<PAGE>
   ____________________________________________________________________
   ____________________________________________________________________


                        SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                __________________

                                    FORM 10-Q

   [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934

   For the quarterly period ended September 30, 1995

                                        OR

   [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934

   For the transition period from ______________ to _______________

                          Commission File Number 1-9864

                                __________________

                                   TENNECO INC.
              (Exact name of registrant as specified in its charter)

            Delaware                       76-0233548
     (State of Incorporation)   (I.R.S. Employer Identification No.)

                      Tenneco Building, Houston, Texas 77002
           (Address of principal executive offices including Zip Code)

   Registrant's telephone number, including area code: (713) 757-2131

                                __________________

       Indicate by check mark whether the registrant (1) has filed all
   reports required to be filed by Section 13 or 15(d) of the Securities
   Exchange Act of 1934 during the preceding 12 months (or for such shorter
   period that the registrant was required to file such reports) and (2) has
   been subject to such filing requirements for the past 90 days.  YES [X] 
   NO [ ]

       Indicate the number of shares outstanding of each of the issuer's
   classes of common stock as of the latest practicable date.

       Common Stock, par value $5 per share: 177,324,860 shares as of
   September 30, 1995.

   ____________________________________________________________________
   ____________________________________________________________________<PAGE>


   <PAGE>
                                TABLE OF CONTENTS
   <TABLE>
   <CAPTION>
                                                                      Page
                                                                      ____
   <S>                                                                <C>
   Part I--Financial Information
     Tenneco Inc. and Consolidated Subsidiaries--
         Statements of Income.....................................      2
         Statements of Cash Flows.................................      5 
         Balance Sheets...........................................      6 
         Statements of Changes in Shareowners' Equity.............      8 
         Statements of Changes in Preferred Stock With 
           Mandatory Redemption Provisions........................      9 
         Notes to Financial Statements............................     10 
         Management's Discussion and Analysis of Financial
           Condition and Results of Operations....................     18 

   Part II--Other Information
     Item 1. Legal Proceedings....................................     27 
     Item 2. Changes in Securities................................      * 
     Item 3. Defaults Upon Senior Securities......................      * 
     Item 4. Submission of Matters to a Vote of Security Holders..      * 
     Item 5. Other Information....................................      * 
     Item 6. Exhibits and Reports on Form 8-K.....................     28 
   </TABLE>
   ________
   * No response to this item is included herein for the reason that
     it is inapplicable or the answer to such item is negative.


























                                        1<PAGE>


     <PAGE>
                                                       PART I
                                               FINANCIAL INFORMATION
                                                STATEMENTS OF INCOME
                                                    (Unaudited)
     <TABLE>
     <CAPTION>
                                                                                Tenneco Inc. and Consolidated Subsidiaries      
                                                                             Three Months Ended              Nine Months Ended
                                                                              September 30,              September 30,         
     (Millions Except Share Amounts)                                        1995          1994           1995           1994   
     <S>                                                                  <C>            <C>           <C>            <C>
     Revenues:
       Net sales and operating revenues--
         Natural gas pipelines.......................................     $       427    $       549   $     1,364    $     1,847 
         Automotive parts............................................             600            511         1,863          1,521 
         Packaging...................................................             665            562         1,983          1,580 
         Shipbuilding................................................             445            424         1,290          1,291 
         Farm and construction equipment.............................               -          1,008             -          3,126 
         Other.......................................................              (1)            (5)           (3)            (9)
                                                                                2,136          3,049         6,497          9,356 
       Other income--
         Interest income.............................................              28             52            96            139 
         Equity in net income of affiliated companies................              34              8           146             39 
         Gain (loss) on sale of businesses and assets, net...........             100             (2)          107             10 
         Other income, net...........................................             (15)           (20)            4            (41)

                                                                                2,283          3,087         6,850          9,503 

     Costs and Expenses:
       Cost of sales (exclusive of depreciation shown below).........           1,302          1,911         3,846          5,760 
       Operating expenses............................................             281            429           973          1,471 
       Selling, general and administrative...........................             188            279           570            847 
       Finance charges--Tenneco Finance..............................              22             30            68            125 
       Depreciation, depletion and amortization......................             113             91           323            300 
       Restructuring costs...........................................               -              -             -            (16)
                                                                                1,906          2,740         5,780          8,487 

     Income Before Interest Expense, Income Taxes and Minority
      Interest.......................................................             377            347         1,070          1,016 
     Interest Expense (net of interest capitalized)..................              78            113           249            306 
     Income Before Income Taxes and Minority Interest................             299            234           821            710 
     Income Tax Expense..............................................              79             72           252            266 
     Income Before Minority Interest.................................             220            162           569            444 
     Minority Interest...............................................               6             12            17             12 
     Income From Continuing Operations...............................             214            150           552            432 
     Income (Loss) From Discontinued Operations, Net of Income Tax...               -              1             -            (12)
     Income Before Extraordinary Loss................................             214            151           552            420 
     Extraordinary Loss, Net of Income Tax...........................               -              -             -             (5)
     Income Before Cumulative Effect of Change in Accounting
      Principle......................................................             214            151           552            415 
     Cumulative Effect of Change in Accounting Principle, Net of
       Income Tax....................................................               -              -             -            (39)
     Net Income......................................................             214            151           552            376 
     Preferred Stock Dividends.......................................               2              2             8              9 
     Net Income to Common Stock......................................     $       212    $       149   $       544    $       367 

     Average Number of Shares of Common Stock Outstanding............     172,429,542    180,902,646   174,804,413    179,811,774 

     Earnings (Loss) Per Average Share of Common Stock:<PAGE>


       Continuing operations.........................................     $      1.23    $      0.81   $      3.11    $      2.35 
       Discontinued operations.......................................               -           0.01             -          (0.06)
       Extraordinary loss............................................               -              -             -          (0.03)
       Cumulative effect of change in accounting principle...........               -              -             -          (0.22)
                                                                          $      1.23    $      0.82   $      3.11    $      2.04 

     Cash Dividends Per Share of Common Stock........................     $       .40    $       .40   $      1.20    $      1.20 
     </TABLE>

     (The accompanying notes to financial statements are
     an integral part of these statements of income.)

                                                         2<PAGE>


     <PAGE>

     <TABLE>
     <CAPTION>

               
                                                   Tenneco Industrial                              Tenneco Finance            
                                        Three Months Ended     Nine Months Ended    Three Months Ended    Nine Months Ended
                                           September 30,         September 30,          September 30,         September 30,   
     (Millions Except Share Amounts)      1995       1994       1995       1994       1995        1994       1995        1994 
     <S>                                <C>        <C>         <C>        <C>         <C>         <C>        <C>         <C>
     Revenues:
       Net sales and operating
        revenues--
          Natural gas pipelines......   $    427   $    549    $  1,364   $  1,847    $      -    $      -   $      -    $      - 
          Automotive parts...........        600        511      1,863       1,521           -           -          -           - 
          Packaging..................        665        562       1,983      1,580           -           -          -           - 
          Shipbuilding...............        445        424       1,290      1,291           -           -          -           - 
          Farm and construction
           equipment.................          -      1,008           -      3,126           -           -          -           - 
          Other......................         (1)        (5)         (3)        (9)          -           -          -           - 
                                           2,136      3,049       6,497      9,356           -           -          -           - 

       Other income--
          Interest income............         12         20          48         42          32          58        100         255 
          Equity in net income of
           affiliated companies......         38         21         161        115           -           -          -           - 
          Gain (loss) on sale of bus-
           inesses and assets, net...        100         (2)        107         10           -           -          -           - 
          Other income, net..........        (15)       (19)          4        (39)          1           2          4           4 

                                           2,271      3,069       6,817      9,484          33          60        104         259 

     Costs and Expenses:
       Cost of sales (exclusive of
        depreciation shown below)....      1,303      1,913       3,850      5,764           -           -          -           - 
       Operating expenses............        277        438         963      1,492           4          (9)        10         (18)
       Selling, general and 
        administrative...............        191        285         579        947           1           7          1           8 
       Finance charges--Tenneco
        Finance......................          -          -           -          -          22          31         68         129 
       Depreciation, depletion and
        amortization.................        113         91         322        299           -           -          1           1 
       Restructuring costs...........          -          -           -        (16)          -           -          -           - 

                                           1,884      2,727       5,714      8,486          27          29         80         120 
     Income Before Interest Expense,
      Income Taxes and Minority
      Interest.......................        387        342       1,103        998           6          31         24         139 
     Interest Expense (net of 
      interest capitalized)..........         90        119         291        336           -           7          -          15 
     Income Before Income Taxes and
      Minority Interest..............        297        223         812        662           6          24         24         124 
     Income Tax Expense..............         77         63         243        220           2           9          9          46 
     Income Before Minority Interest.        220        160         569        442           4          15         15          78 
     Minority Interest...............          6         10          17         10           -           2          -           2 
     Income From Continuing
      Operations.....................        214        150         552        432           4          13         15          76 
     Income (Loss) From Discontinued
      Operations, Net of Income Tax..          -          1           -        (12)          -           -          -           - <PAGE>


     Income Before Extraordinary
      Loss...........................        214        151         552        420           4          13         15          76 
     Extraordinary Loss, Net of
      Income Tax.....................          -          -           -         (5)          -           -          -          (4)
     Income Before Cumulative Effect
      of Change in Accounting
      Principle......................        214        151         552        415           4          13         15          72 
     Cumulative Effect of Change in
      Accounting Principle, Net of
      Income Tax.....................          -          -           -        (39)          -           -          -           - 
     Net Income......................        214        151         552        376           4          13         15          72 
     Preferred Stock Dividends.......          2          2           8          9           -           -          -           - 
     Net Income to Common Stock......   $    212   $    149    $    544   $    367    $      4    $     13   $     15    $     72 
     </TABLE>

     (Reference is made to Note 1 for definitions of 
     "Tenneco Industrial" and "Tenneco Finance.")


