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Tenneco Reports Fourth Quarter and Full-Year 2008 Results
LAKE FOREST, Ill.--(BUSINESS WIRE)--February 5, 2009--Tenneco Inc. (NYSE: TEN):
- Revenue and EBIT declines reflect a rapid deterioration in global industry conditions in the fourth quarter
- Fourth quarter loss includes $215 million in non-cash impairment charges for goodwill and deferred tax assets
- Company benefiting from cost reduction and cash preservation actions
Tenneco Inc. (NYSE: TEN) reported a fourth quarter net loss of $298 million, or $6.40 per diluted share, compared with a net loss of $72 million, or $1.57 per diluted share in fourth quarter 2007.
Adjusted for the items below, the net loss was $24 million, or 51-cents per diluted share, down from net income of $17 million, or 34-cents per diluted share, a year ago. The adjustments include the non-cash impairment charges for goodwill and deferred tax assets. The tables in this press release reconcile GAAP results to non-GAAP results.
EBIT (earnings before interest, taxes and minority interest) was a loss of $145 million, versus earnings of $43 million a year ago. EBIT was negatively impacted by the goodwill impairment charge, lower OE production volumes globally, lower aftermarket sales and higher restructuring costs, all of which were driven by the severe industry conditions. These factors more than offset the benefits of new OE business launches, reduced overhead spending, and cost savings from restructuring and operational flexing actions implemented worldwide. In addition, the global downturn drove unusual changes in currency exchange rates during the quarter, which reduced EBIT by $21 million due to currency transaction and translation losses. Adjusted EBIT was a loss of $7 million, compared with earnings of $61 million the prior year.
EBITDA including minority interest (EBIT before depreciation and amortization) was a loss of $91 million versus earnings of $98 million in fourth quarter 2007. Adjusted EBITDA including minority interest was $47 million compared with $116 million.
“The fourth quarter saw further vehicle sales and OE production volumes declines in North America, compounded by the dramatic fall-off in Europe and rest of the world due to the global economic crisis and ongoing credit freeze, which has driven every major economy into recession. As with the entire automotive industry, Tenneco has been significantly impacted by these severe and unprecedented external conditions,” said Gregg Sherrill, chairman and CEO, Tenneco. “In response, we have and will continue to take aggressive actions to reduce costs, re-size our operations and generate and preserve cash in order to weather this crisis.”
In the fourth quarter 2008, the company announced a global restructuring program that is expected to generate $58 million in annualized savings once fully implemented by the end of 2009. The restructuring and other actions the company is taking include:
- Eliminating 1,100 jobs worldwide;
- Closing three manufacturing plants and one engineering facility;
Controlling compensation and benefits costs including:
- Suspending matching contributions to employee 401(k) programs for 2009;
- Eliminating 2008 performance bonuses for salaried employees;
- Reducing total annual compensation for the top 50 executives on average by more than 60%; and
- Eliminating employee annual salary increases and implementing other salary control actions.
- Continuing to implement hourly layoffs at manufacturing plants worldwide and initiating unpaid furloughs and work hour reductions for some salaried employees to further adjust to declining production volumes;
- Cutting spending on information technology, sales and marketing programs;
- Accelerating working capital improvement opportunities; and
- Reducing capital expenditures by eliminating all discretionary capital spending including eliminating or deferring regional expansion projects and cutting spending tied to delayed customer launches.
The following information was filed by Tenneco Inc (TEN) on Thursday, February 5, 2009 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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