þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 76-0515284 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
500 North Field Drive, Lake Forest, Illinois | 60045 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer þ | Accelerated filer ¨ | |
Non-accelerated filer ¨ | Smaller reporting company ¨ | |
(Do not check if a smaller reporting company) | ||
Emerging growth company ¨ |
Page | ||
Part I — Financial Information | ||
Item 1. | ||
Tenneco Inc. and Consolidated Subsidiaries — | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II — Other Information | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | Defaults Upon Senior Securities | * |
Item 4. | Mine Safety Disclosures | * |
Item 5. | Other Information | * |
Item 6. |
* | No response to this item is included herein for the reason that it is inapplicable or the answer to such item is negative. |
• | general economic, business and market conditions; |
• | our ability to source and procure needed materials, components and other products and services in accordance with customer demand and at competitive prices; |
• | the cost and outcome of existing and any future claims, legal proceedings or investigations, including, but not limited to, any of the foregoing arising in connection with the ongoing global antitrust investigation, product performance, product safety or intellectual property rights; |
• | changes in capital availability or costs, including increases in our cost of borrowing (i.e., interest rate increases), the amount of our debt, our ability to access capital markets at favorable rates, and the credit ratings of our debt; |
• | changes in consumer demand, prices and our ability to have our products included on top selling vehicles, including any shifts in consumer preferences away from light trucks, which tend to be higher margin products for our customers and us, to other lower margin vehicles, for which we may or may not have supply arrangements; |
• | changes in consumer demand for our automotive, commercial or aftermarket products, or changes in automotive and commercial vehicle manufacturers’ production rates and their actual and forecasted requirements for our products due to difficult economic conditions; |
• | the overall highly competitive nature of the automobile and commercial vehicle parts industries, and any resultant inability to realize the sales represented by our awarded book of business (which is based on anticipated pricing and volumes over the life of the applicable program); |
• | the loss of any of our large original equipment manufacturer (“OEM”) customers (on whom we depend for a substantial portion of our revenues), or the loss of market shares by these customers if we are unable to achieve increased sales to other OEMs or any change in customer demand due to delays in the adoption or enforcement of worldwide emissions regulations; |
• | our ability to successfully execute cash management and other cost reduction plans, and to realize the anticipated benefits from these plans; |
• | risks inherent in operating a multi-national company, including economic, exchange rate and political conditions in the countries where we operate or sell our products, adverse changes in trade agreements, tariffs, immigration policies, political stability, and tax and other laws, and potential disruptions of production and supply; |
• | industrywide strikes, labor disruptions at our facilities or any labor or other economic disruptions at any of our significant customers or suppliers or any of our customers’ other suppliers; |
• | increases in the costs of raw materials, including our ability to successfully reduce the impact of any such cost increases through materials substitutions, cost reduction initiatives, customer recovery and other methods; |
• | the negative impact of fuel price volatility on transportation and logistics costs, raw material costs, discretionary purchases of vehicles or aftermarket products and demand for off-highway equipment; |
• | the cyclical nature of the global vehicle industry, including the performance of the global aftermarket sector and the impact of vehicle parts’ longer product lives; |
• | costs related to product warranties and other customer satisfaction actions; |
• | the failure or breach of our information technology systems, including the consequences of any misappropriation, exposure or corruption of sensitive information stored on such systems and the interruption to our business that such failure or breach may cause; |
• | the impact of consolidation among vehicle parts suppliers and customers on our ability to compete; |
• | changes in distribution channels or competitive conditions in the markets and countries where we operate, including the impact of increasing competition from lower cost, private-label products on our aftermarket business; |
• | customer acceptance of new products; |
• | new technologies that reduce the demand for certain of our products or otherwise render them obsolete; |
• | our ability to introduce new products and technologies that satisfy customers' needs in a timely fashion; |
• | our ability to realize our business strategy of improving operating performance; |
• | our ability to successfully integrate any acquisitions that we complete and effectively manage our joint ventures and other third-party relationships; |
• | changes by the Financial Accounting Standards Board or the Securities and Exchange Commission of authoritative generally accepted accounting principles or policies; |
• | changes in accounting estimates and assumptions, including changes based on additional information; |
• | any changes by the International Organization for Standardization (ISO) or other such committees in their certification protocols for processes and products, which may have the effect of delaying or hindering our ability to bring new products to market; |
• | the impact of the extensive, increasing and changing laws and regulations to which we are subject, including environmental laws and regulations, which may result in our incurrence of environmental liabilities in excess of the amount reserved; |
• | the potential impairment in the carrying value of our long-lived assets and goodwill or our deferred tax assets; |
• | potential volatility in our effective tax rate; |
• | natural disasters, such as earthquakes and flooding, and any resultant disruptions in the supply or production of goods or services to us or by us or in demand by our customers; |
• | acts of war and/or terrorism, as well as actions taken or to be taken by the United States and other governments as a result of further acts or threats of terrorism, and the impact of these acts on economic, financial and social conditions in the countries where we operate; and |
• | the timing and occurrence (or non-occurrence) of other transactions, events and circumstances which may be beyond our control. |
/s/ PricewaterhouseCoopers LLP |
Milwaukee, Wisconsin |
November 2, 2017 |
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||||
(Millions Except Share and Per Share Amounts) | (Millions Except Share and Per Share Amounts) | ||||||||||||||
Revenues | |||||||||||||||
Net sales and operating revenues | $ | 2,274 | $ | 2,096 | $ | 6,883 | $ | 6,444 | |||||||
Costs and expenses | |||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 1,913 | 1,743 | 5,790 | 5,329 | |||||||||||
Engineering, research, and development | 40 | 41 | 115 | 117 | |||||||||||
Selling, general, and administrative | 128 | 109 | 529 | 390 | |||||||||||
Depreciation and amortization of other intangibles | 58 | 53 | 165 | 159 | |||||||||||
2,139 | 1,946 | 6,599 | 5,995 | ||||||||||||
Other expense | |||||||||||||||
Loss on sale of receivables | (2 | ) | (2 | ) | (4 | ) | (4 | ) | |||||||
Other income | 1 | 2 | 2 | — | |||||||||||
(1 | ) | — | (2 | ) | (4 | ) | |||||||||
Earnings before interest expense, income taxes, and noncontrolling interests | 134 | 150 | 282 | 445 | |||||||||||
Interest expense | 19 | 24 | 54 | 76 | |||||||||||
Earnings before income taxes and noncontrolling interests | 115 | 126 | 228 | 369 | |||||||||||
Income tax expense (benefit) | 16 | (70 | ) | 41 | 3 | ||||||||||
Net income | 99 | 196 | 187 | 366 | |||||||||||
Less: Net income attributable to noncontrolling interests | 16 | 17 | 48 | 48 | |||||||||||
Net income attributable to Tenneco Inc. | $ | 83 | $ | 179 | $ | 139 | $ | 318 | |||||||
Earnings per share | |||||||||||||||
Weighted average shares of common stock outstanding — | |||||||||||||||
Basic | 52,508,078 | 55,679,969 | 53,265,149 | 56,511,838 | |||||||||||
Diluted | 52,687,656 | 56,165,709 | 53,501,864 | 56,958,447 | |||||||||||
Basic earnings per share of common stock | $ | 1.57 | $ | 3.22 | $ | 2.61 | $ | 5.63 | |||||||
Diluted earnings per share of common stock | $ | 1.57 | $ | 3.19 | $ | 2.60 | $ | 5.58 | |||||||
Cash dividends declared | $ | 0.25 | $ | — | $ | 0.75 | $ | — |
Three Months Ended September 30, 2017 | |||||||||||||||||||||||
Tenneco Inc. | Noncontrolling Interests | Total | |||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) | ||||||||||||||||||
(Millions) | |||||||||||||||||||||||
Net Income | $ | 83 | $ | 16 | $ | 99 | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||
Cumulative Translation Adjustment | |||||||||||||||||||||||
Balance July 1 | $ | (285 | ) | $ | (2 | ) | $ | (287 | ) | ||||||||||||||
Translation of foreign currency statements | 28 | 28 | 1 | 1 | 29 | 29 | |||||||||||||||||
Balance September 30 | (257 | ) | (1 | ) | (258 | ) | |||||||||||||||||
Additional Liability for Pension and Postretirement Benefits | |||||||||||||||||||||||
Balance July 1 | (316 | ) | — | (316 | ) | ||||||||||||||||||
Additional liability for pension and postretirement benefits, net of tax | 3 | 3 | — | — | 3 | 3 | |||||||||||||||||
Balance September 30 | (313 | ) | — | (313 | ) | ||||||||||||||||||
Balance September 30 | $ | (570 | ) | $ | (1 | ) | $ | (571 | ) | ||||||||||||||
Other Comprehensive Income | 31 | 1 | 32 | ||||||||||||||||||||
Comprehensive Income | $ | 114 | $ | 17 | $ | 131 |
Three Months Ended September 30, 2016 | |||||||||||||||||||||||
Tenneco Inc. | Noncontrolling Interests | Total | |||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) | ||||||||||||||||||
(Millions) | |||||||||||||||||||||||
Net Income | $ | 179 | $ | 17 | $ | 196 | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||
Cumulative Translation Adjustment | |||||||||||||||||||||||
Balance July 1 | $ | (294 | ) | $ | (2 | ) | $ | (296 | ) | ||||||||||||||
Translation of foreign currency statements | 1 | 1 | — | — | 1 | 1 | |||||||||||||||||
Balance September 30 | (293 | ) | (2 | ) | (295 | ) | |||||||||||||||||
Additional Liability for Pension and Postretirement Benefits | |||||||||||||||||||||||
Balance July 1 | (361 | ) | — | (361 | ) | ||||||||||||||||||
Additional liability for pension and postretirement benefits, net of tax | 4 | 4 | — | — | 4 | 4 | |||||||||||||||||
Balance September 30 | (357 | ) | — | (357 | ) | ||||||||||||||||||
Balance September 30 | $ | (650 | ) | $ | (2 | ) | $ | (652 | ) | ||||||||||||||
Other Comprehensive Income | 5 | — | 5 | ||||||||||||||||||||
Comprehensive Income | $ | 184 | $ | 17 | $ | 201 |
Nine Months Ended September 30, 2017 | |||||||||||||||||||||||
Tenneco Inc. | Noncontrolling Interests | Total | |||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) | ||||||||||||||||||
(Millions) | |||||||||||||||||||||||
Net Income | $ | 139 | $ | 48 | $ | 187 | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||
Cumulative Translation Adjustment | |||||||||||||||||||||||
Balance January 1 | $ | (338 | ) | $ | (5 | ) | $ | (343 | ) | ||||||||||||||
Translation of foreign currency statements | 81 | 81 | 4 | 4 | 85 | 85 | |||||||||||||||||
Balance September 30 | (257 | ) | (1 | ) | (258 | ) | |||||||||||||||||
Additional Liability for Pension and Postretirement Benefits | |||||||||||||||||||||||
Balance January 1 | (327 | ) | — | (327 | ) | ||||||||||||||||||
Additional Liability for Pension and Postretirement Benefits, net of tax | 14 | 14 | — | — | 14 | 14 | |||||||||||||||||
Balance September 30 | (313 | ) | — | (313 | ) | ||||||||||||||||||
Balance September 30 | $ | (570 | ) | $ | (1 | ) | $ | (571 | ) | ||||||||||||||
Other Comprehensive Income | 95 | 4 | 99 | ||||||||||||||||||||
Comprehensive Income | $ | 234 | $ | 52 | $ | 286 |
Nine Months Ended September 30, 2016 | |||||||||||||||||||||||
Tenneco Inc. | Noncontrolling Interests | Total | |||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | Comprehensive Income (Loss) | ||||||||||||||||||
(Millions) | |||||||||||||||||||||||
Net Income | $ | 318 | $ | 48 | $ | 366 | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||
Cumulative Translation Adjustment | |||||||||||||||||||||||
Balance January 1 | $ | (297 | ) | $ | (1 | ) | $ | (298 | ) | ||||||||||||||
Translation of foreign currency statements | 4 | 4 | (1 | ) | (1 | ) | 3 | 3 | |||||||||||||||
Balance September 30 | (293 | ) | (2 | ) | (295 | ) | |||||||||||||||||
Additional Liability for Pension and Postretirement Benefits | |||||||||||||||||||||||
Balance January 1 | (368 | ) | — | (368 | ) | ||||||||||||||||||
Additional Liability for Pension and Postretirement Benefits, net of tax | 11 | 11 | — | — | 11 | 11 | |||||||||||||||||
Balance September 30 | (357 | ) | — | (357 | ) | ||||||||||||||||||
Balance September 30 | $ | (650 | ) | $ | (2 | ) | $ | (652 | ) | ||||||||||||||
Other Comprehensive Income (Loss) | 15 | (1 | ) | 14 | |||||||||||||||||||
Comprehensive Income | $ | 333 | $ | 47 | $ | 380 |
September 30, 2017 | December 31, 2016 | ||||||
(Millions) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 277 | $ | 347 | |||
Restricted cash | 2 | 2 | |||||
Receivables — | |||||||
Customer notes and accounts, net | 1,451 | 1,272 | |||||
Other | 24 | 22 | |||||
Inventories — | |||||||
Finished goods | 335 | 284 | |||||
Work in process | 289 | 245 | |||||
Raw materials | 184 | 137 | |||||
Materials and supplies | 74 | 64 | |||||
Prepayments and other | 325 | 229 | |||||
Total current assets | 2,961 | 2,602 | |||||
Other assets: | |||||||
Long-term receivables, net | 9 | 9 | |||||
Goodwill | 59 | 57 | |||||
Intangibles, net | 17 | 19 | |||||
Deferred income taxes | 225 | 199 | |||||
Other | 123 | 103 | |||||
433 | 387 | ||||||
Plant, property, and equipment, at cost | 3,967 | 3,548 | |||||
Less — Accumulated depreciation and amortization | (2,426 | ) | (2,191 | ) | |||
1,541 | 1,357 | ||||||
Total Assets | $ | 4,935 | $ | 4,346 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Short-term debt (including current maturities of long-term debt) | $ | 108 | $ | 90 | |||
Accounts payable | 1,601 | 1,501 | |||||
Accrued taxes | 46 | 39 | |||||
Accrued interest | 10 | 15 | |||||
Accrued liabilities | 327 | 285 | |||||
Other | 140 | 43 | |||||
Total current liabilities | 2,232 | 1,973 | |||||
Long-term debt | 1,573 | 1,294 | |||||
Deferred income taxes | 6 | 7 | |||||
Postretirement benefits | 248 | 273 | |||||
Deferred credits and other liabilities | 158 | 139 | |||||
Commitments and contingencies | |||||||
Total liabilities | 4,217 | 3,686 | |||||
Redeemable noncontrolling interests | 32 | 40 | |||||
Tenneco Inc. Shareholders’ equity: | |||||||
Common stock | 1 | 1 | |||||
Premium on common stock and other capital surplus | 3,109 | 3,098 | |||||
Accumulated other comprehensive loss | (570 | ) | (665 | ) | |||
Retained earnings (accumulated deficit) | (1,001 | ) | (1,100 | ) | |||
1,539 | 1,334 | ||||||
Less — Shares held as treasury stock, at cost | 892 | 761 | |||||
Total Tenneco Inc. shareholders’ equity | 647 | 573 | |||||
Noncontrolling interests | 39 | 47 | |||||
Total equity | 686 | 620 | |||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 4,935 | $ | 4,346 |
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||||
(Millions) | |||||||||||||||
Operating Activities | |||||||||||||||
Net income | $ | 99 | $ | 196 | $ | 187 | $ | 366 | |||||||
Adjustments to reconcile net income to cash provided by operating activities — | |||||||||||||||
Depreciation and amortization of other intangibles | 58 | 53 | 165 | 159 | |||||||||||
Deferred income taxes | (1 | ) | (86 | ) | (1 | ) | (74 | ) | |||||||
Stock-based compensation | 1 | 3 | 12 | 13 | |||||||||||
Loss on sale of assets | 1 | 1 | 2 | 2 | |||||||||||
Changes in components of working capital — | |||||||||||||||
(Increase) decrease in receivables | 41 | (10 | ) | (135 | ) | (189 | ) | ||||||||
(Increase) decrease in inventories | (56 | ) | (12 | ) | (116 | ) | (61 | ) | |||||||
(Increase) decrease in prepayments and other current assets | (8 | ) | (34 | ) | (76 | ) | (69 | ) | |||||||
Increase (decrease) in payables | (29 | ) | (5 | ) | 57 | 59 | |||||||||
Increase (decrease) in accrued taxes | 16 | — | (22 | ) | 9 | ||||||||||
Increase (decrease) in accrued interest | (3 | ) | 9 | (5 | ) | 9 | |||||||||
Increase (decrease) in other current liabilities | (51 | ) | 10 | 101 | (7 | ) | |||||||||
Changes in long-term assets | (10 | ) | 1 | (10 | ) | 5 | |||||||||
Changes in long-term liabilities | (6 | ) | 11 | 1 | 13 | ||||||||||
Other | 1 | (7 | ) | 3 | (2 | ) | |||||||||
Net cash provided by operating activities | 53 | 130 | 163 | 233 | |||||||||||
Investing Activities | |||||||||||||||
Proceeds from sale of assets | — | 1 | 6 | 4 | |||||||||||
Proceeds from sale of equity interest | — | — | 9 | — | |||||||||||
Cash payments for plant, property, and equipment | (90 | ) | (74 | ) | (283 | ) | (213 | ) | |||||||
Cash payments for software related intangible assets | (5 | ) | (6 | ) | (17 | ) | (15 | ) | |||||||
Changes in restricted cash | — | 1 | — | (1 | ) | ||||||||||
Other | (1 | ) | — | (5 | ) | — | |||||||||
Net cash used by investing activities | (96 | ) | (78 | ) | (290 | ) | (225 | ) | |||||||
Financing Activities | |||||||||||||||
Issuance (repurchase) of common shares | 1 | 5 | (2 | ) | 7 | ||||||||||
Cash dividends | (14 | ) | — | (40 | ) | — | |||||||||
Retirement of long-term debt - net | (1 | ) | (179 | ) | (9 | ) | (527 | ) | |||||||
Issuance of long-term debt - net | — | 2 | 136 | 508 | |||||||||||
Debt issuance cost of long-term debt | — | — | (8 | ) | (8 | ) | |||||||||
Purchase of common stock under the share repurchase program | (71 | ) | (89 | ) | (131 | ) | (146 | ) | |||||||
Net increase (decrease) in bank overdrafts | (3 | ) | (1 | ) | (12 | ) | 4 | ||||||||
Net increase in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivable | 84 | 198 | 144 | 223 | |||||||||||
Net increase in short-term borrowings secured by accounts receivable | — | 50 | 20 | 20 | |||||||||||
Distributions to noncontrolling interest partners | (12 | ) | (28 | ) | (45 | ) | (55 | ) | |||||||
Net cash provided (used) by financing activities | (16 | ) | (42 | ) | 53 | 26 | |||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | 3 | 3 | 4 | 3 | |||||||||||
Increase (decrease) in cash and cash equivalents | (56 | ) | 13 | (70 | ) | 37 | |||||||||
Cash and cash equivalents, July 1 and January 1, respectively | 333 | 311 | 347 | 287 | |||||||||||
Cash and cash equivalents, September 30 (Note) | $ | 277 | $ | 324 | $ | 277 | $ | 324 | |||||||
Supplemental Cash Flow Information | |||||||||||||||
Cash paid during the period for interest (net of interest capitalized) | $ | 23 | $ | 14 | $ | 61 | $ | 62 | |||||||
Cash paid during the period for income taxes (net of refunds) | 31 | 30 | 74 | 88 | |||||||||||
Non-cash Investing and Financing Activities | |||||||||||||||
Period end balance of trade payables for plant, property, and equipment | $ | 53 | $ | 51 | $ | 53 | $ | 51 |
Nine Months Ended September 30, | |||||||||||||
2017 | 2016 | ||||||||||||
Shares | Amount | Shares | Amount | ||||||||||
(Millions Except Share Amounts) | |||||||||||||
Tenneco Inc. Shareholders: | |||||||||||||
Common Stock | |||||||||||||
Balance January 1 | 65,891,930 | $ | 1 | 65,067,132 | $ | 1 | |||||||
Issued pursuant to benefit plans | 35,843 | — | 313,332 | — | |||||||||
Restricted shares forfeited | (126,682 | ) | — | — | — | ||||||||
Stock options exercised | 208,818 | — | 383,981 | — | |||||||||
Balance September 30 | 66,009,909 | 1 | 65,764,445 | 1 | |||||||||
Premium on Common Stock and Other Capital Surplus | |||||||||||||
Balance January 1 | 3,098 | 3,081 | |||||||||||
Premium on common stock issued pursuant to benefit plans | 11 | 10 | |||||||||||
Balance September 30 | 3,109 | 3,091 | |||||||||||
Accumulated Other Comprehensive Loss | |||||||||||||
Balance January 1 | (665 | ) | (665 | ) | |||||||||
Other comprehensive income | 95 | 15 | |||||||||||
Balance September 30 | (570 | ) | (650 | ) | |||||||||
Retained Earnings (Accumulated Deficit) | |||||||||||||
Balance January 1 | (1,100 | ) | (1,456 | ) | |||||||||
Net income attributable to Tenneco Inc. | 139 | 318 | |||||||||||
Cash dividends declared | (40 | ) | — | ||||||||||
Balance September 30 | (1,001 | ) | (1,138 | ) | |||||||||
Less — Common Stock Held as Treasury Stock, at Cost | |||||||||||||
Balance January 1 | 11,655,938 | 761 | 7,473,325 | 536 | |||||||||