                                                         3<PAGE>


   <PAGE>




















   [THIS PAGE INTENTIONALLY LEFT BLANK]<PAGE>









                                  4<PAGE>


     <PAGE>
                                              STATEMENTS OF CASH FLOWS
                                                    (Unaudited)
     <TABLE>
     <CAPTION>
                                                                         Tenneco Inc. and
                                                                           Consolidated
                                                                           Subsidiaries      Tenneco Industrial    Tenneco Finance 
                                                                         Nine Months Ended    Nine Months Ended   Nine Months Ended
                                                                         September 30,        September 30,       September 30,   
     (Million)                                                          1995     1994        1995     1994       1995     1994    
     <S>                                                                 <C>      <C>         <C>      <C>         <C>      <C>
     Cash Flows from Operating Activities:
       Income from continuing operations.............................    $  552   $  432      $  552   $  432      $   15   $   76 
       Adjustments to reconcile income from continuing operations to
         cash provided (used) by continuing operations--
         Depreciation, depletion and amortization....................       323      300         322      299           1        1 
         Equity in net (income) loss of affiliated companies, net of
          dividends..................................................       (95)       3         190      (50)          -        -
         Deferred income taxes.......................................         4      (97)          2     (106)          2        9 
         Gain on sale of businesses and assets, net..................      (107)     (10)       (107)     (10)          -        - 
         Changes in components of working capital--
           (Increase) decrease in receivables........................       319     (420)         37   (1,586)        268      809 
           (Increase) decrease in inventories........................      (207)     (93)       (207)     (93)          -        - 
           (Increase) decrease in prepayments and other current
             assets..................................................       (21)      21         (23)      36           -       (8)
           Increase (decrease) in payables...........................      (130)      20        (131)    (173)         (5)      43 
           Increase (decrease) in taxes accrued......................        78      146          78      162           -      (16)
           Increase (decrease) in interest accrued...................       (23)       2         (13)      36         (10)     (34)
           Increase (decrease) in restructuring liability............         -      (60)          -      (60)          -        - 
           Increase (decrease) in natural gas pipeline revenue
            reservation..............................................      (169)     (96)       (169)     (96)          -        - 
           Increase (decrease) in other current liabilities..........       (84)     119         (83)     134          (1)     (15)
         (Increase) decrease in long-term notes and receivables......       260      142           8       36         245       99 
         Take-or-pay (refunds to customers) recoupments, net.........        35       15          35       15           -        - 
         Other.......................................................       (31)      (6)        (28)      20          (2)       4 
           Cash provided (used) by continuing operations.............       704      418         463   (1,004)        513      968 
           Cash provided (used) by discontinued operations...........       (11)      15         (11)      15           -        - 
     Net Cash Provided (Used) by Operating Activities................       693      433         452     (989)        513      968 

     Cash Flows from Investing Activities:
       Net proceeds (expenditures) related to the sale of
        discontinued operations......................................       683      (15)        683      (15)          -        - 
       Net proceeds from sale of businesses and assets...............       591      539         591      539           -        - 
       Expenditures for plant, property and equipment--
         Continuing operations.......................................      (566)    (392)       (566)    (392)          -        - 
         Discontinued operations.....................................        (4)     (47)         (4)     (47)          -        - 
       Acquisitions of businesses....................................      (323)      (4)       (323)      (4)          -        - 
       Investments and other.........................................        20      (29)        526     (276)       (500)      64 
     Net Cash Provided (Used) by Investing Activities................       401       52         907     (195)       (500)      64 

     Cash Flows from Financing Activities:
       Issuance of common, treasury and SECT shares..................        74      152          74      152           -      185 
       Purchase of common stock......................................      (496)      (6)       (496)      (6)          -        - 
       Redemption of preferred stock.................................       (20)     (20)        (20)     (20)          -        - 
       Issuance of long-term debt....................................         -      982           -    1,007           -       12 
       Retirement of long-term debt..................................      (393)  (1,316)       (158)    (109)       (235)  (1,273)
       Net increase (decrease) in short-term debt excluding current
         maturities on long-term debt................................       258      221          (9)     335         289      385 
       Dividends (common and preferred)..............................      (216)    (240)       (216)    (240)       (300)     (18)<PAGE>


     Net Cash Provided (Used) by Financing Activities................      (793)    (227)       (825)   1,119        (246)    (709)

     Effect of Foreign Exchange Rate Changes on Cash and Temporary
       Cash Investments..............................................         6       16           6        6           -       10 
     Increase (Decrease) in Cash and Temporary Cash Investments......       307      274         540      (59)       (233)     333 
     Cash and Temporary Cash Investments, January 1..................       405      218         172      213         233        5 
     Cash and Temporary Cash Investments, September 30 (Note)........    $  712   $  492      $  712   $  154      $    -   $  338 

     Cash Paid During the Period for:
       Interest......................................................    $  331   $  454      $  297   $  343      $   77   $  183 
       Income taxes (net of refunds).................................    $  251   $   93      $  244   $   42      $    7   $   51 
     </TABLE>
               
     Note: Cash and temporary cash investments include highly liquid investments
           with a maturity of three months or less at date of purchase.

     (The accompanying notes to financial statements are
     an integral part of these statements of cash flows.)
     (Reference is made to Note 1 for definitions of 
     "Tenneco Industrial "and "Tenneco Finance.")
                                                         5<PAGE>


     <PAGE>
                                                   BALANCE SHEETS
                                                    (Unaudited)
     <TABLE>
     <CAPTION>
                                                                                            Tenneco Inc. and
                                                                                       Consolidated Subsidiaries        
                                                                              September 30,  December 31,  September 30,
     (Millions)                                                                 1995          1994           1994     
     <S>                                                                       <C>            <C>           <C>
     Assets
     Current Assets:
       Cash and temporary cash investments..............................       $     712      $     405     $     492 
       Receivables--
          Customer notes and accounts (net).............................           1,026          1,535         3,254 
          Affiliated companies..........................................              58             67             1 
          Gas transportation and exchange...............................             145            214           330 
          Income taxes..................................................             104            234             - 
          Other.........................................................             299            192           228 
       Inventories--
          Finished goods................................................             312            355           947 
          Work in process...............................................              96             83           193 
          Long-term contracts in progress, less progress billings.......             227            138           100 
          Raw materials.................................................             215            178           322 
          Materials and supplies........................................             152            156           158 
       Deferred income taxes............................................              56             23           150 
       Prepayments and other............................................             263            315           350 
                                                                                   3,665          3,895         6,525 
     Investments and Other Assets:
       Investment in affiliated companies...............................             696            997           499 
       Other investments, at cost.......................................              60             47            52 
       Long-term receivables--
          Notes and other (net).........................................             518            805         1,746 
          Affiliated companies..........................................             285            264             - 
       Investment in subsidiaries in excess of fair value of net assets 
         at date of acquisition, less amortization......................             327            331           403 
       Deferred income taxes............................................              53             49            54 
       Other............................................................           1,408            927         1,124 
                                                                                   3,347          3,420         3,878 
     Plant, Property and Equipment, at cost.............................          11,000         11,108        12,579 
       Less--Reserves for depreciation, depletion and amortization......           5,629          5,881         6,672 
                                                                                   5,371          5,227         5,907 
                                                                               $  12,383      $  12,542     $  16,310 
     Liabilities and Shareowners' Equity
     Current Liabilities:
       Short-term debt (including current maturities on long-term debt).       $     666      $     545     $   1,408 
       Payables--
          Trade.........................................................             846          1,053         1,323 
          Affiliated companies..........................................               1             35            18 
          Gas transportation and exchange...............................             117            159           218 
       Taxes accrued....................................................              99             86           307 
       Interest accrued.................................................             142            127           170 
       Restructuring liability..........................................               -              -           151 
       Natural gas pipeline revenue reservation.........................              13            190           182 
       Other............................................................             991            859         1,441 
                                                                                   2,875          3,054         5,218 
     Long-term Debt.....................................................           3,310          3,570         4,616 
     Deferred Income Taxes..............................................           1,333          1,459         1,176 
     Postretirement Benefits............................................             603            603           795 
     Deferred Credits and Other Liabilities.............................             689            489           790 <PAGE>


     Commitments and Contingencies

     Minority Interest..................................................             315            320           586 

     Preferred Stock with Mandatory Redemption Provisions...............             129            147           146 

     Shareowners' Equity:
       Series A preferred stock.........................................               -              -             9 
       Common stock.....................................................             957            957           870 
       Stock Employee Compensation Trust (common stock held in trust)...            (232)          (298)         (348)
       Premium on common stock and other capital surplus................           3,588          3,553         3,653 
       Cumulative translation adjustments...............................              36           (237)         (214)
       Retained earnings (accumulated deficit)..........................            (578)          (905)         (855)
                                                                                   3,771          3,070         3,115 
       Less--Shares held as treasury stock, at cost.....................             642            170           132 
                                                                                   3,129          2,900         2,983 
                                                                               $  12,383      $  12,542     $  16,310 
     </TABLE>
     (The accompanying notes to financial statements are
     an integral part of these balance sheets.)
                                                         6<PAGE>


     <PAGE>
     <TABLE>
     <CAPTION>

                                                       Tenneco Industrial                            Tenneco Finance             
                                           September 30,  December 31,  September 30,  September 30,  December 31,  September 30,
     (Millions)                                1995          1994           1994           1995          1994           1994     
     <S>                                      <C>            <C>          <C>            <C>           <C>           <C>
     Assets
     Current Assets:
       Cash and temporary cash investments..  $     712      $     172    $     154      $       -     $     233     $     338 
       Receivables--
         Customer notes and accounts (net).         479            650        2,207            544           882         1,044 
         Affiliated companies..............          60             65          192             36           186           412 
         Gas transportation and exchange...         145            214          330              -             -             - 
         Income taxes......................         104            234            -              -             -             - 
         Other.............................         293            187          216              6             5            12 
       Inventories--
         Finished goods....................         312            355          947              -             -             - 
         Work in process...................          96             83          193              -             -             - 
         Long-term contracts in progress,
          less progress billings...........         227            138          100              -             -             - 
         Raw materials.....................         215            178          322              -             -             - 
         Materials and supplies............         152            156          158              -             -             - 
       Deferred income taxes................         56             23          147              -             -             3 
       Prepayments and other................        266            315          338              -             2            14 
                                                  3,117          2,770        5,304            586         1,308         1,823 
     Investments and Other Assets:
       Investment in affiliated companies...        905          1,762        1,397              -             -             - 
       Other investments, at cost...........         60             42           47              -             5             5 
       Long-term receivables--
         Notes and other (net).............         175            214          699            328           566         1,017 
         Affiliated companies..............           -            264            -            285             -             - 
       Investment in subsidiaries in 
        excess of fair value of net assets
        at date of acquisition, less
        amortization........................        327            331          403              -             -             - 
       Deferred income taxes................         53             49           54              -             -             - 
       Other................................      1,421            951        1,163              3             3            10 
                                                  2,941          3,613        3,763            616           574         1,032 
     Plant, Property and Equipment, at
      cost..................................     10,930         11,038       12,510             70            70            69 
       Less--Reserves for depreciation,
        depletion and amortization..........      5,609          5,863        6,654             20            18            18 
                                                  5,321          5,175        5,856             50            52            51 
                                              $  11,379      $  11,558    $  14,923      $   1,252     $   1,934     $   2,906 
     Liabilities and Shareowners' Equity
     Current Liabilities:
       Short-term debt (including current
        maturities on long-term debt).......  $     405      $     310    $     857      $     293     $     410     $   1,135 
       Payables--
         Trade.............................         845          1,053        1,313              1             -            10 
         Affiliated companies..............           7             36           28              -             7            16 
         Gas transportation and exchange...         117            159          218              -             -             - 
       Taxes accrued........................         97             86          303              2             -             4 
       Interest accrued.....................        126            102          151             16            25            19 
       Restructuring liability..............          -              -          151              -             -             - 
       Natural gas pipeline revenue 
        reservation.........................         13            190          182              -             -             - 
       Other................................        982            853        1,405              9             7            40 <PAGE>


                                                  2,592          2,789        4,608            321           449         1,224 
     Long-term Debt.........................      2,604          2,865        3,908            706           705           715 
     Deferred Income Taxes..................      1,318          1,446        1,165             15            13            11 
     Postretirement Benefits................        603            603          795              -             -             - 
     Deferred Credits and Other
      Liabilities...........................        689            488          789              1             2             1 
     Commitment and Contingencies

     Minority Interest......................        315            320          529              -             -            57 

     Preferred Stock with Mandatory
      Redemption Provisions.................        129            147          146              -             -             - 

     Shareowners' Equity:
       Series A preferred stock.............          -              -            9              -             -             - 
       Common stock.........................        957            957          870              -            71            71 
       Stock Employee Compensation Trust
        (common stock held in trust)........       (232)          (298)        (348)             -             -             - 
       Premium on common stock and other
        capital surplus.....................      3,588          3,553        3,653            154           264           401 
       Cumulative translation adjustments...         36           (237)        (214)             -             2             2 
       Retained earnings (accumulated
        deficit)............................       (578)          (905)        (855)            55           428           424 
                                                  3,771          3,070        3,115            209           765           898 
       Less--Shares held as treasury
        stock, at cost......................        642            170          132              -             -             - 
                                                  3,129          2,900        2,983            209           765           898 
                                              $  11,379      $  11,558    $  14,923      $   1,252     $   1,934     $   2,906 
     </TABLE>
     (Reference is made to Note 1 for definitions of 
     "Tenneco Industrial" and "Tenneco Finance.")

                                                         7<PAGE>


     <PAGE>
                                    STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY
                                                    (Unaudited)
     <TABLE>
     <CAPTION>
                                                                           Tenneco Inc. and Consolidated Subsidiaries      
                                                                             Nine Months Ended September 30,             
     (Millions Except Share Amounts)                                      1995                            1994           
                                                                    Shares          Amount         Shares         Amount  
     <S>                                                         <C>             <C>            <C>             <C>         
     Series A Preferred Stock:
        Balance January 1 and September 30..................               -     $         -      8,935,175     $         9 

     Common Stock:
        Balance January 1...................................     191,335,193             957    173,953,012             870 
           Issued pursuant to benefit plans.................           2,900               -         37,996               - 
           Other............................................           4,390               -          1,422               - 
        Balance September 30................................     191,342,483             957    173,992,430             870 

     Stock Employee Compensation Trust (SECT):
        Balance January 1...................................                            (298)                          (499)
           Shares issued....................................                              87                             81 
           Adjustment to market value.......................                             (21)                            70 
        Balance September 30................................                            (232)                          (348)

     Premium on Common Stock and Other Capital Surplus:
        Balance January 1...................................                           3,553                          3,714 
           Premium on common stock issued pursuant to 
             benefit plans..................................                               -                              2 
           Loss on issuance of treasury stock...............                               -                             (2)
           Dividends on shares held by SECT.................                               7                             10 
           Adjustment of SECT to market value...............                              21                            (70)
           Other............................................                               7                             (1)
        Balance September 30................................                           3,588                          3,653 

     Cumulative Translation Adjustments:
        Balance January 1...................................                            (237)                          (303)
           Translation of foreign currency statements.......                              40                             93 
           Sale of investment in foreign subsidiaries.......                             235                              - 
           Hedges of net investment in foreign subsidiaries
             (net of income taxes)..........................                              (2)                            (4)
        Balance September 30................................                              36                           (214)

     Retained Earnings (Accumulated Deficit):
        Balance January 1...................................                            (905)                          (980)
           Net income.......................................                             552                            376 
           Dividends--
              Preferred stock...............................                              (6)                            (6)
              Series A preferred stock......................                               -                            (37)
              Common stock..................................                            (217)                          (205)
           Accretion of excess of redemption value of pre-
             ferred stock over fair value at date of issue..                              (2)                            (3)
        Balance September 30................................                            (578)                          (855)

     Less--Common Stock Held as Treasury Stock, at Cost:
        Balance January 1...................................       3,617,510             170      4,166,835             210 
           Shares acquired..................................      10,411,799             472        213,454              11 
           Shares issued pursuant to benefit and dividend
             reinvestment plans.............................         (11,686)              -     (1,763,504)            (89)
        Balance September 30................................      14,017,623             642      2,616,785             132 <PAGE>


                Total.......................................                     $     3,129                    $     2,983 
     </TABLE>

     (The accompanying notes to financial statements are an
     integral part of these statements of changes in
     shareowners' equity.)

                                                         8<PAGE>


     <PAGE>
                                      STATEMENTS OF CHANGES IN PREFERRED STOCK
                                        WITH MANDATORY REDEMPTION PROVISIONS
                                                    (Unaudited)
     <TABLE>
     <CAPTION>
                                                                            Tenneco Inc. and Consolidated Subsidiaries    
                                                                              Nine Months Ended September 30,            
     (Millions Except Share Amounts)                                        1995                        1994             
                                                                       Shares        Amount        Shares         Amount  
     <S>                                                            <C>           <C>           <C>            <C>
     Preferred Stock:
        Balance January 1.......................................     1,586,764    $     147      1,782,508     $       163 
           Shares redeemed......................................      (195,771)         (20)      (195,744)            (20)
           Accretion of excess of redemption value over fair
             value at date of issue.............................             -            2              -               3 
        Balance September 30....................................     1,390,993    $     129      1,586,764     $       146 
     </TABLE>


     (The accompanying notes to financial statements are an
     integral part of these statements of changes in preferred
     stock with mandatory redemption provisions.)

                                                         9<PAGE>


   <PAGE>
                    TENNECO INC. AND CONSOLIDATED SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS

                                   (Unaudited)

      (1) In the opinion of Tenneco Inc. (hereinafter referred to as the
   "Company"), the accompanying unaudited financial statements of Tenneco
   Inc. and consolidated subsidiaries (hereinafter referred to as "Tenneco")
   contain all adjustments necessary to present fairly the financial position
   as of September 30, 1995, and the results of operations; changes in
   shareowners' equity; changes in preferred stock with mandatory redemption
   provisions; and cash flows for the periods indicated. The financial
   statements of Tenneco include all majority-owned subsidiaries including
   wholly-owned finance subsidiaries. Companies in which at least a 20% to a
   50% voting interest is owned are carried at cost plus equity in
   undistributed earnings since date of acquisition (except for Tenneco's
   Farm and construction equipment segment as noted below) and cumulative
   translation adjustments.

      In June 1994, Tenneco completed an initial public offering ("IPO") of
   approximately 29% of the common stock of Case Corporation ("Case"), the
   holder of Tenneco's Farm and construction equipment segment. In November
   1994, a secondary offering of Case's common stock reduced Tenneco's
   ownership to approximately 44%. A third public offering in August 1995
   reduced Tenneco's ownership further to approximately 21%.  From January
   through November 1994, Case's financial statements were fully consolidated
   with Tenneco's. From July through November 1994, Tenneco's financial
   statements reflected the 29% minority shareowners' interest in Case.
   Subsequent to November 1994, Case was reflected in Tenneco's financial
   statements using the equity method of accounting. See Note 5 for
   additional information regarding Tenneco's investment in Case.

      The accompanying financial statements also include, on a separate and
   supplemental basis, the combination of Tenneco's industrial companies and
   finance companies as follows:

         Tenneco Industrial -- The financial information captioned "Tenneco
                         Industrial" reflects the consolidation of all
                         majority-owned subsidiaries except for the finance
                         subsidiaries. The finance operations have been
                         included using the equity method of accounting
                         whereby the net income and net assets of these
                         companies are reflected, respectively, in the income
                         statement caption, "Equity in net income of
                         affiliated companies," and in the balance sheet
                         caption, "Investment in affiliated companies."

         Tenneco Finance    -- The financial information captioned "Tenneco
                         Finance" reflects the combination of Tenneco's
                         wholly-owned finance subsidiaries.


                                        10<PAGE>


   <PAGE>
                    TENNECO INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO FINANCIAL STATEMENTS--(Continued)

      Prior to the Case IPO, the wholesale (dealer) credit and retail credit
   operations of Case were financed by wholly-owned finance subsidiaries.
   Subsequent to the IPO, the wholesale (dealer) credit operations are being
   financed by Case industrial subsidiaries. As a result of this change,
   interest expense related to the wholesale (dealer) credit operations has
   been reported as "Interest Expense" from July through November 1994,
   rather than "Finance charges-Tenneco Finance" as in prior periods. If the
   first six months of 1994 were reclassified to reflect this prospective
   presentation of interest expense related to wholesale (dealer) credit
   operations, consolidated "Finance charges-Tenneco Finance" would have been
   reduced and "Interest Expense" would have been increased by $18 million
   for the nine months ended September 30, 1994, with no effect on the 1994
   third quarter or on consolidated net income.

      All significant intercompany transactions, including activity within
   and between the "Tenneco Industrial" and "Tenneco Finance" business units,
   have been eliminated.

      The inclusion of Series A preferred stock in the computation of
   earnings per share was antidilutive for the nine months ended September
   30, 1994. In December 1994, all Series A preferred stock was converted
   into common stock.

      Prior years' financial statements have been reclassified where
   appropriate to conform to 1995 presentations.

      (2) Pursuant to Order 636 issued by the Federal Energy Regulatory
   Commission ("FERC") on April 8, 1992, Tennessee Gas Pipeline Company
   ("Tennessee") implemented revisions to its tariff which put into effect on
   September 1, 1993, the restructuring of its transportation, storage and
   sales services. Pursuant to the provisions of Order 636 allowing for the
   recovery of transition costs related to the restructuring, Tennessee has
   made filings to recover gas production costs related to its Bastian Bay
   facilities, the remaining balance of purchased gas ("PGA") costs, stranded
   transportation ("TBO") costs and gas supply realignment ("GSR") costs
   resulting from remaining gas purchase obligations.

      Tennessee's filings to recover production costs related to its Bastian
   Bay facilities have been rejected by the FERC based on the continued use
   of the gas production from the field; however, the FERC recognized the
   ability of Tennessee to file for the recovery of losses upon disposition
   of these assets. Tennessee has filed for appellate review of the FERC
   actions and is confident that the Bastian Bay costs will ultimately be
   recovered as transition costs directly related to Order 636, and no FERC
   order has questioned the ultimate recoverability of these costs.




                                        11<PAGE>


   <PAGE>
                    TENNECO INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO FINANCIAL STATEMENTS--(Continued)

      The filings implementing Tennessee's recovery mechanisms for the
   following transition costs were accepted effective September 1, 1993, and
   made subject to refund pending FERC review: 1) direct-billing of
   unrecovered PGA costs to its former sales customers over a twelve-month
   period, 2) recovery of TBO costs, which Tennessee is obligated to pay
   under existing contracts, through a surcharge from firm transportation
   customers, adjusted annually, and 3) GSR cost recovery of 90% of such
   costs over a period of up to thirty-six months from firm transportation
   customers and recovery of 10% of such costs from interruptible
   transportation customers.

      Following negotiations with its customers, Tennessee filed in July 1994
   with the FERC a Stipulation and Agreement (the "PGA Stipulation"), which
   provides for the recovery of PGA costs of approximately $100 million and
   the recovery of costs associated with the transfer of storage gas
   inventory to new storage customers in Tennessee's restructuring
   proceeding. The PGA Stipulation eliminates all challenges to the PGA
   costs, but establishes a cap on the charges that may be imposed upon
   former sales customers. On November 15, 1994, the FERC issued an order
   approving the PGA Stipulation and resolving all outstanding issues. On
   April 5, 1995, the FERC issued its order on rehearing affirming its
   initial approval of the PGA Stipulation. Tennessee implemented the terms
   of the PGA Stipulation and made refunds in May 1995. The orders approving
   the PGA Stipulation have been appealed to the D.C. Circuit Court of
   Appeals by certain customers. Tennessee believes the PGA Stipulation will
   be upheld on appeal.

      Tennessee is recovering TBO costs formerly incurred to perform its
   sales functions, subject to refund, pending review of data submitted by
   Tennessee. On November 18, 1994, the FERC issued an order on Tennessee's
   initial TBO surcharge filing to recover TBO costs for the twelve-month
   period beginning September 1, 1993. The order required Tennessee to remove
   certain costs from this surcharge. Tennessee has appealed this decision to
   the D.C. Circuit Court of Appeals. On November 30, 1994, Tennessee filed
   with the FERC to collect through a surcharge approximately $25 million
   annually of TBO costs in compliance with the FERC's November 18, 1994
   order, and in a separate filing, Tennessee filed to recover its projected
   annual TBO costs of approximately $21 million for the twelve-month period
   beginning January 1, 1995. The FERC accepted Tennessee's filing to recover
   its projected TBO costs, subject to refund.

      With regard to Tennessee's GSR costs, Tennessee, along with three other
   pipelines, executed four separate settlement agreements with Dakota
   Gasification Company and the U.S. Department of Energy and initiated four
   separate proceedings at the FERC seeking approval to implement the
   settlement agreements. The settlement resolved litigation concerning
   purchases made by Tennessee of synthetic gas produced from the Great
   Plains Coal Gasification plant ("Great Plains"). On October 18, 1994, the 


                                        12<PAGE>


   <PAGE>
                    TENNECO INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO FINANCIAL STATEMENTS--(Continued)

   FERC consolidated the four proceedings and set them for hearing before an
   administrative law judge ("ALJ"). The hearing, which concluded in July
   1995, was limited to the issue of whether the settlement agreements are
   prudent. The ALJ is required to issue his initial decision by December 31,
   1995. The FERC has committed to issuing a final order by December 31,
   1996. Previously, the FERC has ruled that the costs related to the Great
   Plains project are eligible for recovery through GSR and other special
   recovery mechanisms and that the costs are eligible for recovery for the
   duration of the term of the original gas purchase agreements.

      Also related to Tennessee's GSR costs, on October 14, 1993, Tennessee
   was sued in the State District Court of Ector County, Texas, by ICA
   Energy, Inc. ("ICA") and TransTexas Gas Corporation ("TransTexas"). In
   that suit, ICA and TransTexas contended that Tennessee had an obligation
   to purchase gas production which TransTexas thereafter attempted to add
   unilaterally to the reserves originally dedicated to a 1979 gas contract.
   On two subsequent occasions, TransTexas gave Tennessee notice that it was
   adding new production and/or acreage "to the contract." An amendment to
   the pleadings seeks $1.5 billion from Tennessee for alleged damages caused
   by Tennessee's refusal to purchase gas produced from the TransTexas leases
   covering the new production and lands. Neither ICA nor TransTexas were
   original parties to that contract. However, they contend that any stranger
   acquiring a fractional interest in the original committed reserves thereby
   obtains a right to add to the contract unlimited volumes of gas production
   from locations in South Texas. Tennessee filed a motion for summary
   judgment, asserting that the Texas statutes of frauds precluded the
   plaintiffs from adding new production or acreage to the contract. On May
   4, 1995, the trial court granted Tennessee's motion for summary judgment;
   the plaintiffs have filed a notice of appeal.  Thereafter, ICA and
   TransTexas filed a motion for summary judgment on a separate issue
   involving the term "committed reserves" and whether Tennessee has a
   contractual obligation to purchase gas produced from a lease not described
   in the gas contract.  On November 8, 1995, the trial court granted ICA's
   and TransTexas' motion in part.  That order, which is not final, also held
   that ICA's and TransTexas' rights are subject to certain limitations of
   the Texas Business and Commerce Code.  In addition to these defenses,
   which must be resolved at trial, Tennessee has other defenses which it has
   asserted and intends to pursue.  The November 8, 1995 ruling does not
   affect the trial court's previous May 4, 1995 order granting summary
   judgment to Tennessee.

      Tennessee has been engaged in separate settlement and contract
   reformation discussions with holders of certain gas purchase contracts who
   have sued Tennessee. Although Tennessee believes that its defenses in the 







                                        13<PAGE>


   <PAGE>
                    TENNECO INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO FINANCIAL STATEMENTS--(Continued)

   underlying gas purchase contract actions are meritorious, Tennessee
   recorded liabilities in the first quarter of 1995 which it believes are
   adequate to cover the resolution of these matters. On August 1, 1995, the
   Texas Supreme Court affirmed a ruling favorable to Tennessee of the Court
   of Appeals in one of these matters and indicated that it would remand the
   case to the trial court. Motions for rehearing have been filed by the
   producers.  As of the date hereof, the court had not ruled on those
   motions and mandate had not been issued.

      As of September 30, 1995, Tennessee has deferred GSR costs yet to be
   recovered from its customers of approximately $487 million, net of $290
   million previously recovered from its customers, subject to refund.
   Proceedings have commenced to review the recovery of these GSR costs;
   however, the FERC has generally encouraged pipelines to settle such issues
   through negotiations with customers. Although Order 636 contemplates
   complete recovery by pipelines of qualified transition costs, Tennessee is
   engaged in settlement discussions with its customers concerning the amount
   of recoverable GSR costs in response to the FERC and customer statements
   acknowledging the desirability of such settlements.

      Given the uncertainty over the results of ongoing discussions between
   Tennessee and its customers related to the recovery of GSR costs and the
   uncertainty related to predicting the outcome of its gas purchase contract
   reformation efforts and the associated litigation, Tenneco is unable to
   predict the timing or the ultimate impact the resolution of these issues
   will have on its consolidated financial position or results of operations.

      On December 30, 1994, Tennessee filed a general rate increase in Docket
   No. RP95-112 (the "1995 Rate Case"). On January 25, 1995, the FERC
   accepted the filing, suspended its effectiveness for the maximum period of
   five months pursuant to normal regulatory process, and set the matter for
   hearing. On July 1, 1995, Tennessee began collecting rates, subject to
   refund, reflecting an $87 million increase in Tennessee's revenue
   requirement. Settlement discussions with the FERC staff and customers are
   ongoing and Tennessee is reserving revenues it believes adequate to cover
   any refunds which may be required upon final settlement of this
   proceeding.

      Also on January 25, 1995, the FERC issued an order requiring the
   convening of a technical conference to discuss certain issues in the 1995
   Rate Case and concerns expressed in response to operational issues in a
   1995 tariff filing. The concerns include Tennessee's ability to provide
   its shippers with timely and accurate operating and billing information
   and the associated systems costs. Several technical conferences were held
   during the first half of 1995 resulting in modifications to the 1995
   tariff filing, the assignment of certain issues to the 1995 Rate Case for
   final resolution, and the negotiation of a settlement with Tennessee's
   customers as to certain operational tariff issues. On November 1, 1995,
   the FERC approved the settlement of the 1995 tariff issues noting the
   efforts Tennessee has made with its customers. The ultimate resolution of
   these issues may result in adjustments to customer billings.


                                        14<PAGE>


   <PAGE>
                    TENNECO INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO FINANCIAL STATEMENTS--(Continued)

      (3) Reference is made to Note 2 for information concerning gas supply
   litigation. Tenneco Inc. and its subsidiaries are parties to numerous
   other legal proceedings arising from their operations. Tenneco Inc.
   believes that the outcome of these other proceedings, individually and in
   the aggregate, will have no material effect on the financial position or
   results of operations of Tenneco Inc. and its consolidated subsidiaries.

      (4) Since 1988, Tennessee has been engaged in an internal project to
   identify and deal with the presence of polychlorinated biphenyls ("PCBs")
   and other substances of concern, including substances on the U.S.
   Environmental Protection Agency ("EPA") List of Hazardous Substances ("HS
   List") at compressor stations and other facilities operated by both its
   interstate and intrastate natural gas pipeline systems. While conducting
   this project, Tennessee has been in frequent contact with federal and
   state regulatory agencies, both through informal negotiation and formal
   entry of consent orders, in order to assure that its efforts meet
   regulatory requirements.

      Tenneco has established a reserve for Tennessee's environmental
   expenses, which includes: 1) expected remediation expense and associated
   onsite, offsite and groundwater technical studies, 2) legal fees and 3)
   settlement of third party and governmental litigation, including civil
   penalties. Through September 30, 1995, Tenneco has charged approximately
   $121 million against the environmental reserve. Of the remaining reserve,
   $38 million has been recorded on the balance sheet under "Payables-Trade"
   and $104 million under "Deferred Credits and Other Liabilities."

      Due to the current uncertainty regarding the estimated costs of the
   further activity necessary for Tennessee to address the presence of the
   PCBs, the substances on the HS List and other substances of concern on its
   sites, including the requirements for additional site characterization,
   the actual amount of such substances at the sites, and the final,
   site-specific cleanup decisions to be made with respect to cleanup levels
   and remediation technologies, Tennessee cannot at this time accurately
   project what additional costs, if any, may arise from future
   characterization and remediation activities. While there are still many
   uncertainties relating to the ultimate costs which may be incurred, based
   upon Tennessee's evaluation and experience to date, Tenneco continues to
   believe that the amount of the reserve is adequate.

      Tenneco believes that a substantial portion of these costs, which will
   be expended over the next five to ten years, will be recovered from
   customers of its natural gas pipelines. The Stipulation and Agreement
   approved by the FERC in Tennessee's 1991 rate case established procedures
   for resolving the recovery of certain environmental expenditures. These
   environmental costs are currently being collected in Tennessee's rates 







                                        15<PAGE>


   <PAGE>
                    TENNECO INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO FINANCIAL STATEMENTS--(Continued)

   subject to further review and possible refund. Following negotiations with
   its customers, Tennessee in May 1995 filed with the FERC a separate
   Stipulation and Agreement (the "Environmental Stipulation") that addresses
   the recovery of environmental costs currently being recovered in its rates
   and also establishes a mechanism for recovering a substantial portion of
   the environmental costs that will be expended in the future. Upon FERC
   approval, the Environmental Stipulation will become effective as of
   July 1, 1995, and will have no material effect on Tenneco's financial
   position or results of operations. As of September 30, 1995, the balance
   of the regulatory asset is $109 million.

      Tenneco believes that its liability insurance policies in effect during
   the period in which the environmental issues occurred provide coverage for
   remediation costs and related claims. Tennessee has pending litigation in
   a Louisiana state court against its insurance carriers during this period,
   seeking recovery of costs which Tennessee incurred. The issues in dispute
   involve determining: 1) whether the presence of PCBs and other substances
   at each compressor station constituted a separate occurrence for purposes
   of the per-occurrence limits of the policies; 2) the applicability of the
   pollution exclusions in certain policies issued after 1971; 3) the
   applicability of provisions which exclude the environmental impacts
   located solely on the insured's property; 4) whether the term "property
   damage" in the policies will cover the cost of compliance with
   governmental cleanup directives; 5) the allocation of costs to the various
   policies in effect during the period the environmental impact occurred; 6)
   the applicability of provisions excluding pollution that is "expected or
   intended" and 7) the adequacy of notice of claims to insurance carriers.
   Tenneco has completed settlements with and has received payments from the
   majority of the defendant carriers and believes that the likelihood of
   recovery of a portion of its remediation costs and claims against the
   remaining defendant carriers is reasonably possible.

      In July 1994, Tennessee commenced litigation in a Kentucky state court
   against the manufacturer of the PCB-containing lubricant used by
   Tennessee, seeking reimbursement of sums Tennessee has and will incur in
   the defense and settlement of PCB-related claims brought by state and
   federal agencies, private individuals and others. Tennessee anticipates
   that the defendant will raise a variety of issues in dispute of
   Tennessee's claims.

      While Tenneco believes its legal position to be meritorious, Tenneco
   has not adjusted its environmental reserve to reflect any anticipated
   insurance recoveries or recoveries from the manufacturer of the
   PCB-containing lubricant. Recoveries could reduce the amount ultimately
   recoverable from customers.






                                        16<PAGE>


   <PAGE>
                    TENNECO INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO FINANCIAL STATEMENTS--(Continued)

      Tenneco has identified other sites in its various operating divisions
   where environmental remediation expenses may be required should there be a
   change in ownership, operations or applicable regulation.  These
   possibilities cannot be predicted or quantified at this time and
   accordingly, no provision has been recorded.  However, provisions have
   been made for all instances where it has been determined that the
   incurrence of any material remedial expense is probable.

      (5) On August 9, 1995, Tenneco sold in a public offering 16.1 million
   shares of common stock of Case Corporation at $35 per share. Net proceeds
   of approximately $540 million were received, resulting in a gain of $101
   million.  No taxes were payable due to the utilization of previously
   unbenefitted capital loss carryforwards to offset the tax liability
   associated with the transaction. The offering reduced Tenneco's ownership
   in Case from 44% to 21%.

      (6) In September, 1995, Tenneco announced that it had entered into an
   agreement to sell Kern River Corporation which holds a 50% interest in
   Kern River Gas Transmission Company ("Kern River") for approximately $225
   million. The transaction is expected to be finalized in 1995.  Kern River
   owns a 904-mile natural gas pipeline system extending from southwestern
   Wyoming to Bakersfield, California.

      (7) On October 2, 1995, Tenneco announced that it had signed a
   definitive agreement to acquire the Mobil Plastics business from Mobil
   Corporation for $1.27 billion.  The acquired operations will become part
   of Tenneco's packaging division.  Mobil Plastics is the largest North
   American producer of polyethylene and polystyrene packaging.  Mobil
   Plastics' consumer products are sold under the Hefty, Kordite and Baggies
   brand names.  For food service and industrial consumers, Mobil Plastics is
   a leader in polystyrene foam packaging, thermoformed polystyrene packaging
   and polyethylene film products.  The acquisition is scheduled to be
   completed in mid-November.

      (8) In March 1995, the Financial Accounting Standards Board issued
   Statement of Financial Accounting Standards No. 121 which establishes new
   accounting standards for the impairment of long-lived assets and for
   long-lived assets to be disposed of. Tenneco will adopt the new standard
   in the first quarter of 1996 but does not expect that the adoption will
   have a material effect on Tenneco's consolidated financial position or
   results of operations.




              (The above notes are an integral part of the foregoing
                              financial statements.)




                                        17<PAGE>


   <PAGE>
                    TENNECO INC. AND CONSOLIDATED SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   THREE MONTHS RESULTS

   Revenues

      Net sales and operating revenues for the third quarter of 1995 were
   $2.1 billion, down from $3.0 billion in the third quarter of 1994
   primarily due to the exclusion of revenues from Case Corporation and its
   subsidiaries ("Case") as a result of the change to the equity method of
   accounting for Case in December 1994.  (See Note 1 in the "Notes to
   Financial Statements" for additional information.)  Excluding Case,
   revenues increased five percent in the 1995 third quarter compared with
   the third quarter of 1994.

      Natural gas pipelines revenues were down $122 million or 22 percent
   primarily due to the nonregulated sector where both spot prices and
   volumes decreased as a result of increased supply availability and the
   effect of storage reserves on prices.  In the regulated sector, revenues
   declined $25 million due to the continued phase-out of merchant gas sales
   as a result of operating under Order 636 of the Federal Energy Regulatory
   Commission ("FERC").  Automotive parts revenues increased $89 million or
   17 percent, including revenues of $76 million resulting from the November
   1994 acquisition of Heinrich Gillet GmbH & Company ("Gillet").  Packaging
   revenues increased $103 million or 18 percent from strong market
   conditions in the paperboard packaging sector and increased pricing in the
   specialty segment.  Shipbuilding revenues increased $21 million or 5
   percent primarily as a result of higher volume on the aircraft carrier
   RONALD REAGAN.

   Income Before Interest Expense, Income Taxes and Minority Interest
   ("Operating Income")

         Operating income for the third quarter of 1995 was $377 million, up
   $30 million or 9 percent, compared with $347 million for the 1994 third
   quarter.  This improvement was due principally to continuing strong
   performance in packaging's paperboard business and a gain of $101 million
   on the sale of Case stock, partially offset by a $25 million reserve for
   the liquidation of surplus real estate holdings and notes.  The third
   quarter 1994 included a $16 million benefit from a contract settlement
   with Columbia Gas.

      On August 9, 1995, Tenneco sold in a public offering 16.1 million
   shares of common stock of Case Corporation at $35 per share.  Net proceeds
   of approximately $540 million were received, resulting in a gain of $101
   million.  No taxes were payable due to the utilization of previously
   unbenefitted capital loss carryforwards to offset the tax liability
   associated with the transaction.  The offering reduced Tenneco's ownership
   in Case from 44 percent to 21 percent.  The sale resulted in an increase
   to net income of $101 million, or 58 cents per average common share.



                                        18<PAGE>


   <PAGE>
   Natural Gas Pipelines

      Natural gas pipelines reported operating income of $81 million in the
   1995 third quarter compared with $97 million in the 1994 third quarter. 
   Revenues for the third quarter of 1995 decreased to $427 million compared
   with $549 million in the third quarter of 1994. Third quarter 1995
   operating income slightly improved compared with the 1994 third quarter
   after excluding a $2 million lawsuit settlement related to an interstate
   pipeline issue in the 1995 third quarter and a $16 million benefit from a
   contract settlement from Columbia Gas received in the 1994 third quarter.
   Excluding the above special items, operating income in the regulated
   segment was flat compared with the 1994 third quarter.  Higher operating
   income related to the implementation of a new rate structure was offset by
   lower operating income from expiring gas transportation contracts and
   higher administrative expenses.  Operating income in the nonregulated
   segment improved compared with the 1994 third quarter primarily due to the
   acquisition of natural gas pipeline assets from the Pipeline Authority of
   South Australia (PASA), partially offset by decreases in operating income
   as a result of lower natural gas volumes and prices.

      The natural gas pipeline industry is experiencing increasing
   competition, which is the result of actions by the FERC to strengthen
   market forces throughout the industry.  In a number of key markets,
   Tenneco's interstate pipelines face competitive pressure from other major
   pipeline systems, enabling local distribution companies and end users to
   choose a supplier or switch suppliers based on the short-term price of the
   gas and the cost of transportation.  Tenneco's pipelines have been
   required to discount their transportation rates to maintain market share. 
   Additionally, the majority of Tenneco's transportation contracts will be
   expiring over the next five years.  The renegotiation of these contracts
   may be impacted by such competitive factors.  (See Note 2 in the "Notes to
   Financial Statements" for additional information.)

      In September, 1995, Tenneco announced that it had entered into an
   agreement to sell Kern River Corporation which holds a 50 percent interest
   in Kern River Gas Transmission Company ("Kern River") for approximately
   $225 million.  The transaction is expected to be finalized in 1995.  Kern
   River owns a 904-mile natural gas pipeline system extending from
   southwestern Wyoming to Bakersfield, California.

   Automotive Parts

      Automotive parts reported third quarter 1995 operating income of $61
   million compared with $70 million in the 1994 third quarter.  Operating
   income declined in the third quarter of 1995 due primarily to higher
   start-up costs largely related to a new process, hydroforming, which is a
   liquid, high-pressure metal forming application used in the manufacture of
   a new exhaust system for the Ford Taurus.  Revenues for the third quarter
   of 1995 increased to $600 million compared with $511 million in last
   year's third quarter, primarily as a result of the acquisition of Gillet,
   which added $76 million in revenues.  Revenues in the North American
   aftermarket were down 13 percent due to market weakness.  In the North
   American original equipment market, volumes were up 9 percent from last
   year's quarter.  Aftermarket sales were flat worldwide as aftermarket 


                                        19<PAGE>


   <PAGE>
   sales in Europe increased 18 percent from the same quarter a year ago. 
   Original equipment sales grew 54 percent worldwide with much of this
   increase supplied by the Gillet acquisition and the improving European
   economy.

      Tenneco expects new vehicle sales in Europe to continue to improve the
   rest of 1995 and next year and new car and truck production in North
   America to continue at its strong, near record levels throughout 1995. 
   The North American aftermarket, however, is expected to remain sluggish
   through 1995 with a recovery beginning next year.

   Packaging

      Third quarter 1995 operating income for packaging was $111 million, up
   $48 million, compared with $63 million generated in the 1994 third
   quarter.  Revenues for the 1995 third quarter were $665 million compared
   with $562 million in the same period last year.  This increase of 18
   percent was due to continuing strong market conditions in the paperboard
   packaging business and increased pricing in the specialty segment.

      The paperboard packaging business reported operating income of $102
   million in the third quarter of 1995, compared with $42 million in the
   year ago quarter, up more than 140 percent.  The improvement in operating
   income was primarily due to continued strong market conditions, higher
   mill productivity and lower costs for recycled fiber. 

      The outlook for containerboard remains reasonably positive, with
   domestic industry containerboard production for year-to-date September
   1995 up four percent over the same period last year.  September industry
   inventory levels, at 5.5 weeks of supply, are in line with historical
   levels and are expected to decline for the remainder of the year.

      Specialty packaging reported operating income of $9 million in the
   third quarter of 1995, compared with $21 million for the same period last
   year.  Operating income continued to be adversely affected by increased
   raw material costs.  The costs of polystyrene and aluminum reroll were up
   19 percent from the third quarter of 1994.  Raw material costs have
   moderated since the second quarter, however, and fourth quarter unit
   margins should improve.

      On October 2, 1995, Tenneco announced that it had signed a definitive
   agreement to acquire the Mobil Plastics business from Mobil Corporation
   for $1.27 billion.  The acquired operations will become part of Tenneco's
   packaging division.  Mobil Plastics is the largest North American producer
   of polyethylene and polystyrene packaging.  Mobil Plastics' consumer
   products are sold under the Hefty, Kordite and Baggies brand names.  For
   food service and industrial consumers, Mobil Plastics is a leader in
   polystyrene foam packaging, thermoformed polystyrene packaging and
   polyethylene film products.  The acquisition is scheduled to be completed
   in mid-November.

   Shipbuilding

      Shipbuilding reported third quarter 1995 operating income of $35
   million compared with $52 million in the 1994 third quarter.  The $17
   million decline resulted primarily from a $6 million charge for headcount 

                                        20<PAGE>


   <PAGE>
   reductions and a $14 million charge for incremental costs for the
   shipyard's entry into highly competitive commercial markets.  Productivity
   improvements partially offset the decline.  Revenues increased $21 million
   to $445 million in the third quarter of 1995 compared with $424 million in
   the same period last year.

      The backlog at the end of the third quarter of 1995 was $4.9 billion
   and included construction contracts for two LOS ANGELES CLASS submarines,
   three NIMITZ class aircraft carriers, four "Double Eagle" product tankers,
   a conversion contract for two fast SEALIFT ships and the overhaul contract
   for the aircraft carrier USS EISENHOWER.


   Other

      Tenneco recorded $20 million in operating income which represents our
   equity ownership in Case for the third quarter of 1995 compared with $73
   million recorded in the third quarter of 1994.  In August 1995, Tenneco
   sold 16.1 million shares of Case common stock reducing its ownership from
   44 percent to 21 percent and recorded a gain of $101 million on the sale. 
   No taxes were payable due to the utilization of previously unbenefitted
   capital loss carryforwards.  Tenneco's ownership of Case was approximately
   71 percent in the 1994 third quarter.  Other operating income for the 1995
   third quarter also included a $25 million reserve for the liquidation of
   surplus real estate holdings and notes.

