<PAGE> 1
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL 4, 1997
$300,000,000
TENNECO INC.
$300,000,000 7 5/8% DEBENTURES DUE JUNE 15, 2017
Interest payable June 15 and December 15
------------------
The $300,000,000 7 5/8% Debentures due June 15, 2017 (the "Debentures") are
being offered by Tenneco Inc. ("Tenneco"). Interest on the Debentures is payable
semiannually on each June 15 and December 15, beginning December 15, 1997. The
Debentures will mature on June 15, 2017. Tenneco, at its option, may at any time
redeem all or any portion of the Debentures at a redemption price equal to the
greater of (i) 100% of their principal amount and (ii) the sum of the present
values of the remaining scheduled payments of principal and interest thereon
discounted to the date of redemption on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months) at the applicable Treasury Yield (as
defined herein) plus 20 basis points, plus accrued interest to the date of
redemption.
The Debentures will be represented by one or more Global Securities (as defined
herein) registered in the name of the nominee of The Depository Trust Company
(the "Depositary"). Except as provided herein and in the accompanying
Prospectus, Debentures in definitive form will not be issued. See "Description
of Debentures -- Book-Entry System" herein.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND THE
PUBLIC(1) COMMISSIONS COMPANY(1)(2)
-------------- -------------- --------------
<S> <C> <C> <C>
Per Debenture................................ 99.908% 0.875% 99.033%
Total........................................ $299,724,000 $2,625,000 $297,099,000
</TABLE>
(1) Plus accrued interest, if any, from June 16, 1997.
(2) Before deduction of expenses payable by Tenneco, estimated at $350,000.
The Debentures are offered by the Underwriters when, as and if issued by
Tenneco, delivered to and accepted by the Underwriters and subject to their
right to reject orders in whole or in part. It is expected that delivery of the
Debentures in book-entry form will be made through the facilities of the
Depositary on or about June 16, 1997, against payment in immediately available
funds.
CREDIT SUISSE FIRST BOSTON
MORGAN STANLEY DEAN WITTER
CITICORP SECURITIES, INC.
UBS SECURITIES
Prospectus Supplement dated June 11, 1997.
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
THE COMPANY
Tenneco, a Delaware corporation, is a global manufacturing company with
operations in automotive parts ("Tenneco Automotive") and packaging ("Tenneco
Packaging"). Tenneco Automotive is one of the world's leading manufacturers of
automotive exhaust and ride control systems for both the original equipment
market and the replacement market, or aftermarket. Tenneco Packaging is among
the world's leading and most diversified packaging companies, manufacturing
packaging products for consumer, institutional and industrial markets. As used
herein, unless the context otherwise requires, the term "Company" refers to
Tenneco and its consolidated subsidiaries.
Tenneco was incorporated August 26, 1996 under the name "New Tenneco Inc."
as a wholly owned subsidiary of the company then known as Tenneco Inc. ("Old
Tenneco"). Tenneco was formed to facilitate Old Tenneco's corporate
transformation from a highly diversified industrial corporation to a global
manufacturing company focused on its automotive and packaging businesses. As
part of this transformation, Old Tenneco undertook a series of transactions
during the latter portion of 1996 whereby the businesses and assets of Old
Tenneco were restructured so that the assets, liabilities and operations of
Tenneco Automotive, Tenneco Packaging and Old Tenneco's administrative services
businesses were owned and operated by the Company and the assets, liabilities
and operations of Old Tenneco's shipbuilding business were owned and operated by
Newport News Shipbuilding Inc., another wholly owned subsidiary of Old Tenneco
("Newport News"). Following this internal restructuring, on December 11, 1996,
Old Tenneco spun-off Tenneco and Newport News by distributing all of the common
stock of each company to Old Tenneco's common stockholders (the
"Distributions"). Following the Distributions, on December 12, 1996, a
subsidiary of El Paso Natural Gas Company ("El Paso") was merged (the "Merger")
into Old Tenneco (which then consisted solely of Old Tenneco's remaining active
businesses and certain discontinued operations), with Old Tenneco surviving the
Merger as a subsidiary of El Paso, and with the Company succeeding to the name
"Tenneco Inc." Unless the context otherwise requires, references to "Tenneco"
and the "Company" for periods prior to the Distributions are to Old Tenneco and
its consolidated subsidiaries.
S-2
<PAGE> 3
TENNECO AUTOMOTIVE
Tenneco Automotive is one of the world's largest manufacturers and
marketers of automotive exhaust and ride control systems for the original
equipment ("OE") market and aftermarket. Tenneco Automotive is a global business
that sells its products in over 100 countries, manufacturing and marketing its
automotive exhaust systems primarily under the Walker(R) brand name and its ride
control equipment under the Monroe(R) brand name.
ANALYSIS OF TENNECO AUTOMOTIVE'S REVENUES
The following table sets forth for each of the years 1994 through 1996
certain information relating to the net sales of Tenneco Automotive, the two
primary businesses of Tenneco Automotive and the aftermarket and OE market
within each primary business:
<TABLE>
<CAPTION>
NET SALES (MILLIONS)
----------------------------
YEAR ENDED DECEMBER 31,
----------------------------
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
EXHAUST SYSTEMS BUSINESS
Aftermarket.................................... $ 710 $ 637 $ 609
OE Market...................................... 989 829 465
------ ------ ------
1,699 1,466 1,074
------ ------ ------
RIDE CONTROL BUSINESS
Aftermarket.................................... 768 687 644
OE Market...................................... 513 326 271
------ ------ ------
1,281 1,013 915
------ ------ ------
Total Tenneco Automotive............... $2,980 $2,479 $1,989
====== ====== ======
</TABLE>
EXHAUST SYSTEMS
Automotive exhaust systems play a critical role in safely conveying noxious
gases away from the passenger compartment, reducing the level of pollutants and
reducing engine exhaust noise to an acceptable level. Precise engineering of the
manifold, pipe, catalytic converter and muffler leads to a pleasant, tuned
engine sound, reduced pollutants and optimized engine performance.
Tenneco Automotive designs, manufactures and distributes exhaust systems
primarily under the Walker(R) brand name. These products include a variety of
automotive exhaust systems and emission control products, including mufflers,
catalytic converters, tubular exhaust manifolds, pipes, exhaust accessories and
electronic noise cancellation products. Founded in 1888 and a division of
Tenneco since 1967, Walker is the aftermarket leader for exhaust systems in
North America, Europe and Australia. Walker is a leading supplier in the OE
market in the U.S. as well, supplying exhaust systems used in seven of the 10
top-selling 1996 new car models in the U.S. and nine of the 10 top-selling light
trucks in the U.S. Walker has long been the European aftermarket leader for
exhaust systems, and with the acquisition of Heinrich Gillet GmbH & Co.
("Gillet") in 1994, Walker became Europe's leading OE exhaust systems supplier.
In 1995, Walker acquired ownership of Manufacturas Fonos, S.L., Spain's
largest participant in the exhaust systems aftermarket, and Perfection
Automotive Products, a U.S. catalytic converter producer, further expanding
Walker's presence in the exhaust systems replacement market. In 1996, Walker
established a joint venture in China (Dalian) to supply exhaust systems to the
northern China automotive market and expanded its North American heavy duty
truck aftermarket business through the acquisition of Stemco Inc.
S-3
<PAGE> 4
The following table sets forth for each of the years 1994 through 1996
information relating to Tenneco Automotive's sales of exhaust systems:
<TABLE>
<CAPTION>
PERCENTAGE OF SALES
--------------------------
YEAR ENDED DECEMBER 31,
--------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
United States Sales
Aftermarket....................................... 46% 46% 48%
OE Market......................................... 54 54 52
--- --- ---
100% 100% 100%
=== === ===
Foreign Sales
Aftermarket....................................... 38% 42% 68%
OE Market......................................... 62 58 32
--- --- ---
100% 100% 100%
=== === ===
Total Sales by Geographic Area
United States..................................... 44% 42% 58%
European Union.................................... 43 45 24
Canada............................................ 6 7 10
Other areas....................................... 7 6 8
--- --- ---
100% 100% 100%
=== === ===
</TABLE>
RIDE CONTROL PRODUCTS
Tenneco Automotive designs, manufactures and distributes ride control
products primarily under the Monroe(R) brand name. Tenneco Automotive's ride
control products consist of hydraulic shock absorbers, air adjustable shock
absorbers, gas charged shock absorbers and struts, electronically adjustable
suspension systems, vibration control components, bushings, springs and modular
assemblies. Tenneco Automotive manufactures and markets replacement shock
absorbers for virtually all North American, European and Asian makes of
automobiles. In addition, Tenneco Automotive manufactures and markets shock
absorbers and struts for use on passenger cars and trucks, as well as for other
uses such as exercise and other recreational equipment. Founded in 1916, Monroe
introduced the world's first automotive shock absorber in 1926 and became part
of Tenneco in 1977. Tenneco Automotive is the market leader for ride control
equipment in the aftermarket in North America, Europe and Australia, as well as
in the OE market in Australia.
