LAKE FOREST, Ill. — Tenneco Inc. reported third quarter net income of $10 million, or 17 cents per diluted share, up from a net loss of $8 million, or 17cents per diluted share, in third quarter 2009.

EBIT (earnings before interest, taxes and noncontrolling interests) was $67 million, up 90 percent from $35 million a year ago. Adjusted EBIT was $77 million, up 64 percent from $46 million in third quarter 2009.

“We delivered another strong performance this quarter. Our results reflect our ability to take advantage of higher OE production volumes, which together with an increase in global aftermarket sales drove strong revenue growth and higher earnings,” said Gregg Sherrill, chairman and CEO, Tenneco. “Our results also show our commitment to ongoing actions that drive profitability improvement including managing costs and continuing to improve operational efficiency.”

EBITDA including noncontrolling interests (EBIT before depreciation and amortization) was $122 million, a 35 percent increase from $90 million the prior year. Adjusted EBITDA including noncontrolling interests was $129 million, a 28 percent increase from $101 million a year ago.

Revenue in the third quarter rose to $1.542 billion, a 23 percent increase from $1.254 billion a year ago. Excluding substrate sales and the impact of $22 million in negative currency, revenue increased to $1.201 billion, up 20 percent from $999 million in third quarter 2009. The revenue increase was driven by higher OE production volumes across all regions – particularly North America – and increased global aftermarket sales.

Cash generated by operations in the quarter was $17 million, versus $77 million in third quarter 2009. Inventory days-on-hand and days sales outstanding metrics improved in the quarter; however, the 23 percent increase in revenues drove a greater year-over-year use of cash for operations as the cash demand for accounts receivables and inventories increased.

Tenneco ended the third quarter with net debt at $1.113 billion, down from $1.331 billion a year ago.

The company said stronger earnings drove its leverage ratio – net debt to adjusted EBITDA including noncontrolling interests – to 2.2x, an all-time low and down significantly from 5.0x at September 30, 2009.

Capital expenditures in the quarter were $34 million, up from third quarter 2009 spending of $22 million. Capital expenditures this quarter include investments in light and commercial vehicle customer programs and vehicle launches, and expanding in emerging markets such as India, China and Thailand. In the third quarter, Tenneco opened new facilities in Chennai, India and Guangzhou, China to support future business, beginning with the launch of Nissan’s new global small car platform.

Tenneco said its revenue growth will be driven by global OE light vehicle production volume recovery; increasing ride and emission control content on light vehicle platforms; expanding business in fast-growing automotive markets; and the launch and ramp-up of new higher-content emission control business with commercial vehicle customers, particularly for off-road applications. In the third quarter, the company launched new emission control business with Caterpillar in North America and Deutz in Europe.

The company is launching programs – beginning in the fourth quarter 2009 and through 2011– with 11 different commercial vehicle customers to meet new diesel emissions regulations in China, North America, Europe and South America. Driving this growth is the company’s full suite of diesel aftertreatment solutions, which provides a range of options for different applications and customer powertrain strategies.

“Although the pace of the industry recovery continues to vary by region, Tenneco is well-positioned globally. We are benefiting from the balance across our operations in terms of markets, geography, customers, products and platform mix,” said Sherrill. “We are staying focused and aligned on our three-pillar strategy – technology-driven growth, operational excellence and balance sheet strength. Strong execution on these strategies continues to drive our performance as we launch new business and capture additional growth opportunities.”