   Interest Expense (net of interest capitalized)

      Net interest expense for the third quarter of 1995 was $78 million
   compared with $113 million reported for the 1994 third quarter.  This
   decrease was a result of lower debt stemming from reducing Tenneco's Case
   ownership in late 1994.  Excluding Case's interest expense in the third
   quarter of 1994, interest expense for the third quarter of 1995 would have
   decreased $8 million compared with the third quarter of 1994.  Interest
   capitalized was $2 million for the third quarter of 1995 compared with $1
   million for the 1994 period.

   Income Taxes

      Income tax expense for the third quarter of 1995 was $79 million
   compared with $72 million reported for the 1994 third quarter.  This
   increase was primarily due to higher 1995 pre-tax income excluding the
   $101 million gain on the sale of Case stock.  No taxes were payable on the
   sale of Case stock due to the utilization of previously unbenefitted
   capital loss carryforwards to offset the tax liability related to the
   transaction.

   Discontinued Operations

      Income from discontinued operations in the third quarter of 1994 of $1
   million represented the net income of Tenneco's chemicals division which
   was sold in the fourth quarter of 1994.




                                        21<PAGE>


   <PAGE>
   Earnings Per Average Common Share 

      Net income for the third quarter of 1995 was $214 million, or $1.23 per
   average common share after preferred stock dividends, compared with net
   income of $151 million, or 82 cents per average common share after
   preferred stock dividends in the 1994 third quarter.  Net income for the
   1994 period included $1 million of income from discontinued operations
   (net of income tax).  Preferred stock dividends were $2 million for both
   quarters.

      Average shares outstanding used for the calculation of earnings per
   average common share for the third quarter of 1995 were 172.4 million
   compared with 180.9 million in the 1994 third quarter.  The decrease was
   primarily the result of the common stock repurchase program partially
   offset by the issuance of shares from the stock employee compensation
   trust ("SECT") to employee benefit plans.

   NINE MONTHS RESULTS

   Revenues

      Net sales and operating revenues for the first nine months of 1995 were
   $6.5 billion, down from $9.4 billion reported in 1994 primarily due to the
   exclusion of farm and construction equipment revenues as a result of the
   change to the equity method of accounting for Case in December 1994. 
   Excluding farm and construction equipment revenues for the first nine
   months of 1994, revenues increased four percent compared with the first
   nine months of 1994.  Higher revenues for packaging (up $403 million or 26
   percent) and automotive parts (up $342 million or 22 percent) were
   partially offset by lower revenues for natural gas pipelines (down $483
   million or 26 percent).

   Income Before Interest Expense, Income Taxes and Minority Interest
   ("Operating Income")

      Operating income for the first nine months of 1995 was $1,070 million
   compared with $1,016 million reported for the same period of 1994, an
   improvement of five percent.

      Natural gas pipelines reported operating income of $229 million for the
   first nine months of 1995 compared with $291 million in the same period of
   1994.  Revenues decreased to $1.36 billion compared with $1.85 billion in
   the first nine months of 1994 primarily due to the decline in gas spot
   prices and lower volumes in the nonregulated segment and the phase-out of
   merchant gas sales by the regulated pipelines.  Operating income declined
   in the first nine months of 1995 compared with 1994 mainly due to
   competitive pressures related to operating under FERC Order 636 and the
   $16 million benefit from a contract settlement with Columbia Gas in the
   third quarter of 1994.  Operating income also decreased as a result of
   depressed natural gas volumes and prices in the nonregulated business.

      Automotive parts reported operating income of $195 million for the
   first nine months of 1995 compared with $201 million recorded in the same
   period a year ago.  Year-to-date revenues for 1995 totaled $1.86 billion
   as compared with last year's amount of $1.52 billion.  Revenues increased 


                                        22<PAGE>


   <PAGE>
   primarily as a result of the acquisition of Gillet, which added $249
   million in revenues, and increased European aftermarket revenues.  Profit
   margins declined in the first nine months of 1995 due to higher start-up
   costs associated with a new process discussed in the "Three Months
   Results" and competitive pressures in the North American original
   equipment and aftermarket.

      Shipbuilding reported operating income of $125 million for the nine
   months ended September 1995 compared with $153 million in the year ago
   period.  Revenues were $1.29 billion for the first nine months of both
   1995 and 1994.  Operating income declined primarily as a result of lower
   profit margins on SEALIFT work, incremental costs for shipbuilding's entry
   into highly competitive commercial markets and a charge related to
   personnel reductions.

      Packaging reported operating income of $355 million in the first nine
   months of 1995 compared with $127 million in the prior year period. 
   Revenues were $1.98 billion in the first nine months of 1995 compared with
   $1.58 billion in the first nine months of 1994.  Higher revenues and
   operating income were primarily due to strengthening containerboard
   pricing partially offset by lower operating income in specialty packaging
   associated with higher raw material costs.  In addition, the 1995 first
   quarter operating income included a $14 million gain on the sale of a mill
   in Sylva, North Carolina. 

      Tenneco's other operating income included $94 million for its equity
   ownership in Case's earnings for the first nine months of 1995 compared
   with Case's operating income of $265 million in the first nine months of
   1994.  Also, included in other operating income is the gain on the sale of
   Case stock of $101 million along with a $25 million reserve for the
   liquidation of surplus real estate holdings and notes recorded in the
   third quarter of 1995. 

   Interest Expense (net of interest capitalized)

      Net interest expense decreased from $306 million in the first nine
   months of 1994 to $249 million in the 1995 period, while interest
   capitalized was $5 million for the nine months ended September 1995
   compared with $4 million for the year ago period.  The year-to-year
   comparison of this item is due to the same reason discussed under "Three
   Months Results" above.

   Income Taxes

      Income tax expense for the first nine months of 1995 was $252 million
   compared with $266 million in the 1994 period.  Income tax expense
   decreased in the first nine months of 1995 primarily due to lower pre-tax
   income excluding the gain on the Case sale and Case equity income.  No
   taxes were payable on the sale of Case stock due to the utilization of
   previously unbenefitted capital loss carryforwards to offset the tax
   liability related to the transaction.




                                        23<PAGE>


   <PAGE>
   Discontinued Operations and Extraordinary Loss

      Loss from discontinued operations for the first nine months of 1994 of
   $12 million (net of an income tax benefit of $10 million) included a $21
   million loss (net of income tax benefit of $15 million) on the sale of
   Tenneco's brakes business and a loss of $5 million (net of income tax
   benefit of $5 million) from the brakes operations.  Net income from the
   chemicals operations for the first nine months of 1994 was $14 million,
   net of income tax expense of $10 million.

      The extraordinary loss for the first nine months of 1994 of $5 million
   was attributable to the second quarter early redemption premiums on long-
   term debt.

   Cumulative Effect of a Change in Accounting Principle

      Effective January 1, 1994, Tenneco adopted Statement of Financial
   Accounting Standards ("FAS") No. 112, Employers' Accounting for
   Postemployment Benefits.  This new standard was adopted using the
   cumulative catch-up method and requires employers to account for
   postemployment benefits for former or inactive employees after employment
   but before retirement on the accrual basis rather than the "pay-as-you-go"
   basis.  As a result of the adoption of this statement, the 1994 Statement
   of Income includes an after-tax charge of $39 million, or 22 cents per
   average common share, for the cumulative effect of the accounting change.

   Earnings (Loss) Per Average Common Share

      Income from continuing operations for the first nine months of 1995 was
   $552 million, or $3.11 per average common share after preferred stock
   dividends, compared with income from continuing operations of $432
   million, or $2.35 per average common share after preferred stock
   dividends, in the 1994 first nine months.  Preferred stock dividends were
   $8 million in the first nine months of 1995 and $9 million in the 1994
   period.

      Loss from discontinued operations for the first nine months of 1994 was
   $12 million, or six cents per average common share.  Also included in 1994
   was the charge of $39 million, or 22 cents per average common share,
   related to the cumulative effect of a change in accounting principle.  The
   extraordinary loss for the first nine months of 1994 was $5 million, or
   three cents per average common share.  Net income to common stock for the
   first nine months of 1995 was $544 million, or $3.11 per average common
   share, compared to net income to common stock of $367 million, or $2.04
   per average common share, for the first nine months of 1994.

      Average shares outstanding used for the calculation of earnings per
   average common share for the first nine months of 1995 were 174.8 million
   compared to 179.8 million in the first nine months of 1994.  The decrease
   was primarily the result of the common stock repurchase program partially
   offset by the issuance of SECT shares to employee benefit plans.



                                        24<PAGE>


   <PAGE>
   Cash Flow

      Net cash provided by operating activities was $693 million for the
   first nine months of 1995 compared with $433 million for the same period
   in 1994, an increase of $260 million.  This increase was due primarily to
   an increase in trade receivables sold to Asset Securitization Cooperative
   Corporation partially offset by higher inventories and income tax
   payments. Inventories increased in the first nine months of 1995 due
   primarily to government conversion and repair work, higher anticipated
   sales and increased raw material costs.

      Net cash provided by investing activities in the first nine months of
   1995 was $401 million compared with net cash provided of $52 million in
   the first nine months of 1994.  Proceeds from the sale of discontinued
   operations and assets were higher in the first nine months of 1995 due to
   the completion of an IPO of the Albright & Wilson resulting in net
   proceeds of approximately $700 million and the sale of Case stock for net
   proceeds of approximately $540 million.  The 1994 period includes the
   proceeds from the sale of 29 percent of the common stock of Case in June
   1994.  Higher proceeds from the sale of discontinued operations and assets
   in the first nine months of 1995 were partially offset by higher capital
   spending and the acquisition of businesses.

      Expenditures for plant, property and equipment from continuing
   operations for the first nine months of 1995 were $566 million compared
   with $392 million for the 1994 period.  Increased expenditures for natural
   gas pipelines ($74 million), automotive parts ($71 million), shipbuilding
   ($30 million) and packaging ($61 million) were partially offset by the
   decline for farm and construction equipment ($62 million).

      Cash used for financing activities for the first nine months of 1995
   was $793 million compared with $227 million for the first nine months of
   1994.  In the first nine months of 1995, Tenneco purchased approximately
   $500 million of its common stock as a part of its common stock repurchase
   programs.  Since the repurchase programs began in December 1994, 11.4
   million shares have been acquired at a cost of $513 million.

   Liquidity and Capital Resources

      Capitalization totaled $7.55 billion at September 30, 1995, an increase
   of $67 million from December 31, 1994.  The resulting ratio of total debt
   to capitalization decreased from 55.0 percent at December 31, 1994, to
   52.7 percent at September 30, 1995.  Tenneco's total debt to
   capitalization ratio was 51.1 percent at September 30, 1995, including the
   market value of the SECT shares compared to 52.9 percent at December 31,
   1994.  The major changes in capitalization were: total debt decreased $139
   million, shareowners' equity increased $229 million, minority interest
   decreased $5 million and preferred stock decreased $18 million due to a
   mandatory redemption.






                                        25<PAGE>


   <PAGE>
      Based upon Tenneco's estimates of anticipated needs and circumstances
   of business operations, together with anticipated market conditions and
   including any payments associated with the settlement of the GSR issues,
   Tenneco expects adequate sources of funds to be available to finance its
   future operations through internally generated funds, the sale of assets,
   the use of credit facilities and the issuance of other long-term
   securities.