Superior ride control is governed by a vehicle's suspension system,
including its shocks and struts. Shocks and struts are components that help
maintain vertical loads placed on a vehicle's tires to help keep the tires in
contact with the road. A vehicle's ability to steer, brake and accelerate
depends on the contact between the vehicle's tires and the road. Adhesion is
directly influenced by shock absorber and strut performance. Worn shocks and
struts can allow weight to transfer from side to side (roll), from front to rear
(sway) and up and down (bounce). Shocks are designed to maintain vertical loads
placed on tires by providing resistance to vehicle roll, sway and bounce.
Variations in tire to road contact can affect a vehicle's handling and braking
performance and the safe operation of a vehicle; thus, by maintaining the
tire-to-road contact, Monroe's ride control products are actually designed to
function as safety components of a vehicle rather than merely providing a
comfortable ride.
As a means of expanding its product lines and offering OE manufacturers a
more complete modular ride control system, in July 1996 Tenneco Automotive
acquired The Pullman Company and its Clevite products division ("Clevite").
Clevite is a leading OE manufacturer of elastomeric vibration control
components, including bushings and engine mounts, for the auto, light truck and
heavy truck markets. With this acquisition, Tenneco Automotive now has full
capability to deliver complete suspension systems to the OE manufacturers. The
Clevite acquisition also complements Tenneco Automotive's interest in global
growth opportunities, as both Clevite and Monroe have manufacturing operations
in Mexico and Brazil. Tenneco
S-4
<PAGE> 5
Automotive has a 51% interest in a joint venture that has three ride control
manufacturing facilities in India and has a 51% interest in a joint venture that
has one ride control manufacturing facility in China. It is anticipated that the
joint venture in India will also manufacture exhaust systems.
The following table sets forth information relating to Tenneco Automotive's
sales of ride control equipment:
<TABLE>
<CAPTION>
PERCENTAGE OF SALES
--------------------------
YEAR ENDED DECEMBER 31,
--------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
United States Sales
Aftermarket....................................... 62% 70% 72%
OE Market......................................... 38 30 28
--- --- ---
100% 100% 100%
=== === ===
Foreign Sales
Aftermarket....................................... 59% 66% 69%
OE Market......................................... 41 34 31
--- --- ---
100% 100% 100%
=== === ===
Total Sales by Geographic Area
United States..................................... 48% 48% 49%
European Union.................................... 34 36 32
Canada............................................ 3 3 5
Other areas....................................... 15 13 14
--- --- ---
100% 100% 100%
=== === ===
</TABLE>
STRATEGY
Tenneco Automotive's primary goal is to grow and enhance its position as a
global leader in the manufacture of exhaust and ride control systems. Tenneco
Automotive intends to capitalize on certain significant existing and emerging
trends in the automotive industry, including (i) the consolidation and
globalization of the OE supplier base, (ii) increased outsourcing by OE
manufacturers, particularly of more complex components, assemblies, modules and
complete systems to sophisticated, independent suppliers, and (iii) growth of
emerging markets for both OE and replacement markets.
TENNECO PACKAGING
Tenneco Packaging is among the world's leading and most diversified
packaging companies, manufacturing packaging products for consumer,
institutional and industrial markets. The paperboard business manufactures
corrugated containers, folding cartons and containerboard, has a joint venture
in recycled paperboard, and offers value-added products such as enhanced
graphics packaging and displays and kraft honeycomb products. Its specialty
products business produces disposable aluminum, foam and clear plastic food
containers, molded fiber and pressed paperboard products, as well as
polyethylene bags and industrial stretch wrap. Tenneco Packaging's consumer
products include such recognized brand names as Hefty(R), Baggies(R), Hefty
OneZip(R) and E-Z Foil(R).
S-5
<PAGE> 6
ANALYSIS OF TENNECO PACKAGING'S REVENUES
The following table sets forth for each of the years 1994 through 1996
certain information relating to the net sales of Tenneco Packaging, the two
primary businesses of Tenneco Packaging, and major product lines of each primary
business:
<TABLE>
<CAPTION>
NET SALES (MILLIONS)
----------------------------
YEAR ENDED DECEMBER 31,
----------------------------
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
PAPERBOARD BUSINESS
Corrugated shipping containers and
containerboard products..................... $1,432 $1,589 $1,214
Folding cartons and recycled paperboard mill
products.................................... 149 204 196
Paper stock and other.......................... 119 135 119
------ ------ ------
1,700 1,928 1,529
------ ------ ------
SPECIALTY BUSINESS
Disposable plastic and aluminum packaging
products.................................... 1,669 593 434
Molded fiber products.......................... 193 191 186
Other.......................................... 40 40 35
------ ------ ------
1,902 824 655
------ ------ ------
Total Tenneco Packaging................ $3,602 $2,752 $2,184
====== ====== ======
</TABLE>
PAPERBOARD PRODUCTS
The paperboard business manufactures and sells corrugated containers,
folding cartons, containerboard, lumber and building products, and has a joint
venture in recycled paperboard. The business product line includes value-added
products such as enhanced graphics packaging and displays and kraft honeycomb
products. The paperboard business produces over two million tons of
containerboard annually that is converted by its corrugated container plants and
sold to both domestic and export customers. Over 80% of the containerboard used
by the corrugated converting operations is either produced by mills operated by
Tenneco Packaging or supplied through trade partnerships for other grades in
exchange for product produced at mills operated by Tenneco Packaging. This helps
assure a secure supply of containerboard in a wide variety of grades to meet the
requirements of its customers. The paperboard business also produces high
quality, innovative folding carton products utilizing the latest in printing and
cutting technology for the sheet-fed offset, narrow-web flexo and rotogravure
processes. Finally, Tenneco Packaging participates in the wood products business
and has access to one million acres of timberland in the United States through
both owned and leased properties.
In June 1996, Tenneco Packaging and Caraustar entered into a joint venture
pursuant to which Tenneco Packaging contributed its two recycled paperboard
mills (Rittman, Ohio and Tama, Iowa) and a recovered paper stock and brokerage
operation for cash and a 20% equity position in the business. The mills will
continue to supply recycled paperboard to Tenneco Packaging's five folding
carton plants.
SPECIALTY PRODUCTS
Tenneco Packaging's specialty business produces disposable aluminum, foam
and clear plastic products for the food processing, food preparation and food
service industries. It also manufactures molded fiber and pressed paperboard
products, as well as polyethylene bags and industrial stretch film. Consumer
products are sold under such recognized brand names as Hefty(R), Baggies(R),
Hefty OneZip(R) and E-Z Foil(R).
Tenneco Packaging's lightweight, durable plastic packaging for in-store
deli, produce, bakery and catering applications maintain quality and enhance
presentation. Plastic food storage and trash bags, foam and molded fiber
dinnerware, disposable aluminum baking pans and related products are sold
through a variety of retail
S-6
<PAGE> 7
outlets. Tenneco Packaging also manufactures molded fiber for produce and egg
packaging food service items and institutional tableware.
Tenneco Packaging acquired the Mobil Plastics Division of Mobil Oil
Corporation in late 1995, which more than doubled the size of its specialty
business and added new technologies and product development capabilities. The
acquisition provided strong consumer branded products such as Hefty(R) trash
bags, Baggies(R) food bags and Hefty OneZip(R) food storage bags. The plastics
division acquired from Mobil also manufactures clear and foam polystyrene food
service containers; plates and meat trays; and polyethylene film products,
including can liners, produce and retail bags and medical and industrial
disposable packaging.
In August 1996, Tenneco Packaging purchased Amoco Foam Products Company.
Amoco Foam Products, with 1995 sales of approximately $288 million, manufactures
foam polystyrene tableware including cups, plates, carrying trays; hinged-lid
food containers; packaging trays, primarily for meat and poultry; and industrial
products for residential and commercial construction applications.
INTERNATIONAL
Tenneco Packaging has a growing international presence with a 1996 revenue
base of approximately $228 million and an additional $80 million in export sales
to approximately 40 countries, manufacturing products that serve a wide range of
packaging needs. Tenneco Packaging expects to enlarge its international
operations significantly by growing its base businesses, strengthening its
export capabilities for both fiber-based and plastic products, and by growing
selectively in new markets, geographies or channels that represent high-
potential opportunities.