Purchase of common stock through stock repurchase program | 2,310,443 | 131 | 2,783,064 | 146 | |||||||||
Balance September 30 | 13,966,381 | 892 | 10,256,389 | 682 | |||||||||
Total Tenneco Inc. shareholders’ equity | $ | 647 | $ | 622 | |||||||||
Noncontrolling Interests: | |||||||||||||
Balance January 1 | $ | 47 | $ | 39 | |||||||||
Net income | 21 | 20 | |||||||||||
Other comprehensive income | 2 | — | |||||||||||
Dividends declared | (31 | ) | (22 | ) | |||||||||
Balance September 30 | $ | 39 | $ | 37 | |||||||||
Total equity | $ | 686 | $ | 659 |
(1) | Consolidation and Presentation |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Millions) | |||||||
Balance January 1 | $ | 40 | $ | 41 | |||
Net income attributable to redeemable noncontrolling interests | 27 | 27 | |||||
Other comprehensive loss | 2 | (1 | ) | ||||
Dividends declared | (37 | ) | (35 | ) | |||
Balance September 30 | $ | 32 | $ | 32 |
(2) | Financial Instruments |
September 30, 2017 | December 31, 2016 | ||||||||||||||
Net Carrying Amount | Fair Value | Net Carrying Amount | Fair Value | ||||||||||||
(Millions) | |||||||||||||||
Long-term debt (including current maturities) | $ | 1,575 | $ | 1,612 | $ | 1,297 | $ | 1,311 | |||||||
Equity swap agreement and foreign currency forward contracts: | |||||||||||||||
Asset derivative contracts (a) | 6 | 6 | — | — |
Level 1 | — | Quoted prices in active markets for identical assets or liabilities. |
Level 2 | — | Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. |
Level 3 | — | Unobservable inputs based on our own assumptions. |
Notional Amount in Foreign Currency | |||
(Millions) | |||
British pounds | —Purchase | 10 | |
Canadian dollars | —Sell | (2 | ) |
European euro | —Sell | (4 | ) |
U.S. dollars | —Purchase | 7 | |
—Sell | (14 | ) |
(3) | Long-Term Debt and Financing Arrangements |
Quarter Ended | |||||||||||||||||
September 30, 2017 | June 30, 2017 | March 31, 2017 | |||||||||||||||
Required | Actual | Required | Actual | Required | Actual | ||||||||||||
Leverage Ratio (maximum) | 3.50 | 2.15 | 3.50 | 1.97 | 3.50 | 1.62 | |||||||||||
Interest Coverage Ratio (minimum) | 2.75 | 11.48 | 2.75 | 12.44 | 2.75 | 15.38 |
(4) | Income Taxes |
(5) | Accounts Receivable Securitization |
(6) | Restructuring and Other Charges |
December 31, 2016 Restructuring Reserve | 2017 Expenses | 2017 Cash Payments | Impact of Exchange Rates | September 30, 2017 Restructuring Reserve | ||||||||||||
(Millions) | ||||||||||||||||
Employee Severance, Termination Benefits and Other Related Costs | $15 | 38 | (18 | ) | 2 | $37 |
(7) | Environmental Matters, Legal Proceedings and Product Warranties |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Millions) | |||||||
Beginning Balance January 1, | $ | 20 | $ | 23 | |||
Accruals related to product warranties | 13 | 6 | |||||
Reductions for payments made | (8 | ) | (10 | ) | |||
Ending Balance September 30, | $ | 25 | $ | 19 |
(8) | Earnings Per Share |
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||||
(Millions Except Share and Per Share Amounts) | |||||||||||||||
Basic earnings per share — | |||||||||||||||
Net income attributable to Tenneco Inc. | $ | 83 | $ | 179 | $ | 139 | $ | 318 | |||||||
Weighted Average shares of common stock outstanding | 52,508,078 | 55,679,969 | 53,265,149 | 56,511,838 | |||||||||||
Earnings per share of common stock | $ | 1.57 | $ | 3.22 | $ | 2.61 | $ | 5.63 | |||||||
Diluted earnings per share — | |||||||||||||||
Net income attributable to Tenneco Inc. | $ | 83 | $ | 179 | $ | 139 | $ | 318 | |||||||
Weighted Average shares of common stock outstanding | 52,508,078 | 55,679,969 | 53,265,149 | 56,511,838 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Restricted stock | 89,666 | 207,707 | 106,320 | 144,145 | |||||||||||
Stock options | 89,912 | 278,033 | 130,395 | 302,464 | |||||||||||
Weighted Average shares of common stock outstanding including dilutive securities | 52,687,656 | 56,165,709 | 53,501,864 | 56,958,447 | |||||||||||
Earnings per share of common stock | $ | 1.57 | $ | 3.19 | $ | 2.60 | $ | 5.58 |
(9) | Common Stock |
Nine Months Ended September 30, 2017 | ||||||||||||
Shares Under Option | Weighted Avg. Exercise Prices | Weighted Avg. Remaining Life in Years | Aggregate Intrinsic Value | |||||||||
(Millions) | ||||||||||||
Outstanding Stock Options | ||||||||||||
Outstanding, January 1, 2017 | 606,525 | $ | 38.54 | 2.6 | $ | 12 | ||||||
Canceled | (2,214 | ) | 56.23 | — | ||||||||
Forfeited | (1,107 | ) | 56.23 | — | ||||||||
Exercised | (164,863 | ) | 33.70 | 5 | ||||||||
Outstanding, March 31, 2017 | 438,341 | $ | 40.22 | 2.6 | $ | 11 | ||||||
Forfeited | (278 | ) | 66.54 | — | ||||||||
Exercised | (3,242 | ) | 45.42 | — | ||||||||
Outstanding, June 30, 2017 | 434,821 | $ | 40.16 | 2.4 | $ | 8 | ||||||
Forfeited | (41,369 | ) | 19.53 | — | ||||||||
Exercised | (50,125 | ) | 34.79 | 1 | ||||||||
Outstanding, September 30, 2017 | 343,327 | $ | 43.44 | 2.4 | $ | 4 | ||||||
Nine Months Ended September 30, 2017 | ||||||
Shares | Weighted Avg. Grant Date Fair Value | |||||
Nonvested Restricted Shares | ||||||
Nonvested balance at January 1, 2017 | 591,416 | $ | 44.63 | |||
Granted | 182,543 | 68.04 | ||||
Vested | (261,003 | ) | 50.95 | |||
Forfeited | (65,354 | ) | 53.12 | |||
Nonvested balance at March 31, 2017 | 447,602 | $ | 49.25 | |||
Granted | 23,295 | 57.22 | ||||
Vested | (15,336 | ) | 46.77 | |||
Forfeited | (6,271 | ) | 48.10 | |||
Nonvested balance at June 30, 2017 | 449,290 | $ | 49.79 | |||
Granted | 2,001 | 55.80 | ||||
Vested | (4,581 | ) | 55.52 | |||
Forfeited | (10,234 | ) | 44.82 | |||
Nonvested balance at September 30, 2017 | 436,476 | $ | 49.87 |
(10) | Pension Plans, Postretirement and Other Employee Benefits |
Three Months Ended September 30, | |||||||||||||||||||||||
Pension | Postretirement | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
US | Foreign | US | Foreign | US | US | ||||||||||||||||||
(Millions) | |||||||||||||||||||||||
Service cost — benefits earned during the period | $ | 1 | $ | 3 | $ | 1 | $ | 2 | $ | — | $ | — | |||||||||||
Interest cost | 2 | 4 | 4 | 4 | 1 | 1 | |||||||||||||||||
Expected return on plan assets | (4 | ) | (4 | ) | (6 | ) | (5 | ) | — | — | |||||||||||||
Net amortization: | |||||||||||||||||||||||
Actuarial loss | 1 | 1 | 2 | 1 | 2 | 2 | |||||||||||||||||
Prior service cost (credit) | — | 1 | — | 1 | — | (1 | ) | ||||||||||||||||
Net pension and postretirement costs | $ | — | $ | 5 | $ | 1 | $ | 3 | $ | 3 | $ | 2 | |||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||
Pension | Postretirement | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
US | Foreign | US | Foreign | US | US | ||||||||||||||||||
(Millions) | |||||||||||||||||||||||
Service cost — benefits earned during the period | $ | 1 | $ | 7 | $ | 1 | $ | 6 | $ | — | $ | — | |||||||||||
Interest cost | 7 | 10 | 13 | 11 | 4 | 4 | |||||||||||||||||
Expected return on plan assets | (11 | ) | (19 | ) | (18 | ) | (15 | ) | — | — | |||||||||||||
Settlement loss | 6 | — | — | — | — | — | |||||||||||||||||
Net amortization: | |||||||||||||||||||||||
Actuarial loss | 4 | 6 | 6 | 5 | 5 | 4 | |||||||||||||||||
Prior service cost (credit) | — | 1 | — | 1 | (1 | ) | (1 | ) | |||||||||||||||
Net pension and postretirement costs | $ | 7 | $ | 5 | $ | 2 | $ | 8 | $ | 8 | $ | 7 |
Three Months Ended September 30, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
Before-Tax Amount | Tax Benefit | Net-of-Tax Amount | Before- Tax Amount | Tax Benefit | Net-of-Tax Amount | ||||||||||||||||||
(Millions) | |||||||||||||||||||||||
Defined benefit pension and postretirement plans: | |||||||||||||||||||||||
Amortization of prior service cost included in net periodic pension and postretirement cost | $ | 1 | $ | — | $ | 1 | $ | — | $ | — | $ | — | |||||||||||
Amortization of actuarial loss included in net periodic pension and postretirement cost | 4 | (2 | ) | 2 | 5 | (1 | ) | 4 | |||||||||||||||
Other comprehensive income – pension benefits | $ | 5 | $ | (2 | ) | $ | 3 | $ | 5 | $ | (1 | ) | $ | 4 |
Nine Months Ended September 30, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
Before-Tax Amount | Tax Benefit | Net-of-Tax Amount | Before- Tax Amount | Tax Benefit | Net-of-Tax Amount | ||||||||||||||||||
(Millions) | |||||||||||||||||||||||
Defined benefit pension and postretirement plans: | |||||||||||||||||||||||
Amortization of actuarial loss included in net periodic pension and postretirement cost | $ | 15 | $ | (5 | ) | $ | 10 | $ | 15 | $ | (4 | ) | $ | 11 | |||||||||
Settlement charge | 6 | (2 | ) | 4 | — | — | — | ||||||||||||||||
Other comprehensive income – pension benefits | $ | 21 | $ | (7 | ) | $ | 14 | $ | 15 | $ | (4 | ) | $ | 11 |
(11) | New Accounting Pronouncements |
• | We recorded a tax benefit of $2 million within income tax expense for the nine months ended September 30, 2017 related to the excess tax benefit on share-based awards. Prior to adoption, this amount would have been recorded as an addition of additional paid-in capital. |
• | We no longer reclassify the excess tax benefit from operating activities to financing activities in the statement of cash flows. Cash payments made to the taxing authorities on employees' behalf for withheld shares are presented as financing activities. Tenneco elected to apply this change in presentation retrospectively and thus prior periods have been adjusted. |
• | We excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of our diluted earnings per share for the quarter ended September 30, 2017. The impact was not material. |
(12) | Segment Information |
Clean Air Division | Ride Performance Division | ||||||||||||||||||||||||||||||||||
North America | Europe & South America | Asia Pacific | North America | Europe & South America | Asia Pacific | Other | Reclass & Elims | Total | |||||||||||||||||||||||||||
(Millions) | |||||||||||||||||||||||||||||||||||
At September 30, 2017 and for the Three Months Ended September 30, 2017 | |||||||||||||||||||||||||||||||||||
Revenues from external customers | $ | 723 | $ | 536 | $ | 313 | $ | 304 | $ | 279 | $ | 119 | $ | — | $ | — | $ | 2,274 | |||||||||||||||||
Intersegment revenues | 5 | 7 | — | 2 | 6 | 16 | — | (36 | ) | — | |||||||||||||||||||||||||
EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 46 | 25 | 36 | 29 | 6 | 11 | (19 | ) | — | 134 | |||||||||||||||||||||||||
Total assets | 1,504 | 882 | 751 | 761 | 590 | 388 | — | 59 | 4,935 | ||||||||||||||||||||||||||
At September 30, 2016 and for the Three Months Ended September 30, 2016 | |||||||||||||||||||||||||||||||||||
Revenues from external customers | 716 | 474 | 270 | 306 | 229 | 101 | — | — | 2,096 | ||||||||||||||||||||||||||
Intersegment revenues | 4 | 24 | 1 | 2 | 6 | 12 | — | (49 | ) | — | |||||||||||||||||||||||||
EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 42 | 29 | 39 | 37 | 8 | 17 | (22 | ) | — | 150 | |||||||||||||||||||||||||
Total assets | 1,390 | 810 | 625 | 727 | 478 | 333 | — | 47 | 4,410 | ||||||||||||||||||||||||||
At September 30, 2017 and for the Nine Months Ended September 30, 2017 | |||||||||||||||||||||||||||||||||||
Revenues from external customers | $ | 2,341 | $ | 1,620 | $ | 861 | $ | 945 | $ | 786 | $ | 330 | $ | — | $ | — | $ | 6,883 | |||||||||||||||||
Intersegment revenues | 13 | 38 | 3 | 8 | 23 | 44 | — | (129 | ) | — | |||||||||||||||||||||||||
EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 153 | 79 | 91 | 100 | 19 | 45 | (205 | ) | — | 282 | |||||||||||||||||||||||||
Total assets | 1,504 | 882 | 751 | 761 | 590 | 388 | — | 59 | 4,935 | ||||||||||||||||||||||||||
At September 30, 2016 and for the Nine Months Ended September 30, 2016 | |||||||||||||||||||||||||||||||||||
Revenues from external customers | 2,252 | 1,462 | 813 | 952 | 689 | 276 | — | — | 6,444 | ||||||||||||||||||||||||||
Intersegment revenues | 9 | 71 | 2 | 6 | 21 | 37 | — | (146 | ) | — | |||||||||||||||||||||||||
EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 168 | 72 | 110 | 127 | 12 | 43 | (87 | ) | — | 445 | |||||||||||||||||||||||||
Total assets | 1,390 | 810 | 625 | 727 | 478 | 333 | — | 47 | 4,410 |
(13) | Supplemental Guarantor Condensed Consolidating Financial Statements |
Three Months Ended September 30, 2017 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
(Millions) | |||||||||||||||||||
Revenues | |||||||||||||||||||
Net sales and operating revenues — | |||||||||||||||||||
External | $ | 917 | $ | 1,357 | $ | — | $ | — | $ | 2,274 | |||||||||
Affiliated companies | 128 | 143 | — | (271 | ) | — | |||||||||||||
1,045 | 1,500 | — | (271 | ) | 2,274 | ||||||||||||||
Costs and expenses | |||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 889 | 1,295 | — | (271 | ) | 1,913 | |||||||||||||
Engineering, research, and development | 17 | 23 | — | — | 40 | ||||||||||||||
Selling, general, and administrative | 51 | 77 | — | — | 128 | ||||||||||||||
Depreciation and amortization of other intangibles | 23 | 35 | — | — | 58 | ||||||||||||||
980 | 1,430 | — | (271 | ) | 2,139 | ||||||||||||||
Other income (expense) | |||||||||||||||||||
Loss on sale of receivables | (1 | ) | (1 | ) | — | — | (2 | ) | |||||||||||
Other income (expense) | (9 | ) | 10 | — | — | 1 | |||||||||||||
(10 | ) | 9 | — | — | (1 | ) | |||||||||||||
Earnings (loss) before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies | 55 | 79 | — | — | 134 | ||||||||||||||
Interest expense — | |||||||||||||||||||
External (net of interest capitalized) | 7 | 2 | 10 | — | 19 | ||||||||||||||
Affiliated companies (net of interest income) | (5 | ) | 3 | 2 | — | — | |||||||||||||
Earnings (loss) before income taxes, noncontrolling interests, and equity in net income from affiliated companies | 53 | 74 | (12 | ) | — | 115 | |||||||||||||
Income tax (benefit) expense | (5 | ) | 21 | — | — | 16 | |||||||||||||
Equity in net income (loss) from affiliated companies | 31 | — | 95 | (126 | ) | — | |||||||||||||
Net income (loss) | 89 | 53 | 83 | (126 | ) | 99 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | 16 | — | — | 16 | ||||||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | 89 | $ | 37 | $ | 83 | $ | (126 | ) | $ | 83 | ||||||||
Comprehensive income (loss) attributable to Tenneco Inc. | $ | 89 | $ | 31 | $ | 114 | $ | (120 | ) | $ | 114 |
Three Months Ended September 30, 2016 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
(Millions) | |||||||||||||||||||
Revenues | |||||||||||||||||||
Net sales and operating revenues — | |||||||||||||||||||
External | $ | 928 | $ | 1,168 | $ | — | $ | — | $ | 2,096 | |||||||||
Affiliated companies | 134 | 183 | — | (317 | ) | — | |||||||||||||
1,062 | 1,351 | — | (317 | ) | 2,096 | ||||||||||||||
Costs and expenses | |||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 904 | 1,156 | — | (317 | ) | 1,743 | |||||||||||||
Engineering, research, and development | 20 | 21 | — | — | 41 | ||||||||||||||
Selling, general, and administrative | 48 | 61 | — | — | 109 | ||||||||||||||
Depreciation and amortization of other intangibles | 23 | 30 | — | — | 53 | ||||||||||||||
995 | 1,268 | — | (317 | ) | 1,946 | ||||||||||||||
Other income (expense) | |||||||||||||||||||
Loss on sale of receivables | (1 | ) | (1 | ) | — | — | (2 | ) | |||||||||||
Other income (expense) | (7 | ) | 9 | — | — | 2 | |||||||||||||
(8 | ) | 8 | — | — | — | ||||||||||||||
Earnings (loss) before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies | 59 | 91 | — | — | 150 | ||||||||||||||
Interest expense — | |||||||||||||||||||
External (net of interest capitalized) | (1 | ) | 1 | 24 | — | 24 | |||||||||||||
Affiliated companies (net of interest income) | (3 | ) | 2 | 1 | — | — | |||||||||||||
Earnings (loss) before income taxes, noncontrolling interests, and equity in net income from affiliated companies | 63 | 88 | (25 | ) | — | 126 | |||||||||||||
Income tax expense | (108 | ) | 38 | — | — | (70 | ) | ||||||||||||
Equity in net income (loss) from affiliated companies | 33 | — | 204 | (237 | ) | — | |||||||||||||
Net income (loss) | 204 | 50 | 179 | (237 | ) | 196 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | 17 | — | — | 17 | ||||||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | 204 | $ | 33 | $ | 179 | $ | (237 | ) | $ | 179 | ||||||||
Comprehensive income (loss) attributable to Tenneco Inc. | $ | 204 | $ | 33 | $ | 184 | $ | (237 | ) | $ | 184 |
Nine Months Ended September 30, 2017 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
(Millions) | |||||||||||||||||||
Revenues | |||||||||||||||||||
Net sales and operating revenues — | |||||||||||||||||||
External | $ | 2,958 | $ | 3,925 | $ | — | $ | — | $ | 6,883 | |||||||||
Affiliated companies | 413 | 497 | — | (910 | ) | — | |||||||||||||
3,371 | 4,422 | — | (910 | ) | 6,883 | ||||||||||||||
Costs and expenses | |||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 2,871 | 3,829 | — | (910 | ) | 5,790 | |||||||||||||
Engineering, research, and development | 56 | 59 | — | — | 115 | ||||||||||||||
Selling, general, and administrative | 310 | 219 | — | — | 529 | ||||||||||||||
Depreciation and amortization of other intangibles | 65 | 100 | — | — | 165 | ||||||||||||||
3,302 | 4,207 | — | (910 | ) | 6,599 | ||||||||||||||
Other income (expense) | |||||||||||||||||||
Loss on sale of receivables | (2 | ) | (2 | ) | — | — | (4 | ) | |||||||||||
Other income (expense) | (9 | ) | 26 | — | (15 | ) | 2 | ||||||||||||
(11 | ) | 24 | — | (15 | ) | (2 | ) | ||||||||||||
Earnings (loss) before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies | 58 | 239 | — | (15 | ) | 282 | |||||||||||||
Interest expense — | |||||||||||||||||||
External (net of interest capitalized) | 10 | 4 | 40 | — | 54 | ||||||||||||||
Affiliated companies (net of interest income) | (12 | ) | 6 | 6 | — | — | |||||||||||||
Earnings (loss) before income taxes, noncontrolling interests, and equity in net income from affiliated companies | 60 | 229 | (46 | ) | (15 | ) | 228 | ||||||||||||
Income tax expense | 6 | 35 | — | — | 41 | ||||||||||||||
Equity in net income (loss) from affiliated companies | 119 | — | 185 | (304 | ) | — | |||||||||||||
Net income (loss) | 173 | 194 | 139 | (319 | ) | 187 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | 48 | — | — | 48 | ||||||||||||||
Net income attributable to Tenneco Inc. | $ | 173 | $ | 146 | $ | 139 | $ | (319 | ) | $ | 139 | ||||||||
Comprehensive income (loss) attributable to Tenneco Inc. | $ | 173 | $ | 140 | $ | 234 | $ | (313 | ) | $ | 234 |
Nine Months Ended September 30, 2016 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
(Millions) | |||||||||||||||||||
Revenues | |||||||||||||||||||
Net sales and operating revenues — | |||||||||||||||||||
External | $ | 2,929 | $ | 3,515 | $ | — | $ | — | $ | 6,444 | |||||||||
Affiliated companies | 389 | 569 | — | (958 | ) | — | |||||||||||||
3,318 | 4,084 | — | (958 | ) | 6,444 | ||||||||||||||
Costs and expenses | |||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 2,800 | 3,487 | — | (958 | ) | 5,329 | |||||||||||||
Engineering, research, and development | 59 | 58 | — | — | 117 | ||||||||||||||
Selling, general, and administrative | 174 | 215 | 1 | — | 390 | ||||||||||||||
Depreciation and amortization of other intangibles | 65 | 94 | — | — | 159 | ||||||||||||||
3,098 | 3,854 | 1 | (958 | ) | 5,995 | ||||||||||||||
Other income (expense) | |||||||||||||||||||
Loss on sale of receivables | (2 | ) | (2 | ) | — | — | (4 | ) | |||||||||||
Other income (expense) | (6 | ) | 21 | — | (15 | ) | — | ||||||||||||
(8 | ) | 19 | — | (15 | ) | (4 | ) | ||||||||||||
Earnings (loss) before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies | 212 | 249 | (1 | ) | (15 | ) | 445 | ||||||||||||
Interest expense — | |||||||||||||||||||
External (net of interest capitalized) | (1 | ) | 3 | 74 | — | 76 | |||||||||||||
Affiliated companies (net of interest income) | (9 | ) | 6 | 3 | — | — | |||||||||||||
Earnings (loss) before income taxes, noncontrolling interests, and equity in net income from affiliated companies | 222 | 240 | (78 | ) | (15 | ) | 369 | ||||||||||||
Income tax expense | (71 | ) | 74 | — | — | 3 | |||||||||||||
Equity in net income (loss) from affiliated companies | 118 | — | 396 | (514 | ) | — | |||||||||||||
Net income (loss) | 411 | 166 | 318 | (529 | ) | 366 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | 48 | — | — | 48 | ||||||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | 411 | $ | 118 | $ | 318 | $ | (529 | ) | $ | 318 | ||||||||
Comprehensive income (loss) attributable to Tenneco Inc. | $ | 411 | $ | 118 | $ | 333 | $ | (529 | ) | $ | 333 |
September 30, 2017 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
(Millions) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 4 | $ | 273 | $ | — | $ | — | $ | 277 | |||||||||
Restricted cash | — | 2 | — | — | 2 | ||||||||||||||
Receivables, net | 619 | 1,578 | — | (722 | ) | 1,475 | |||||||||||||
Inventories | 394 | 488 | — | — | 882 | ||||||||||||||
Prepayments and other | 104 | 221 | — | — | 325 | ||||||||||||||
Total current assets | 1,121 | 2,562 | — | (722 | ) | 2,961 | |||||||||||||
Other assets: | |||||||||||||||||||