   Other Matters

      In March 1995, the Financial Accounting Standards Board issued
   Statement of Financial Accounting Standards No. 121 which establishes new
   accounting standards for the impairment of long-lived assets and for long-
   lived assets to be disposed of.  Tenneco will adopt the new standard in
   the first quarter of 1996 but does not expect that the adoption will have
   a material effect on Tenneco's consolidated financial position or results
   of operations.






































                                        26<PAGE>


   <PAGE>
                                     PART II
                                OTHER INFORMATION

   Item 1. Legal Proceedings.

      (1) Environmental Proceedings.

         Tennessee is a party in proceedings involving federal and state
   authorities regarding the past use by Tennessee of a lubricant containing
   polychlorinated biphenyls ("PCBs") in its starting air systems.

         Tennessee has executed a consent order with the United States
   Environmental Protection Agency ("EPA") governing the remediation of its
   compressor stations in Regions IV, V and VI. With respect to the stations
   in Regions II and III, EPA has advised Tennessee that it is deferring to
   the Pennsylvania and New York environmental agencies to specify the
   remediation requirements applicable to Tennessee. Tennessee has executed a
   consent order with the Pennsylvania Department of Environmental Resources
   dated August 1, 1995, governing remediation at the Pennsylvania stations;
   this consent order also obligates Tennessee to pay a civil penalty of
   $500,000. In addition, Tennessee has agreed to fund environmentally
   beneficial projects within the State of Pennsylvania over the next three
   years; those projects are expected to have a total cost to Tennessee of
   approximately $490,000. Tennessee will continue its negotiations with the
   New York Department of Environmental Conservation on remediation at the
   New York stations. Tenneco believes that the ultimate resolution of this
   matter will not have a material adverse effect on the financial condition
   or results of operations of Tenneco Inc. and its consolidated
   subsidiaries.

      (2) Other Proceedings.

         On October 14, 1993, Tennessee was sued in the State District Court
   of Ector County, Texas, by ICA Energy, Inc. ("ICA") and TransTexas Gas
   Corporation ("TransTexas"). In that suit, ICA and TransTexas contended
   that Tennessee had an obligation to purchase gas production which
   TransTexas thereafter attempted to add unilaterally to the reserves
   originally dedicated to a 1979 gas contract. On two subsequent occasions,
   TransTexas gave Tennessee notice that it was adding new production and/or
   acreage "to the contract." An amendment to the pleadings seeks $1.5
   billion from Tennessee for alleged damages caused by Tennessee's refusal
   to purchase gas produced from the TransTexas leases covering the new
   production and lands. Neither ICA nor TransTexas were original parties to
   that contract. However, they contend that any stranger acquiring a
   fractional interest in the original committed reserves thereby obtains a
   right to add to the contract unlimited volumes of gas production from
   locations in South Texas. Tennessee filed a motion for summary judgment,
   asserting that the Texas statutes of frauds precluded the plaintiffs from
   adding new production or acreage to the contract. On May 4, 1995, the
   trial court granted Tennessee's motion for summary judgment; the
   plaintiffs have filed a notice of appeal.  Thereafter, ICA and TransTexas
   filed a motion for summary judgment on a separate issue involving the term
   "committed reserves" and whether Tennessee has a contractual obligation to


                                        27<PAGE>


   <PAGE>
   purchase gas produced from a lease not described in the gas contract.  On
   November 8, 1995, the trial court granted ICA's and TransTexas' motion in
   part.  That order, which is not final, also held that ICA's and
   TransTexas' rights are subject to certain limitations of the Texas
   Business and Commerce Code.  In addition to these defenses, which must be
   resolved at trial, Tennessee has other defenses which it has asserted and
   intends to pursue.  The November 8, 1995 ruling does not affect the trial
   court's previous May 4, 1995 order granting summary judgment to Tennessee.

      (3) Potential Superfund Liability.

         At September 30, 1995, Tenneco has been designated as a potentially
   responsible party in 54 "Superfund" sites. With respect to its pro rata
   share of the remediation costs of certain sites, Tenneco is fully
   indemnified by third parties. With respect to certain other sites, Tenneco
   has sought to resolve its liability through payments to the other
   potentially responsible parties. For the remaining sites, Tenneco has
   estimated its share of the remediation costs to be between $12 million and
   $69 million or 0.4 percent to 2.5 percent of the total remediation costs
   for those sites and has provided reserves that it believes are adequate
   for such costs. Because the clean-up costs are estimates and are subject
   to revision as more information becomes available about the extent of
   remediation required, Tenneco's estimate of its share of remediation costs
   could change. Moreover, liability under the Comprehensive Environmental
   Response, Compensation and Liability Act is joint and several, meaning
   that Tenneco could be required to pay in excess of its pro rata share of
   remediation costs. Tenneco's understanding of the financial strength of
   other potentially responsible parties has been considered, where
   appropriate, in Tenneco's determination of its estimated liability.
   Tenneco does not believe that the costs associated with its current status
   as a potentially responsible party in the Superfund sites described above
   will be material to its consolidated financial position or results of
   operations.

         For additional information concerning environmental matters, see
   Note 4 in the "Notes to Financial Statements" of Tenneco Inc. and
   Consolidated Subsidiaries.


   Item 6. Exhibits and Reports on Form 8-K.

      (a) Exhibits.

         10--Supplemental Pension Agreement, dated September 12, 1995,
            between Dana G. Mead and Tenneco Inc.

         11--Computation of Earnings (Loss) Per Share of Common Stock

         12--Computation of Ratio of Earnings to Fixed Charges

         27--Financial Data Schedule

      (b) Reports on Form 8-K. Tenneco Inc. did not file any Current Reports
   on Form 8-K during the quarter ended September 30, 1995.


                                        28<PAGE>


   <PAGE>

                                    SIGNATURE

      Pursuant to the requirements of the Securities Exchange Act of 1934,
   the Registrant has duly caused this report to be signed on its behalf by
   the undersigned thereunto duly authorized.

                                               TENNECO INC.


   Date:  November 14, 1995                    By       ROBERT T. BLAKELY    

                                                       Robert T. Blakely
                                                  Senior Vice President and
                                                   Chief Financial Officer







































                                        29<PAGE>


   <PAGE>
                                                                    Exhibit 10


                          SUPPLEMENTAL PENSION AGREEMENT
                                     BETWEEN
                                   DANA G. MEAD
                                       AND
                                  TENNECO INC.         


          In consideration of his services to Tenneco Inc. and Tenneco
   Management Company (collectively, the "Company") and for other good and
   valuable consideration, the receipt and sufficiency of which are hereby
   acknowledged, the Company hereby establishes the supplemental pension plan
   (the "Plan") described herein for the benefit of Dana G. Mead ("Mead") and
   his Beneficiaries, as that term is defined herein, and the parties hereto
   agree as follows, effective September 12, 1995:

          1.  Mead shall be entitled to monthly pension benefits from the
   Company in the amount determined under Section 2 hereof commencing on the
   first day of the calendar month immediately following the termination of
   his employment with the Company.

          2.  The monthly pension benefits to which Mead shall be entitled
   shall be equal to the greater of (a) or (b), where

          (a) equals the benefits to which Mead would be entitled under the
              Tenneco Inc. Retirement Plan (the "TRP"), Tenneco Inc. Benefit
              Equalization Plan and Tenneco Inc. Supplemental Executive
              Retirement Plan, computed using Final Average Earnings, as
              defined in Section 3 hereof, and Years of Credited Service, as
              defined in Section 4 hereof, and substituting the rules of
              Sections 1, 5 and 6 hereof for the generally applicable rules
              of such plans; and

          (b) equals 2.48% of Mead's Final Average Earnings, as defined in
              Section 3 hereof, times his Years of Credited Services, as
              defined in Section 4 hereof, but not exceeding 20 Years of
              Credited Service.

          3.  "Final Average Earnings" means the quotient of (i) Mead's
   Earnings, as defined below, for the 3 calendar years in which his Earnings
   were the highest in the 5 consecutive calendar year period ending prior to
   his termination of employment, divided by (ii) 36.  "Earnings" means
   regular base salary plus Executive Incentive Compensation Plan bonus
   earned (regardless of when paid) with respect to that period.

          4.  "Years of Credited Service" means the total of (i) 14 2/3 plus
   (ii) Mead's Actual Tenneco Service, as defined below.  "Actual Tenneco
   Service" means the period, in whole years and fractions thereof with each
   month or portion thereof counting as one-twelfth of one year, from April
   1, 1992 through the date of Mead's termination of employment with the
   Company.

          5.  The benefits provided hereunder shall be paid in the joint and
   50% survivor form of annuity if Mead is married at the time benefits are
   to commence -- i.e., to Mead for life and, after his death, 50% of the
   monthly amount payable during Mead's life continuing to the spouse, if <PAGE>


   <PAGE>
   any, to whom he was legally married at the date of the commencement of
   payment of benefits hereunder and to whom he was so married on the date of
   his death.  There shall be no reduction in the amount of the benefits
   payable during Mead's life on account of payment in the joint and 50%
   survivor form.  The benefits provided hereunder shall be paid in the life
   only form of annuity if Mead is not married at the time that benefit
   payments are to commence.  Subject to the rules stated in the immediately
   following paragraph, Mead may elect to receive such benefits in another
   form which is the actuarial equivalent of the normal form of benefit
   specified above for his marital status at the time in question.  At Mead's
   election, the Company will purchase and distribute to him an annuity
   contract issued by an insurance company acceptable to Mead to provide such
   benefits.

          If his termination of employment is effective after he attains age
   62 or earlier with the consent of the Company, Mead may elect to receive
   such benefits in the form of a lump sum distribution.  If a lump sum
   distribution is elected, it shall be computed under the assumptions then
   in use with respect to the Tenneco Inc. Retirement Plan, or its successor;
   provided, that in no event shall the interest assumption be greater than
   the Pension Benefit Guaranty Corporation immediate annuity interest rate
   in effect as of January 1 of the year in which the payment is to be made,
   and provided further that the mortality table shall be no less favorable
   to Mead or his Beneficiary than the 1983 group annuity table, 50% male,
   50% female mix.

          Mead may elect that the lump sum benefit be paid at some date
   certain which is later than the date specified for benefit commencement in
   Section 1 hereof.  Any such election shall be irrevocable and must be
   filed no later than 90 days prior to the date benefits would otherwise
   commence hereunder.  If he makes such an election, the lump sum amount
   computed above shall be credited with interest at the prime rate
   prevailing from time to time from the date specified in Section 1 above
   until the date of actual payment.

          6.  If Mead dies before commencing to receive the benefits
   described hereunder, his Beneficiary will receive a death benefit in a
   lump sum distribution which is the present value of the benefits which he
   has accrued hereunder as of the date of his death computed in accordance
   with the rules set forth herein, including the interest assumption
   specified in Section 5 hereof.  Without limiting the generality of the
   foregoing, it is specifically provided that the special alternative death
   benefit called for by the TRP as in effect on December 31, 1994, shall
   apply if that produces a higher benefit.  Mead's Beneficiary shall be the
   person or entity which he has designated on a form filed with the Company
   prior to his death.  If, at the time of his death, no valid beneficiary
   designation is on file, his Beneficiary shall be his spouse, or, if his
   spouse does not survive him, his estate.

          7.  The benefits provided hereunder are in lieu of any benefits to
   which Mead might otherwise be entitled under the Tenneco Inc. Retirement
   Plan, Tenneco Inc. Benefit Equalization Plan or Tenneco Inc. Supplemental
   Executive Retirement Plan, but shall not adversely affect his entitlement
   to benefits under any other plan, fund or program maintained by the <PAGE>


   <PAGE>
   Company, nor shall benefits provided under any other such plan fund or
   program be offset against or otherwise reduce the benefits provided for
   hereunder.