In April 1997, the Company acquired the protective and flexible packaging
division of NV Koninklijke KNP BT (the "KNP Protective and Flexible Packaging
Division"), a Dutch distribution, paper and packaging firm, for approximately
$381 million, including the assumption of debt and the issuance of $6 million of
preferred stock by a subsidiary of Tenneco. The acquisition consisted of a
protective packaging business with six manufacturing operations in Europe and 11
manufacturing operations in North America and a flexible packaging business with
seven manufacturing operations in Europe and one manufacturing operation in
Egypt. The KNP Protective and Flexible Packaging Division accounted for
approximately U.S. $542 million in 1996 sales and employed approximately 3,000
persons worldwide. Approximately $331 million of the purchase price for the KNP
Protective and Flexible Packaging Division was financed with the proceeds of
short-term borrowings of the Company. See "Capitalization".
In addition to the international manufacturing operations of the KNP
Protective and Flexible Packaging Division, Tenneco Packaging currently operates
or has an ownership interest in 15 other international manufacturing operations.
Omni-Pac is Europe's leading manufacturer of molded fiber packaging with
facilities in Elsfeth, Germany and Great Yarmouth, England. Tenneco Packaging's
Alupak operation in Belp, Switzerland is a major producer of smoothwall aluminum
portion packs. In plastics, Tenneco Packaging has the leading share of
single-use thermoformed plastic food containers in the United Kingdom, with four
manufacturing operations in England, Scotland and Wales.
Tenneco Packaging also operates a folding carton plant in Budapest, Hungary
and is building a wood products operation in Romania. It participates in several
international joint ventures, including folding carton plants in Donngguan,
China and Bucharest, Romania, paperboard honeycomb products operations in
Israel, Japan and Spain, and a corrugated converting facility in Zhejiang,
China.
In 1995, Tenneco Packaging purchased Penlea and Delyn, two plastic
thermoforming operations in the United Kingdom. In Romania, Tenneco Packaging is
negotiating for harvesting rights in excess of 1.8 million cubic meters of
timber and is constructing a wood processing plant for value-added furniture
components, to be supported by a full sawmill operation.
STRATEGY
Tenneco Packaging has embarked upon an aggressive growth plan to be the
leading specialty packaging company offering a broad line of products to provide
customers with the best packaging solutions. From 1994
S-7
<PAGE> 8
through 1996, Tenneco Packaging increased its revenues by nearly 65% to $3.6
billion through internal growth in its base businesses, productivity gains and
12 acquisitions. In addition, as described above, the Company acquired the KNP
Protective and Flexible Packaging Division in April 1997.
In the future, Tenneco Packaging intends to continue to pursue value-added,
non-cyclical growth opportunities, maintain market leadership positions in its
primary businesses and leverage its new product development expertise.
TENNECO BUSINESS SERVICES
Tenneco Business Services ("TBS") designs, implements and administers
shared administrative service programs for the Company's businesses as well as
on an "as requested" basis for former Tenneco business entities and affiliates.
Primary service areas of TBS include: (i) Financial Accounting Services,
including asset management, general accounting, purchasing and payables, travel
and entertainment, tax compliance and reporting and other applications; (ii)
Supplier Development and Administration, including vendor negotiations and
contract administration; (iii) Employee Benefits Administration for all major
salaried and hourly benefit plans; (iv) Technology Services, including main
frame computing services, telecommunication services and distributed processing
services; (v) Human Resources and Payroll Services, including payroll
processing, relocation services, government compliance services and expatriate
relocation and repatriation services; and (vi) Environmental Health and Safety
Services, including remediation consultation, operations risk analysis and
compliance audits.
S-8
<PAGE> 9
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,(a) YEARS ENDED DECEMBER 31,(b)
------------------------- -------------------------------------------------------------------------
1997 1996 1996(c) 1995(c) 1994(c) 1993 1992
----------- ----------- ----------- ----------- ----------- ----------- -----------
(MILLIONS EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Statements of Income
(Loss) Data(d):
Net sales and operating
revenues from
continuing
operations--
Automotive........... $ 778 $ 683 $ 2,980 $ 2,479 $ 1,989 $ 1,785 $ 1,763
Packaging............ 852 859 3,602 2,752 2,184 2,042 2,078
Intergroup sales and
other.............. (1) (3) (10) (10) (7) (7) (5)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total.............. $ 1,629 $ 1,539 $ 6,572 $ 5,221 $ 4,166 $ 3,820 $ 3,836
============ ============ ============ ============ ============ ============ ============
Income from continuing
operations before
interest expense,
income taxes and
minority interest--
Automotive........... 80 59 $ 249 $ 240 $ 223 $ 222 $ 237
Packaging............ 80 106 401 430 209 139 221
Other................ (1) (4) (22) 2 24 20 7
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total.............. 159 161 628 672 456 381 465
Interest expense (net
of interest
capitalized)......... 45 47 195 160 104 101 102
Income tax expense..... 33 49 194 231 114 115 154
Minority interest...... 5 5 21 23 -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income from continuing
operations........... 76 60 218 258 238 165 209
Income (loss) from
discontinued
operations, net of
income tax(f)........ -- 435 428 477 214 (e) 286(e) (821)(e)
Extraordinary loss, net
of income tax........ -- -- (236)(g) -- (5) (25) (12)
Cumulative effect of
changes in accounting
principles, net of
income tax........... -- -- -- -- (39)(h) -- (699)(h)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss)...... 76 495 410 735 408 426 (1,323)
Preferred stock
dividends............ -- 3 12 12 12 14 16
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss) to
common stock......... $ 76 $ 492 $ 398 $ 723 $ 396 $ 412 $ (1,339)
============ ============ ============ ============ ============ ============ ============
Average number of
shares of common
stock outstanding.... 171,330,890 170,440,074 170,635,277 173,995,941 180,084,909 168,772,852 144,110,151
Earnings (loss) per
average share of
common stock--
Continuing
operations....... $ .44 $ .34 $ 1.28 $ 1.48 $ 1.32 $ .98 $ 1.45
Discontinued
operations....... -- 2.55 2.43 2.68 1.13 1.61 (5.80)
Extraordinary
loss............. -- -- (1.38) -- (.03) (.15) (.08)
Cumulative effect
of changes in
accounting
principles....... -- -- -- -- (.22) -- (4.86)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net earnings
(loss)(i).......... $ .44 $ 2.89 $ 2.33 $ 4.16 $ 2.20 (j) $ 2.44(j) $ (9.29)(j)
============ ============ ============ ============ ============ ============ ============
Cash dividends per
common share......... $ .30 $ .45 $ 1.80 $ 1.60 $ 1.60 $ 1.60 $ 1.60
Balance Sheet Data(d):
Net assets of
discontinued
operations........... $ -- $ 1,455 $ -- $ 1,045 $ 1,858 $ 2,008 $ 1,329
Total assets........... 7,622 7,940 7,587 7,413 5,853 5,097 4,229
Short-term debt(i)..... 472 574 236 384 108 94 182
Long-term debt(i)...... 2,045 1,680 2,067 1,648 1,039 1,178 1,675
Minority interest...... 304 301 304 301 301 1 1
Shareowners' equity.... 2,555 3,532 2,646 3,148 2,900 2,601 1,330
Statement of Cash Flows
Data(d):
Net cash provided
(used) by operating
activities........... $ (23) $ (788) $ 253 $ 1,443 $ 450 $ 1,615 $ 929
Net cash provided
(used) by investing
activities........... (65) 805 (693) (1,146) (117) (338) 105
Net cash provided
(used) by financing
activities........... 143 (133) 147 (356) (151) (1,166) (1,136)
Capital expenditures
for continuing
operations........... (81) (136) (573) (562) (280) (217) (159)
Other Data:
EBITDA (k)........... $ 246 $ 226 $ 916 $ 845 $ 598 $ 518 $ 595
</TABLE>
(footnotes on next page)
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<PAGE> 10
- ---------------
(a) The selected consolidated financial data for the three months ended March
31, 1997 and 1996 are derived from the unaudited consolidated financial
statements of the Company set forth in the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1997 incorporated by reference
herein. Such unaudited consolidated financial statements, in the opinion of
the Company's management, include all adjustments necessary for the fair
presentation of the financial position and the results of operations of the
Company for such periods and as of such dates. Operating results for the
three months ended March 31, 1997 are not necessarily indicative of the
results of operations that may be expected for the year ending December 31,
1997. The data are qualified in their entirety by, and should be read in
conjunction with, the consolidated financial statements of the Company and
the related notes thereto and Item 2. "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997.
(b) The selected consolidated financial data for the years ended December 31,
1996, 1995, 1994, 1993 and 1992 are derived from the audited consolidated
financial statements of the Company set forth in the Company's Annual Report
on Form 10-K for the year ended December 31, 1996 incorporated by reference
herein. The data are qualified in their entirety by, and should be read in
conjunction with, the consolidated financial statements of the Company and
the related notes thereto and Item 7. "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997.
