MEET STRICTER EMISSION REGULATIONS

2008 2010 2011 2013 2014

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 20145137-CORP-9/10 (10)

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REGULATORY-DRIVEN EMISSION CONTROL PRODUCT PIPELINE

T.R.U.E.-Clean®

& DPF

Retrofit NOxAftertreatment (ProductionReady)

MultiwrapConverter

Gasoline Particulate Filter

Integrated Manifold/TurbochargerHousing

Turnkey SCRSystem

Urea Injectionand Dosing Module

RetrofitLocomotiveAftertreatment

Stationary EngineAftertreatment

Urea Qualityand PM Sensors

Enhanced 32 bit ECU

CVS Vaporizer

Low PressureEGR

Fuel Vaporizer

Hydrocarbon Injector

Aftertreatment ECU

Retrofit MarineAftertreatment

Electronic Exhaust Valve

Gen 3 Urea SCR

NextGeneration Manifold(3 layer)

HydrocarbonLean NOxCatalyst

Low BackpressureValve Muffler

Solid SCR

Air AssistDosing System

Exhaust GasHeat Exchanger

Off-Road Diesel Oxidation Catalyst & DPF

Off-Road Emissions Module

Internet BasedRetrofit DataLogger

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Page 12: 5137-CORP-9/10 (1) - Tenneconew CES business – Volvo V70, XC70, S80, XC60, S60, V60 – Audi A6, Allroad – Ford S-Max, Galaxy, Mondeo – Mercedes C-class, E-class and other models

• 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.-Clean® and DOC/ 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

STRATEGIES TO LEAD THE INDUSTRY IN EMISSION CONTROL SYSTEMS

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FULL SUITE OF NOx ABATEMENT SOLUTIONS

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Globally preferredNOx abatementtechnology for light duty and onroad commercialvehicles

Innovative alternativeNOx reduction technology thatfunctions quicklyand effectively even at very low temperatures

Proprietary highperformance NOxaftertreatment

Utilizes no PlatinumGroup Metals

Alternative exhaustaftertreatment forNOx reduction forsmall displacementengines

Fully variable backpressure control valve enables low pressure EGR system for efficientNOx reduction

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UREA SELECTIVE CATALYTIC REDUCTION SYSTEM

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

Globally unique turnkey solution for NOx abatement; Combines exhaust, controls, dosing and exhaust system integration

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HC-LEAN NOx 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 NOx conversion- Superior cold climate performance- Reduced electrical demand- Easier packaging; shorter mixing length- Lower cost materials

Developed for both on-road and non-road applications

Engine Evaluation Conditions: ULSD fuel, C:N = 5 (200ppm NOx), 7% H2O, 9% O2,50K/hr Space Velocity. 50 hours thermally aged at 650C; E85 reductant.

All trademarks shown are the property of their respective owners.

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Advantages:

Packaging– Lower volumes/mass source for NH3– Refill at maintenance interval

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

Storage volume required for equal ammonia capacity

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In collaboration with

SOLID AMMONIUM CARBAMATE DOSING SYSTEM

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THERMAL MANAGEMENT SOLUTIONS

Active heat management for DPF regeneration; used instead of a diesel oxidation catalyst

Works with EGR or SCR

Sulfur tolerant, cost effective alternative to DOC

On and off-road applications with exhaust temperatures < 300C

• HC secondary injection utilizes Tenneco’s injectorand vaporizer technology to promote reliable DPF regeneration

• Heat Exchanger to convert wasted energy into accessible on-board power

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Page 18: 5137-CORP-9/10 (1) - Tenneconew CES business – Volvo V70, XC70, S80, XC60, S60, V60 – Audi A6, Allroad – Ford S-Max, Galaxy, Mondeo – Mercedes C-class, E-class and other models

RIDE CONTROL TECHNOLOGY ROADMAP

Multi TunableValve (GlobalValve)

Hollow Piston Rod

Blow Off Disc SpringValve

BOCS Valve

ENRES Energy Recuperation

ACOCAR Active System

DSI DiscSpring Intake

UpgradedCES I

Plastic SpringSeat

Kinetic H2CES Combo

LightweightAluminumTube

Kinetic H2 for ATV

LightweightRod Guide

FSDValvingSystem

DRiV TM

Digital Valve

CVS ActiveRegenerativeShock

LightweightCompositeStrut

CES for CVSAxle

Variable Tube Thickness

Velocity ProgressiveSeat Dampers

High-VelocityCompressionDamping

LightweightDamper

CES II External Valve

Green Shockwith Bio Oil

Global Valve II

IndependentCVS FrontSuspension

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Electronic Damping for Improved Ride Performance and Safety

• Continue to win and launch new CES business – Volvo V70, XC70, S80, XC60, S60, V60

– Audi A6, Allroad

– Ford S-Max, Galaxy, Mondeo

– Mercedes C-class, E-class and other models

– Volkswagen Passat, Golf and other models

– Additional launches in 2010 with existing and two more customers

ADVANCED RIDE CONTROL TECHNOLOGIES DRIVING GROWTH

• Combination of Kinetic and CES

Kinetic – Independent corner control

– Results in a more neutral steering behavior

CES – Semi-active body and wheel hop control

– Results in a better compromise between handling and comfort

• Fully-active suspension with ultimate comfort and excellent handling

• Results in better body control than H2CES

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Suspension management with full suite of ride control technologies and capabilities to address noise, vibration and harshness

ADVANCED RIDE CONTROL TECHNOLOGIES DRIVING GROWTH

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

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DOING BUSINESS WITH TENNECO

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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

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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 setforth in Tenneco’s Annual Report on Form 10-K for the year ended December 31, 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 2010. Tenneco provides revenue projections annually and does not intend to update these projections until February 2011.

• 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.

TENNECO’S OE REVENUE PROJECTIONS

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