          8.  This Plan shall be administered by the Company, and the Company
   shall bear all costs of administration.

          9.  This Plan contains all of the terms agreed upon by the parties
   with respect to the subject matter hereof and supersedes all prior
   agreements, arrangements and communications between the parties dealing
   with such subject matter, whether oral or written, including, without
   limitation, Section 9 of that certain agreement among the parties dated
   March 12, 1992.

          10. Benefits provided for hereunder may not be assigned or
   hypothecated, and to the extent permitted by law, no such benefits shall
   be subject to legal process or attachment for the payment of any claims
   against any person entitled to receive the same.

          11. If it shall be found that any person to whom a payment is due
   hereunder is unable to care for his affairs because of physical or mental
   disability, as determined by a licensed physician, the Company shall have
   the authority to cause the payments becoming due such person to be made to
   the legally appointed guardian of any such person or the spouse, brother,
   sister, or other person as it shall determine.  Payments made pursuant to
   such power shall operate as a complete discharge of the Company.

          12. The Plan shall be construed, regulated and administered
   according to the laws of the State of Texas.

          13. This Plan shall be binding upon any successor (whether direct
   or indirect, by purchase, merger, consolidation, or otherwise) to all or
   substantially all of the business and/or assets of the Company in the same
   manner and to the same extent that the Company would be bound to perform
   if no such succession had taken place.

          14. This Plan may be amended or terminated only by written
   agreement between and among the parties hereto.



                                 DANA G. MEAD                          
                                 Dana G. Mead


                                 TENNECO MANAGEMENT COMPANY


                                 By   ROBERT T. BLAKELY                
                                 Its  Senior Vice President and Chief
                                       Financial Officer


                                 TENNECO INC.


                                 By   KARL A. STEWART                  
                                 Its  Vice President & Secretary       <PAGE>

     <PAGE>                                                  Exhibit 11
                                 TENNECO INC. AND CONSOLIDATED SUBSIDIARIES
                                      COMPUTATION OF EARNINGS (LOSS) PER SHARE
                                                   OF COMMON STOCK
                                                    (Unaudited)
     <TABLE>
     <CAPTION>
                                                                                    (Millions Except Share Amounts)           
                                                                           Three Months Ended            Nine Months Ended
                                                                              September 30,                September 30,      
                                                                            1995          1994            1995         1994   
     <S>                                                                 <C>            <C>           <C>            <C>
     Computation for Statements of Income
       Primary Earnings Per Share (average shares outstanding):
         Income from continuing operations..........................     $       214    $       150   $       552    $       432 
         Income (loss) from discontinued operations, net of
          income tax................................................               -              1             -            (12)
         Income before extraordinary loss...........................             214            151           552            420 
         Extraordinary loss, net of income tax......................               -              -             -             (5)
         Income before cumulative effect of change in accounting
          principle.................................................             214            151           552            415 
         Cumulative effect of change in accounting principle, net 
          of income tax.............................................               -              -             -            (39)
         Net income.................................................             214            151           552            376 
         Preferred stock dividends..................................               2              2             8              9 
         Net income to common stock.................................     $       212    $       149   $       544    $       367 

         Average shares of common stock outstanding (a),(b).........     172,429,542    180,902,646   174,804,413    179,811,774 
         Earnings (loss) per average share of common stock:
           Continuing operations....................................     $      1.23    $       .81   $      3.11    $      2.35 
           Discontinued operations..................................               -            .01             -           (.06)
           Extraordinary loss.......................................               -              -             -           (.03)
           Cumulative effect of change in accounting principle......               -              -             -           (.22)
                                                                         $      1.23    $       .82   $      3.11    $      2.04 
     Additional Computations (c)
       Net income to common stock, per above........................     $       212    $       149   $       544    $       367 
       Primary Earnings Per Share (including common stock
        equivalents):
         Average shares of common stock outstanding (a),(b).........     172,429,542    180,902,646   174,804,413    179,811,774 
         Incremental common shares applicable to common stock
          options based on the common stock daily average market
          price during the period...................................          93,096         63,993        67,648         87,359 
         Incremental common shares applicable to performance units
          based upon the attainment of specified goals..............          27,625              -        27,625              - 
         Average common shares, as adjusted.........................     172,550,263    180,966,639   174,899,686    179,899,133 
         Earnings (loss) per average share of common stock
          (including common stock equivalents):
           Continuing operations....................................     $      1.23    $       .81   $      3.11    $      2.35 
           Discontinued operations..................................               -            .01             -           (.06)
           Extraordinary loss.......................................               -              -             -           (.03)
           Cumulative effect of change in accounting principle......               -              -             -           (.22)
                                                                         $      1.23    $       .82   $      3.11    $      2.04 
       Fully Diluted Earnings Per Share:
         Average shares of common stock outstanding (a),(b).........     172,429,542    180,902,646   174,804,413    179,811,774 
         Incremental common shares applicable to common stock
          options based on the more dilutive of the common stock
          ending or average market price during the period..........          93,096         63,993        72,492         87,359 
         Average common shares issuable assuming conversion of
          Tenneco Inc. 10% loan stock...............................          36,805         41,192        38,242         41,619 
         Incremental common shares applicable to performance units <PAGE>


           based upon the attainment of specified goals.............          27,625              -        27,625              - 
         Average common shares assuming full dilution...............     172,587,068    181,007,831   174,942,772    179,940,752 
         Fully diluted earnings (loss) per average share, assuming
           conversion of all applicable securities:
           Continuing operations....................................     $      1.23    $       .81   $      3.11    $      2.35 
           Discontinued operations..................................               -            .01             -           (.06)
           Extraordinary loss.......................................               -              -             -           (.03)
           Cumulative effect of change in accounting principle......               -              -             -           (.22)
                                                                         $      1.23    $       .82   $      3.11    $      2.04 
     </TABLE>
               
     NOTES: (a)  In 1992, 12,000,000 shares of common stock were issued to the 
                 Stock Employee Compensation Trust ("SECT").  Shares of common 
                 stock issued to a related trust are not considered to be out
                 standing in the computation of average shares of common stock
                 until the shares are utilized to fund the obligations for which
                 the trust was established.  At September 30, 1995, the SECT had
                 utilized 6,933,798 of these shares.
            (b)  Prior to conversion in December 1994, Series A preferred stock 
                 was converted into common stock under the Contingent Share
                 method.  The above computation includes 8,935,175 shares of 
                 Series A preferred stock which were converted into 17,342,763
                 shares of common stock. 
                 In December 1994, all of the outstanding shares of Series A
                 preferred stock were converted into Tenneco Inc. common
                 stock.  The inclusion of Series A preferred stock in the 
                 computation of earnings per share was antidilutive for the nine
                 months ended September 30, 1994.
            (c)  These calculations are submitted in accordance with Securities
                 and Exchange Commission requirements although not required by
                 Accounting Principles Board Opinion No. 15 because they result
                 in dilution of less than 3%.<PAGE>


     <PAGE>                                                     Exhibit 12
                               TENNECO INC. AND CONSOLIDATED SUBSIDIARIES

                      COMBINED WITH 50% OWNED UNCONSOLIDATED SUBSIDIARIES

                       COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                                               (Dollars in Millions)
                                                    (Unaudited)
     <TABLE>
     <CAPTION>
                                                                                           Nine Months Ended
                                                                                             September 30,   
                                                                                            1995       1994  

     <S>                                                                                  <C>        <C>      
     Income from continuing operations............................................        $   552    $    432 
     Add:
         Interest.................................................................            345         457 
         Portion of rentals representative of interest factor.....................             44          50 
         Preferred stock dividend requirements of majority-owned subsidiaries.....             17           - 
         Income tax expense and other taxes on income.............................            253         267 
         Amortization of interest capitalized applicable to nonutility companies..              3           4 
         Interest capitalized applicable to utility companies.....................              1           1 
         Undistributed earnings of affiliated companies in which less than
           a 50% voting interest is owned.........................................            (98)         (4)
             Earnings as defined..................................................        $ 1,117    $  1,207 

     Interest.....................................................................        $   345    $    457 
     Interest capitalized.........................................................              5           4 
     Portion of rentals representative of interest factor.........................             44          50 
     Preferred stock dividend requirements of majority-owned
      subsidiaries on a pretax basis..............................................             29           - 
             Fixed charges as defined.............................................        $   423    $    511 

     Ratio of earnings to fixed charges...........................................           2.64        2.36 
     /TABLE
<PAGE>


     <PAGE>
                                                           Exhibit 27

   THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
   EXTRACTED FROM THE TENNECO INC. AND CONSOLIDATED
   SUBSIDIARIES FINANCIAL STATEMENTS AND IS QUALIFIED
   IN ITS ENTIRETY BY
   REFERENCE TO SUCH FINANCIAL STATEMENTS.

                               TENNECO INC. AND CONSOLIDATED SUBSIDIARIES
                                             FINANCIAL DATA SCHEDULE
     <TABLE>
     <CAPTION>
                                                                                            (Millions Except
                                                                                             Per Share Data)  
                                                                                                 As of
                                                                                           September 30, 1995
                                                                                            and for the Nine
                                                                                            Months Then Ended  
     <S>                                                                                       <C>    
     Cash and cash items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           $   712
     Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 0
     Notes and accounts receivable--trade  . . . . . . . . . . . . . . . . . . . . .             1,026
     Allowances for doubtful accounts  . . . . . . . . . . . . . . . . . . . . . . .                 0
     Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             1,002
     Total current assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             3,665
     Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . .            11,000
     Accumulated depreciation  . . . . . . . . . . . . . . . . . . . . . . . . . . .             5,629
     Total assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            12,383
     Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .             2,875
     Bonds, mortgages and similar debt . . . . . . . . . . . . . . . . . . . . . . .             3,310
     Preferred stock--mandatory redemption . . . . . . . . . . . . . . . . . . . . .               129
     Preferred stock--no mandatory redemption  . . . . . . . . . . . . . . . . . . .                 0
     Common stock  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               957
     Other stockholders' equity  . . . . . . . . . . . . . . . . . . . . . . . . . .             2,172
     Total liabilities and stockholders' equity  . . . . . . . . . . . . . . . . . .            12,383
     Net sales of tangible products  . . . . . . . . . . . . . . . . . . . . . . . .             6,497
     Total revenues  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             6,497
     Cost of tangible goods sold . . . . . . . . . . . . . . . . . . . . . . . . . .             4,819
     Total costs and expenses applicable to sales and revenues . . . . . . . . . . .             4,819
     Other costs and expenses  . . . . . . . . . . . . . . . . . . . . . . . . . . .               961
     Provision for doubtful accounts and notes . . . . . . . . . . . . . . . . . . .                 0
     Interest and amortization of debt discount  . . . . . . . . . . . . . . . . . .               249
     Income before taxes and other items . . . . . . . . . . . . . . . . . . . . . .               821
     Income tax expense  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               252
     Income/loss continuing operations . . . . . . . . . . . . . . . . . . . . . . .               552
     Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 0
     Extraordinary items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 0
     Cumulative effect--changes in accounting principles . . . . . . . . . . . . . .                 0
     Net income or loss  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           $   552
     Earnings per share--primary . . . . . . . . . . . . . . . . . . . . . . . . . .             $3.11
     Earnings per share--fully diluted . . . . . . . . . . . . . . . . . . . . . . .             $3.11
     /TABLE
<PAGE>