(c) For a discussion of the significant items affecting comparability of the
financial information for 1996, 1995 and 1994, see Item 7. "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
the Company's Annual Report on Form 10-K for the year ended December 31,
1996 incorporated by reference herein. See also Note 1 to the Financial
Statements of Tenneco Inc. and Consolidated Subsidiaries in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996 incorporated
by reference herein for a discussion of the Merger and Distributions
transactions.
(d) During the years presented, Tenneco completed numerous acquisitions, the
most significant of which were Tenneco Packaging's acquisition of Mobil
Plastics for $1.3 billion in late 1995 and Amoco Foam Products for $310
million in August 1996, and Tenneco Automotive's acquisition of Clevite for
approximately $328 million in July 1996. See Note 3 to the Financial
Statements of Tenneco Inc. and Consolidated Subsidiaries in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996 incorporated
by reference herein.
(e) Includes a restructuring charge of $920 million related to the discontinued
farm and construction equipment business in 1992 reduced by $20 million in
1993 and $16 million in 1994.
(f) Discontinued operations reflected in the above periods include Tenneco's
energy and shipbuilding operations, which, as a result of the Merger and
Distributions, respectively, were treated as discontinued in December 1996,
its farm and construction equipment operations, which were discontinued in
March 1996, its chemicals and brakes operations, which were discontinued
during 1994, and its minerals and pulp chemicals operations, which were
discontinued in 1992.
(g) Represents the extraordinary loss recognized in the realignment of Tenneco's
consolidated indebtedness preceding the Merger and Distributions. See Notes
4 and 5 to the Financial Statements of Tenneco Inc. and Consolidated
Subsidiaries in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 incorporated by reference herein.
(h) In 1994, Tenneco adopted FAS No. 112, "Employers' Accounting for
Postemployment Benefits." In 1992, Tenneco adopted FAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions," and FAS No.
109, "Accounting for Income Taxes."
(i) Amounts for March 31, 1996 and 1995 and prior years are net of allocations
for corporate debt to the net assets of the discontinued energy and
shipbuilding operations. The allocation is based on the proportion of
Tenneco's investment in the energy operations' and shipbuilding operations'
net assets to Tenneco consolidated net assets plus debt. See Note 5 to the
Financial Statements of Tenneco Inc. and Consolidated Subsidiaries in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996
incorporated by reference herein.
(j) For purposes of computing earnings per share, Series A preferred stock was
included in average common shares outstanding until its conversion into
common stock in December 1994; therefore, the preferred dividends paid were
not deducted from net income (loss) to determine net income (loss) to common
stock. The inclusion of Series A preferred stock in the computation of
earnings per share was antidilutive for the years and certain quarters in
1994, 1993 and 1992. Other convertible securities and common stock
equivalents outstanding during each of the quarters ended March 31, 1997 and
1996 and the five years ended December 31, 1996, 1995, 1994, 1993, and 1992
were not materially dilutive.
(k) EBITDA represents income from continuing operations before interest expense,
income taxes and depreciation, depletion and amortization. EBITDA is not a
calculation based upon generally accepted accounting principles; however,
the amounts included in the EBITDA calculation are derived from amounts
included in the Statements of Income. In addition, EBITDA should not be
considered as an alternative to net income or operating income, as an
indicator of operating performance, or as an alternative to operating cash
flows as a measure of liquidity.
S-10
<PAGE> 11
USE OF PROCEEDS
The net proceeds to be received by Tenneco from the sale of the Debentures
are estimated to be approximately $297 million and will be used to refinance, on
a long-term basis, approximately $297 million of short-term debt incurred by
Tenneco for working capital purposes and for the acquisition of the KNP
Protective and Flexible Packaging Division. This short-term debt consists of
commercial paper which, at June 10, 1997, had a weighted average interest rate
of approximately 5.80% and an average maturity of 21 days.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
March 31, 1997 and as adjusted to reflect (i) the issuance on April 23, 1997 of
$300 million ($293 million net of original issue discount and underwriting
discount) of two other series of securities issued under the Indenture (as
defined herein), (ii) the acquisition of the KNP Protective and Flexible
Packaging Division, and (iii) the issuance of $300 million ($297 million net of
original issue discount and underwriting discount) of the Debentures. The
capitalization of the Company should be read in conjunction with the "Financial
Statements of Tenneco Inc. and Consolidated Subsidiaries" and notes thereto, the
"Selected Consolidated Financial Data" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations," included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996 and the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997,
each incorporated by reference herein.
<TABLE>
<CAPTION>
MARCH 31, 1997
---------------------
HISTORICAL ADJUSTED
---------- --------
(MILLIONS)
<S> <C> <C>
Cash and temporary cash investments........................................ $ 116 $ 116
======= ======
Short-term debt (including current maturities)............................. $ 472 $ 213
Long-term debt............................................................. 2,045 2,684
---------- --------
Total debt............................................................... 2,517 2,897
---------- --------
Minority interest.......................................................... 304 310
Shareowners' equity:
Common stock............................................................... 2 2
Premium on common stock and other capital surplus.......................... 2,652 2,652
Cumulative translation adjustments......................................... (35) (35)
Retained earnings.......................................................... 3 3
Shares held as Treasury Stock, at cost..................................... (67) (67)
---------- --------
Total shareowners' equity................................................ 2,555 2,555
---------- --------
Total capitalization....................................................... $5,376 $5,762
======= ======
</TABLE>
S-11
<PAGE> 12
DESCRIPTION OF DEBENTURES
The Debentures offered hereby are a series of "Securities" as defined and
described in the accompanying Prospectus dated April 4, 1997 (the "Prospectus"),
and the following description of terms of the Debentures supplements the
description of the general terms and provisions of the Securities set forth in
the Prospectus.
The Debentures are to be issued pursuant to the provisions of an Indenture
dated as of November 1, 1996, between Tenneco and The Chase Manhattan Bank, as
Trustee (hereinafter called the "Trustee"), as supplemented by supplemental
indentures (such Indenture as supplemented and amended from time to time in
accordance with the terms thereof being hereinafter referred to as the
"Indenture"). At March 31, 1997, $1,993 million book value ($1,860 million face
amount) of indebtedness was outstanding under the Indenture. On April 23, 1997,
Tenneco issued an aggregate of $300 million face value ($293 million net
proceeds) of additional indebtedness under the Indenture. See "Capitalization."
The Debentures will mature on June 15, 2017. The Debentures are to bear
interest from June 16, 1997 (at the rate per annum referred to on the cover of
this Prospectus Supplement) payable on June 15 and December 15 of each year
beginning December 15, 1997 at the office of the Trustee in the City of New
York. Subject to certain exceptions therein set forth, the Indenture provides
for the payment of interest on any interest payment date only to holders of the
Debentures in whose names the Debentures are registered on the interest record
date, which is the June 1 or December 1, as the case may be, next preceding such
interest payment date if such record date is a business day or the business day
immediately preceding such record date if such date is not a business day.
OPTIONAL REDEMPTION
Tenneco, at its option, may at any time redeem all or any portion of the
Debentures, at a redemption price equal to the greater of (i) 100% of their
principal amount and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the date of
redemption on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at the applicable Treasury Yield plus 20 basis points, plus
accrued interest to the date of redemption.
"Treasury Yield" means, with respect to any redemption date applicable to
the Debentures, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
applicable Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means, with respect to the Debentures, the
United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of the Debentures that would
be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Debentures. "Independent Investment
Banker" means, with respect to the Debentures offered hereby, Credit Suisse
First Boston Corporation or, if such firm is unwilling or unable to select the
applicable Comparable Treasury Issue, an independent investment banking
institution of national standing appointed by the Trustee.
"Comparable Treasury Price" means, with respect to any redemption date
applicable to the Debentures, (i) the average of the applicable Reference
Treasury Dealer Quotations for such redemption date, after excluding the highest
and lowest such applicable Reference Treasury Dealer Quotations, or (ii) if the
Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such Quotations. "Reference Treasury Dealer Quotations" means,
with respect to each Reference Treasury Dealer and any redemption date for the
Debentures, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue for the Debentures (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding such redemption date.
"Reference Treasury Dealer" means, with respect to the Debentures offered
hereby, each of Credit Suisse First Boston Corporation, Morgan Stanley & Co.
Incorporated, Citicorp Securities, Inc. and UBS
S-12
<PAGE> 13
Securities LLC; provided however, that if any of the foregoing shall cease to be
a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), Tenneco shall substitute therefor another Primary Treasury
Dealer.
Holders of the Debentures to be redeemed will receive notice thereof by
first-class mail at least 30 and not more than 60 days prior to the date fixed
for redemption.
GLOBAL SECURITIES
The Debentures will be issued in the form of one or more global securities
("Global Securities") that will be deposited with, or on behalf of, The
Depository Trust Company, New York, New York (the "Depositary"). Interests in
the Global Securities will be issued only in denominations of $1,000 or integral
multiples thereof. Unless and until it is exchanged in whole or in part for
Debentures in definitive form, a Global Security may not be transferred except
as a whole to a nominee of the Depositary for such Global Security, or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary.