Investment in affiliated companies | 1,256 | — | 1,517 | (2,773 | ) | — | |||||||||||||
Notes and advances receivable from affiliates | 968 | 18,572 | 4,010 | (23,550 | ) | — | |||||||||||||
Long-term receivables, net | 8 | 1 | — | — | 9 | ||||||||||||||
Goodwill | 22 | 37 | — | — | 59 | ||||||||||||||
Intangibles, net | 6 | 11 | — | — | 17 | ||||||||||||||
Deferred income taxes | 101 | 36 | 88 | — | 225 | ||||||||||||||
Other | 62 | 61 | — | — | 123 | ||||||||||||||
2,423 | 18,718 | 5,615 | (26,323 | ) | 433 | ||||||||||||||
Plant, property, and equipment, at cost | 1,463 | 2,504 | — | — | 3,967 | ||||||||||||||
Less — Accumulated depreciation and amortization | (937 | ) | (1,489 | ) | — | — | (2,426 | ) | |||||||||||
526 | 1,015 | — | — | 1,541 | |||||||||||||||
Total assets | $ | 4,070 | $ | 22,295 | $ | 5,615 | $ | (27,045 | ) | $ | 4,935 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Short-term debt (including current maturities of long-term debt) | |||||||||||||||||||
Short-term debt — non-affiliated | $ | — | $ | 93 | $ | 15 | $ | — | $ | 108 | |||||||||
Short-term debt — affiliated | 398 | 151 | — | (549 | ) | — | |||||||||||||
Accounts payable | 594 | 1,098 | — | (91 | ) | 1,601 | |||||||||||||
Accrued taxes | 45 | 1 | — | — | 46 | ||||||||||||||
Other | 224 | 326 | 9 | (82 | ) | 477 | |||||||||||||
Total current liabilities | 1,261 | 1,669 | 24 | (722 | ) | 2,232 | |||||||||||||
Long-term debt — non-affiliated | 846 | 13 | 714 | — | 1,573 | ||||||||||||||
Long-term debt — affiliated | 706 | 18,614 | 4,230 | (23,550 | ) | — | |||||||||||||
Deferred income taxes | — | 6 | — | — | 6 | ||||||||||||||
Postretirement benefits and other liabilities | 275 | 131 | — | — | 406 | ||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Total liabilities | 3,088 | 20,433 | 4,968 | (24,272 | ) | 4,217 | |||||||||||||
Redeemable noncontrolling interests | — | 32 | — | — | 32 | ||||||||||||||
Tenneco Inc. shareholders’ equity | 982 | 1,791 | 647 | (2,773 | ) | 647 | |||||||||||||
Noncontrolling interests | — | 39 | — | — | 39 | ||||||||||||||
Total equity | 982 | 1,830 | 647 | (2,773 | ) | 686 | |||||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 4,070 | $ | 22,295 | $ | 5,615 | $ | (27,045 | ) | $ | 4,935 |
December 31, 2016 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
(Millions) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 9 | $ | 338 | $ | — | $ | — | $ | 347 | |||||||||
Restricted cash | — | 2 | — | — | 2 | ||||||||||||||
Receivables, net | 386 | 1,412 | — | (504 | ) | 1,294 | |||||||||||||
Inventories | 361 | 369 | — | — | 730 | ||||||||||||||
Prepayments and other | 62 | 167 | — | — | 229 | ||||||||||||||
Total current assets | 818 | 2,288 | — | (504 | ) | 2,602 | |||||||||||||
Other assets: | |||||||||||||||||||
Investment in affiliated companies | 1,213 | — | 1,207 | (2,420 | ) | — | |||||||||||||
Notes and advances receivable from affiliates | 939 | 16,529 | 4,781 | (22,249 | ) | — | |||||||||||||
Long-term receivables, net | 9 | — | — | — | 9 | ||||||||||||||
Goodwill | 22 | 35 | — | — | 57 | ||||||||||||||
Intangibles, net | 7 | 12 | — | — | 19 | ||||||||||||||
Deferred income taxes | 47 | 23 | 129 | — | 199 | ||||||||||||||
Other | 46 | 49 | 8 | — | 103 | ||||||||||||||
2,283 | 16,648 | 6,125 | (24,669 | ) | 387 | ||||||||||||||
Plant, property, and equipment, at cost | 1,371 | 2,177 | — | — | 3,548 | ||||||||||||||
Less — Accumulated depreciation and amortization | (895 | ) | (1,296 | ) | — | — | (2,191 | ) | |||||||||||
476 | 881 | — | — | 1,357 | |||||||||||||||
Total assets | $ | 3,577 | $ | 19,817 | $ | 6,125 | $ | (25,173 | ) | $ | 4,346 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Short-term debt (including current maturities of long-term debt) | |||||||||||||||||||
Short-term debt — non-affiliated | $ | — | $ | 75 | $ | 15 | $ | — | $ | 90 | |||||||||
Short-term debt — affiliated | 167 | 187 | — | (354 | ) | — | |||||||||||||
Accounts payable | 562 | 1,027 | — | (88 | ) | 1,501 | |||||||||||||
Accrued taxes | 4 | 35 | — | — | 39 | ||||||||||||||
Other | 147 | 243 | 15 | (62 | ) | 343 | |||||||||||||
Total current liabilities | 880 | 1,567 | 30 | (504 | ) | 1,973 | |||||||||||||
Long-term debt — non-affiliated | — | 12 | 1,282 | — | 1,294 | ||||||||||||||
Long-term debt — affiliated | 1,543 | 16,466 | 4,240 | (22,249 | ) | — | |||||||||||||
Deferred income taxes | — | 7 | — | — | 7 | ||||||||||||||
Postretirement benefits and other liabilities | 297 | 115 | — | — | 412 | ||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Total liabilities | 2,720 | 18,167 | 5,552 | (22,753 | ) | 3,686 | |||||||||||||
Redeemable noncontrolling interests | — | 40 | — | — | 40 | ||||||||||||||
Tenneco Inc. shareholders’ equity | 857 | 1,563 | 573 | (2,420 | ) | 573 | |||||||||||||
Noncontrolling interests | — | 47 | — | — | 47 | ||||||||||||||
Total equity | 857 | 1,610 | 573 | (2,420 | ) | 620 | |||||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 3,577 | $ | 19,817 | $ | 6,125 | $ | (25,173 | ) | $ | 4,346 |
Three Months Ended September 30, 2017 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
(Millions) | |||||||||||||||||||
Operating Activities | |||||||||||||||||||
Net cash provided (used) by operating activities | $ | 39 | $ | 26 | $ | (8 | ) | $ | (4 | ) | $ | 53 | |||||||
Investing Activities | |||||||||||||||||||
Cash payments for plant, property, and equipment | (29 | ) | (61 | ) | — | — | (90 | ) | |||||||||||
Cash payments for software related intangible assets | (4 | ) | (1 | ) | — | — | (5 | ) | |||||||||||
Other | (1 | ) | — | — | — | (1 | ) | ||||||||||||
Net cash used by investing activities | (34 | ) | (62 | ) | — | — | (96 | ) | |||||||||||
Financing Activities | |||||||||||||||||||
Issuance of common shares | — | — | 1 | — | 1 | ||||||||||||||
Cash dividends | — | — | (14 | ) | — | (14 | ) | ||||||||||||
Retirement of long-term debt - net | — | (1 | ) | — | — | (1 | ) | ||||||||||||
Purchase of common stock under the share repurchase program | — | — | (71 | ) | — | (71 | ) | ||||||||||||
Net increase in bank overdrafts | — | (3 | ) | — | — | (3 | ) | ||||||||||||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt | 82 | 2 | — | — | 84 | ||||||||||||||
Intercompany dividend payments and net increase (decrease) in intercompany obligations | (87 | ) | (9 | ) | 92 | 4 | — | ||||||||||||
Distributions to noncontrolling interest partners | — | (12 | ) | — | — | (12 | ) | ||||||||||||
Net cash provided (used) by financing activities | (5 | ) | (23 | ) | 8 | 4 | (16 | ) | |||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | — | 3 | — | — | 3 | ||||||||||||||
Decrease in cash and cash equivalents | — | (56 | ) | — | — | (56 | ) | ||||||||||||
Cash and cash equivalents, July 1 | 4 | 329 | — | — | 333 | ||||||||||||||
Cash and cash equivalents, September 30 (Note) | $ | 4 | $ | 273 | $ | — | $ | — | $ | 277 |
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
Three Months Ended September 30, 2016 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
(Millions) | |||||||||||||||||||
Operating Activities | |||||||||||||||||||
Net cash provided (used) by operating activities | $ | 170 | $ | (17 | ) | $ | (19 | ) | $ | (4 | ) | $ | 130 | ||||||
Investing Activities | |||||||||||||||||||
Proceeds from sale of assets | 1 | — | — | — | 1 | ||||||||||||||
Cash payments for plant, property, and equipment | (29 | ) | (45 | ) | — | — | (74 | ) | |||||||||||
Cash payments for software related intangible assets | (6 | ) | — | — | — | (6 | ) | ||||||||||||
Changes in restricted cash | — | 1 | — | — | 1 | ||||||||||||||
Net cash used by investing activities | (34 | ) | (44 | ) | — | — | (78 | ) | |||||||||||
Financing Activities | |||||||||||||||||||
Issuance of common shares | — | — | 5 | — | 5 | ||||||||||||||
Retirement of long-term debt - net | — | — | (179 | ) | — | (179 | ) | ||||||||||||
Issuance of long-term debt - net | — | 2 | — | — | 2 | ||||||||||||||
Purchase of common stock under the share repurchase program | — | — | (89 | ) | — | (89 | ) | ||||||||||||
Net decrease in bank overdrafts | — | (1 | ) | — | — | (1 | ) | ||||||||||||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivables | — | 46 | 152 | — | 198 | ||||||||||||||
Net decrease in short-term borrowings secured by accounts receivable | — | — | 50 | — | 50 | ||||||||||||||
Intercompany dividend payments and net increase (decrease) in intercompany obligations | (137 | ) | 54 | 79 | 4 | — | |||||||||||||
Distributions to noncontrolling interest partners | — | (28 | ) | — | — | (28 | ) | ||||||||||||
Net cash provided (used) by financing activities | (137 | ) | 73 | 18 | 4 | (42 | ) | ||||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | (1 | ) | 3 | 1 | — | 3 | |||||||||||||
Increase (decrease) in cash and cash equivalents | (2 | ) | 15 | — | — | 13 | |||||||||||||
Cash and cash equivalents, July 1 | 2 | 309 | — | — | 311 | ||||||||||||||
Cash and cash equivalents, September 30 (Note) | $ | — | $ | 324 | $ | — | $ | — | $ | 324 |
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
Nine Months Ended September 30, 2017 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
(Millions) | |||||||||||||||||||
Operating Activities | |||||||||||||||||||
Net cash provided (used) by operating activities | $ | 102 | $ | 101 | $ | (29 | ) | $ | (11 | ) | $ | 163 | |||||||
Investing Activities | |||||||||||||||||||
Proceeds from sale of equity interest | — | 9 | — | — | 9 | ||||||||||||||
Proceeds from sale of assets | 3 | 3 | — | — | 6 | ||||||||||||||
Cash payments for plant, property, and equipment | (110 | ) | (173 | ) | — | — | (283 | ) | |||||||||||
Cash payments for software related intangible assets | (10 | ) | (7 | ) | — | — | (17 | ) | |||||||||||
Other | (5 | ) | — | — | — | (5 | ) | ||||||||||||
Net cash used by investing activities | (122 | ) | (168 | ) | — | — | (290 | ) | |||||||||||
Financing Activities | |||||||||||||||||||
Repurchase of common shares | — | — | (2 | ) | — | (2 | ) | ||||||||||||
Cash dividends | — | — | (40 | ) | — | (40 | ) | ||||||||||||
Retirement of long-term debt - net | — | (3 | ) | (6 | ) | — | (9 | ) | |||||||||||
Issuance of long-term debt - net | 400 | — | (264 | ) | — | 136 | |||||||||||||
Debt issuance cost of long-term debt | (8 | ) | — | — | — | (8 | ) | ||||||||||||
Purchase of common stock under the share repurchase program | — | — | (131 | ) | — | (131 | ) | ||||||||||||
Net decrease in bank overdrafts | — | (12 | ) | — | — | (12 | ) | ||||||||||||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivables | 451 | 16 | (323 | ) | — | 144 | |||||||||||||
Net increase in short-term borrowings secured by accounts receivables | — | — | 20 | — | 20 | ||||||||||||||
Intercompany dividend payments and net increase (decrease) in intercompany obligations | (828 | ) | 42 | 775 | 11 | — | |||||||||||||
Distributions to noncontrolling interest partners | — | (45 | ) | — | — | (45 | ) | ||||||||||||
Net cash provided by financing activities | 15 | (2 | ) | 29 | 11 | 53 | |||||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | — | 4 | — | — | 4 | ||||||||||||||
Decrease in cash and cash equivalents | (5 | ) | (65 | ) | — | — | (70 | ) | |||||||||||
Cash and cash equivalents, January 1 | 9 | 338 | — | — | 347 | ||||||||||||||
Cash and cash equivalents, June 30 (Note) | $ | 4 | $ | 273 | $ | — | $ | — | $ | 277 |
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
Nine Months Ended September 30, 2016 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
(Millions) | |||||||||||||||||||
Operating Activities | |||||||||||||||||||
Net cash provided (used) by operating activities | $ | 113 | $ | 187 | $ | (52 | ) | $ | (15 | ) | $ | 233 | |||||||
Investing Activities | |||||||||||||||||||
Proceeds from sale of assets | 1 | 3 | — | — | 4 | ||||||||||||||
Cash payments for plant, property, and equipment | (72 | ) | (141 | ) | — | — | (213 | ) | |||||||||||
Cash payments for software related intangible assets | (10 | ) | (5 | ) | — | — | (15 | ) | |||||||||||
Changes in restricted cash | — | (1 | ) | — | — | (1 | ) | ||||||||||||
Net cash used by investing activities | (81 | ) | (144 | ) | — | — | (225 | ) | |||||||||||
Financing Activities | |||||||||||||||||||
Issuance of common shares | — | — | 7 | — | 7 | ||||||||||||||
Retirement of long-term debt - net | — | (16 | ) | (511 | ) | — | (527 | ) | |||||||||||
Issuance of long-term debt - net | — | 8 | 500 | — | 508 | ||||||||||||||
Debt issuance cost of long-term debt | — | — | (8 | ) | — | (8 | ) | ||||||||||||
Purchase of common stock under the share repurchase program | — | — | (146 | ) | — | (146 | ) | ||||||||||||
Net decrease in bank overdrafts | — | 4 | — | — | 4 | ||||||||||||||
Net increase in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivables | — | 36 | 187 | — | 223 | ||||||||||||||
Net increase in short-term borrowings secured by accounts receivables | — | — | 20 | — | 20 | ||||||||||||||
Intercompany dividend payments and net increase (decrease) in intercompany obligations | (34 | ) | 16 | 3 | 15 | — | |||||||||||||
Distributions to noncontrolling interest partners | — | (55 | ) | — | — | (55 | ) | ||||||||||||
Net cash provided (used) by financing activities | (34 | ) | (7 | ) | 52 | 15 | 26 | ||||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | — | 3 | — | — | 3 | ||||||||||||||
Increase (decrease) in cash and cash equivalents | (2 | ) | 39 | — | — | 37 | |||||||||||||
Cash and cash equivalents, January 1 | 2 | 285 | — | — | 287 | ||||||||||||||
Cash and cash equivalents, June 30 (Note) | $ | — | $ | 324 | $ | — | $ | — | $ | 324 |
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
(14) | Revision of Previously Issued Financial Statements |
Three Months Ended September 30, 2016 | ||||||||||||
As Previously Reported | Adjustment | As Revised | ||||||||||
(Millions Except Per Share Amounts) | ||||||||||||
Condensed Consolidated Income Statement | ||||||||||||
Cost of sales (exclusive of depreciation and amortization) | $ | 1,741 | $ | 2 | $ | 1,743 | ||||||
Earnings before interest expense, income taxes, and noncontrolling interests | 152 | (2 | ) | 150 | ||||||||
Earnings before income taxes and noncontrolling interests | 128 | (2 | ) | 126 | ||||||||
Income tax expense (benefit) | (69 | ) | (1 | ) | (70 | ) | ||||||
Net income | 197 | (1 | ) | 196 | ||||||||
Net income attributable to Tenneco Inc. | $ | 180 | $ | (1 | ) | $ | 179 | |||||
Earnings per share | ||||||||||||
Basic earnings per share of common stock | $ | 3.24 | $ | (0.02 | ) | $ | 3.22 | |||||
Diluted earnings per share of common stock | $ | 3.21 | $ | (0.02 | ) | $ | 3.19 |
Nine Months Ended September 30, 2016 | ||||||||||||
As Previously Reported | Adjustment | As Revised | ||||||||||
(Millions Except Per Share Amounts) | ||||||||||||
Condensed Consolidated Income Statement | ||||||||||||
Cost of sales (exclusive of depreciation and amortization) | $ | 5,321 | $ | 8 | $ | 5,329 | ||||||
Earnings before interest expense, income taxes, and noncontrolling interests | 453 | (8 | ) | 445 | ||||||||
Earnings before income taxes and noncontrolling interests | 377 | (8 | ) | 369 | ||||||||
Income tax expense (benefit) | 5 | (2 | ) | 3 | ||||||||
Net income | 372 | (6 | ) | 366 | ||||||||
Less: Net income attributable to noncontrolling interests | 49 | (1 | ) | 48 | ||||||||
Net income attributable to Tenneco Inc. | $ | 323 | $ | (5 | ) | $ | 318 | |||||
Earnings per share | ||||||||||||
Basic earnings per share of common stock | $ | 5.72 | $ | (0.09 | ) | $ | 5.63 | |||||
Diluted earnings per share of common stock | $ | 5.67 | $ | (0.09 | ) | $ | 5.58 |
Three Months Ended September 30, 2016 | ||||||||||||
As Previously Reported | Adjustment | As Revised | ||||||||||
(Millions) | ||||||||||||
Condensed Consolidated Statement of Comprehensive Income | ||||||||||||
Tenneco Inc. | ||||||||||||
Net Income | $ | 180 | $ | (1 | ) | $ | 179 | |||||
Other Comprehensive Income | 5 | — | 5 | |||||||||
Comprehensive Income | $ | 185 | $ | (1 | ) | $ | 184 | |||||
Noncontrolling Interests | ||||||||||||
Net Income | $ | 17 | $ | — | $ | 17 | ||||||
Other Comprehensive Income | — | — | — | |||||||||
Comprehensive Income | $ | 17 | $ | — | $ | 17 | ||||||
Total | ||||||||||||
Net Income | $ | 197 | $ | (1 | ) | $ | 196 | |||||
Other Comprehensive Income | 5 | — | 5 | |||||||||
Comprehensive Income | $ | 202 | $ | (1 | ) | $ | 201 |
Nine Months Ended September 30, 2016 | ||||||||||||
As Previously Reported | Adjustment | As Revised | ||||||||||
(Millions) | ||||||||||||
Condensed Consolidated Statement of Comprehensive Income | ||||||||||||
Tenneco Inc. | ||||||||||||
Net Income | $ | 323 | $ | (5 | ) | $ | 318 | |||||
Other Comprehensive Income | 15 | — | 15 | |||||||||
Comprehensive Income | $ | 338 | $ | (5 | ) | $ | 333 | |||||
Noncontrolling Interests | ||||||||||||
Net Income | $ | 49 | $ | (1 | ) | $ | 48 | |||||
Other Comprehensive Loss | (1 | ) | — | (1 | ) | |||||||
Comprehensive Income | $ | 48 | $ | (1 | ) | $ | 47 | |||||
Total | ||||||||||||
Net Income | $ | 372 | $ | (6 | ) | $ | 366 | |||||
Other Comprehensive Income | 14 | — | 14 | |||||||||
Comprehensive Income | $ | 386 | $ | (6 | ) | $ | 380 |
Three Months Ended September 30, 2016 | ||||||||||||
As Previously Reported | Adjustment | As Revised | ||||||||||
(Millions) | ||||||||||||
Condensed Consolidated Statement of Cash Flow * | ||||||||||||
Net income | $ | 197 | $ | (1 | ) | $ | 196 | |||||
Increase (decrease) in payables | (7 | ) | 2 | (5 | ) | |||||||
Increase (decrease) in accrued taxes | 1 | (1 | ) | — |
Nine Months Ended September 30, 2016 | ||||||||||||
As Previously Reported | Adjustment | As Revised | ||||||||||
(Millions) | ||||||||||||
Condensed Consolidated Statement of Cash Flow * | ||||||||||||
Net income | $ | 372 | $ | (6 | ) | $ | 366 | |||||
Deferred income taxes | (73 | ) | (1 | ) | (74 | ) | ||||||
Increase (decrease) in payables | 55 | 4 | 59 | |||||||||
Increase (decrease) in accrued taxes | 10 | (1 | ) | 9 | ||||||||
Changes in long-term liabilities | 9 | 4 | 13 |
Nine Months Ended September 30, 2016 | ||||||||||||
As Previously Reported | Adjustment | As Revised | ||||||||||
(Millions) | ||||||||||||
Condensed Consolidated Statements of Changes in Shareholders' Equity | ||||||||||||
Retained earnings (accumulated deficit) | ||||||||||||
Balance January 1 | $ | (1,448 | ) | $ | (8 | ) | $ | (1,456 | ) | |||
Net income attributable to Tenneco Inc. | 323 | (5 | ) | 318 | ||||||||
Balance September 30 | $ | (1,125 | ) | $ | (13 | ) | $ | (1,138 | ) | |||
Total Tenneco Inc. shareholders' equity | $ | 635 | $ | (13 | ) | $ | 622 | |||||
Noncontrolling interests: | ||||||||||||
Balance January 1 | $ | 42 | $ | (3 | ) | $ | 39 | |||||
Net income | 21 | (1 | ) | 20 | ||||||||
Other comprehensive loss | (1 | ) | 1 | — | ||||||||
Dividends declared | (22 | ) | $ | — | (22 | ) | ||||||
Balance September 30 | $ | 40 | $ | (3 | ) | $ | 37 | |||||
Total Equity | $ | 675 | $ | (16 | ) | $ | 659 |
Quarter ended September 30, 2016 | $ | 1,743 | |
Volume and mix | 125 | ||
Material | 2 | ||
Currency exchange rates | 39 | ||
Restructuring | 6 | ||
Other costs | (2 | ) | |
Quarter ended September 30, 2017 | $ | 1,913 |
Nine months ended September 30, 2016 | $ | 5,329 | |
Volume and mix | 414 | ||
Material | 26 | ||
Currency exchange rates | (1 | ) | |
Restructuring | 18 | ||
Other Costs | 4 | ||
Nine months ended September 30, 2017 | $ | 5,790 |
Three Months Ended September 30, 2017 | |||||||||||||||||||
Revenues | Substrate Sales | Value-add Revenues | Currency Impact on Value-add Revenues | Value-add Revenues excluding Currency | |||||||||||||||
(Millions) | |||||||||||||||||||
Clean Air Division | |||||||||||||||||||
North America | $ | 723 | $ | 244 | $ | 479 | $ | — | $ | 479 | |||||||||
Europe & South America | 536 | 200 | 336 | 27 | 309 | ||||||||||||||
Asia Pacific | 313 | 78 | 235 | 1 | 234 | ||||||||||||||
Total Clean Air Division | 1,572 | 522 | 1,050 | 28 | 1,022 | ||||||||||||||
Ride Performance Division | |||||||||||||||||||
North America | 304 | — | 304 | 2 | 302 | ||||||||||||||
Europe & South America | 279 | — | 279 | 10 | 269 | ||||||||||||||
Asia Pacific | 119 | — | 119 | 1 | 118 | ||||||||||||||
Total Ride Performance Division | 702 | — | 702 | 13 | 689 | ||||||||||||||
Total Tenneco Inc. | $ | 2,274 | $ | 522 | $ | 1,752 | $ | 41 | $ | 1,711 |
Three Months Ended September 30, 2016 | |||||||||||||||||||
Revenues | Substrate Sales | Value-add Revenues | Currency Impact on Value-add Revenues | Value-add Revenues excluding Currency | |||||||||||||||
(Millions) | |||||||||||||||||||
Clean Air Division | |||||||||||||||||||
North America | $ | 716 | $ | 248 | $ | 468 | $ | — | $ | 468 | |||||||||
Europe & South America | 474 | 177 | 297 | — | 297 | ||||||||||||||
Asia Pacific | 270 | 59 | 211 | — | 211 | ||||||||||||||
Total Clean Air Division | 1,460 | 484 | 976 | — | 976 | ||||||||||||||
Ride Performance Division | |||||||||||||||||||
North America | 306 | — | 306 | — | 306 | ||||||||||||||
Europe & South America | 229 | — | 229 | — | 229 | ||||||||||||||
Asia Pacific | 101 | — | 101 | — | 101 | ||||||||||||||
