Tenneco improves year-over-year operating cash flow in pursuit of leverage ratio goal

By Jennifer Lanning Drey

Portland, Ore., April 29 - Tenneco Inc. improved its first-quarter cash flow from operations by $86 million year over year after applying a 2010 accounting rule change, putting the company closer to its long-term goal of achieving a net debt to adjusted EBITDA ratio of 2.0 times, Gregg Sherrill, Tenneco's chief executive officer, said Thursday during its earnings conference call for the period.

Tenneco's ratio of net debt to adjusted EBITDA was 2.8 times at March 31.

During the call, Sherrill said higher earnings and a continued focus on working capital performance drove the improvement in operating cash flow.

"We are maintaining our relentless focus on generating cash through our disciplined approach to managing working capital and capital spending, and we are keeping the same laser focuses on actions to improve operational efficiency," Sherrill said.

The company posted first-quarter EBITDA, including non-controlling interests, of $114 million on revenues of $1.316 billion. The figures compared to EBITDA, including non-controlling interests, of $39 million on revenues of $967 million in the first quarter of 2009.

"Our results reflect an unwavering focus on improving our financial position while continuing to take advantage of all of our growth opportunities," Sherrill said.

During the quarter, Tenneco remained focused on its three-pillar strategy, which is based on technology-driven growth, operational excellence and financial stability, he said.

Tenneco had total debt of $1.339 billion at March 31, versus total debt of $1.587 billion a year earlier.

The company's cash balance was $193 million at quarter-end, compared with cash of $113 million at the end of the same period in 2009.

Tenneco had no borrowings outstanding on its revolving credit facilities at March 31, leaving $629 million in unused borrowing capacity, the company's chief financial officer, Kenneth Trammell, reported during the call.

Tenneco is a Lake Forest, Ill.-based designer, manufacturer and marketer of emission-control and ride-control products and systems for the automotive original equipment market and the aftermarket.

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