BOOK-ENTRY SYSTEM
Initially, the Debentures will be registered in the name of Cede & Co., the
nominee of the Depositary. Accordingly, beneficial interests in the Debentures
will be shown on, and transfers thereof will be effected only through, records
maintained by the Depositary and its participants.
The Depositary has advised Tenneco and the Underwriters as follows: the
Depositary is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the United States Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
United States Securities Exchange Act of 1934, as amended. The Depositary holds
securities that its participants ("Direct Participants") deposit with the
Depositary. The Depositary also facilitates the settlement among Direct
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in such
Direct Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers (including the Underwriters), banks, trust companies,
clearing corporations, and certain other organizations. The Depositary is owned
by a number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the Depositary's book-entry system is also available to
others such as securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The rules applicable to
the Depositary and its Direct and Indirect Participants are on file with the
United States Securities and Exchange Commission.
The Depositary advises that its established procedures provide that (i)
upon issuance of the Debentures by Tenneco, the Depositary will credit the
accounts of Direct and Indirect Participants designated by the Underwriters with
the principal amounts of the Debentures purchased by the Underwriters and (ii)
ownership of interest in the Global Securities will be shown on, and the
transfer of the ownership will be effected only through, records maintained by
the Depositary, the Direct Participants and the Indirect Participants. The laws
of some States require that certain persons take physical delivery in definitive
form of securities which they own. Consequently, the ability to transfer
beneficial interests in the Global Securities is limited to such extent.
So long as a nominee of the Depositary is the registered owner of the
Global Securities, such nominee for all purposes will be considered the sole
owner or holder of such Global Securities under the Indenture. Except as
provided below, owners of beneficial interests in the Global Securities will not
be entitled to have Debentures registered in their names, will not receive or be
entitled to receive physical delivery of Debentures in definitive form and will
not be considered the owners or holders thereof under the Indenture.
S-13
<PAGE> 14
Neither Tenneco, the Trustee, any paying agent nor the registrar will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Securities, or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Principal and interest payments on the Debentures registered in the name of
the Depositary's nominee will be made in immediately available funds to the
Depositary's nominee as the registered owner of the Global Securities. Under the
terms of the Debentures, Tenneco and the Trustee will treat the persons in whose
names the Debentures are registered as the owners of such Debentures for the
purpose of receiving payment of principal and interest on such Debentures and
for all other purposes whatsoever. Therefore, neither Tenneco, the Trustee nor
any paying agent has any direct responsibility or liability for the payment of
principal or interest on the Debentures to owners of beneficial interests in the
Global Securities. The Depositary has advised Tenneco and the Trustee that its
current practice is, upon receipt of any payment of principal or interest, to
credit Direct Participants' accounts on the payment date in accordance with
their respective holdings of beneficial interests in the Global Securities as
shown on the Depositary's records, unless the Depositary has reason to believe
that it will not receive payment on the payment date. Payments by Direct and
Indirect Participants to owners of beneficial interests in the Global Securities
will be governed by standing instructions and customary practices, as is the
case with securities held for the accounts of customers in bearer form or
registered in "street name", and will be the responsibility of such Direct and
Indirect Participants and not of the Depositary, the Trustee, or Tenneco,
subject to any statutory requirements that may be in effect from time to time.
Payment of principal and interest to the Depositary is the responsibility of
Tenneco or the Trustee, disbursement of such payments to the owners of
beneficial interests in the Global Securities shall be the responsibility of the
Depositary and Direct and Indirect Participants.
Debentures represented by a Global Security will be exchangeable for
Debentures in definitive form of like tenor as such Global Security in
denominations of $1,000 and in any greater amount that is an integral multiple
if the Depositary notifies Tenneco that it is unwilling or unable to continue as
Depositary for such Global Security or if at any time the Depositary ceases to
be a clearing agency registered under applicable law and a successor depositary
is not appointed by Tenneco within 90 days or Tenneco in its discretion at any
time determines not to require all of the Debentures to be represented by a
Global Security and notifies the Trustee thereof. Any Debentures that are
exchangeable pursuant to the preceding sentence are exchangeable for Debentures
issuable in authorized denominations and registered in such names as the
Depositary shall direct. Subject to the foregoing, a Global Security is not
exchangeable, except for a Global Security or Global Securities of the same
aggregate denominations to be registered in the name of the Depositary or its
nominee.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made by the Underwriters in
immediately available funds. So long as the Depositary continues to make its
Same-Day Funds Settlement System available to Tenneco, all payments of principal
and interest on the Debentures will be made by Tenneco in immediately available
funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the
Debentures will trade in the Depositary's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Debentures will therefore
be required by the Depositary to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Debentures.
S-14
<PAGE> 15
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated June 11, 1996 (the "Underwriting Agreement"), the Underwriters
named below (the "Underwriters") have severally but not jointly agreed to
purchase from the Company the following respective principal amounts of the
Debentures:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
UNDERWRITER OF DEBENTURES
- ------------------------------------------------------------------------------ -------------
<S> <C>
Credit Suisse First Boston Corporation........................................ $ 75,000,000
Morgan Stanley & Co.
Incorporated......................................................... 75,000,000
Citicorp Securities, Inc...................................................... 75,000,000
UBS Securities LLC............................................................ 75,000,000
-------------
Total....................................................................... $ 300,000,000
===========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all the Debentures, if any are
purchased. The Underwriting Agreement provides that in the event of default by
an Underwriter, in certain circumstances the purchase commitments of the
non-defaulting Underwriters may be increased or the Underwriting Agreement may
be terminated.
Tenneco has been advised by the Underwriters that the Underwriters propose
to offer the Debentures to the public initially at the public offering price set
forth on the cover page of this Prospectus Supplement and to certain dealers at
such price less a concession of 0.50% of the principal amount per Debenture, and
the Underwriters and such dealers may allow a discount of 0.25% of such
principal amount per Debenture on sales to certain other dealers. After the
initial public offering, the public offering price and concession and discount
to dealers may be changed by the Underwriters.
The Debentures are a new issue of securities with no established trading
market. The Debentures will not be listed on any securities exchange. The
Underwriters have advised Tenneco that they intend to act as market makers for
the Debentures. However, the Underwriters are not obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Debentures.
Tenneco has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933, or
contribute to payments which the Underwriters may be required to make in respect
thereof.
The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids. Over-allotment involves
syndicate sales in excess of the offering size, which creates a syndicate short
position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum.
Syndicate covering transactions involve the purchase of the Debentures in the
open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the Underwriters to reclaim a
selling concession from a syndicate member when the Debentures originally sold
by such syndicate member are purchased in a syndicate covering transaction to
cover syndicate short positions. Such stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of the Debentures to
be higher than it would otherwise be in the absence of such transactions.
The Underwriters and their respective affiliates may be customers of,
lenders to, engage in transactions with, and perform services for Tenneco and
its subsidiaries in the ordinary course of business.
S-15
<PAGE> 16
PROSPECTUS
$700,000,000
DEBT SECURITIES
TENNECO INC.
Tenneco Inc. (the "Company") directly, through agents designated from time
to time, or through dealers or underwriters also to be designated, may sell from
time to time up to $700,000,000 aggregate principal amount (or its equivalent)
of its debt securities (the "Securities") on terms to be determined at the time
of sale. The specific designation, aggregate principal amount, maturities, rate
(or method of calculation) and time of payment of interest, purchase price, any
terms for redemption, the agent, dealer or underwriter, if any, in connection
with the sale of the Securities in respect of which this Prospectus is being
delivered and the other terms of the Securities are set forth in the
accompanying Prospectus Supplement (the "Prospectus Supplement"). The Company
reserves the sole right to accept and, together with its agents from time to
time, to reject in whole or in part any proposed purchase of Securities to be
made directly or through agents.
If an agent of the Company or a dealer or underwriter is involved in the
sale of the Securities in respect of which this Prospectus is being delivered,
the agent's commission, dealer's purchase price, or underwriter's discount is
set forth in, or may be calculated from, the Prospectus Supplement, and the net
proceeds to the Company from such sale will be the purchase price of such
Securities less such commission in the case of an agent, the purchase price of
such Securities in the case of a dealer or the public offering price less such
discount in the case of an underwriter, and less, in each case, the other
attributable issuance expenses. The aggregate proceeds to the Company from all
the Securities will be the purchase price of Securities sold less the aggregate
of agents' commissions and underwriters' discounts and other expenses of
issuance and distribution. See "Plan of Distribution" for possible
indemnification arrangements for the agents, dealers and underwriters.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is April 4, 1997
<PAGE> 17
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information....................................... 2
Incorporation of Certain Documents by Reference............. 3
Tenneco Inc. ............................................... 3
Use of Proceeds............................................. 3
Ratio of Earnings to Fixed Charges.......................... 3
Description of Securities................................... 4
Plan of Distribution........................................ 9
Legal Opinions.............................................. 10
Experts..................................................... 10
</TABLE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and in accordance therewith
files reports, proxy and information statements and other information with the
Securities and Exchange Commission ("Commission"). Reports, proxy and
information statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at regional offices of the Commission at the following
addresses: Seven World Trade Center, 13th Floor, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can also be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates, or may be accessed electronically on the Commission's website
(at http://www.sec.gov). Such reports, proxy and information statements and
other information can also be inspected at the offices of: the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005; the Chicago Stock
Exchange, Incorporated, 440 South LaSalle Street, Chicago, Illinois 60605; and
The Pacific Stock Exchange Incorporated, 301 Pine Street, San Francisco,
California 94104.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all of the information that has been incorporated by reference in the Prospectus
(not including exhibits to the information that is incorporated by reference
unless such exhibits are specifically incorporated by reference into the
information that the Prospectus incorporates). Requests for such copies should
be directed to Mr. Karl A. Stewart, Vice President and Secretary, Tenneco Inc.,
1275 King Street, Greenwich, Connecticut 06831, telephone number (203) 863-1000.
This Prospectus constitutes a part of a Registration Statement on Form S-3
filed by the Company with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus omits certain of the information
contained in the Registration Statement in accordance with the rules and
regulations of the Commission. For further information, reference is hereby made
to the Registration Statement and the exhibits thereto, which may be obtained
from the Commission in the manner set forth above. Statements contained herein
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
2
<PAGE> 18
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated as of their respective dates in this Prospectus by reference:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1996;
(b) Amended Current Report on Form 8-K/A dated February 24, 1997; and
(d) Current Report on Form 8-K dated March 27, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(e), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering hereunder shall be deemed incorporated in this
Prospectus by reference and to be a part of this Prospectus from the date of the
filing of such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
TENNECO INC.
Tenneco Inc. ("Tenneco") is a holding company conducting all of its
operations through subsidiaries. As used herein, unless the context otherwise
requires the term the "Company" refers to Tenneco and its consolidated
subsidiaries.
The major businesses of the Company are the manufacture and sale of
automotive exhaust system parts and ride control products, and the manufacture
and sale of packaging materials, cartons, containers and specialty packaging
products.
Because Tenneco is a holding company rather than an operating company, its
ability to pay principal and interest on its outstanding indebtedness depends
primarily upon the availability of funds from its operating subsidiaries.
The address of the Company, a Delaware corporation, is 1275 King Street,
Greenwich, Connecticut 06831, and its telephone number is (203) 863-1000.
USE OF PROCEEDS
Unless otherwise indicated in a Prospectus Supplement, the net proceeds
from the sale of the Securities will be added to the general funds of the
Company and will be used for working capital and capital expenditures or to
reduce indebtedness incurred for such purposes and to refinance long term debt
maturing over the next several years and to refinance short term debt incurred
to acquire businesses and assets. Any additional funds required for any of the
foregoing purposes may be derived from internal sources, additional borrowings
or other financial arrangements.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratio of earnings to fixed
charges for Tenneco and its consolidated subsidiaries, calculated based on
results from continuing operations, for each of the periods indicated:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges.......................... 2.31 2.77 3.22 2.87 3.43
==== ==== ==== ==== ====
</TABLE>
3
<PAGE> 19
DESCRIPTION OF SECURITIES
The Securities are to be issued pursuant to the provisions of an indenture
(hereinafter called the "Indenture") dated as of November 1, 1996 between the
Company, then known as New Tenneco Inc., and The Chase Manhattan Bank, as
Trustee (hereinafter called the "Trustee"). The following statements are
summaries of certain provisions contained in the Indenture, a copy of which is
filed as an exhibit to the registration statement of which this Prospectus is a
part. They do not purport to be complete statements of all the terms and
provisions of the Indenture, and reference is made to the Indenture for full and
complete statements of such terms and provisions. As used under this caption,
the term "Debt Securities" means all evidences of indebtedness for money
borrowed which have been or may be issued under the Indenture and will include
the Securities if and when issued.
GENERAL
The Indenture does not limit the amount of Debt Securities that may be
issued thereunder and provides that Debt Securities may be issued thereunder
from time to time in one or more series as from time to time authorized by
Tenneco. The Debt Securities are and will be unsubordinated and unsecured
obligations of Tenneco and will rank pari passu with other unsubordinated and
unsecured obligations of Tenneco (including trade payables). Claims of holders
of Debt Securities, including the Securities, will be effectively subordinated
to the claims of holders of the debt (including trade payables) of Tenneco's
subsidiaries with respect to the assets of such subsidiaries. At December 31,
1996, Tenneco had approximately $2,215 million ($2,079 million face amount), and
Tenneco's subsidiaries had approximately $88 million ($110 million face amount),
of total short-term and long-term debt (excluding trade payables and
intercompany debt), respectively.
The Indenture does not limit the amount of other indebtedness or securities
which may be issued by the Company, although the issuance, assumption or
guarantee of indebtedness secured by certain property is subject to the
restrictions described under "-- Certain Covenants of Tenneco." There are no
provisions of the Indenture which will afford holders of the Securities
protection in the event of a highly leveraged transaction involving the Company.
The Prospectus Supplement sets forth the following terms of the Securities
in respect of which this Prospectus is delivered: (i) the designation of such
Securities; (ii) the aggregate principal amount of such Securities; (iii) the
percentage of principal amount at which such Securities will be issued; (iv) the
date or dates on which such Securities will mature; (v) the rate or rates, if
any, per annum (which may be fixed or variable) at which such Securities will
bear interest or the method of determining such rate or rates; (vi) the times at
which such interest, if any, will be payable; (vii) the date, if any, after
which such Securities may be redeemed, or any applicable sinking fund
requirements, and the redemption price or prices; (viii) the currency in which
the Securities will be denominated (if other than U.S. dollars); and (ix) any
other special terms.
CERTAIN COVENANTS OF TENNECO
Negative Pledge. If Tenneco or any Restricted Subsidiary (as defined below)
shall issue, assume, incur or guarantee any Debt (as defined below) secured by a
Mortgage (as defined below) on any Principal Manufacturing Property (as defined
below) of Tenneco or any Restricted Subsidiary or on any shares of capital stock
or Debt of any Restricted Subsidiary, Tenneco will secure, or cause such
Restricted Subsidiary to secure, the outstanding Debt Securities equally and
ratably with such secured Debt, unless after giving effect thereto the aggregate
amount of all such secured Debt together with all Attributable Debt (as defined
below) of Tenneco and its Subsidiaries (as defined below) in respect of sale and
leaseback transactions involving Principal Manufacturing Properties would not
exceed 15% of the Consolidated Net Tangible Assets (as defined below) of Tenneco
and its consolidated Subsidiaries. This restriction generally does not apply in
the case of:
(a) the creation of Mortgages on any Principal Manufacturing Property
acquired by Tenneco or a Restricted Subsidiary after the date of the
Indenture to secure or provide for the payment or financing of all or any
part of the purchase price thereof or construction of fixed improvements
thereon (prior to, at the time of or within 180 days after the latest of
the acquisition, completion of construction or
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<PAGE> 20
commencement of commercial operation thereof), or existing Mortgages on any
Principal Manufacturing Property acquired by Tenneco or a Restricted
Subsidiary (whether or not such Mortgages are assumed), provided the
Mortgage shall not apply to any property theretofore owned by Tenneco or a
Restricted Subsidiary, other than any theretofore unimproved real property;
(b) any Mortgages on any Principal Manufacturing Property of a
corporation which is merged into or consolidated with Tenneco or a
Restricted Subsidiary or substantially all of the assets of which are
acquired by Tenneco or a Restricted Subsidiary (whether or not the
obligations secured thereby are assumed by Tenneco or a Restricted
Subsidiary);
(c) Mortgages in favor of governmental bodies of the United States or
any State thereof or any other country or any political subdivision thereof
to secure partial, progress, advance or other payments pursuant to any
contract or statute, or to secure any Debt incurred or guaranteed for the
purpose of financing all or any part of the cost of acquiring, constructing
or improving the property subject to such Mortgages;
(d) Mortgages on particular property (or any proceeds of the sale
thereof) to secure all or any part of the cost of exploration, drilling,
mining, development, maintenance or operation thereof intended to obtain or
increase the production and sale or other disposition of oil, gas, coal,
natural gas, carbon dioxide, sulphur, helium, metals, minerals, steam,
timber, or other natural resources therefrom, or any Debt created, issued,
assumed or guaranteed to provide funds for any or all such purposes;
(e) Mortgages securing Debt of a Restricted Subsidiary owing to
Tenneco or another Restricted Subsidiary;
(f) Mortgages on any Principal Manufacturing Property of Tenneco or a
Restricted Subsidiary which Mortgages were in existence on the date of the
Indenture; provided, however, that each such Mortgage shall be limited to
all or a part of the property which secured such Mortgage at such date
(plus improvements and construction on such property);
(g) certain extensions, renewals or replacements of Mortgages referred
to in the foregoing clauses; and
(h) Permitted Mortgages (as defined below).