Total Ride Performance Division | 636 | — | 636 | — | 636 | ||||||||||||||
Total Tenneco Inc. | $ | 2,096 | $ | 484 | $ | 1,612 | $ | — | $ | 1,612 |
Three Months Ended September 30, 2017 Versus Three Months Ended September 30, 2016 Dollar and Percent Increase (Decrease) | |||||||||||||
Revenues | Percent | Value-add Revenues excluding Currency | Percent | ||||||||||
(Millions Except Percent Amounts) | |||||||||||||
Clean Air Division | |||||||||||||
North America | $ | 7 | 1 | % | $ | 11 | 2 | % | |||||
Europe & South America | 62 | 13 | % | 12 | 4 | % | |||||||
Asia Pacific | 43 | 16 | % | 23 | 11 | % | |||||||
Total Clean Air Division | 112 | 8 | % | 46 | 5 | % | |||||||
Ride Performance Division | |||||||||||||
North America | (2 | ) | (1 | )% | (4 | ) | (1 | )% | |||||
Europe & South America | 50 | 22 | % | 40 | 17 | % | |||||||
Asia Pacific | 18 | 18 | % | 17 | 17 | % | |||||||
Total Ride Performance Division | 66 | 10 | % | 53 | 8 | % | |||||||
Total Tenneco Inc. | $ | 178 | 8 | % | $ | 99 | 6 | % |
Three Months Ended September 30, | |||||||||||
2017 | 2016 | Increase (Decrease) | % Increase (Decrease) | ||||||||
(Number of Vehicles in Thousands) | |||||||||||
North America | 3,995 | 4,424 | (429 | ) | (10 | )% | |||||
Europe | 4,991 | 4,745 | 246 | 5 | % | ||||||
South America | 870 | 691 | 179 | 26 | % | ||||||
Total Europe & South America | 5,861 | 5,436 | 425 | 8 | % | ||||||
China | 6,349 | 6,301 | 48 | 1 | % | ||||||
India | 1,166 | 1,127 | 39 | 3 | % | ||||||
Australia | 34 | 45 | (11 | ) | (24 | )% |
Nine Months Ended September 30, 2017 | |||||||||||||||||||
Revenues | Substrate Sales | Value-add Revenues | Currency Impact on Value-add Revenues | Value-add Revenues excluding Currency | |||||||||||||||
(Millions) | |||||||||||||||||||
Clean Air Division | |||||||||||||||||||
North America | $ | 2,341 | $ | 795 | $ | 1,546 | $ | — | $ | 1,546 | |||||||||
Europe & South America | 1,620 | 608 | 1,012 | 10 | 1,002 | ||||||||||||||
Asia Pacific | 861 | 207 | 654 | (15 | ) | 669 | |||||||||||||
Total Clean Air Division | 4,822 | 1,610 | 3,212 | (5 | ) | 3,217 | |||||||||||||
Ride Performance Division | |||||||||||||||||||
North America | $ | 945 | — | 945 | — | 945 | |||||||||||||
Europe & South America | 786 | — | 786 | 11 | 775 | ||||||||||||||
Asia Pacific | 330 | — | 330 | (3 | ) | 333 | |||||||||||||
Total Ride Performance Division | 2,061 | — | 2,061 | 8 | 2,053 | ||||||||||||||
Total Tenneco Inc. | $ | 6,883 | $ | 1,610 | $ | 5,273 | $ | 3 | $ | 5,270 |
Nine Months Ended September 30, 2016 | |||||||||||||||||||
Revenues | Substrate Sales | Value-add Revenues | Currency Impact on Value-add Revenues | Value-add Revenues excluding Currency | |||||||||||||||
(Millions) | |||||||||||||||||||
Clean Air Division | |||||||||||||||||||
North America | $ | 2,252 | $ | 792 | $ | 1,460 | $ | — | $ | 1,460 | |||||||||
Europe & South America | 1,462 | 537 | 925 | — | 925 | ||||||||||||||
Asia Pacific | 813 | 184 | 629 | — | 629 | ||||||||||||||
Total Clean Air Division | 4,527 | 1,513 | 3,014 | — | 3,014 | ||||||||||||||
Ride Performance Division | |||||||||||||||||||
North America | $ | 952 | — | 952 | — | 952 | |||||||||||||
Europe & South America | 689 | — | 689 | — | 689 | ||||||||||||||
Asia Pacific | 276 | — | 276 | — | 276 | ||||||||||||||
Total Ride Performance Division | 1,917 | — | 1,917 | — | 1,917 | ||||||||||||||
Total Tenneco Inc. | $ | 6,444 | $ | 1,513 | $ | 4,931 | $ | — | $ | 4,931 |
Nine Months Ended September 30, 2017 Versus Nine Months Ended September 30, 2016 Dollar and Percent Increase (Decrease) | |||||||||||||
Revenues | Percent | Value-add Revenues excluding Currency | Percent | ||||||||||
(Millions Except Percent Amounts) | |||||||||||||
Clean Air Division | |||||||||||||
North America | $ | 89 | 4 | % | $ | 86 | 6 | % | |||||
Europe & South America | 158 | 11 | % | 77 | 8 | % | |||||||
Asia Pacific | 48 | 6 | % | 40 | 6 | % | |||||||
Total Clean Air Division | 295 | 7 | % | 203 | 7 | % | |||||||
Ride Performance Division | |||||||||||||
North America | (7 | ) | (1 | )% | (7 | ) | (1 | )% | |||||
Europe & South America | 97 | 14 | % | 86 | 12 | % | |||||||
Asia Pacific | 54 | 20 | % | 57 | 21 | % | |||||||
Total Ride Performance Division | 144 | 8 | % | 136 | 7 | % | |||||||
Total Tenneco Inc. | $ | 439 | 7 | % | $ | 339 | 7 | % |
Nine Months Ended September 30, | |||||||||||
2017 | 2016 | Increase (Decrease) | % Increase (Decrease) | ||||||||
(Number of Vehicles in Thousands) | |||||||||||
North America | 12,980 | 13,479 | (499 | ) | (4 | )% | |||||
Europe | 16,558 | 16,170 | 388 | 2 | % | ||||||
South America | 2,404 | 1,988 | 416 | 21 | % | ||||||
Total Europe & South America | 18,962 | 18,158 | 804 | 4 | % | ||||||
China | 19,248 | 18,754 | 494 | 3 | % | ||||||
India | 3,343 | 3,137 | 206 | 7 | % | ||||||
Australia | 90 | 123 | (33 | ) | (26 | )% |
Three Months Ended September 30, | Change | ||||||||||
2017 | 2016 | ||||||||||
(Millions) | |||||||||||
Clean Air Division | |||||||||||
North America | $ | 46 | $ | 42 | $ | 4 | |||||
Europe & South America | 25 | 29 | (4 | ) | |||||||
Asia Pacific | 36 | 39 | (3 | ) | |||||||
Total Clean Air Division | 107 | 110 | (3 | ) | |||||||
Ride Performance Division | |||||||||||
North America | 29 | 37 | (8 | ) | |||||||
Europe & South America | 6 | 8 | (2 | ) | |||||||
Asia Pacific | 11 | 17 | (6 | ) | |||||||
Total Ride Performance Division | 46 | 62 | (16 | ) | |||||||
Other | (19 | ) | (22 | ) | 3 | ||||||
Total Tenneco Inc. | $ | 134 | $ | 150 | $ | (16 | ) |
Three Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Millions) | |||||||
Clean Air Division | |||||||
North America | |||||||
Restructuring and related expenses | $ | 1 | $ | — | |||
Europe & South America | |||||||
Restructuring and related expenses | — | 1 | |||||
Asia Pacific | |||||||
Restructuring and related expenses | 2 | 1 | |||||
Total Clean Air Division | 3 | 2 | |||||
Ride Performance Division | |||||||
North America | |||||||
Restructuring and related expenses | 5 | 5 | |||||
Europe & South America | |||||||
Restructuring and related expenses | 4 | — | |||||
Asia Pacific | |||||||
Restructuring and related expenses | 8 | — | |||||
Total Ride Performance Division | 17 | 5 | |||||
Total Tenneco Inc. | $ | 20 | $ | 7 |
Three Months Ended September 30, | |||||
2017 | 2016 | ||||
Clean Air Division | |||||
North America | 6 | % | 6 | % | |
Europe & South America | 5 | % | 6 | % | |
Asia Pacific | 12 | % | 14 | % | |
Total Clean Air Division | 7 | % | 8 | % | |
Ride Performance Division | |||||
North America | 10 | % | 12 | % | |
Europe & South America | 2 | % | 3 | % | |
Asia Pacific | 9 | % | 17 | % | |
Total Ride Performance Division | 7 | % | 10 | % | |
Total Tenneco Inc. | 6 | % | 7 | % |
Nine Months Ended September 30, | Change | ||||||||||
2017 | 2016 | ||||||||||
(Millions) | |||||||||||
Clean Air Division | |||||||||||
North America | $ | 153 | $ | 168 | $ | (15 | ) | ||||
Europe & South America | 79 | 72 | 7 | ||||||||
Asia Pacific | 91 | 110 | (19 | ) | |||||||
Total Clean Air Division | 323 | 350 | (27 | ) | |||||||
Ride Performance Division | |||||||||||
North America | 100 | 127 | (27 | ) | |||||||
Europe & South America | 19 | 12 | 7 | ||||||||
Asia Pacific | 45 | 43 | 2 | ||||||||
Total Ride Performance Division | 164 | 182 | (18 | ) | |||||||
Other | (205 | ) | (87 | ) | (118 | ) | |||||
Total Tenneco Inc. | $ | 282 | $ | 445 | $ | (163 | ) |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Millions) | |||||||
Clean Air Division | |||||||
North America | |||||||
Restructuring and related expenses | $ | 1 | $ | — | |||
Europe & South America | |||||||
Restructuring and related expenses | 10 | 2 | |||||
Asia Pacific | |||||||
Restructuring and related expenses | 14 | 1 | |||||
Total Clean Air Division | 25 | 3 | |||||
Ride Performance Division | |||||||
North America | |||||||
Restructuring and related expenses | 8 | 6 | |||||
Warranty settlement (1) | 7 | — | |||||
Europe & South America | |||||||
Restructuring and related expenses | 8 | 17 | |||||
Asia Pacific | |||||||
Restructuring and related expenses | 8 | — | |||||
Total Ride Performance Division | 31 | 23 | |||||
Other | |||||||
Restructuring and related expenses | 3 | — | |||||
Pension charges / Stock vesting (2) | 11 | — | |||||
Antitrust settlement accrual (3) | 132 | — | |||||
Gain on sale of unconsolidated JV (4) | (5 | ) | — | ||||
Total Other | 141 | — | |||||
Total Tenneco Inc. | $ | 197 | $ | 26 |
Nine Months Ended September 30, | |||||
2017 | 2016 | ||||
Clean Air Division | |||||
North America | 7 | % | 7 | % | |
Europe & South America | 5 | % | 5 | % | |
Asia Pacific | 11 | % | 14 | % | |
Total Clean Air Division | 7 | % | 8 | % | |
Ride Performance Division | |||||
North America | 11 | % | 13 | % | |
Europe & South America | 2 | % | 2 | % | |
Asia Pacific | 14 | % | 16 | % | |
Total Ride Performance Division | 8 | % | 9 | % | |
Total Tenneco Inc. | 4 | % | 7 | % |
December 31, 2016 Restructuring Reserve | 2017 Expenses | 2017 Cash Payments | Impact of Exchange Rates | September 30, 2017 Restructuring Reserve | ||||||||||||
(Millions) | ||||||||||||||||
Employee Severance, Termination Benefits and Other Related Costs | $ | 15 | 38 | (18 | ) | 2 | $ | 37 |
Three Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Millions) | |||||||
Cash provided (used) by: | |||||||
Operating activities (1) | $ | 53 | $ | 130 | |||
Investing activities | (96 | ) | (78 | ) | |||
Financing activities (1) | (16 | ) | (42 | ) |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Millions) | |||||||
Cash provided (used) by: | |||||||
Operating activities (1) | $ | 163 | $ | 233 | |||
Investing activities | (290 | ) | (225 | ) | |||
Financing activities (1) | 53 | 26 |
• | Future reversals of existing taxable temporary differences; |
• | Taxable income or loss, based on recent results, exclusive of reversing temporary differences and carryforwards; |
• | Tax-planning strategies; and |
• | Taxable income in prior carryback years if carryback is permitted under the relevant tax law. |
September 30, 2017 | December 31, 2016 | % Change | ||||||||
(Millions) | ||||||||||
Short-term debt and maturities classified as current | $ | 108 | $ | 90 | 20 | % | ||||
Long-term debt | 1,573 | 1,294 | 22 | |||||||
Total debt | 1,681 | 1,384 | 21 | |||||||
Total redeemable noncontrolling interests | 32 | 40 | (20 | ) | ||||||
Total noncontrolling interests | 39 | 47 | (17 | ) | ||||||
Tenneco Inc. shareholders’ equity | 647 | 573 | 13 | |||||||
Total equity | 686 | 620 | 11 | |||||||
Total capitalization | $ | 2,399 | $ | 2,044 | 17 | % |
Quarter Ended | |||||||||||||||||
September 30, 2017 | June 30, 2017 | March 31, 2017 | |||||||||||||||
Required | Actual | Required | Actual | Required | Actual | ||||||||||||
Leverage Ratio (maximum) | 3.50 | 2.15 | 3.50 | 1.97 | 3.50 | 1.62 | |||||||||||
Interest Coverage Ratio (minimum) | 2.75 | 11.48 | 2.75 | 12.44 | 2.75 | 15.38 |
Pro forma Consolidated Leverage Ratio | Aggregate Senior Note Maximum Amount | ||
(Millions) | |||
Greater than or equal to 3.25x | $ | 20 | |
Greater than or equal to 3.0x | $ | 100 | |
Greater than or equal to 2.5x | $ | 225 | |
Less than 2.5x | no limit |
September 30, 2017 | |||
Notional Amount in Foreign Currency | |||
(Millions) | |||
British pounds | —Purchase | 10 | |
Canadian dollars | —Sell | (2 | ) |
European euro | —Sell | (4 | ) |
U.S. dollars | —Purchase | 7 | |
—Sell | (14 | ) |
Period | Total Number of Shares Purchased (1) | Average Price Paid | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Value of Shares That May Yet be Purchased Under These Plans or Programs (Millions) | |||||||||
July 2017 | 81,953 | $ | 56.93 | 81,000 | $ | 335 | |||||||
August 2017 | 603,676 | $ | 53.36 | 603,000 | 302 | ||||||||
September 2017 | 570,677 | $ | 56.31 | 570,643 | 269 | ||||||||
Total | 1,256,306 | $ | 54.93 | 1,254,643 | $ | 269 |
(1) | Includes shares withheld upon vesting of restricted stock in the amount of 953 in July 2017, 676 in August and 34 in September 2017. |
TENNECO INC. | ||
By: | /S/ KENNETH R. TRAMMELL | |
Kenneth R. Trammell | ||
Executive Vice President and Chief Financial Officer |
Exhibit Number | Description | |
*10.1 | — | Amendment No. 3, effective October 26, 2017, to Amended and Restated Tenneco Value Added Incentive Compensation Plan. |
*12 | — | Computation of Ratio of Earnings to Fixed Charges. |
*15.1 | — | Letter of PricewaterhouseCoopers LLP regarding interim financial information. |
*31.1 | — | Certification of Brian J. Kesseler under Section 302 of the Sarbanes-Oxley Act of 2002. |
*31.2 | — | Certification of Kenneth R. Trammell under Section 302 of the Sarbanes-Oxley Act of 2002. |
*32.1 | — | Certification of Brian J. Kesseler and Kenneth R. Trammell under Section 906 of the Sarbanes-Oxley Act of 2002. |
*101.INS | — | XBRL Instance Document. |
*101.SCH | — | XBRL Taxonomy Extension Schema Document. |
*101.CAL | — | XBRL Taxonomy Extension Calculation Linkbase Document. |
*101.DEF | — | XBRL Taxonomy Extension Definition Linkbase Document. |
*101.LAB | — | XBRL Taxonomy Extension Label Linkbase Document. |
*101.PRE | — | XBRL Taxonomy Extension Presentation Linkbase Document. |
* | Filed herewith. |
1. | Effective immediately upon execution of this Amendment, by substituting the following for subsection 5(d) of the Plan: |
2. | With respect to payments under the Plan for periods after calendar year 2018, by substituting the following for subsection 6(a) of the Plan: |
3. | Effective for calendar years beginning on or after January 1, 2018, by substituting the following for subsection 6(f) of the Plan: |
4. | Effective immediately upon execution of this Amendment, by deleting subsection 7(g) of the Plan. |
5. | Effective immediately upon execution of this Amendment, by substituting the following for the last sentence of Section 8 of the Plan. |
6. | Effective immediately upon the execution of this Amendment, by substituting the following for subsection 9(a) of the Plan: |
By: /s/ | Gregg A. Bolt | ||
Name: | Gregg A. Bolt | ||
Title: | Senior Vice President Global Human Resources and Administration |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Millions) | |||||||
Net income attributable to Tenneco Inc. * | $ | 139 | $ | 318 | |||
Add: | |||||||
Interest expense | 54 | 76 | |||||
Portion of rental representative of the interest factor | 18 | 16 | |||||
Income tax expense * | 41 | 3 | |||||
Noncontrolling interests * | 48 | 48 | |||||
Amortization of interest capitalized | 3 | 3 | |||||
Undistributed losses of affiliated companies in which less | |||||||
than a 50% voting interest is owned | 1 | — | |||||
Earnings as defined * | $ | 304 | $ | 464 | |||
Interest expense | 54 | 76 | |||||
Interest capitalized | 6 | 4 | |||||
Portion of rentals representative of the interest factor | 18 | 16 | |||||
Fixed charges as defined | $ | 78 | $ | 96 | |||
Ratio of earnings to fixed charges * | 3.90 | 4.83 |
1. | I have reviewed this quarterly report on Form 10-Q of Tenneco Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of the registrant’s internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ | BRIAN J. KESSELER | |
Brian J. Kesseler | ||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Tenneco Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of the registrant’s internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ | KENNETH R. TRAMMELL | |
Kenneth R. Trammell | ||
Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ | BRIAN J. KESSELER |
Brian J. Kesseler | |
Chief Executive Officer | |
/s/ | KENNETH R. TRAMMELL |
Kenneth R. Trammell | |
Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 27, 2017 |
|
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | TENNECO INC | |
Entity Central Index Key | 0001024725 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 51,588,561 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Revenues | ||||
Net sales and operating revenues | $ 2,274,000,000 | $ 2,096,000,000 | $ 6,883,000,000 | $ 6,444,000,000 |
Costs and expenses | ||||
Cost of sales (exclusive of depreciation and amortization shown below) | 1,913,000,000 | 1,743,000,000 | 5,790,000,000 | 5,329,000,000 |
Engineering, research, and development | 40,000,000 | 41,000,000 | 115,000,000 | 117,000,000 |
Selling, general, and administrative | 128,000,000 | 109,000,000 | 529,000,000 | 390,000,000 |
Depreciation and amortization of other intangibles | 58,000,000 | 53,000,000 | 165,000,000 | 159,000,000 |
Costs and expenses | 2,139,000,000 | 1,946,000,000 | 6,599,000,000 | 5,995,000,000 |
Other expense | ||||
Loss on sale of receivables | (2,000,000) | (2,000,000) | (4,000,000) | (4,000,000) |
Other income | 1,000,000 | 2,000,000 | 2,000,000 | 0 |
Total other expense | (1,000,000) | 0 | (2,000,000) | (4,000,000) |
Earnings before interest expense, income taxes, and noncontrolling interests | 134,000,000 | 150,000,000 | 282,000,000 | 445,000,000 |
Interest expense | 19,000,000 | 24,000,000 | 54,000,000 | 76,000,000 |
Earnings before income taxes and noncontrolling interests | 115,000,000 | 126,000,000 | 228,000,000 | 369,000,000 |
Income tax expense (benefit) | 16,000,000 | (70,000,000) | 41,000,000 | 3,000,000 |
Net income | 99,000,000 | 196,000,000 | 187,000,000 | 366,000,000 |
Less: Net income attributable to noncontrolling interests | 16,000,000 | 17,000,000 | 48,000,000 | 48,000,000 |
Net income attributable to Tenneco Inc. | $ 83,000,000 | $ 179,000,000 | $ 139,000,000 | $ 318,000,000 |
Weighted average shares of common stock outstanding — | ||||
Basic (in shares) | 52,508,078 | 55,679,969 | 53,265,149 | 56,511,838 |
Diluted (in shares) | 52,687,656 | 56,165,709 | 53,501,864 | 56,958,447 |
Basic earnings per share of common stock (in dollars per share) | $ 1.57 | $ 3.22 | $ 2.61 | $ 5.63 |
Diluted earnings per share of common stock (in dollars per share) | $ 1.57 | $ 3.19 | $ 2.60 | $ 5.58 |
Cash dividends declared (in dollars per share) | $ 0.25 | $ 0.00 | $ 0.75 | $ 0.00 |
Consolidation and Presentation |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidation and Presentation | Consolidation and Presentation As you read the accompanying financial statements you should also read our amended Annual Report on Form 10-K/A for the year ended December 31, 2016. In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of Tenneco Inc.’s results of operations, comprehensive income, financial position, cash flows, and changes in shareholders’ equity for the periods indicated. We have prepared the unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (U.S. GAAP) for annual financial statements. Our condensed consolidated financial statements include all majority-owned subsidiaries. We carry investments in 20 percent to 50 percent owned companies in which the Company does not have a controlling interest, as equity method investments, at cost plus equity in undistributed earnings since the date of acquisition and cumulative translation adjustments. We have eliminated all intercompany transactions. Revision of Previously Issued Financial Statements For the periods from April 1, 2013 through March 31, 2017, we identified in the second quarter of 2017 that approximately $34 million in lump sum payments from our suppliers were incorrectly recorded upon receipt as a reduction to cost of sales. The errors resulted from the intentional mischaracterization by certain purchasing and accounting personnel at the Company’s China subsidiaries of the nature of the accounting transactions related to the payments received from suppliers. These payments should have been deferred and amortized over the life of the underlying supplier agreements. The deferred amount related to these payments was $25 million at September 30, 2017 and recorded within deferred credit and other liabilities. In addition, we identified in the second quarter of 2017 an unrelated error of approximately $7 million of substrate liabilities that should have been accrued during the periods from January 1, 2016 through March 31, 2017, understating cost of sales in each of these periods. We evaluated the impact of these items on prior periods under the guidance of SEC Staff Accounting Bulletin (SAB) No. 99, “Materiality” and determined that the amounts were not material to previously issued financial statements. As a result, we will revise for interim periods in future filings, for certain amounts in the consolidated financial statements in order to correct these errors. See Note 14 in our notes to condensed consolidated financial statements located in Part I Item 1 of this Form 10-Q. Prepayments and Other Prepayments and other included $133 million and $97 million at September 30, 2017 and December 31, 2016, respectively, for in-process tools and dies that we are building for our original equipment customers. Accounts Payable Accounts payable included $109 million and $99 million at September 30, 2017 and December 31, 2016, respectively, for accrued compensation and $14 million and $26 million at September 30, 2017 and December 31, 2016, respectively, for bank overdrafts at our European subsidiaries. Redeemable Noncontrolling Interests The following is a rollforward of activities in our redeemable noncontrolling interests for the nine months ended September 30, 2017 and 2016, respectively:
