
(15)	Supplemental Guarantor Condensed Consolidating Financial Statements

Basis of Presentation

Subject to limited exceptions, 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 2015, 2018, and 2020 on a joint and several basis. 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.

Distributions

There are no significant restrictions on the ability of the Guarantor Subsidiaries to make distributions to us.

STATEMENT OF INCOME (LOSS)


	For the Three Months Ended June 30, 2011
						Tenneco Inc.
	Guarantor		Nonguarantor			(Parent			Reclass &
	Subsidiaries		Subsidiaries			Company)			Elims			Consolidated
						(Millions)

Revenues
Net sales and operating revenues —
External	$	797	$	1,091		$	—		$	—		$	1,888
Affiliated companies		40		126			—			(166	)		—

		837		1,217			—			(166	)		1,888

Costs and expenses
Cost of sales (exclusive of depreciation and amortization shown below)		721		1,010			—			(166	)		1,565
Engineering, research, and development		13		22			—			—			35
Selling, general, and administrative		39		79			—			—			118
Depreciation and amortization of other intangibles		19		35			—			—			54

		792		1,146			—			(166	)		1,772

Other income (expense)
Loss on sale of receivables		—		(2	)		—			—			(2	)
Other income (loss)		33		1			—			(35	)		(1	)

		33		(1	)		—			(35	)		(3	)

Earnings before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies		78		70			—			(35	)		113

Interest expense —
External (net of interest capitalized)		—		1			25			—			26
Affiliated companies (net of interest income)		53		(19	)		(34	)		—			—
Income tax expense		4		26			—			—			30
Equity in net income (loss) from affiliated companies		53		—			41			(94	)		—

Net Income		74		62			50			(129	)		57

Less: Net income attributable to noncontrolling interests		—		7			—			—			7

Net income (loss) attributable to Tenneco Inc.	$	74	$	55		$	50		$	(129	)	$	50

STATEMENT OF INCOME (LOSS)


	For the Three Months Ended June 30, 2010
							Tenneco Inc.
	Guarantor			Nonguarantor			(Parent			Reclass &
	Subsidiaries			Subsidiaries			Company)			Elims			Consolidated
							(Millions)

Revenues
Net sales and operating revenues —
External	$	677		$	825		$	—		$	—		$	1,502
Affiliated companies		31			126			—			(157	)		—

		708			951			—			(157	)		1,502

Costs and expenses
Cost of sales (exclusive of depreciation and amortization shown below)		533			846			—			(157	)		1,222
Engineering, research, and development		17			16			—			—			33
Selling, general, and administrative		36			60			2			—			98
Depreciation and amortization of other intangibles		21			32			—			—			53

		607			954			2			(157	)		1,406

Other income (expense)
Loss on sale of receivables		—			(1	)		—			—			(1	)
Other income (loss)		9			3			1			(15	)		(2	)

		9			2			1			(15	)		(3	)

Earnings (loss) before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies		110			(1	)		(1	)		(15	)		93

Interest expense —
External (net of interest capitalized)		(1	)		3			30			—			32
Affiliated companies (net of interest income)		50			(18	)		(32	)		—			—
Income tax expense (benefit)		3			12			—			—			15
Equity in net income (loss) from affiliated companies		(8	)		—			39			(31	)		—

Net Income (loss)		50			2			40			(46	)		46

Less: Net income (loss) attributable to noncontrolling interests		—			6			—			—			6

Net income (loss) attributable to Tenneco Inc.	$	50		$	(4	)	$	40		$	(46	)	$	40

STATEMENT OF INCOME (LOSS)


	For the Six Months Ended June 30, 2011
						Tenneco Inc.
	Guarantor		Nonguarantor			(Parent			Reclass &
	Subsidiaries		Subsidiaries			Company)			Elims			Consolidated
	(Millions)

Revenues
Net sales and operating revenues —
External	$	1,570	$	2,078		$	—		$	—		$	3,648
Affiliated companies		81		257			—			(338	)		—

		1,651		2,335			—			(338	)		3,648

Costs and expenses
Cost of sales (exclusive of depreciation and amortization shown below)		1,445		1,924			—			(338	)		3,031
Engineering, research, and development		28		42			—			—			70
Selling, general, and administrative		72		154			1			—			227
Depreciation and amortization of other intangibles		37		68			—			—			105

		1,582		2,188			1			(338	)		3,433

Other income (expense)
Loss on sale of receivables		—		(3	)		—			—			(3	)
Other income (loss)		32		(2	)		—			(35	)		(5	)

		32		(5	)		—			(35	)		(8	)

Earnings before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies		101		142			(1	)		(35	)		207