(Section 3.6 of the Indenture.) The Indenture does not restrict the
incurrence of unsecured debt by Tenneco or any Subsidiary.
Restrictions on Sale and Leaseback Transactions. Neither Tenneco nor any
Restricted Subsidiary may, after the effective date of the Indenture, enter into
any sale and leaseback transaction involving any Principal Manufacturing
Property, unless the net proceeds of the sale or transfer of such property shall
be at least equal to the fair value of the property (as determined by resolution
adopted by the Board of Directors of Tenneco) and:
(a) Tenneco or such Restricted Subsidiary would be entitled to create
or assume Debt secured by a Mortgage on such property as described in
clauses (a)-(h) under "Negative Pledge" in an amount equal to the
Attributable Debt with respect to the sale and leaseback transaction
without equally and ratably securing the outstanding Debt Securities;
(b) during the period commencing 12 months prior to and ending 12
months after a sale and leaseback transaction, Tenneco or such Restricted
Subsidiary expends for facilities comprising a Principal Manufacturing
Property (or part thereof) all or a part of the net proceeds of such sale
and leaseback transaction and elects to designate such amount as a credit
against such sale and leaseback transaction; or
(c) to the extent not credited as described above, Tenneco applies to
the retirement of long-term Debt of Tenneco or any Restricted Subsidiary
(other than certain intercompany debt) an amount equal to the Attributable
Debt with respect to such sale and leaseback transaction.
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<PAGE> 21
(Section 3.6 of the Indenture.) This restriction does not apply to any sale and
leaseback transaction (a) between Tenneco and a Restricted Subsidiary or between
Restricted Subsidiaries, (b) involving the taking back of a lease for a period
of three years or less, or (c) if after giving effect to a sale and leaseback
transaction, permitted secured debt plus Attributable Debt of Tenneco and its
Subsidiaries in respect of sale and leaseback transactions involving Principal
Manufacturing Properties would not exceed 15% of the Consolidated Net Tangible
Assets of Tenneco and its consolidated Subsidiaries.
Except as may be applicable to a particular series of Securities that may
be issued in the future, there are no covenants or other provisions in the
Indenture providing for a put or increased interest or that would otherwise
afford holders of Securities additional protection in the event of a
recapitalization transaction, a change of control of the Company or a highly
leveraged transaction.
The following terms which are used in the Indenture have the meanings set
forth below:
"Attributable Debt" means the total net amount of the rent required to be
paid during the remaining term of any lease, discounted at the weighted average
rate per annum then borne by the outstanding Debt Securities. (Section 1.1 of
the Indenture.)
"Consolidated Net Tangible Assets" means the total assets shown on the
consolidated balance sheet of Tenneco and its consolidated Subsidiaries for the
most recent fiscal quarter, after deducting the amount of all current
liabilities and intangible assets. (Section 1.1 of the Indenture.)
"Debt" of any person shall mean any debt for money borrowed which is
issued, assumed, incurred or guaranteed in any manner by such person. (Section
1.1 of the Indenture.)
"Mortgage" means any mortgage, pledge, lien or other encumbrance securing
Debt of any person. (Section 1.1 of the Indenture.)
"Permitted Mortgage" means:
(a) any governmental, mechanics', materialmen's, carriers' or similar
lien created in the ordinary course of business which is not yet due or
which is being contested in good faith by appropriate proceedings and any
undetermined lien which is incidental to construction;
(b) any right reserved to, or vested in, any municipality or public
authority by the terms of any right, power, franchise, grant, license,
permit or by any provision of law, to purchase or recapture or to designate
a purchaser of, any property;
(c) any lien of taxes and assessments which is (A) for the current
year, (B) not at the time delinquent or (C) delinquent but the validity of
which is being contested at the time by Tenneco or any Subsidiary in good
faith;
(d) any lien arising from or in connection with a conveyance by
Tenneco or any Subsidiary of any production payment with respect to oil,
gas, natural gas, carbon dioxide, sulphur, helium, coal, metals, minerals,
steam, timber or other natural resources;
(e) any lien to secure obligations imposed by statute or governmental
regulations; or
(f) any lien of, or to secure performance of, leases (other than
leases relating to a sale and leaseback transaction). (Section 1.1 of the
Indenture.)
"Principal Manufacturing Property" means any manufacturing plant or testing
or research and development facility of Tenneco or a Subsidiary located in the
United States unless the Tenneco Board of Directors determines that such plant
or facility is not of material importance to the total business conducted by
Tenneco and its consolidated Subsidiaries. "Principal Manufacturing Property"
shall include, without limitation, additions, improvements, replacements,
repairs, fixtures, appurtenances or component parts of any such plant or
facility attaching to or required to be attached to property or assets pursuant
to the terms of any Mortgage (including, without limitation, pursuant to any
"after-acquired property" clause or similar term thereof). (Section 1.1 of the
Indenture.)
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<PAGE> 22
"Restricted Subsidiary" means any Subsidiary owning or leasing any
Principal Manufacturing Property. (Section 1.1 of the Indenture.)
"Subsidiary" means any corporation, partnership or other entity of which
more than 50% of the outstanding voting stock or equity interests is directly or
indirectly owned or controlled by Tenneco. (Section 1.1 of the Indenture.)
CONSOLIDATION, MERGER AND SALE OF ASSETS
Tenneco may not merge or consolidate with any other person or sell, lease
or convey substantially all of its assets to any person, unless (i) either
Tenneco is the continuing entity or the successor or transferee or lessee is a
corporation organized under the laws of the United States, any State thereof or
the District of Columbia and expressly assumes Tenneco's obligations under the
Debt Securities and the Indenture, and (ii) immediately after giving effect to
the transaction Tenneco, such person or such successor corporation, as the case
may be, shall not be in default of any such obligations. (Section 9.1 of the
Indenture.) Upon any such consolidation, merger, sale, lease or conveyance the
successor corporation formed by such consolidation, or into which Tenneco is
merged or to which such sale, lease or conveyance is made, shall succeed to, and
be substituted for Tenneco under the Indenture and under the Debt Securities.
(Section 9.2 of the Indenture.)
EVENTS OF DEFAULT
Any one of the following events will constitute an "Event of Default" under
the Indenture with respect to Debt Securities of any series: (i) failure to pay
any interest on any Debt Security of that series when due and continuance of
such default for 30 days; (ii) failure to pay principal of any Debt Security of
that series when due, either at maturity, upon any redemption, by declaration or
otherwise; (iii) failure to observe or perform any other of the covenants or
agreements of Tenneco in the Indenture (other than a covenant the default or
breach of which is otherwise specifically dealt with in the Indenture) for 60
days after written notice as provided in the Indenture; (iv) certain events of
bankruptcy, insolvency or reorganization of Tenneco; or (v) any other Event of
Default provided in a supplemental indenture with respect to, or the form of,
Debt Securities of that series. (Section 5.1 of the Indenture.)
If any Event of Default occurs and is continuing, either the Trustee or the
holders of at least 25% in aggregate principal amount of the outstanding Debt
Securities of each affected series (or, in certain instances, all series),
voting as a single class, by written notice to Tenneco (and to the Trustee, if
given by such holders of Debt Securities), may declare the principal amount of
(or, if the Debt Securities of an affected series are original issue discount
debt securities, such portion of the principal amount as may be specified
therefor) and accrued interest on all the Debt Securities of each affected
series to be due and payable immediately. At any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree based on such acceleration has been obtained, the
holders of a majority in aggregate principal amount of outstanding Debt
Securities of that series may, under certain circumstances, rescind and annul
such acceleration. (Section 5.1 of the Indenture.)
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default with respect to the Debt Securities of any series, give
to the holders of the Debt Securities of that series notice of all defaults
known to it unless such default shall have been cured or waived; provided that
except in the case of a default in payment on the Debt Securities of that
series, the Trustee may withhold the notice if and so long as it in good faith
determines that withholding such notice is in the interests of the holders of
the Debt Securities of that series. (Section 5.11 of the Indenture.)
The Indenture provides that the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of each series affected
(with all such series voting as a single class) may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee for
such series, or exercising any trust or power conferred on the Trustee. (Section
5.9 of the Indenture.)