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Financial Instruments |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments The net carrying and estimated fair values of our financial instruments by class at September 30, 2017 and December 31, 2016 were as follows:
(a) All derivatives are categorized within Level 2 of the fair value hierarchy. Asset and Liability Instruments — The fair value of cash and cash equivalents, short and long-term receivables, accounts payable, and short-term debt was considered to be the same as or was not determined to be materially different from the carrying amount. Long-term Debt — The fair value of our public fixed rate senior notes is based on quoted market prices (level 1). The fair value of our private borrowings under our senior credit facility and other long-term debt instruments is based on the market value of debt with similar maturities, interest rates and risk characteristics (level 2). The fair value of our level 1 debt, as classified in the fair value hierarchy, was $749 million and $725 million at September 30, 2017 and December 31, 2016, respectively. We have classified $849 million and $571 million as level 2 in the fair value hierarchy at September 30, 2017 and December 31, 2016, respectively, since we utilize valuation inputs that are observable both directly and indirectly. We classified the remaining $14 million and $15 million, consisting of foreign subsidiary debt, as level 3 in the fair value hierarchy at September 30, 2017 and December 31, 2016, respectively. The fair value hierarchy definition prioritizes the inputs used in measuring fair value into the following levels:
Foreign Exchange Forward Contracts — We use derivative financial instruments, principally foreign currency forward purchase and sales contracts with terms of less than one year, to hedge our exposure to changes in foreign currency exchange rates. Our primary exposure to changes in foreign currency rates results from intercompany loans made between affiliates to minimize the need for borrowings from third parties. Additionally, we enter into foreign currency forward purchase and sale contracts to mitigate our exposure to changes in exchange rates on certain intercompany and third-party trade receivables and payables. We manage counter-party credit risk by entering into derivative financial instruments with major financial institutions that can be expected to fully perform under the terms of such agreements. We do not enter into derivative financial instruments for speculative purposes. The fair value of our foreign currency forward contracts is based on an internally developed model which incorporates observable inputs including quoted spot rates, forward exchange rates and discounted future expected cash flows utilizing market interest rates with similar quality and maturity characteristics. We record the change in fair value of these foreign exchange forward contracts as part of currency gains (losses) within cost of sales in the consolidated statements of income. The fair value of foreign exchange forward contracts are recorded in prepayments and other current assets or other current liabilities in the consolidated balance sheet. The fair value of our foreign currency forward contracts was a net asset position of less than $1 million at September 30, 2017 and a net liability position of less than $1 million at December 31, 2016, respectively. The following table summarizes by major currency the notional amounts for foreign currency forward purchase and sale contracts as of September 30, 2017 (all of which mature in 2017):
Cash-settled Share Swap Transactions — In the second quarter of 2017, we entered into an equity swap agreement with a financial institution. We selectively use cash-settled share swaps to reduce market risk associated with our deferred liabilities. These equity compensation liabilities increase as our stock price increases and decrease as our stock price decreases. In contrast, the value of the swap agreement moves in the opposite direction of these liabilities, allowing us to fix a portion of the liabilities at a stated amount. As of September 30, 2017, we had hedged our deferred liability related to approximately 250,000 common share equivalents. The fair value of the equity swap agreement is recorded in other current assets in the consolidated balance sheet. The fair value of our equity swap agreement was a net asset position of $5 million at September 30, 2017. Guarantees —We have from time to time issued guarantees for the performance of obligations by some of our subsidiaries, and some of our subsidiaries have guaranteed our debt. All of our existing and future material domestic subsidiaries fully and unconditionally guarantee our senior credit facility and our senior notes on a joint and several basis. The arrangement for the senior credit facility is also secured by first-priority liens on substantially all our domestic assets and pledges of up to 66 percent of the stock of certain first-tier foreign subsidiaries. No assets or capital stock secure our senior notes. For additional information, refer to Note 13 of the condensed consolidated financial statements of Tenneco Inc., where we present the Supplemental Guarantor Condensed Consolidating Financial Statements. We have two performance guarantee agreements in the U.K. between Tenneco Management (Europe) Limited (“TMEL”) and the two Walker Group Retirement Plans, the Walker Group Employee Benefit Plan and the Walker Group Executive Retirement Benefit Plan (the “Walker Plans”), whereby TMEL will guarantee the payment of all current and future pension contributions in the event of a payment default by the sponsoring or participating employers of the Walker Plans. The Walker Plans are comprised of employees from Tenneco Walker (U.K.) Limited and Futaba (U.K.) Limited, formerly our Futaba-Tenneco (U.K.) joint venture. Employer contributions are funded by Tenneco Walker (U.K.) Limited, as the sponsoring employer, and were also funded by Futaba (U.K.) Limited prior to its ceasing, on April 28, 2017, to be an entity in which Tenneco has an equity interest. The performance guarantee agreements are expected to remain in effect until all pension obligations for the Walker Plans’ sponsoring and participating employers have been satisfied. We did not record an additional liability for this performance guarantee since Tenneco Walker (U.K.) Limited, as the sponsoring employer of the Walker Plans, already recognizes 100 percent of the pension obligation calculated based on U.S. GAAP, for all of the Walker Plans’ participating employers on its balance sheet, which was $12 million and $19 million at September 30, 2017 and December 31, 2016, respectively. At September 30, 2017, all pension contributions under the Walker Plans were current for all of the Walker Plans’ sponsoring and participating employers. In June 2011, we entered into an indemnity agreement between TMEL and Futaba Industrial Co. Ltd. (Futaba) which required Futaba to indemnify TMEL for any cost, loss or liability which TMEL may have incurred under the performance guarantee agreements relating to the Futaba-Tenneco U.K. joint venture. The maximum amount reimbursable by Futaba to TMEL under this indemnity agreement was equal to the amount incurred by TMEL under the performance guarantee agreements multiplied by Futaba’s shareholder ownership percentage of the Futaba-Tenneco U.K. joint venture. On April 28, 2017, Walker Limited sold its equity interest in the Futaba-Tenneco U.K. joint venture entity to Futaba Industrial Co., Ltd. In connection with the closing of that transaction, this indemnity agreement was terminated and accordingly Futaba no longer has any reimbursement obligations thereunder. We have issued guarantees through letters of credit in connection with some obligations of our affiliates. As of September 30, 2017, we have guaranteed $32 million in letters of credit to support some of our subsidiaries’ insurance arrangements, foreign employee benefit programs, environmental remediation activities and cash management and capital requirements. Financial Instruments — In certain instances, several of our Chinese subsidiaries receive payment from customers through the receipt of financial instruments on the date the customer payments are due. Several of our Chinese subsidiaries also satisfy vendor payments through the delivery of financial instruments on the date the payments are due. Financial instruments issued to satisfy vendor payables and not redeemed totaled $8 million and $12 million at September 30, 2017 and December 31, 2016, respectively, and were classified as notes payable. Financial instruments received from original equipment (OE) customers and not redeemed totaled $3 million and $5 million at September 30, 2017 and December 31, 2016, respectively. We classify financial instruments received from our customers as other current assets if issued by a financial institution of our customers or as customer notes and accounts, net if issued by our customer. We classified $3 million and $5 million in other current assets at September 30, 2017 and December 31, 2016, respectively. The financial instruments received by some of our Chinese subsidiaries are drafts drawn that are payable at a future date and, in some cases, are negotiable and/or are guaranteed by the banks of the customers. The use of these instruments for payment follows local commercial practice. Because certain of such financial instruments are guaranteed by our customers’ banks, we believe they represent a lower financial risk than the outstanding accounts receivable that they satisfy which are not guaranteed by a bank. Supply Chain Financing — Certain of our suppliers participate in supply chain financing programs under which they securitize their accounts receivables from Tenneco. Financial institutions participate in the supply chain financing program on an uncommitted basis and can cease purchasing receivables or drafts from Tenneco's suppliers at any time. If the financial institutions did not continue to purchase receivables or drafts from Tenneco's suppliers under these programs, the participating vendors may have a need to renegotiate their payment terms with Tenneco which in turn would cause our borrowings under our revolving credit facility to increase. Restricted Cash — Some of our Chinese subsidiaries that issue their own financial instruments to pay vendors are required to maintain a cash balance if they exceed credit limits with the financial institution that guarantees the financial instruments. A restricted cash balance was required at those Chinese subsidiaries for $1 million and $2 million at September 30, 2017 and December 31, 2016, respectively. One of our subsidiaries in Brazil is required by law to maintain a cash deposit with a financial institution to guarantee the maximum estimated loss related to a tax audit until a settlement is reached. The cash deposit required was $1 million which has been classified as restricted cash on the Tenneco Inc. consolidated balance sheet at September 30, 2017. |
Long-Term Debt and Financing Arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt and Financing Arrangements | Long-Term Debt and Financing Arrangements Our financing arrangements are primarily provided by a committed senior secured financing arrangement with a syndicate of banks and other financial institutions. The arrangement is secured by substantially all our domestic assets and pledges of up to 66 percent of the stock of certain first-tier foreign subsidiaries, as well as guarantees by our material domestic subsidiaries. On May 12, 2017, we completed a refinancing of our senior credit facility by entering into an amendment and restatement of that facility. The amended and restated credit agreement enhances financial flexibility by increasing the size and extending the term of its revolving credit facility and term loan facility, and by adding Tenneco Automotive Operating Company Inc. as a co-borrower under the revolver credit facility. The amended and restated credit agreement also adds foreign currency borrowing capability and permits the joinder of our foreign and domestic subsidiaries as borrowers under the revolving credit facility in the future. If any foreign subsidiary of Tenneco is added to the revolving credit facility as a borrower, the obligations of such foreign borrower will be secured by the assets of such foreign borrower, and also will be secured by the assets of, and guaranteed by, the domestic borrowers and domestic guarantors as well as certain foreign subsidiaries of Tenneco in the chain of ownership of such foreign borrower. The amended and restated credit facility consists of a $1,600 million revolving credit facility and a $400 million term loan A facility, which replaced our former $1,200 million revolving credit facility and $264 million term loan A facility, respectively. As of September 30, 2017, the senior credit facility provides us with a total revolving credit facility of $1,600 million and had a $395 million balance outstanding under the term loan A facility, both of which will mature on May 12, 2022. Net carrying amount for the balance outstanding under the term loan A facility including a $2 million debt issuance cost was $393 million as of September 30, 2017. Funds may be borrowed, repaid and re-borrowed under the revolving credit facility without premium or penalty (subject to any customary LIBOR breakage fees). The revolving credit facility is reflected as debt on our balance sheet only if we borrow money under this facility or if we use the facility to make payments for letters of credit. Outstanding letters of credit reduce our availability to borrow revolving loans under the facility. We are required to make quarterly principal payments under the term loan A facility of $5 million through June 30, 2019, $7.5 million beginning September 30, 2019 through June 30, 2020, $10 million beginning September 30, 2020 through March 31, 2022 and a final payment of $260 million is due on May 12, 2022. We have excluded the required payments, within the next twelve months, under the term loan A facility totaling $20 million from current liabilities as of September 30, 2017, because we have the intent and ability to refinance the obligations on a long-term basis by using our revolving credit facility. We recorded $1 million of pre-tax interest charges in May 2017 related to amendment and restatement of the senior credit facility and the write off of deferred debt issuance costs related to the senior credit facility. The financial ratios required under the senior credit facility, and the actual ratios we achieved for the first three quarters of 2017, are as follows:
The senior credit facility includes a maximum leverage ratio covenant of 3.50 and a minimum interest coverage ratio of 2.75, in each case through May 12, 2022. The amended and restated senior credit facility provides us with the flexibility not to exclude certain otherwise excludable charges incurred in any relevant period from the calculation of the leverage and interest coverage ratios for such period. At September 30, 2017, of the $1,600 million available under the revolving credit facility, we had unused borrowing capacity of $1,147 million with $453 million in outstanding borrowings and no outstanding letters of credit. As of September 30, 2017, our outstanding debt also included (i) $395 million of a term loan which consisted of a $393 million net carrying amount including a $2 million debt issuance cost related to our term loan A facility which is subject to quarterly principal payments as described above through May 12, 2022, (ii) $225 million of notes which consisted of a $222 million net carrying amount including a $3 million debt issuance cost related to our 53/8 percent senior notes due December 15, 2024, (iii) $500 million of notes which consisted of a $492 million net carrying amount including a $8 million debt issuance cost related to our 5 percent senior notes due July 15, 2026, and (iv) $121 million of other debt. |
Income Taxes |
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Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For interim tax reporting we estimate our annual effective tax rate and apply it to our year to date ordinary income. Jurisdictions where no tax benefit can be recognized due to a valuation allowance are excluded from the estimated annual effective tax rate. The impact of including these jurisdictions on the quarterly effective rate calculation could result in a higher or lower effective tax rate during a particular quarter due to the mix and timing of actual earnings versus annual projections. The tax effects of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur. We reported income tax expense of $16 million and income tax benefit of $70 million in the three month periods ended September 30, 2017 and 2016, respectively. The tax expense recorded in the third quarter of 2017 included a net tax benefit of $12 million primarily relating to valuation allowance releases. The tax benefit recorded in the third quarter of 2016 included a net tax benefit of $105 million primarily relating to recognizing a U.S. tax benefit for foreign taxes. During the third quarter of 2016, we completed a detailed analysis of our ability to recognize and utilize foreign tax credits within the carryforward period. As a result, we amended our U.S. federal tax returns for years 2006 to 2012 to claim foreign tax credits in lieu of deducting foreign taxes paid. The U.S. foreign tax credit law provides for a credit against U.S. taxes otherwise payable for foreign taxes paid with regards to dividends, interest and royalties paid to us in the U.S. We reported income tax expense of $41 million and $3 million in the nine month periods ended September 30, 2017 and 2016, respectively. The tax expense recorded in the first nine months of 2017 included a net tax benefit of $12 million primarily relating to valuation allowance releases. In addition, the tax expense included a $50 million reduction related to an antitrust settlement accrual. The tax expense recorded in the first nine months of 2016 included a net tax benefit of $106 million primarily relating to recognizing a U.S. tax benefit for foreign taxes as described above. We believe it is reasonably possible that up to $5 million in unrecognized tax benefits related to the expiration of foreign statute of limitations and the conclusion of income tax examinations may be recognized within the next twelve months. |
Accounts Receivable Securitization |
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Sep. 30, 2017 | |
Accounts Receivable Additional Disclosures [Abstract] | |