Interest expense —
External (net of interest capitalized)		—		2			52			—			54
Affiliated companies (net of interest income)		102		(34	)		(68	)		—			—
Income tax expense		5		39			—			—			44
Equity in net income (loss) from affiliated companies		118		—			82			(200	)		—

Net Income		112		135			97			(235	)		109

Less: Net income attributable to noncontrolling interests		—		12			—			—			12

Net income (loss) attributable to Tenneco Inc.	$	112	$	123		$	97		$	(235	)	$	97

STATEMENT OF INCOME (LOSS)


	For the Six Months Ended June 30, 2010
							Tenneco Inc.
	Guarantor			Nonguarantor			(Parent			Reclass &
	Subsidiaries			Subsidiaries			Company)			Elims			Consolidated
	(Millions)

Revenues
Net sales and operating revenues —
External	$	1,220		$	1,598		$	—		$	—		$	2,818
Affiliated companies		62			235			—			(297	)		—

		1,282			1,833			—			(297	)		2,818

Costs and expenses
Cost of sales (exclusive of depreciation and amortization shown below)		1,052			1,540			—			(297	)		2,295
Engineering, research, and development		26			34			—			—			60
Selling, general, and administrative		73			123			2			—			198
Depreciation and amortization of other intangibles		43			65			—			—			108

		1,194			1,762			2			(297	)		2,661

Other income (expense)
Loss on sale of receivables		—			(2	)		—			—			(2	)
Other income (loss)		9			2			1			(15	)		(3	)

		9			—			1			(15	)		(5	)

Earnings (loss) before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies		97			71			(1	)		(15	)		152

Interest expense —
External (net of interest capitalized)		(1	)		4			61			—			64
Affiliated companies (net of interest income)		87			(23	)		(64	)		—			—
Income tax expense (benefit)		4			26			—			—			30
Equity in net income (loss) from affiliated companies		47			—			45			(92	)		—

Net Income (loss)		54			64			47			(107	)		58

Less: Net income (loss) attributable to noncontrolling interests		—			11			—			—			11

Net income (loss) attributable to Tenneco Inc.	$	54		$	53		$	47		$	(107	)	$	47

BALANCE SHEET


	June 30, 2011
							Tenneco Inc.
	Guarantor			Nonguarantor			(Parent		Reclass
	Subsidiaries			Subsidiaries			Company)		& Elims			Consolidated
	(Millions)

ASSETS
Current assets:
Cash and cash equivalents	$	—		$	161		$	—	$	—		$	161
Receivables, net		512			1,374			24		(774	)		1,136
Inventories		233			393			—		—			626
Deferred income taxes		73			—			—		(31	)		42
Prepayments and other		28			149			—		—			177

Total current assets		846			2,077			24		(805	)		2,142

Other assets:
Investment in affiliated companies		495			—			830		(1,325	)		—
Notes and advances receivable from affiliates		4,149			963			5,950		(11,062	)		—
Long-term receivables, net		1			11			—		—			12
Goodwill		22			69			—		—			91
Intangibles, net		14			20			—		—			34
Deferred income taxes		41			24			27		—			92
Other		25			48			31		—			104

		4,747			1,135			6,838		(12,387	)		333

Plant, property, and equipment, at cost		998			2,284			—		—			3,282
Less — Accumulated depreciation and amortization		(723	)		(1,476	)		—		—			(2,199	)

		275			808			—		—			1,083

Total assets	$	5,868		$	4,020		$	6,862	$	(13,192	)	$	3,558


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt (including current maturities of long-term debt)
Short-term debt — non-affiliated	$	—		$	66		$	1	$	—		$	67
Short-term debt — affiliated		219			394			10		(623	)		—
Trade payables		445			873			1		(111	)		1,208
Accrued taxes		27			28			—		—			55
Other		132			238			41		(71	)		340

Total current liabilities		823			1,599			53		(805	)		1,670

Long-term debt — non-affiliated		—			16			1,211		—			1,227
Long-term debt — affiliated		4,649			990			5,423		(11,062	)		—
Deferred income taxes		—			58			—		—			58
Postretirement benefits and other liabilities		332			82			—		4			418
Commitments and contingencies

Total liabilities		5,804			2,745			6,687		(11,863	)		3,373

Redeemable noncontrolling interests		—			10			—		—			10

Tenneco Inc. Shareholders’ equity		64			1,230			175		(1,329	)		140

Noncontrolling interests		—			35			—		—			35

Total equity		64			1,265			175		(1,329	)		175

Total liabilities, redeemable noncontrolling interests and equity	$	5,868		$	4,020		$	6,862	$	(13,192	)	$	3,558

BALANCE SHEET


	December 31, 2010
							Tenneco Inc.
	Guarantor			Nonguarantor			(Parent		Reclass
	Subsidiaries			Subsidiaries			Company)		& Elims			Consolidated
							(Millions)