The holders of a majority in aggregate principal amount outstanding of all
series of Debt Securities with respect to which an Event of Default has occurred
(voting as a single class) by notice to the Trustee and prior
7
<PAGE> 23
to acceleration of the maturity thereof may waive, on behalf of the holders of
all Debt Securities of all such series, any past default or Event of Default
with respect to that series and its consequences except in respect of a covenant
or provision of the Indenture which cannot under the terms of the Indenture be
amended or modified without the consent of the holder of each outstanding Debt
Security affected. (Section 5.10 of the Indenture.)
The Indenture includes a covenant that Tenneco will file annually with the
Trustee a certificate as to Tenneco's compliance with all conditions and
covenants of the Indenture. (Section 3.5 of the Indenture.)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting Tenneco and the Trustee to
enter into one or more supplemental indentures without the consent of the
holders of any of the Debt Securities in order: (i) to transfer or pledge any
property to the Trustee as security for the Debt Securities of any series; (ii)
to evidence the succession of another corporation to Tenneco and the assumption
of the covenants of Tenneco by a successor to Tenneco; (iii) to add to the
covenants of Tenneco such further covenants or provisions so as to further
protect the holders of Debt Securities; (iv) to establish the form or terms of
Debt Securities; (v) to evidence and provide for successor trustees; or (vi) to
cure any ambiguity or correct or supplement any defective provisions or to make
any other provisions as Tenneco deems necessary or desirable, provided such
action does not adversely affect the interests of any holder of Debt Securities
of any series. (Section 8.1 of the Indenture.)
The Indenture also contains provisions permitting Tenneco and the Trustee,
with the consent of the holders of a majority in aggregate principal amount of
the outstanding Debt Securities affected by such supplemental indenture (voting
as one class), to execute supplemental indentures adding any provisions to or
changing or eliminating any of the provisions of the Indenture or any
supplemental indenture or modifying the rights of the holders of Debt Securities
of such series, except that no such supplemental indenture may, without the
consent of the holder of each Debt Security so affected: (i) extend the time for
payment of principal or interest on any Debt Security; (ii) reduce the principal
of, or the rate of interest on, any Debt Security; (iii) reduce the amount of
premium, if any, payable upon the redemption of any Debt Security; (iv) reduce
the amount of principal payable upon acceleration of the maturity of any
original issue discount security; (v) change the currency or currency unit in
which any Debt Security or any premium or interest thereon is payable; (vi)
impair the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security; or (vii) reduce the percentage in principal amount
of the outstanding Debt Securities affected thereby the consent of whose holders
is required for modification or amendment of the Indenture. (Section 8.2 of the
Indenture.)
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that Tenneco, at its option, (a) will be discharged
from any and all obligations ("defeasance") in respect of the Debt Securities of
any series (except for certain obligations to register the transfer or exchange
of Debt Securities of such series, replace stolen, lost or mutilated Debt
Securities of such series, maintain paying agencies and hold moneys for payment
in trust) or (b) need not comply with certain covenants of the Indenture,
including those described under "Certain Covenants of Tenneco" and "--
Consolidation, Merger and Sale of Assets," and the occurrence of an event
described in clause (iii) of the first paragraph under "-- Events of Default"
shall no longer be an Event of Default ("covenant defeasance"), in each case, if
Tenneco deposits, in trust, with the Trustee money or, in certain cases, U.S.
Government Obligations (as defined below) which through the payment of interest
and principal in accordance with their terms will provide money, in an amount
sufficient to pay all the principal of (and premium, if any) and interest on the
Debt Securities of such series, and any mandatory sinking fund or analogous
payments, on the dates such payments are due in accordance with the terms of the
Debt Securities of such series. If such defeasance is to occur at least one year
prior to the date such Debt Securities become due and payable or are to be
redeemed such defeasance may only be established if Tenneco shall have delivered
an opinion of counsel to the effect that the holders of Debt Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit or defeasance and will be subject to federal income tax on the same
8
<PAGE> 24
amount, in the same manner and at the same times as if such defeasance had not
occurred. In addition, such opinion of counsel must be based upon a ruling of
the Internal Revenue Service or a change in applicable federal income tax law
occurring after the date of the Indenture. "U.S. Government Obligations" means
obligations issued or guaranteed as to principal and interest by the United
States or by an entity controlled or supervised by or acting as an
instrumentality of the United States government. (Article 10 of the Indenture.)
PLAN OF DISTRIBUTION
Tenneco may sell the Securities being offered hereby in four ways: (i)
directly to purchasers, (ii) through agents, (iii) through underwriters and (iv)
through dealers.
Offers to purchase Securities may be solicited directly by Tenneco or by
agents designated by Tenneco from time to time. Any such agent, who may be
deemed to be an underwriter as that term is defined in the Securities Act,
involved in the offer or sale of the Securities in respect of which this
Prospectus is delivered will be named, and any commissions payable by Tenneco to
such agent will be set forth, in the Prospectus Supplement. Agents may be
entitled under agreements which may be entered into with Tenneco to
indemnification by Tenneco against certain liabilities, including liabilities
under the Securities Act, and may be customers of, engage in transactions with,
or perform services for, Tenneco in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale of Securities,
Tenneco will execute an underwriting agreement with such underwriters at the
time of sale to them and the names of the underwriters and the terms of the
transaction will be set forth in the Prospectus Supplement, which will be used
by the underwriters to make resales of the Securities in respect of which this
Prospectus is delivered to the public. The underwriters may be entitled, under
the relevant underwriting agreement, to indemnification by Tenneco against
certain liabilities, including liabilities under the Securities Act.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, Tenneco will sell such Securities to the dealer,
as principal. The dealer may then resell such Securities to the public at
varying prices to be determined by such dealer at the time of resale. Dealers
may be entitled to indemnification by Tenneco against certain liabilities,
including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, Tenneco will authorize agents
and underwriters to solicit offers by certain institutions to purchase
Securities from Tenneco at the public offering price set forth in the Prospectus
Supplement pursuant to Delayed Delivery Contracts ("Contracts") providing for
payment and delivery on the date specified in the Prospectus Supplement. Each
Contract will be for an amount not less than, and unless Tenneco otherwise
agrees the aggregate principal amount of Securities sold pursuant to Contracts
shall be not less nor more than, the respective amounts specified in the
Prospectus Supplement. Institutions with whom Contracts, when authorized, may be
made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and other
institutions but shall in all cases be subject to the approval of Tenneco.
Contracts will not be subject to any conditions except that the purchase by an
institution of the Securities covered by its Contract shall not at the time of
delivery be prohibited under the laws of any jurisdiction in the United States
to which such institution is subject and that the issuance of the Securities
covered by any Contract shall not result in the breach of any of the provisions
of or constitute a default under any other agreement or instrument of Tenneco. A
commission indicated in the Prospectus Supplement will be paid to underwriters
and agents soliciting purchases of Securities pursuant to Contracts accepted by
Tenneco.
The place and time of delivery for the Securities in respect of which this
Prospectus is delivered are set forth in the accompanying Prospectus Supplement.
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<PAGE> 25
LEGAL OPINIONS
Certain legal matters in connection with the Securities offered hereby are
being passed upon for Tenneco by Mr. Theodore R. Tetzlaff, General Counsel of
Tenneco and a partner of Jenner & Block, and for any agents or underwriters, as
the case may be, by Messrs. Cahill Gordon & Reindel (a partnership including a
professional corporation), 80 Pine Street, New York, New York. Tenneco has been
advised by Mr. Tetzlaff that at January 31, 1997 he beneficially owned 87,623
shares of Common Stock of Tenneco (including options to purchase 44,118 shares
of Common Stock, which options were either exercisable as of such date or
exercisable within 60 days of such date). Cahill Gordon & Reindel from time to
time performs legal services for the Company and its subsidiaries and members of
Cahill Gordon & Reindel are the beneficial owners of securities of the Company.
EXPERTS
The financial statements and schedules of Tenneco and its consolidated
subsidiaries included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, incorporated by reference in this Prospectus, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report. Reference is made to said report, which includes an explanatory
paragraph with respect to the change in the method of accounting for
postemployment benefits.
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<PAGE> 26
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY TENNECO OR ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF TENNECO SINCE SUCH DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company............................ S-2
Selected Consolidated Financial Data... S-9
Use of Proceeds........................ S-11
Capitalization......................... S-11
Description of Debentures.............. S-12
Underwriting........................... S-15
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 3
Tenneco Inc. .......................... 3
Use of Proceeds........................ 3
Ratio of Earnings to Fixed Charges..... 3
Description of Securities.............. 4
Plan of Distribution................... 9
Legal Opinions......................... 10
Experts................................ 10
</TABLE>
======================================================
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TENNECO INC.
$300,000,000
7 5/8% DEBENTURES
DUE JUNE 15, 2017
PROSPECTUS SUPPLEMENT
Credit Suisse First Boston
Morgan Stanley Dean Witter
Citicorp Securities, Inc.
UBS Securities
======================================================