Accounts Receivable Securitization | Accounts Receivable Securitization We securitize some of our accounts receivable on a limited recourse basis in the U.S. and Europe. As servicer under these accounts receivable securitization programs, we are responsible for performing all accounts receivable administration functions for these securitized financial assets including collections and processing of customer invoice adjustments. In the U.S., we have an accounts receivable securitization program with three commercial banks comprised of a first priority facility and a second priority facility. We securitize original equipment and aftermarket receivables on a daily basis under the bank program. In April 2017, the U.S. program was amended and extended to April 30, 2019. The first priority facility now provides financing of up to $155 million and the second priority facility, which is subordinated to the first priority facility, now provides up to an additional $25 million of financing. Both facilities monetize accounts receivable generated in the U.S. and Canada that meet certain eligibility requirements, and the second priority facility also monetizes certain accounts receivable generated in the U.S. and Canada that would otherwise be ineligible under the first priority securitization facility. The amount of outstanding third-party investments in our securitized accounts receivable under the U.S. program was $50 million and $30 million at September 30, 2017 and December 31, 2016, respectively. Each facility contains customary covenants for financings of this type, including restrictions related to liens, payments, mergers or consolidations and amendments to the agreements underlying the receivables pool. Further, each facility may be terminated upon the occurrence of customary events (with customary grace periods, if applicable), including breaches of covenants, failure to maintain certain financial ratios, inaccuracies of representations and warranties, bankruptcy and insolvency events, certain changes in the rate of default or delinquency of the receivables, a change of control and the entry or other enforcement of material judgments. In addition, each facility contains cross-default provisions, where the facility could be terminated in the event of non-payment of other material indebtedness when due and any other event which permits the acceleration of the maturity of material indebtedness. We also securitize receivables in our European operations with regional banks in Europe. The arrangements to securitize receivables in Europe are provided under six separate facilities provided by various financial institutions in each of the foreign jurisdictions. The commitments for these arrangements are generally for one year, but some may be canceled with notice 90 days prior to renewal. In some instances, the arrangement provides for cancellation by the applicable financial institution at any time upon notification. The amount of outstanding third-party investments in our securitized accounts receivable in Europe was $212 million and $160 million at September 30, 2017 and December 31, 2016, respectively. If we were not able to securitize receivables under either the U.S. or European securitization programs, our borrowings under our revolving credit agreement might increase. These accounts receivable securitization programs provide us with access to cash at costs that are generally favorable to alternative sources of financing, and allow us to reduce borrowings under our revolving credit agreement. In our U.S. accounts receivable securitization program, we transfer a partial interest in a pool of receivables and the interest that we retain is subordinate to the transferred interest. Accordingly, we account for our U.S. securitization program as a secured borrowing. In our European programs, we transfer accounts receivables in their entirety to the acquiring entities and satisfy all of the conditions established under ASC Topic 860, “Transfers and Servicing,” to report the transfer of financial assets in their entirety as a sale. The fair value of assets received as proceeds in exchange for the transfer of accounts receivable under our European securitization programs approximates the fair value of such receivables. We recognized $1 million interest expense in each of the three month periods ended September 30, 2017 and 2016, and $3 million and $2 million in the nine month periods ended September 30, 2017 and 2016, respectively, relating to our U.S. securitization program. In addition, we recognized a loss of $2 million in each of the three month periods ended September 30, 2017 and 2016, and $4 million in each of the nine months periods ended September 30, 2017 and 2016, on the sale of trade accounts receivable in our European accounts receivable securitization programs, representing the discount from book values at which these receivables were sold to our banks. The discount rate varies based on funding costs incurred by our banks, which averaged approximately one percent and two percent during the first nine months of 2017 and 2016, respectively. |
Restructuring and Other Charges |
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Restructuring and Other Charges | Restructuring and Other Charges Over the past several years, we have adopted plans to restructure portions of our operations. These plans were approved by our Board of Directors and were designed to reduce operational and administrative overhead costs throughout the business. For the full year 2016, we incurred $36 million in restructuring and related costs including asset write-downs of $6 million, primarily related to manufacturing footprint improvements in North America Ride Performance, headcount reduction and cost improvement initiatives in Europe and China Clean Air, South America and Australia, of which $17 million was recorded in cost of sales, $12 million in SG&A, $1 million in engineering expense, $2 million in other expense and $4 million in depreciation and amortization expense. In the third quarter of 2017, we incurred $20 million in restructuring and related costs including asset write-downs of $1 million, primarily related to closing an OE Clean Air manufacturing plant and downsizing Ride Performance operations in Australia and cost improvement initiatives, of which $8 million was recorded in cost of sales, $11 million in SG&A and $1 million in depreciation and amortization expense. In the third quarter of 2016, we incurred $7 million in restructuring and related costs, primarily related to manufacturing footprint improvements in North America Ride Performance as well as headcount reduction and cost improvement initiatives in Europe and China Clean Air, of which $3 million was recorded in cost of sales and $4 million in SG&A. In the first nine months of 2017, we incurred $52 million in restructuring and related costs including asset write-downs of $3 million, primarily related to closing a Clean Air Belgian JIT plant in response to the end of production on a customer platform, closing an OE Clean Air manufacturing plant and downsizing Ride Performance operations in Australia and cost improvement initiatives, of which $31 million was recorded in cost of sales, $18 million in SG&A, and $3 million in depreciation and amortization expense. In the first nine months of 2016, we incurred $26 million in restructuring and related costs including asset write-downs of $5 million primarily related to manufacturing footprint improvements in North America Ride Performance as well as headcount reduction and cost improvement initiatives in Europe and China Clean Air and South America, of which $9 million was recorded in cost of sales, $12 million in SG&A, $2 million in other expense and $3 million in depreciation and amortization expense. Amounts related to activities that are part of our restructuring reserves are as follows:
On June 29, 2017, our Board of Directors approved a restructuring initiative to close our Clean Air manufacturing plant in O'Sullivan Beach, Australia when General Motors and Toyota end vehicle production in the country, which occurred in October 2017. All such restructuring activities related to this initiative are expected to be completed by the first quarter 2018. We recorded total charges related to this initiative of $9 million in the third quarter of 2017 including asset write-downs of $1 million and $21 million in the first nine months of 2017 including asset write-downs of $2 million. The charges included severance payments to employees, the cost of decommissioning equipment, a lease termination payment and other costs associated with this action. Under the terms of our amended and restated senior credit agreement that took effect on May 12, 2017, we are allowed to exclude, at our discretion, (i) up to $35 million in 2017 and $25 million each year thereafter of cash restructuring charges and related expenses, with the ability to carry forward any amount not used in one year to the next following year, and (ii) up to $150 million in the aggregate of all costs, expenses, fees, fines, penalties, judgments, legal settlements and other amounts associated with any restructuring, litigation, claim, proceeding or investigation related to or undertaken by us or any of our subsidiaries, together with any related provision for taxes, incurred for any quarterly period ending after May 12, 2017 in the calculation of the financial covenant ratios required under our senior credit facility. As of September 30, 2017, we elected not to exclude any of the $181 million of allowable cash charges and related expenses recognized in the first nine months of 2017 for antitrust settlement and restructuring related costs against the $150 million aggregate limit available under the terms of the senior credit facility or the $35 million annual limit for 2017. |
Environmental Matters, Litigation and Product Warranties |
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Environmental Matters, Litigation and Product Warranties | Environmental Matters, Legal Proceedings and Product Warranties We are involved in environmental remediation matters, legal proceedings, claims, investigations and warranty obligations. These matters are typically incidental to the conduct of our business and create the potential for contingent losses. We accrue for potential contingent losses when our review of available facts indicates that it is probable a loss has been incurred and the amount of the loss is reasonably estimable. Each quarter we assess our loss contingencies based upon currently available facts, existing technology, presently enacted laws and regulations and taking into consideration the likely effects of inflation and other societal and economic factors and record adjustments to these reserves as required. As an example, we consider all available evidence, including prior experience in remediation of contaminated sites, other companies’ cleanup experiences and data released by the United States Environmental Protection Agency or other organizations when we evaluate our environmental remediation contingencies. All of our loss contingency estimates are subject to revision in future periods based on actual costs or new information. With respect to our environmental liabilities, where future cash flows are fixed or reliably determinable, we have discounted those liabilities. We evaluate recoveries separately from the liability and, when they are assured, recoveries are recorded and reported separately from the associated liability in our consolidated financial statements. Environmental Matters We are subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which we operate. We expense or capitalize, as appropriate, expenditures for ongoing compliance with environmental regulations that relate to current operations. We expense costs related to an existing condition caused by past operations that do not contribute to current or future revenue generation. As of September 30, 2017, we have the obligation to remediate or contribute towards the remediation of certain sites, including one Federal Superfund site. At September 30, 2017, our aggregated estimated share of environmental remediation costs for all these sites on a discounted basis was approximately $14 million, of which $2 million is recorded in other current liabilities and $12 million is recorded in deferred credits and other liabilities in our consolidated balance sheet. For those locations where the liability was discounted, the weighted average discount rate used was 2.3 percent. The undiscounted value of the estimated remediation costs was $17 million. Our expected payments of environmental remediation costs are estimated to be approximately $1 million in 2017, $1 million in each year beginning 2018 through 2021 and $12 million in aggregate thereafter. Based on information known to us, we have established reserves that we believe are adequate for these costs. Although we believe these estimates of remediation costs are reasonable and are based on the latest available information, the costs are estimates and are subject to revision as more information becomes available about the extent of remediation required. At some sites, we expect that other parties will contribute to the remediation costs. In addition, certain environmental statutes provide that our liability could be joint and several, meaning that we could be required to pay in excess of our share of remediation costs. Our understanding of the financial strength of other potentially responsible parties at these sites has been considered, where appropriate, in our determination of our estimated liability. We do not believe that any potential costs associated with our current status as a potentially responsible party in the Federal Superfund site, or as a liable party at the other locations referenced herein, will be material to our consolidated financial position, results of operations, or liquidity. Antitrust Investigations and Litigation On March 25, 2014, representatives of the European Commission were at Tenneco GmbH's Edenkoben, Germany administrative facility to gather information in connection with an ongoing global antitrust investigation concerning multiple automotive suppliers. On March 25, 2014, we also received a related subpoena from the U.S. Department of Justice ("DOJ"). On November 5, 2014, the DOJ granted us conditional leniency pursuant to an agreement we entered into under the Antitrust Division's Corporate Leniency Policy. This agreement provides us with important benefits in exchange for our self-reporting of matters to the DOJ and our continuing full cooperation with the DOJ's resulting investigation. For example, the DOJ will not bring any criminal antitrust prosecution against us, nor seek any criminal fines or penalties, in connection with the matters we reported to the DOJ. Additionally, there are limits on our liability related to any follow-on civil antitrust litigation in the U.S. The limits include single rather than treble damages, as well as relief from joint and several antitrust liability with other relevant civil antitrust action defendants. These limits are subject to our satisfying the DOJ and any court presiding over such follow-on civil litigation. On April 27, 2017, Tenneco received notification from the European Commission (EC) that it has administratively closed its global antitrust inquiry regarding the production, assembly, and supply of complete exhaust systems. No charges against Tenneco or any other competitor were initiated at any time and the EC inquiry is now closed. Certain other competition agencies are also investigating possible violations of antitrust laws relating to products supplied by our company. We have cooperated and continue to cooperate fully with all of these antitrust investigations, and take other actions to minimize our potential exposure. Tenneco and certain of its competitors are also currently defendants in civil putative class action litigation in the United States and Canada. More related lawsuits may be filed, including in other jurisdictions. Plaintiffs in these cases generally allege that defendants have engaged in anticompetitive conduct, in violation of federal and state laws, relating to the sale of automotive exhaust systems or components thereof. Plaintiffs seek to recover, on behalf of themselves and various purported classes of purchasers, injunctive relief, damages and attorneys’ fees. However, as explained above, because we received conditional leniency from the DOJ, our civil liability in the U.S. follow-on actions is limited to single damages and we will not be jointly and severally liable with the other defendants, provided that we have satisfied our obligations under the DOJ leniency agreement and approval is granted by the presiding court. Typically, exposure for follow-on actions in Canada is less than exposure for U.S. follow-on actions. Following the EC’s decision to administratively close its antitrust inquiry into exhaust systems in 2017, Tenneco’s receipt of conditional leniency from the DOJ in 2014 and discussions during the third quarter of 2017 following the appointment of a special settlement master in the civil putative class action cases pending against Tenneco and/or certain of its competitors in the U.S., Tenneco continues to vigorously defend itself and/or take actions to minimize its potential exposure to matters pertaining to the global antitrust investigation, including engaging in settlement discussions when it is in the best interests of the company and its stockholders. For example, in October 2017, Tenneco settled an administrative action brought by Brazil's competition authority for an amount that was not material. Based upon those earlier developments, including settlement discussions, Tenneco established a reserve of $132 million in its second quarter 2017 financial results for settlement costs that are probable, reasonably estimable, and currently expected to be necessary to resolve Tenneco’s antitrust matters globally, which primarily involves the resolution of civil suits and related claims. Of the $132 million reserve that was established, $45 million was paid in the third quarter of 2017 to resolve certain antitrust claims. While Tenneco continues to cooperate with certain competition agencies investigating possible violations of antitrust laws relating to products supplied by Tenneco, and the company may be subject to other civil lawsuits and/or related claims, no amount of this reserve is attributable to matters with the DOJ or the EC, and no such amount is expected based on current information. Rather, Tenneco expects to obtain final leniency from the DOJ in the near future. The above reserve is based upon all currently available information and an assessment of the probability of events for those matters where Tenneco can make a reasonable estimate of the costs to resolve such outstanding matters. Tenneco’s estimate involves significant judgment, given the number, variety and potential outcomes of actual and potential claims, the uncertainty of future rulings and approvals by a court or other authority, the behavior or incentives of adverse parties or regulatory authorities, and other factors outside of the control of Tenneco. As a result, Tenneco’s reserve may change from time to time, and actual costs may vary. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on current information, we do not expect that any such change in the reserve will have a material adverse impact on our annual consolidated financial position, results of operations or liquidity. Other Legal Proceedings, Claims and Investigations For many years we have been and continue to be subject to lawsuits initiated by claimants alleging health problems as a result of exposure to asbestos. Our current docket of active and inactive cases is less than 500 cases nationwide. A small number of claims have been asserted against one of our subsidiaries by railroad workers alleging exposure to asbestos products in railroad cars. The substantial majority of the remaining claims are related to alleged exposure to asbestos in our automotive products although a significant number of those claims appear also to involve occupational exposures sustained in industries other than automotive. We believe, based on scientific and other evidence, it is unlikely that claimants were exposed to asbestos by our former products and that, in any event, they would not be at increased risk of asbestos-related disease based on their work with these products. Further, many of these cases involve numerous defendants, with the number in some cases exceeding 100 defendants from a variety of industries. Additionally, in many cases the plaintiffs either do not specify any, or specify the jurisdictional minimum, dollar amount for damages. As major asbestos manufacturers and/or users continue to go out of business or file for bankruptcy, we may experience an increased number of these claims. We vigorously defend ourselves against these claims as part of our ordinary course of business. In future periods, we could be subject to cash costs or charges to earnings if any of these matters are resolved unfavorably to us. To date, with respect to claims that have proceeded sufficiently through the judicial process, we have regularly achieved favorable resolutions. Accordingly, we presently believe that these asbestos-related claims will not have a material adverse impact on our future consolidated financial position, results of operations or liquidity. We are also from time to time involved in other legal proceedings, claims or investigations. Some of these matters involve allegations of damages against us relating to environmental liabilities (including toxic tort, property damage and remediation), intellectual property matters (including patent, trademark and copyright infringement, and licensing disputes), personal injury claims (including injuries due to product failure, design or warning issues, and other product liability related matters), taxes, unclaimed property, employment matters, and commercial or contractual disputes, sometimes related to acquisitions or divestitures. Additionally, some of these matters involve allegations relating to legal compliance. For example, in July 2017 a complaint was filed against us in federal district court in Chicago, Illinois alleging that we misappropriated a third party's trade secrets in connection with certain of our ride control products. While we vigorously defend ourselves against all of these legal proceedings, claims and investigations and take other actions to minimize our potential exposure, in future periods, we could be subject to cash costs or charges to earnings if any of these matters are resolved on unfavorable terms. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on current information, including our assessment of the merits of the particular claim, except as described above under "Antitrust Investigations" and in this paragraph we do not expect the legal proceedings, claims or investigations currently pending against us will have any material adverse impact on our consolidated financial position, results of operations or liquidity. With respect to the trade secret claim described above, we are in the process of evaluating the claim but, at this stage of the case and given the inherent uncertainly of litigation, we are unable to estimate whether a loss is reasonably possible. While we do not believe that this litigation will have a material adverse effect on our annual consolidated financial position, results of operations or liquidity, we cannot assure you that this will be the case. Warranty Matters We provide warranties on some of our products. The warranty terms vary but range from one year up to limited lifetime warranties on some of our premium aftermarket products. Provisions for estimated expenses related to product warranty are made at the time products are sold or when specific warranty issues are identified with our products. These estimates are established using historical information about the nature, frequency, and average cost of warranty claims. We actively study trends of our warranty claims and take action to improve product quality and minimize warranty claims. We believe that the warranty reserve is appropriate; however, actual claims incurred could differ from the original estimates, requiring adjustments to the reserve. The reserve is included in both current and long-term liabilities on the balance sheet. Below is a table that shows the activity in the warranty accrual accounts:
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Earnings per share of common stock outstanding were computed as follows:
Options to purchase 834 and 171,580 shares of common stock were outstanding as of September 30, 2017 and 2016, respectively, but not included in the computation of diluted earnings per share respectively, because the options were anti-dilutive. |
Common Stock |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Common Stock Equity Plans — We have granted a variety of awards, including common stock, restricted stock, restricted stock units, performance units, stock appreciation rights (“SARs”), and stock options to our directors, officers, and employees. Accounting Methods — We recorded compensation expense (net of taxes) of less than $1 million in each of the three month periods ended September 30, 2017 and 2016, less than $1 million in compensation expense for the nine month period ended September 30, 2017 and $1 million for the nine month period ended September 30, 2016 related to nonqualified stock options as part of our selling, general and administrative expense. This had no impact on basic or diluted earnings per share for each of the three month periods ended September 30, 2017 and 2016 and a decrease of less than $0.01 and $0.01 in both basic and diluted earnings per share for the nine month periods ended September 30, 2017 and 2016. For employees eligible to retire at grant date, we immediately expense stock options and restricted stock. If an employee becomes retiree eligible during the vesting period, we amortize the expense for stock options and restricted stock over a period starting at the grant date to the date an employee becomes retiree eligible. As of September 30, 2017, there was no unrecognized compensation cost related to our stock option awards. Compensation expense for restricted stock, restricted stock units, long-term performance units and SARs (net of taxes) was $2 million and $5 million for the three month periods ended September 30, 2017 and 2016, respectively, and $10 million and $14 million for the nine month periods ended September 30, 2017 and 2016, respectively, and was recorded in selling, general, and administrative expense in our condensed consolidated statements of income. Cash received from stock option exercises for the nine month periods ended September 30, 2017 and 2016 was $7 million and $4 million, respectively. Stock options exercised in the first nine months of 2017 and 2016 generated a tax benefit of $2 million and $1 million, respectively. Stock Options — The following table reflects the status and activity for all options to purchase common stock for the period indicated:
There have been no stock options granted since 2015. The total fair value of shares vested from options that were granted prior to 2015 was $2 million and $4 million for the periods ended September 30, 2017 and 2016, respectively. Restricted Stock — The following table reflects the status for all nonvested restricted shares for the period indicated:
The fair value of restricted stock grants is usually equal to the average of the high and low trading price of our stock on the date of grant. As of September 30, 2017, approximately $10 million of total unrecognized compensation costs related to restricted stock awards is expected to be recognized over a weighted-average period of approximately 1.9 years. The total fair value of restricted shares vested was $14 million and $9 million at September 30, 2017 and 2016, respectively. Share Repurchase Program — In January 2015, our Board of Directors approved a share repurchase program, authorizing our company to repurchase up to $350 million of our outstanding common stock over a three year period. In October 2015, our Board of Directors expanded this share repurchase program, authorizing the repurchase of an additional $200 million of the Company's outstanding common stock. In February 2017, our Board of Directors authorized the repurchase of up to $400 million of the Company's outstanding common stock over the next three years. This includes $112 million that remained authorized under earlier repurchase programs. The Company anticipates acquiring the shares through open market or privately negotiated transactions, which will be funded through cash from operations. The repurchase program does not obligate the Company to repurchase shares within any specific time or situations, and opportunities in higher priority areas could affect the cadence of this program. We repurchased 2.3 million shares for $131 million through this program in the nine months ended September 30, 2017. Since we announced the share repurchase program in January 2015, we have repurchased 10.7 million shares for $569 million through September 30, 2017. Treasury stock shares including repurchased shares were 13,966,381 and 11,655,938 shares at September 30, 2017 and December 31, 2016, respectively. Dividends — On February 1, 2017, Tenneco announced the reinstatement of a quarterly dividend program. We expect to pay a quarterly dividend of $0.25 per share on our common stock, representing a planned annual dividend of $1.00 per share. In March 2017, we paid an initial quarterly dividend of $0.25 per share, or $13 million. In June 2017, we paid a quarterly dividend of $0.25 per share, or $13 million. In September 2017, we paid a quarterly dividend of $0.25 per share, or $14 million. While we currently expect that comparable quarterly cash dividends will continue to be paid in the future, our dividend program and the payment of future cash dividends under the program are subject to continued capital availability, the judgment of our Board of Directors and our continued compliance with the provisions pertaining to the payment of dividends under our debt agreements. Long-Term Performance Units, Restricted Stock Units and SARs — Long-term performance units, restricted stock units and SARs are paid in cash and recognized as a liability based upon their fair value. As of September 30, 2017, $19 million of total unrecognized compensation costs is expected to be recognized over a weighted-average period of approximately 1.9 years. |
Pension Plans, Postretirement and Other Employee Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans, Postretirement and Other Employee Benefits | ension Plans, Postretirement and Other Employee Benefits Net periodic pension costs and postretirement benefit costs consist of the following components:
For the nine months ended September 30, 2017, we made pension contributions of $12 million and $10 million for our domestic and foreign pension plans, respectively. Based on current actuarial estimates, we believe we will be required to contribute approximately $10 million for the remainder of 2017. Pension contributions beyond 2017 will be required, but those amounts will vary based upon many factors including, for example, the performance of our pension fund investments during 2017. In February 2016, the Company launched a voluntary program to buy out active employees and retirees who had earned benefits in the U.S. pension plans. As of June 30, 2017, this program has been substantially completed and all cash payments have been made from pension plan assets to those who elected to take the buyout. In connection with this program the Company contributed $10 million into the pension trust and recognized a non-cash charge of $6 million in the first quarter of 2017. We made postretirement contributions of approximately $8 million during the first nine months of 2017. Based on current actuarial estimates, we believe we will be required to contribute approximately $2 million for the remainder of 2017. The assets of some of our pension plans are invested in trusts that permit commingling of the assets of more than one employee benefit plan for investment and administrative purposes. Each of the plans participating in the trust has interests in the net assets of the underlying investment pools of the trusts. The investments for all our pension plans are recorded at estimated fair value, in compliance with the accounting guidance on fair value measurement. Amounts recognized for pension and postretirement benefits in other comprehensive income for the three and nine months ended September 30, 2017 and 2016 include the following components:
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New Accounting Pronouncements |
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Sep. 30, 2017 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
New Accounting Pronouncements |
In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The new guidance improves the presentation of net periodic pension cost and net period postretirement benefit cost. For public business entities, the standard is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In November 2016, the FASB issued Accounting Standard Update 2016-18, Statement of Cash Flows - Restricted Cash (Topic 230) to eliminate diversity in practice in the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. For public business entities, the standard is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In October 2016, the FASB issued Accounting Standard Update 2016-16, Income Taxes - Intra Entity Transfers of Assets Other Than Inventory (Topic 740). The new standard changes the accounting for income taxes when a company transfers certain tangible and intangible assets, such as equipment or intellectual property, between entities in different tax jurisdictions. The new standard does not change the current accounting for the income taxes related to transfers of inventory. For public business entities, the standard is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In March 2016, the FASB issued Accounting Standard Update 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, as part of its initiative to reduce complexity in accounting standards. The areas for simplification in this update involve several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, the standard is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We adopted this standard for the first quarter of 2017. The impact of the adoption resulted in the following:
In February 2016, the FASB issued Accounting Standard Update 2016-02, Leases (Topic 842). The amendments in this update create Topic 842, Leases, and supersede the leases requirements in Topic 840, Leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flow arising from a lease. For public business entities, the standard is effective for financial statements issued for annual periods beginning after December 15, 2018, and interim periods within those annual periods. We will adopt this amendment on January 1, 2019. We are currently evaluating the potential impact of this new guidance on our consolidated financial statements. In May 2014, the FASB issued an amendment on revenue recognition. The amendment in this update creates Topic 606, Revenue from Contracts with Customers, and supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendment supersedes the cost guidance in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts, and creates new Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers. The core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB approved a one-year deferral of the effective date from January 1, 2017 to January 1, 2018, while allowing for early adoption as of January 1, 2017 for public entities. We will adopt this amendment on January 1, 2018. The guidance permits the use of either the retrospective or modified retrospective (cumulative effect) transition method. We will adopt the guidance effective January 1, 2018 using the modified retrospective method by recognizing the cumulative effect in equity at the date of initial application. We have established a cross-functional coordinated team to implement the guidance related to the recognition of revenue from contracts with customers. We are in the process of assessing our customer contracts, identifying contractual provisions that may result in a change in the timing or the amount of revenue recognized in comparison with current guidance, as well as assessing the enhanced disclosure requirements of the new guidance. Under current guidance, we generally recognize revenue when products are shipped and risk of loss has transferred to the customer. Under the new requirements, the customized nature of some of our products combined with contractual provisions that provide us with an enforceable right to payment will require us to recognize revenue over time during production. Our findings to date indicate only a small number of our customers provide an enforceable right to payment and therefore would be recognized over time. We evaluated how the new guidance may affect our accounting for contractually guaranteed reimbursements related to customer tooling, engineering services and pre-production costs. Under the current applicable guidance, these customer reimbursements are recorded as cost recovery offsets; whereas under the new standard these guaranteed recoveries may represent consideration from contracts with customers and be recorded as revenues. Our findings to date indicate these reimbursements are outside the scope of the new accounting standard and thus accounting for such reimbursements is not expected to be impacted. In addition, we are assessing pricing provisions contained in certain of our customer contracts. Certain price adjustments if they are determined to represent an option to purchase additional product at a reduced price could grant a material right to the customer and require a deferral of revenue. While Tenneco pricing provisions contained in customer contracts are generally reflective of market conditions and customary industry pricing practices, some may provide the customer with a material right. Based on our evaluation to date, no pricing provisions have been considered to represent a material right. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information In connection with the reportable segment changes announced on February 7, 2017, our Clean Air and Ride Performance product lines in India, which have been reported as part of Europe, South America and India segments, will now be reported with their respective product lines in the Asia Pacific segments. Beginning with the first quarter of 2017, we are organized and manage our business along our two major product lines (clean air and ride performance) and three geographic areas (North America; Europe and South America; Asia Pacific), resulting in six operating segments (North America Clean Air, North America Ride Performance, Europe and South America Clean Air, Europe and South America Ride Performance, Asia Pacific Clean Air and Asia Pacific Ride Performance). Within each geographical area, each operating segment manufactures and distributes either clean air or ride performance products primarily for the original equipment and aftermarket industries. Each of the six operating segments constitutes a reportable segment. Costs related to other business activities, primarily corporate headquarter functions, are disclosed separately from the six operating segments as "Other." We evaluate segment performance based primarily on earnings before interest expense, income taxes, and noncontrolling interests. Products are transferred between segments and geographic areas on a basis intended to reflect as nearly as possible the “market value” of the products. Prior period segment information has been revised to reflect our new reporting segments. The following table summarizes certain Tenneco Inc. segment information:
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Supplemental Guarantor Condensed Consolidating Financial Statements |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Guarantor Condensed Consolidating Financial Statements | Supplemental Guarantor Condensed Consolidating Financial Statements Basis of Presentation Substantially all of our existing and future material domestic 100% owned subsidiaries (which are referred to as the Guarantor Subsidiaries) fully and unconditionally guarantee our senior notes due in 2024 and 2026 on a joint and several basis. However, a subsidiary’s guarantee may be released in certain customary circumstances such as a sale of the subsidiary or all or substantially all of its assets in accordance with the indenture applicable to the notes. The Guarantor Subsidiaries are combined in the presentation below. These consolidating financial statements are presented on the equity method. Under this method, our investments are recorded at cost and adjusted for our ownership share of a subsidiary’s cumulative results of operations, capital contributions and distributions, and other equity changes. You should read the condensed consolidating financial information of the Guarantor Subsidiaries in connection with our condensed consolidated financial statements and related notes of which this note is an integral part. The accompanying supplemental guarantor condensed consolidating financial statements have been updated to reflect the revision as described in Note 14. Distributions There are no significant restrictions on the ability of the Guarantor Subsidiaries to make distributions to us. STATEMENT OF COMPREHENSIVE INCOME (LOSS)
STATEMENT OF COMPREHENSIVE INCOME (LOSS)
STATEMENT OF COMPREHENSIVE INCOME (LOSS)
STATEMENT OF COMPREHENSIVE INCOME (LOSS)
BALANCE SHEET
BALANCE SHEET
STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS
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Revision of Previously Issued Financial Statements |
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revision of Previously Issued Financial Statements | ion of Previously Issued Financial Statements For the periods from April 1, 2013 through March 31, 2017, we identified in the second quarter of 2017 that approximately $34 million in lump sum payments from our suppliers were incorrectly recorded upon receipt as a reduction to cost of sales. These payments should have been deferred and amortized over the life of the underlying supplier agreements. The deferred credit balance related to these payments was $25 million at September 30, 2017. In addition, we identified in the second quarter of 2017 that approximately $7 million in cost of sales should have been accrued in prior periods for substrate liabilities, impacting the periods from January 1, 2016 through March 31, 2017. We evaluated the impact of these items on prior periods under the guidance of SEC Staff Accounting Bulletin (SAB) No. 99, “Materiality” and determined that the amounts were not material to previously issued financial statements. We also evaluated the impact of correcting these items through a cumulative adjustment to our financial statements and concluded that based on the guidance within SEC SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” it was appropriate to revise our previously issued financial statements to reflect this correction. As a result, we have revised and will revise for annual and interim periods in future filings, for certain amounts in the consolidated financial statements and related notes in order to correct these errors, which are described further below. The following tables present the impact of this revision on our condensed consolidated statements of income, comprehensive income and cash flows for the three months and nine months ended September 30, 2016, and changes in shareholders' equity for the nine months ended September 30, 2016.
* No change to net cash provided by operating activities.
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New Accounting Pronouncements (Policies) |
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Sep. 30, 2017 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
New Accounting Pronouncements | New Accounting Pronouncements In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The new guidance improves the presentation of net periodic pension cost and net period postretirement benefit cost. For public business entities, the standard is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In November 2016, the FASB issued Accounting Standard Update 2016-18, Statement of Cash Flows - Restricted Cash (Topic 230) to eliminate diversity in practice in the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. For public business entities, the standard is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In October 2016, the FASB issued Accounting Standard Update 2016-16, Income Taxes - Intra Entity Transfers of Assets Other Than Inventory (Topic 740). The new standard changes the accounting for income taxes when a company transfers certain tangible and intangible assets, such as equipment or intellectual property, between entities in different tax jurisdictions. The new standard does not change the current accounting for the income taxes related to transfers of inventory. For public business entities, the standard is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In March 2016, the FASB issued Accounting Standard Update 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, as part of its initiative to reduce complexity in accounting standards. The areas for simplification in this update involve several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, the standard is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We adopted this standard for the first quarter of 2017. The impact of the adoption resulted in the following:
In February 2016, the FASB issued Accounting Standard Update 2016-02, Leases (Topic 842). The amendments in this update create Topic 842, Leases, and supersede the leases requirements in Topic 840, Leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flow arising from a lease. For public business entities, the standard is effective for financial statements issued for annual periods beginning after December 15, 2018, and interim periods within those annual periods. We will adopt this amendment on January 1, 2019. We are currently evaluating the potential impact of this new guidance on our consolidated financial statements. In May 2014, the FASB issued an amendment on revenue recognition. The amendment in this update creates Topic 606, Revenue from Contracts with Customers, and supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendment supersedes the cost guidance in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts, and creates new Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers. The core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB approved a one-year deferral of the effective date from January 1, 2017 to January 1, 2018, while allowing for early adoption as of January 1, 2017 for public entities. We will adopt this amendment on January 1, 2018. The guidance permits the use of either the retrospective or modified retrospective (cumulative effect) transition method. We will adopt the guidance effective January 1, 2018 using the modified retrospective method by recognizing the cumulative effect in equity at the date of initial application. We have established a cross-functional coordinated team to implement the guidance related to the recognition of revenue from contracts with customers. We are in the process of assessing our customer contracts, identifying contractual provisions that may result in a change in the timing or the amount of revenue recognized in comparison with current guidance, as well as assessing the enhanced disclosure requirements of the new guidance. Under current guidance, we generally recognize revenue when products are shipped and risk of loss has transferred to the customer. Under the new requirements, the customized nature of some of our products combined with contractual provisions that provide us with an enforceable right to payment will require us to recognize revenue over time during production. Our findings to date indicate only a small number of our customers provide an enforceable right to payment and therefore would be recognized over time. We evaluated how the new guidance may affect our accounting for contractually guaranteed reimbursements related to customer tooling, engineering services and pre-production costs. Under the current applicable guidance, these customer reimbursements are recorded as cost recovery offsets; whereas under the new standard these guaranteed recoveries may represent consideration from contracts with customers and be recorded as revenues. Our findings to date indicate these reimbursements are outside the scope of the new accounting standard and thus accounting for such reimbursements is not expected to be impacted. In addition, we are assessing pricing provisions contained in certain of our customer contracts. Certain price adjustments if they are determined to represent an option to purchase additional product at a reduced price could grant a material right to the customer and require a deferral of revenue. While Tenneco pricing provisions contained in customer contracts are generally reflective of market conditions and customary industry pricing practices, some may provide the customer with a material right. Based on our evaluation to date, no pricing provisions have been considered to represent a material right. |
Consolidation and Presentation (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interest | The following is a rollforward of activities in our redeemable noncontrolling interests for the nine months ended September 30, 2017 and 2016, respectively:
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Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying and Estimated Fair Value | The net carrying and estimated fair values of our financial instruments by class at September 30, 2017 and December 31, 2016 were as follows:
(a) All derivatives are categorized within Level 2 of the fair value hierarchy. |
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Summarization for Foreign Currency Forward Purchase and Sale Contracts | The following table summarizes by major currency the notional amounts for foreign currency forward purchase and sale contracts as of September 30, 2017 (all of which mature in 2017):
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Long-Term Debt and Financing Arrangements (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Ratios under Senior Credit Facility | The financial ratios required under the senior credit facility, and the actual ratios we achieved for the first three quarters of 2017, are as follows:
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Restructuring and Other Charges (Tables) |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Roll Forward of Restructuring Reserve | Amounts related to activities that are part of our restructuring reserves are as follows:
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Environmental Matters, Litigation and Product Warranties (Tables) |
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Environmental Matters, Litigation and Product Warranties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warranty Accrual Rollforward | Below is a table that shows the activity in the warranty accrual accounts:
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Earnings Per Share of Common Stock | Earnings per share of common stock outstanding were computed as follows:
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Common Stock (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options Status and Activity | Stock Options — The following table reflects the status and activity for all options to purchase common stock for the period indicated:
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Nonvested Restricted Shares | Restricted Stock — The following table reflects the status for all nonvested restricted shares for the period indicated:
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Pension Plans, Postretirement and Other Employee Benefits (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Cost | t periodic pension costs and postretirement benefit costs consist of the following components:
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Amounts Recognized for Pension and Postretirement Benefits in Other Comprehensive Income | mounts recognized for pension and postretirement benefits in other comprehensive income for the three and nine months ended September 30, 2017 and 2016 include the following components:
|
Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | The following table summarizes certain Tenneco Inc. segment information:
|
Supplemental Guarantor Condensed Consolidating Financial Statements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of Comprehensive Income (Loss) | STATEMENT OF COMPREHENSIVE INCOME (LOSS)
STATEMENT OF COMPREHENSIVE INCOME (LOSS)
STATEMENT OF COMPREHENSIVE INCOME (LOSS)
STATEMENT OF COMPREHENSIVE INCOME (LOSS)
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Balance Sheet | BALANCE SHEET
BALANCE SHEET
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Statement of Cash Flows | STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS
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Revision of Previously Issued Financial Statements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments | The following tables present the impact of this revision on our condensed consolidated statements of income, comprehensive income and cash flows for the three months and nine months ended September 30, 2016, and changes in shareholders' equity for the nine months ended September 30, 2016.
* No change to net cash provided by operating activities.
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Consolidation and Presentation - Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
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Redeemable Noncontrolling Interest [Roll Forward] | ||
Balance January 1 | $ 40 | $ 41 |
Net income attributable to redeemable noncontrolling interests | 27 | 27 |
Other comprehensive loss | 2 | (1) |
Dividends declared | (37) | (35) |
Balance September 30 | $ 32 | $ 32 |
Financial Instruments - Carrying and Estimated Fair Value (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Carrying And Estimated Fair Value [Line Items] | ||
Long-term debt (including current maturities) | $ 1,573 | $ 1,294 |
Net Carrying Amount | ||
Carrying And Estimated Fair Value [Line Items] | ||
Long-term debt (including current maturities) | 1,575 | 1,297 |
Net Carrying Amount | Equity swap agreement and foreign currency forward contracts | ||
Equity swap agreement and foreign currency forward contracts: | ||
Asset derivative contracts (a) | 6 | 0 |
Fair Value | ||
Carrying And Estimated Fair Value [Line Items] | ||
Long-term debt (including current maturities) | 1,612 | 1,311 |
Fair Value | Equity swap agreement and foreign currency forward contracts | ||
Equity swap agreement and foreign currency forward contracts: | ||
Asset derivative contracts (a) | $ 6 | $ 0 |
Financial Instruments - Fair Value of Long Term Debt (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
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Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of long term debt | $ 749 | $ 725 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of long term debt | 849 | 571 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of long term debt | $ 14 | $ 15 |
Financial Instruments - Summarization for Foreign Currency Forward Purchase and Sale Contracts (Details) - Sep. 30, 2017 - Foreign Exchange Forward Contracts € in Millions, £ in Millions, CAD in Millions, $ in Millions |
CAD |
GBP (£) |
USD ($) |
EUR (€) |
---|---|---|---|---|
British, Pounds | Long | ||||
Derivative [Line Items] | ||||
Notional Amount in Foreign Currency | £ | £ 10 | |||
Canada, Dollars | Short | ||||
Derivative [Line Items] | ||||
Notional Amount in Foreign Currency | CAD | CAD 2 | |||
European, Euro | Short | ||||
Derivative [Line Items] | ||||
Notional Amount in Foreign Currency | € | € 4 | |||
U.S., Dollars | Long | ||||
Derivative [Line Items] | ||||
Notional Amount in Foreign Currency | $ 7 | |||
U.S., Dollars | Short | ||||
Derivative [Line Items] | ||||
Notional Amount in Foreign Currency | $ 14 |
Long-Term Debt and Financing Arrangements - Financial Ratios under Senior Credit Facility (Details) |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
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Required | |||
Financial Ratios Under Senior Credit Facility [Line Items] | |||
Leverage Ratio (maximum) | 3.5 | 3.5 | 3.5 |
Interest Coverage Ratio (minimum) | 2.75 | 2.75 | 2.75 |
Actual | |||
Financial Ratios Under Senior Credit Facility [Line Items] | |||
Leverage Ratio (maximum) | 2.15 | 1.97 | 1.62 |
Interest Coverage Ratio (minimum) | 11.48 | 12.44 | 15.38 |
Income Taxes - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Income Tax Disclosure [Abstract] | ||||
Income tax (benefit) expense | $ 16 | $ (70) | $ 41 | $ 3 |
Income tax benefit related to valuation allowance | 12 | 12 | ||
Net tax expense (benefit) for prior year tax adjustments | $ 105 | $ (106) | ||
Tax expense reduction related to antitrust settlement accrual | 50 | |||
Reasonably possible change in unrecognized tax benefits | $ 5 | $ 5 |
Restructuring and Other Charges - Roll Forward of Restructuring Reserve (Details) - Severance $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Restructuring Reserve | $ 15 |
Restructuring charges | 38 |
Cash Payments | (18) |
Impact of exchange rates | 2 |
Restructuring Reserve | $ 37 |
Environmental Matters, Litigation and Product Warranties - Warranty Accrual Rollforward (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
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Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Beginning Balance | $ 20 | $ 23 |
Accruals related to product warranties | 13 | 6 |
Reductions for payments made | (8) | (10) |
Ending Balance | $ 25 | $ 19 |
Earnings Per Share - Additional Information (Details) - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
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Earnings Per Share [Abstract] | ||
Anti-dilutive stock options | 834 | 171,580 |
Common Stock - Stock Options Status and Activity (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
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Shares Under Option | |||||
Outstanding, Beginning Balance (in shares) | 434,821 | 438,341 | 606,525 | 606,525 | |
Canceled (in shares) | (2,214) | ||||
Forfeited (in shares) | (41,369) | (278) | (1,107) | ||
Exercised (in shares) | (50,125) | (3,242) | (164,863) | ||
Outstanding, Ending Balance (in shares) | 343,327 | 434,821 | 438,341 | 343,327 | 606,525 |
Weighted Avg. Exercise Prices | |||||
Outstanding, Beginning Balance (in dollars per share) | $ 40.16 | $ 40.22 | $ 38.54 | $ 38.54 | |
Canceled (in dollars per share) | 56.23 | ||||
Forfeited (in dollars per share) | 19.53 | 66.54 | 56.23 | ||
Exercised (in dollars per share) | 34.79 | 45.42 | 33.70 | ||
Outstanding, Ending Balance (in dollars per share) | $ 43.44 | $ 40.16 | $ 40.22 | $ 43.44 | $ 38.54 |
Weighted Avg. Remaining Life in Years | 2 years 5 months 6 days | 2 years 7 months 6 days | 2 years 5 months 6 days | 2 years 7 months 6 days | |
Aggregate Intrinsic Value, Outstanding, Beginning Balance | $ 8 | $ 11 | $ 12 | $ 12 | |
Aggregate Intrinsic Value, Exercised | 1 | 0 | 5 | ||
Aggregate Intrinsic Value, Outstanding, Ending Balance | $ 4 | $ 8 | $ 11 | $ 4 | $ 12 |
Common Stock - Nonvested Restricted Shares (Details) - Restricted Stock - $ / shares |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
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Nonvested Restricted Shares | |||
Nonvested, Beginning Balance (in shares) | 449,290 | 447,602 | 591,416 |
Granted (in shares) | 2,001 | 23,295 | 182,543 |
Vested (in shares) | (4,581) | (15,336) | (261,003) |
Forfeited (in shares) | (10,234) | (6,271) | (65,354) |
Nonvested, Ending Balance (in shares) | 436,476 | 449,290 | 447,602 |
Weighted Avg. Grant Date Fair Value | |||
Nonvested, Beginning Balance (in dollars per share) | $ 49.79 | $ 49.25 | $ 44.63 |
Granted (in dollars per share) | 55.80 | 57.22 | 68.04 |
Vested (in dollars per share) | 55.52 | 46.77 | 50.95 |
Forfeited (in dollars per share) | 44.82 | 48.10 | 53.12 |
Nonvested, Ending Balance (in dollars per share) | $ 49.87 | $ 49.79 | $ 49.25 |
Pension Plans, Postretirement and Other Employee Benefits - Additional Information (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Pension | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Employer contributions, remainder of fiscal year | $ 10 |
Other Pension Plan | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Employer contributions | 10 |
Non-cash contribution expense | 6 |
Postretirement | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Employer contributions | 8 |
Employer contributions, remainder of fiscal year | 2 |
US | Pension | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Employer contributions | 12 |
Foreign | Pension | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Employer contributions | $ 10 |
New Accounting Pronouncements (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Accounting Policies [Abstract] | |
Excess tax benefit | $ 2 |
Segment Information - Additional Information (Details) |
9 Months Ended |
---|---|
Sep. 30, 2017
product_segment
geographic_segment
Segment
operating_segment
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Segment Reporting [Abstract] | |
Number of product segments | product_segment | 2 |
Number of geographic areas | geographic_segment | 3 |
Number of operating segments | operating_segment | 6 |
Number of reportable segments | Segment | 6 |
Supplemental Guarantor Condensed Consolidating Financial Statements - Additional Information (Details) |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Ownership percentage of existing and future material domestic owned subsidiaries | 100.00% |
Revision of Previously Issued Financial Statements - Balance Sheet (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Deferred income taxes | $ 225 | $ 199 | ||
Total Assets | 4,935 | 4,346 | $ 4,410 | |
Accounts payable | 1,601 | 1,501 | ||
Accrued taxes | 46 | 39 | ||
Deferred credits and other liabilities | 158 | 139 | ||
Redeemable noncontrolling interests | 32 | 40 | 32 | $ 41 |
Retained earnings (accumulated deficit) | (1,001) | (1,100) | ||
Total Tenneco Inc. shareholders’ equity | 647 | 573 | ||
Noncontrolling interests | 39 | 47 | ||
Total equity | 686 | 620 | 659 | |
Total liabilities, redeemable noncontrolling interests and equity | $ 4,935 | $ 4,346 | ||
As Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Total equity | 675 | |||
Adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Total equity | $ (16) |
Revision of Previously Issued Financial Statements - Cash Flows (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income | $ 99 | $ 196 | $ 187 | $ 366 |
Deferred income taxes | (1) | (86) | (1) | (74) |
Increase (decrease) in payables | (29) | (5) | 57 | 59 |
Increase (decrease) in accrued taxes | 16 | 0 | (22) | 9 |
Changes in long-term liabilities | $ (6) | 11 | $ 1 | 13 |
As Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income | 197 | 372 | ||
Deferred income taxes | (73) | |||
Increase (decrease) in payables | (7) | 55 | ||
Increase (decrease) in accrued taxes | 1 | 10 | ||
Changes in long-term liabilities | 9 | |||
Adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income | (1) | (6) | ||
Deferred income taxes | (1) | |||
Increase (decrease) in payables | 2 | 4 | ||
Increase (decrease) in accrued taxes | $ (1) | (1) | ||
Changes in long-term liabilities | $ 4 |