ASSETS
Current assets:
Cash and cash equivalents	$	—		$	233		$	—	$	—		$	233
Receivables, net		402			1,106			24		(706	)		826
Inventories		221			326			—		—			547
Deferred income taxes		103			—			—		(65	)		38
Prepayments and other		35			111			—		—			146

Total current assets		761			1,776			24		(771	)		1,790

Other assets:
Investment in affiliated companies		391			—			707		(1,098	)		—
Notes and advances receivable from affiliates		4,119			788			5,853		(10,760	)		—
Long-term receivables, net		1			8			—		—			9
Goodwill		22			67			—		—			89
Intangibles, net		14			18			—		—			32
Deferred income taxes		37			21			34		—			92
Other		26			46			33		—			105

		4,610			948			6,627		(11,858	)		327

Plant, property, and equipment, at cost		997			2,112			—		—			3,109
Less — Accumulated depreciation and amortization		(713	)		(1,346	)		—		—			(2,059	)

		284			766			—		—			1,050

Total assets	$	5,655		$	3,490		$	6,651	$	(12,629	)	$	3,167


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt (including current maturities of long-term debt)
Short-term debt — non-affiliated	$	—		$	62		$	1	$	—		$	63
Short-term debt — affiliated		214			371			10		(595	)		—
Trade payables		367			773			—		(92	)		1,048
Accrued taxes		20			31			—		—			51
Other		130			213			47		(84	)		306

Total current liabilities		731			1,450			58		(771	)		1,468

Long-term debt — non-affiliated		—			11			1,149		—			1,160
Long-term debt — affiliated		4,583			768			5,409		(10,760	)		—
Deferred income taxes		—			56			—		—			56
Postretirement benefits and other liabilities		347			85			—		4			436
Commitments and contingencies

Total liabilities		5,661			2,370			6,616		(11,527	)		3,120

Redeemable noncontrolling interests		—			12			—		—			12

Tenneco Inc. Shareholders’ equity		(6	)		1,069			35		(1,102	)		(4	)

Noncontrolling interests		—			39			—		—			39

Total equity		(6	)		1,108			35		(1,102	)		35

Total liabilities, redeemable noncontrolling interests and equity	$	5,655		$	3,490		$	6,651	$	(12,629	)	$	3,167

STATEMENT OF CASH FLOWS


	Three Months Ended June 30, 2011
							Tenneco Inc.
	Guarantor			Nonguarantor			(Parent			Reclass
	Subsidiaries			Subsidiaries			Company)			& Elims		Consolidated
	(Millions)

Operating Activities
Net cash provided (used) by operating activities	$	46		$	90		$	(69	)	$	—	$	67

Investing Activities
Proceeds from sale of assets		(1	)		1			—			—		—
Cash payments for plant, property, and equipment		(16	)		(33	)		—			—		(49	)
Cash payments for software related intangible assets		(1	)		(2	)		—			—		(3	)

Net cash used by investing activities		(18	)		(34	)		—			—		(52	)

Financing Activities
Capital contribution from noncontrolling interest partner		—			1			—			—		1
Purchase of common stock under the share repurchase program		—			—			(11	)		—		(11	)
Issuance of long-term debt		—			4			—			—		4
Debt issuance cost of long-term debt		—			—			(1	)		—		(1	)
Retirement of long-term debt		—			(1	)		—			—		(1	)
Increase (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		—			3			38			—		41
Net increase (decrease) in short-term borrowings secured by accounts receivables		—			(82	)		—			—		(82	)
Intercompany dividends and net increase (decrease) in intercompany obligations		(30	)		(13	)		43			—		—

Distributions to noncontrolling interest partners		—			(10	)		—			—		(10	)

Net cash provided (used) by financing activities		(30	)		(97	)		69			—		(58	)

Effect of foreign exchange rate changes on cash and cash equivalents		—			5			—			—		5

Increase (decrease) in cash and cash equivalents		(2	)		(36	)		—			—		(38	)
Cash and cash equivalents, April 1		2			197			—			—		199

Cash and cash equivalents, June 30 (Note)	$	—		$	161		$	—		$	—	$	161


Note:	Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase.

STATEMENT OF CASH FLOWS


	Three Months Ended June 30, 2010
							Tenneco Inc.
	Guarantor			Nonguarantor			(Parent			Reclass
	Subsidiaries			Subsidiaries			Company)			& Elims		Consolidated
							(Millions)

Operating Activities
Net cash provided (used) by operating activities	$	(91	)	$	263		$	(68	)	$	—	$	104

Investing Activities
Cash payments for plant, property, and equipment		(14	)		(20	)		—			—		(34	)
Cash payments for software related intangible assets		(4	)		(2	)		—			—		(6	)
Investments and other		—			1			—			—		1

Net cash used by investing activities		(18	)		(21	)		—			—		(39	)

Financing Activities
Issuance of long-term debt		—			5			150			—		155
Retirement of long-term debt		—			(1	)		(128	)		—		(129	)
Debt issuance cost on long-term debt		—			—			(9	)		—		(9	)
Increase (decrease) in bank overdrafts		—			3			—			—		3
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		—			(7	)		25			—		18
Net increase (decrease) in short-term borrowings secured by accounts receivables		—			(126	)		—			—		(126	)
Intercompany dividends and net increase (decrease) in intercompany obligations		111			(141	)		30			—		—
Distribution to noncontrolling interests partners		—			(10	)		—			—		(10	)

Net cash provided (used) by financing activities		111			(277	)		68			—		(98	)

Effect of foreign exchange rate changes on cash and cash equivalents		—			(14	)		—			—		(14	)

Increase (decrease) in cash and cash equivalents		2			(49	)		—			—		(47	)
Cash and cash equivalents, April 1		—			193			—			—		193

Cash and cash equivalents, June 30 (Note)	$	2		$	144		$	—		$	—	$	146


Note:	Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase.

STATEMENT OF CASH FLOWS


	Six Months Ended June 30, 2011
							Tenneco Inc.
	Guarantor			Nonguarantor			(Parent			Reclass
	Subsidiaries			Subsidiaries			Company)			& Elims		Consolidated
							(Millions)

Operating Activities
Net cash provided (used) by operating activities	$	152		$	(70	)	$	(118	)	$	—	$	(36	)

Investing Activities
Proceeds from sale of assets		3			1			—			—		4
Cash payments for plant, property, and equipment		(30	)		(65	)		—			—		(95	)
Cash payments for software related intangible assets		(2	)		(4	)		—			—		(6	)

Net cash used by investing activities		(29	)		(68	)		—			—		(97	)

Financing Activities
Capital contribution from noncontrolling interest partner		—			1			—			—		1
Purchase of common stock under the share repurchase program		—			—			(11	)		—		(11	)
Issuance of long-term debt		—			4			—			—		4
Debt issuance cost of long-term debt		—			—			(1	)		—		(1	)
Retirement of long-term debt		—			(1	)		(22	)		—		(23	)
Increase (decrease) in bank overdrafts		—			8			—			—		8
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt		—			3			85			—		88
Intercompany dividends and net increase (decrease) in intercompany obligations		(123	)		56			67			—		—
Distribution to noncontrolling interest partners		—			(10	)		—			—		(10	)

Net cash provided (used) by financing activities		(123	)		61			118			—		56

Effect of foreign exchange rate changes on cash and cash equivalents		—			5			—			—		5

Increase (decrease) in cash and cash equivalents		—			(72	)		—			—		(72	)
Cash and cash equivalents, January 1		—			233			—			—		233

Cash and cash equivalents, June 30 (Note)	$	—		$	161		$	—		$	—	$	161


Note:	Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase.

STATEMENT OF CASH FLOWS


	Six Months Ended June 30, 2010
							Tenneco Inc.
	Guarantor			Nonguarantor			(Parent			Reclass
	Subsidiaries			Subsidiaries			Company)			& Elims		Consolidated
	(Millions)

Operating Activities
Net cash provided (used) by operating activities	$	(63	)	$	227		$	(117	)	$	—	$	47

Investing Activities
Proceeds from sale of assets		—			1			—			—		1
Cash payments for plant, property, and equipment		(29	)		(43	)		—			—		(72	)
Cash payments for software related intangible assets		(5	)		(3	)		—			—		(8	)
Investments and other		—			2			—			—		2

Net cash used by investing activities		(34	)		(43	)		—			—		(77	)

Financing Activities
Issuance of long-term debt		—			5			150			—		155
Retirement of long-term debt		—			(2	)		(135	)		—		(137	)
Debt issuance cost on long-term debt		—			—			(9	)		—		(9	)
Increase (decrease) in bank overdrafts		—			2			—			—		2
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt		—			(5	)		25			—		20
Intercompany dividends and net increase (decrease) in intercompany obligations		79			(165	)		86			—		—
Distribution to noncontrolling interests partners		—			(11	)		—			—		(11	)

Net cash provided (used) by financing activities		79			(176	)		117			—		20

Effect of foreign exchange rate changes on cash and cash equivalents		—			(11	)		—			—		(11	)

Increase (decrease) in cash and cash equivalents		(18	)		(3	)		—			—		(21	)
Cash and cash equivalents, January 1		20			147			—			—		167

Cash and cash equivalents, June 30 (Note)	$	2		$	144		$	—		$	—	$	146


Note:	Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase.