þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the Quarterly Period Ended June 30, 2011 | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
(State or other jurisdiction of incorporation or organization) |
76-0515284 (I.R.S. Employer Identification No.) |
|
500 North Field Drive, Lake Forest, Illinois (Address of principal executive offices) |
60045 (Zip Code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
Page | ||||||||
4 | ||||||||
Tenneco Inc. and Consolidated Subsidiaries
|
||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
8 | ||||||||
9 | ||||||||
11 | ||||||||
38 | ||||||||
67 | ||||||||
68 | ||||||||
Item 1. Legal Proceedings
|
* | |||||||
69 | ||||||||
69 | ||||||||
Item 3. Defaults Upon Senior Securities
|
* | |||||||
Item 4. Removed and Reserved
|
* | |||||||
Item 5. Other Information
|
* | |||||||
Item 6. Exhibits
|
71 | |||||||
EX-12 | ||||||||
EX-15.1 | ||||||||
EX-31.1 | ||||||||
EX-31.2 | ||||||||
EX-32.1 | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT | ||||||||
EX-101 DEFINITION LINKBASE DOCUMENT |
* | No response to this item is included herein for the reason that it is inapplicable or the answer to such item is negative. |
1
| 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, including any impact on our ability to source and procure such items and services due to supply disruptions that may be caused by the recent earthquake and tsunami in Japan; | |
| 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 contracts; | |
| changes in automotive and commercial vehicle manufacturers production rates and their actual and forecasted requirements for our products, such as the significant production cuts during 2008 and 2009 by automotive manufacturers in response 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 for the applicable program over its life); | |
| 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; | |
| 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 (such as the 2008 strike at American Axle, which disrupted our supply of products for significant General Motors platforms); | |
| 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, low cost country sourcing, and price recovery efforts with aftermarket and OE customers; | |
| the negative impact of higher fuel prices on transportation and logistics costs, raw material costs and discretionary purchases of vehicles or aftermarket products; | |
| the cyclical nature of the global vehicle industry, including the performance of the global aftermarket sector and the longer product lives of vehicle parts; | |
| our ability to successfully execute cash management, restructuring and other cost reduction plans and to realize anticipated benefits from these plans; | |
| costs related to product warranties and other customer satisfaction actions; |
2
| 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 changes in distribution channels for aftermarket products on our ability to increase or maintain aftermarket sales; | |
| the cost and outcome of existing and any future legal proceedings, including, but not limited to, proceedings against us or our customers relating to intellectual property rights; | |
| economic, exchange rate and political conditions in the countries where we operate or sell our products; | |
| customer acceptance of new products; | |
| new technologies that reduce the demand for certain of our products or otherwise render them obsolete; | |
| 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 partnerships; | |
| 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 International Standards Organization (ISO), Technical Specifications (TS) and other such committees in their certification processes for processes and products, which may have the effect of delaying or hindering our ability to bring new products to market; | |
| the impact of changes in and compliance with laws and regulations, including environmental laws and regulations, which may result in our incurrence of environmental liabilities in excess of the amount reserved, the implementation of mandated timelines for worldwide emission regulation, which could impact the demand for certain of our products, and any changes to the timing of the funding requirements for our pension and other postretirement benefit liabilities; | |
| decisions by federal, state and local governments to provide (or discontinue) incentive programs related to automobile or other vehicle purchases; | |
| 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; | |
| 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. |
3
ITEM 1. | FINANCIAL STATEMENTS (UNAUDITED) |
4
Three Months |
Three Months |
Six Months |
Six Months |
|||||||||||||
Ended |
Ended |
Ended |
Ended |
|||||||||||||
June 30, |
June 30, |
June 30, |
June 30, |
|||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Millions Except Share and Per Share Amounts) | ||||||||||||||||
Revenues
|
||||||||||||||||
Net sales and operating revenues
|
$ | 1,888 | $ | 1,502 | $ | 3,648 | $ | 2,818 | ||||||||
Costs and expenses
|
||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown
below)
|
1,565 | 1,222 | 3,031 | 2,295 | ||||||||||||
Engineering, research, and development
|
35 | 33 | 70 | 60 | ||||||||||||
Selling, general, and administrative
|
118 | 98 | 227 | 198 | ||||||||||||
Depreciation and amortization of other intangibles
|
54 | 53 | 105 | 108 | ||||||||||||
1,772 | 1,406 | 3,433 | 2,661 | |||||||||||||
Other income (expense)
|
||||||||||||||||
Loss on sale of receivables
|
(2 | ) | (1 | ) | (3 | ) | (2 | ) | ||||||||
Other income (expense)
|
(1 | ) | (2 | ) | (5 | ) | (3 | ) | ||||||||
(3 | ) | (3 | ) | (8 | ) | (5 | ) | |||||||||
Earnings before interest expense, income taxes, and
noncontrolling interests
|
113 | 93 | 207 | 152 | ||||||||||||
Interest expense (net of interest capitalized of $1 million
in each of the three months ended June 30, 2011 and 2010,
respectively and $2 million in each of the six months ended
June 30, 2011 and 2010, respectively)
|
26 | 32 | 54 | 64 | ||||||||||||
Income tax expense
|
30 | 15 | 44 | 30 | ||||||||||||
Net income
|
57 | 46 | 109 | 58 | ||||||||||||
Less: Net income attributable to noncontrolling interests
|
7 | 6 | 12 | 11 | ||||||||||||
Net income attributable to Tenneco Inc.
|
$ | 50 | $ | 40 | $ | 97 | $ | 47 | ||||||||
Earnings per share
|
||||||||||||||||
Weighted average shares of common stock outstanding
|
||||||||||||||||
Basic
|
59,980,866 | 59,142,946 | 59,901,929 | 59,033,416 | ||||||||||||
Diluted
|
61,813,474 | 60,999,029 | 61,913,337 | 60,892,967 | ||||||||||||
Basic earnings per share of common stock
|
$ | 0.84 | $ | 0.68 | $ | 1.62 | $ | 0.79 | ||||||||
Diluted earnings per share of common stock
|
$ | 0.81 | $ | 0.66 | $ | 1.56 | $ | 0.77 |
5
June 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
(Millions) | ||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 161 | $ | 233 | ||||
Receivables
|
||||||||
Customer notes and accounts, net
|
1,091 | 796 | ||||||
Other
|
45 | 30 | ||||||
Inventories
|
||||||||
Finished goods
|
262 | 222 | ||||||
Work in process
|
179 | 164 | ||||||
Raw materials
|
138 | 118 | ||||||
Materials and supplies
|
47 | 43 | ||||||
Deferred income taxes
|
42 | 38 | ||||||
Prepayments and other
|
177 | 146 | ||||||
Total current assets
|
2,142 | 1,790 | ||||||
Other assets:
|
||||||||
Long-term receivables, net
|
12 | 9 | ||||||
Goodwill
|
91 | 89 | ||||||
Intangibles, net
|
34 | 32 | ||||||
Deferred income taxes
|
92 | 92 | ||||||
Other
|
104 | 105 | ||||||
333 | 327 | |||||||
Plant, property, and equipment, at cost
|
3,282 | 3,109 | ||||||
Less Accumulated depreciation and amortization
|
(2,199 | ) | (2,059 | ) | ||||
1,083 | 1,050 | |||||||
Total assets
|
$ | 3,558 | $ | 3,167 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||
Current liabilities:
|
||||||||
Short-term debt (including current maturities of long-term debt)
|
$ | 67 | $ | 63 | ||||
Trade payables
|
1,208 | 1,048 | ||||||
Accrued taxes
|
55 | 51 | ||||||
Accrued interest
|
13 | 13 | ||||||
Accrued liabilities
|
265 | 227 | ||||||
Other
|
62 | 66 | ||||||
Total current liabilities
|
1,670 | 1,468 | ||||||
Long-term debt
|
1,227 | 1,160 | ||||||
Deferred income taxes
|
58 | 56 | ||||||
Postretirement benefits
|
297 | 311 | ||||||
Deferred credits and other liabilities
|
121 | 125 | ||||||
Commitments and contingencies
|
||||||||
Total liabilities
|
3,373 | 3,120 | ||||||
Redeemable noncontrolling interests
|
10 | 12 | ||||||
Tenneco Inc. Shareholders equity:
|
||||||||
Common stock
|
1 | 1 | ||||||
Premium on common stock and other capital surplus
|
3,011 | 3,008 | ||||||
Accumulated other comprehensive loss
|
(182 | ) | (237 | ) | ||||
Retained earnings (accumulated deficit)
|
(2,439 | ) | (2,536 | ) | ||||
391 | 236 | |||||||
Less Shares held as treasury stock, at cost
|
251 | 240 | ||||||
Total Tenneco Inc. shareholders equity
|
140 | (4 | ) | |||||
Noncontrolling interests
|
35 | 39 | ||||||
Total equity
|
175 | 35 | ||||||
Total liabilities, redeemable noncontrolling interests and equity
|
$ | 3,558 | $ | 3,167 | ||||
6
Three Months |
Three Months |
Six Months |
Six Months |
|||||||||||||
Ended |
Ended |
Ended |
Ended |
|||||||||||||
June 30, |
June 30, |
June 30, |
June 30, |
|||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Millions) | ||||||||||||||||
Operating Activities
|
||||||||||||||||
Net income
|
$ | 57 | $ | 46 | $ | 109 | $ | 58 | ||||||||
Adjustments to reconcile net income to cash provided (used) by
operating activities
|
||||||||||||||||
Depreciation and amortization of other intangibles
|
54 | 53 | 105 | 108 | ||||||||||||
Deferred income taxes
|
| 5 | (5 | ) | 2 | |||||||||||
Stock-based compensation
|
2 | 2 | 4 | 5 | ||||||||||||
Loss on sale of assets
|
1 | 1 | 1 | 3 | ||||||||||||
Changes in components of working capital
|
||||||||||||||||
(Increase) decrease in receivables
|
(39 | ) | (102 | ) | (290 | ) | (293 | ) | ||||||||
(Increase) decrease in inventories
|
17 | (27 | ) | (60 | ) | (71 | ) | |||||||||
(Increase) decrease in prepayments and other current assets
|
(9 | ) | 9 | (24 | ) | 2 | ||||||||||
Increase (decrease) in payables
|
(5 | ) | 112 | 134 | 232 | |||||||||||
Increase (decrease) in accrued taxes
|
(8 | ) | (6 | ) | | 1 | ||||||||||
Increase (decrease) in accrued interest
|
(8 | ) | (8 | ) | | 1 | ||||||||||
Increase (decrease) in other current liabilities
|
16 | 25 | 17 | 19 | ||||||||||||
Changes in long-term assets
|
| 2 | (3 | ) | 1 | |||||||||||
Changes in long-term liabilities
|
(9 | ) | (10 | ) | (21 | ) | (21 | ) | ||||||||
Other
|
(2 | ) | 2 | (3 | ) | | ||||||||||
Net cash provided (used) by operating activities
|
67 | 104 | (36 | ) | 47 | |||||||||||
Investing Activities
|
||||||||||||||||
Proceeds from the sale of assets
|
| | 4 | 1 | ||||||||||||
Cash payments for plant, property, and equipment
|
(49 | ) | (34 | ) | (95 | ) | (72 | ) | ||||||||
Cash payments for software related intangible assets
|
(3 | ) | (6 | ) | (6 | ) | (8 | ) | ||||||||
Other
|
| 1 | | 2 | ||||||||||||
Net cash used by investing activities
|
(52 | ) | (39 | ) | (97 | ) | (77 | ) | ||||||||
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 | 155 | 4 | 155 | ||||||||||||
Debt issuance cost of long-term debt
|
(1 | ) | (9 | ) | (1 | ) | (9 | ) | ||||||||
Retirement of long-term debt
|
(1 | ) | (129 | ) | (23 | ) | (137 | ) | ||||||||
Increase (decrease) in bank overdrafts
|
1 | 3 | 8 | 2 | ||||||||||||
Net increase (decrease) in revolver borrowings and short-term
debt excluding current maturities of long-term debt and
short-term borrowings secured by accounts receivable
|
41 | 18 | 88 | 20 | ||||||||||||
Net decrease in short-term borrowings secured by accounts
receivable
|
(82 | ) | (126 | ) | | | ||||||||||
Distributions to noncontrolling interest partners
|
(10 | ) | (10 | ) | (10 | ) | (11 | ) | ||||||||
Net cash provided (used) by financing activities
|
(58 | ) | (98 | ) | 56 | 20 | ||||||||||
Effect of foreign exchange rate changes on cash and cash
equivalents
|
5 | (14 | ) | 5 | (11 | ) | ||||||||||
Decrease in cash and cash equivalents
|
(38 | ) | (47 | ) | (72 | ) | (21 | ) | ||||||||
Cash and cash equivalents, April 1 and January 1,
respectively
|
199 | 193 | 233 | 167 | ||||||||||||
Cash and cash equivalents, June 30 (Note)
|
$ | 161 | $ | 146 | $ | 161 | $ | 146 | ||||||||
Supplemental Cash Flow Information
|
||||||||||||||||
Cash paid during the period for interest
|
$ | 34 | $ | 39 | $ | 53 | $ | 61 | ||||||||
Cash paid during the period for income taxes (net of refunds)
|
23 | 16 | 33 | 24 | ||||||||||||
Non-cash Investing and Financing Activities
|
||||||||||||||||
Period end balance of trade payables for plant, property, and
equipment
|
$ | 22 | $ | 11 | $ | 22 | $ | 11 |
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
7
Six Months Ended June 30, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
(Millions Except Share Amounts) | ||||||||||||||||
Tenneco Inc. Shareholders:
|
||||||||||||||||
Common Stock
|
||||||||||||||||
Balance January 1
|
61,541,760 | $ | 1 | 60,789,739 | $ | 1 | ||||||||||
Issued pursuant to benefit plans
|
53,302 | | 141,246 | | ||||||||||||
Stock options exercised
|
207,790 | | 92,921 | | ||||||||||||
Balance June 30
|
61,802,852 | 1 | 61,023,906 | 1 | ||||||||||||
Premium on Common Stock and Other Capital Surplus
|
||||||||||||||||
Balance January 1
|
3,008 | 3,005 | ||||||||||||||
Purchase of additional noncontrolling equity interest
|
| (11 | ) | |||||||||||||
Premium on common stock issued pursuant to benefit plans
|
3 | 5 | ||||||||||||||
Balance June 30
|
3,011 | 2,999 | ||||||||||||||
Accumulated Other Comprehensive Loss
|
||||||||||||||||
Balance January 1
|
(237 | ) | (212 | ) | ||||||||||||
Other comprehensive income (loss)
|
55 | (106 | ) | |||||||||||||
Balance June 30
|
(182 | ) | (318 | ) | ||||||||||||
Retained Earnings (Accumulated Deficit)
|
||||||||||||||||
Balance January 1
|
(2,536 | ) | (2,575 | ) | ||||||||||||
Net income attributable to Tenneco Inc.
|
97 | 47 | ||||||||||||||
Balance June 30
|
(2,439 | ) | (2,528 | ) | ||||||||||||
Less Common Stock Held as Treasury Stock, at
Cost
|
||||||||||||||||
Balance January 1
|
1,294,692 | 240 | 1,294,692 | 240 | ||||||||||||
Purchase of common stock through stock repurchase program
|
270,500 | 11 | | | ||||||||||||
Balance June 30
|
1,565,192 | 251 | 1,294,692 | 240 | ||||||||||||
Total Tenneco Inc. shareholders equity
|
$ | 140 | $ | (86 | ) | |||||||||||
Noncontrolling Interests:
|
||||||||||||||||
Balance January 1
|
$ | 39 | $ | 32 | ||||||||||||
Net income
|
10 | 7 | ||||||||||||||
Sale of twenty percent equity interest to Tenneco Inc.
|
| (4 | ) | |||||||||||||
Other comprehensive income (loss)
|
| 2 | ||||||||||||||
Dividend declared
|
(14 | ) | (8 | ) | ||||||||||||
Balance June 30
|
$ | 35 | $ | 29 | ||||||||||||
Total equity
|
$ | 175 | $ | (57 | ) | |||||||||||
8
Three Months Ended June 30, 2011 | ||||||||||||||||||||||||
Tenneco Inc. | Noncontrolling Interests | Total | ||||||||||||||||||||||
Accumulated |
Accumulated |
Accumulated |
||||||||||||||||||||||
Other |
Other |
Other |
||||||||||||||||||||||
Comprehensive |
Comprehensive |
Comprehensive |
Comprehensive |
Comprehensive |
Comprehensive |
|||||||||||||||||||
Income |
Income |
Income |
Income |
Income |
Income |
|||||||||||||||||||
(Loss) | (Loss) | (Loss) | (Loss) | (Loss) | (Loss) | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Net Income
|
$ | 50 | $ | 7 | $ | 57 | ||||||||||||||||||
Accumulated Other Comprehensive Income (Loss)
|
||||||||||||||||||||||||
Cumulative Translation Adjustment
|
||||||||||||||||||||||||
Balance April 1
|
$ | 38 | $ | 6 | $ | 44 | ||||||||||||||||||
Translation of foreign currency statements
|
21 | 21 | (1 | ) | (1 | ) | 20 | 20 | ||||||||||||||||
Balance June 30
|
59 | 5 | 64 | |||||||||||||||||||||
Additional Liability for Pension Benefits
|
||||||||||||||||||||||||
Balance April 1
|
(249 | ) | | (249 | ) | |||||||||||||||||||
Additional Liability for Pension and Postretirement Benefits,
net of tax
|
3 | 3 | 3 | 3 | ||||||||||||||||||||
Balance June 30
|
(246 | ) | | (246 | ) | |||||||||||||||||||
Balance June 30
|
$ | (187 | ) | $ | 5 | $ | (182 | ) | ||||||||||||||||
Other Comprehensive Income (Loss)
|
24 | (1 | ) | 23 | ||||||||||||||||||||
Comprehensive Income
|
$ | 74 | $ | 6 | $ | 80 | ||||||||||||||||||
Three Months Ended June, 2010 | ||||||||||||||||||||||||
Tenneco Inc. | Noncontrolling Interests | Total | ||||||||||||||||||||||
Accumulated |
Accumulated |
Accumulated |
||||||||||||||||||||||
Other |
Other |
Other |
||||||||||||||||||||||
Comprehensive |
Comprehensive |
Comprehensive |
Comprehensive |
Comprehensive |
Comprehensive |
|||||||||||||||||||
Income |
Income |
Income |
Income |
Income |
Income |
|||||||||||||||||||
(Loss) | (Loss) | (Loss) | (Loss) | (Loss) | (Loss) | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Net Income
|
$ | 40 | $ | 6 | $ | 46 | ||||||||||||||||||
Accumulated Other Comprehensive Income (Loss)
|
||||||||||||||||||||||||
Cumulative Translation Adjustment
|
||||||||||||||||||||||||
Balance April 1
|
$ | 5 | $ | | $ | 5 | ||||||||||||||||||
Translation of foreign currency statements
|
(77 | ) | (77 | ) | 3 | 3 | (74 | ) | (74 | ) | ||||||||||||||
Balance June 30
|
(72 | ) | 3 | (69 | ) | |||||||||||||||||||
Additional Liability for Pension Benefits
|
||||||||||||||||||||||||
Balance April 1
|
(248 | ) | | (248 | ) | |||||||||||||||||||
Additional Liability for Pension and Postretirement Benefits,
net of tax
|
2 | 2 | 2 | 2 | ||||||||||||||||||||
Balance June 30
|
(246 | ) | | (246 | ) | |||||||||||||||||||
Balance June 30
|
$ | (318 | ) | $ | 3 | $ | (315 | ) | ||||||||||||||||
Other Comprehensive Income (Loss)
|
(75 | ) | 3 | (72 | ) | |||||||||||||||||||
Comprehensive Income (Loss)
|
$ | (35 | ) | $ | 9 | $ | (26 | ) | ||||||||||||||||
9
Six Months Ended June 30, 2011 | ||||||||||||||||||||||||
Tenneco Inc. | Noncontrolling Interests | Total | ||||||||||||||||||||||
Accumulated |
Accumulated |
Accumulated |
||||||||||||||||||||||
Other |
Other |
Other |
||||||||||||||||||||||
Comprehensive |
Comprehensive |
Comprehensive |
Comprehensive |
Comprehensive |
Comprehensive |
|||||||||||||||||||
Income |
Income |
Income |
Income |
Income |
Income |
|||||||||||||||||||
(Loss) | (Loss) | (Loss) | (Loss) | (Loss) | (Loss) | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Net Income
|
$ | 97 | $ | 12 | $ | 109 | ||||||||||||||||||
Accumulated Other Comprehensive Income (Loss)
|
||||||||||||||||||||||||
Cumulative Translation Adjustment
|
||||||||||||||||||||||||
Balance January 1
|
$ | 8 | $ | 5 | $ | 13 | ||||||||||||||||||
Translation of foreign currency statements
|
51 | 51 | | | 51 | 51 | ||||||||||||||||||
Balance June 30
|
59 | 5 | 64 | |||||||||||||||||||||
Additional Liability for Pension Benefits
|
||||||||||||||||||||||||
Balance January 1
|
(250 | ) | | (250 | ) | |||||||||||||||||||
Additional Liability for Pension and Postretirement Benefits,
net of tax
|
4 | 4 | 4 | 4 | ||||||||||||||||||||
Balance June 30
|
(246 | ) | | (246 | ) | |||||||||||||||||||
Balance June 30
|
$ | (187 | ) | $ | 5 | $ | (182 | ) | ||||||||||||||||
Other Comprehensive Income
|
55 | | 55 | |||||||||||||||||||||
Comprehensive Income
|
$ | 152 | $ | 12 | $ | 164 | ||||||||||||||||||
Six Months Ended June, 2010 | ||||||||||||||||||||||||
Tenneco Inc. | Noncontrolling Interests | Total | ||||||||||||||||||||||
Accumulated |
Accumulated |
Accumulated |
||||||||||||||||||||||
Other |
Other |
Other |
||||||||||||||||||||||
Comprehensive |
Comprehensive |
Comprehensive |
Comprehensive |
Comprehensive |
Comprehensive |
|||||||||||||||||||
Income |
Income |
Income |
Income |
Income |
Income |
|||||||||||||||||||
(Loss) | (Loss) | (Loss) | (Loss) | (Loss) | (Loss) | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Net Income
|
$ | 47 | $ | 11 | $ | 58 | ||||||||||||||||||
Accumulated Other Comprehensive Income (Loss)
|
||||||||||||||||||||||||
Cumulative Translation Adjustment
|
||||||||||||||||||||||||
Balance January 1
|
$ | 37 | $ | | $ | 37 | ||||||||||||||||||
Translation of foreign currency statements
|
(109 | ) | (109 | ) | 3 | 3 | (106 | ) | (106 | ) | ||||||||||||||
Balance June 30
|
(72 | ) | 3 | (69 | ) | |||||||||||||||||||
Additional Liability for Pension Benefits
|
||||||||||||||||||||||||
Balance January 1
|
(249 | ) | | (249 | ) | |||||||||||||||||||
Additional Liability for Pension and Postretirement Benefits,
net of tax
|
3 | 3 | 3 | 3 | ||||||||||||||||||||
Balance June 30
|
(246 | ) | | (246 | ) | |||||||||||||||||||
Balance June 30
|
$ | (318 | ) | $ | 3 | $ | (315 | ) | ||||||||||||||||
Other Comprehensive Income (Loss)
|
(106 | ) | 3 | (103 | ) | |||||||||||||||||||
Comprehensive Income (Loss)
|
$ | (59 | ) | $ | 14 | $ | (45 | ) | ||||||||||||||||
10
(1) | Consolidation and Presentation |
(2) | Financial Instruments |
June 30, 2011 | December 31, 2010 | |||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
(Millions) | ||||||||||||||||
Long-term debt (including current maturities)
|
$ | 1,230 | $ | 1,265 | $ | 1,162 | $ | 1,201 | ||||||||
Instruments with off-balance sheet risk:
|
||||||||||||||||
Foreign exchange forward contracts
|
| | 2 | 2 |
11
Fair Value of Derivative Instruments | ||||||||||||||||||||||||
June 30, 2011 | December 31, 2010 | |||||||||||||||||||||||
Asset |
Liability |
Asset |
Liability |
|||||||||||||||||||||
Derivatives | Derivatives | Total | Derivatives | Derivatives | Total | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Foreign exchange forward contracts
|
$ | | $ | | $ | | $ | 2 | $ | | $ | 2 |
June 30, 2011 | December 31, 2010 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Financial Assets:
|
||||||||||||||||||||||||
Foreign exchange forward contracts
|
n/a | $ | | n/a | n/a | $ | 2 | n/a |
Notional Amount |
||||||
in Foreign Currency | ||||||
(Millions) | ||||||
Australian dollars
|
Purchase | 2 | ||||
British pounds
|
Purchase | 4 | ||||
European euro
|
Sell | (12 | ) | |||
Japanese Yen
|
Purchase | 532 | ||||
South African rand
|
Purchase | 164 | ||||
U.S. dollars
|
Purchase | 14 | ||||
Sell | (22 | ) | ||||
Other
|
Purchase | 1 | ||||
Sell | (13 | ) |
(3) | Long-Term Debt and Financing Arrangements |
12
Interest |
||||||||
Leverage |
Coverage |
|||||||
Period Ending | Ratio | Ratio | ||||||
September 30, 2011
|
3.50 | 2.55 | ||||||
December 31, 2011
|
3.50 | 2.55 | ||||||
Each quarter thereafter
|
3.50 | 2.75 |
13
14
(4) | Income Taxes |
| Future reversals of existing taxable temporary differences; | |
| Taxable income or loss, based on recent results, exclusive of reversing temporary differences and carryforwards; and | |
| Tax-planning strategies. |
(5) | Accounts Receivable Securitization |
15
16
(6) | Restructuring and Other Charges |
December 31, |
June 30, |
|||||||||||||||||||
2010 |
2011 |
Impact of |
2011 |
|||||||||||||||||
Restructuring |
Cash |
Exchange |
Reserve |
Restructuring |
||||||||||||||||
Reserve | Payments | Rates | Adjustments | Reserve | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Severance
|
$ | 7 | (4 | ) | | | $ | 3 |
(7) | Environmental Matters, Litigation and Product Warranties |
17
18
Six Months |
||||||||
Ended |
||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
(Millions) | ||||||||
Beginning Balance January 1,
|
$ | 33 | $ | 32 | ||||
Accruals related to product warranties
|
2 | 8 | ||||||
Reductions for payments made
|
(6 | ) | (8 | ) | ||||
Ending Balance June 30,
|
$ | 29 | $ | 32 | ||||
19
(8) | Earnings Per Share |
Three Months |
Three Months |
Six Months |
Six Months |
|||||||||||||
Ended |
Ended |
Ended |
Ended |
|||||||||||||
June 30, |
June 30, |
June 30, |
June 30, |
|||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Millions Except Share and Per Share Amounts) | ||||||||||||||||
Basic earnings per share
|
||||||||||||||||
Net income attributable to Tenneco Inc.
|
$ | 50 | $ | 40 | $ | 97 | $ | 47 | ||||||||
Average shares of common stock outstanding
|
59,980,866 | 59,142,946 | 59,901,929 | 59,033,416 | ||||||||||||
Earnings per average share of common stock
|
$ | 0.84 | $ | 0.68 | $ | 1.62 | $ | 0.79 | ||||||||
Diluted earnings per share
|
||||||||||||||||
Net income attributable to Tenneco Inc.
|
$ | 50 | $ | 40 | $ | 97 | $ | 47 | ||||||||
Average shares of common stock outstanding
|
59,980,866 | 59,142,946 | 59,901,929 | 59,033,416 | ||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Restricted stock
|
211,556 | 354,974 | 294,526 | 414,059 | ||||||||||||
Stock options
|
1,621,052 | 1,501,109 | 1,716,882 | 1,445,492 | ||||||||||||
Average shares of common stock outstanding including dilutive
securities
|
61,813,474 | 60,999,029 | 61,913,337 | 60,892,967 | ||||||||||||
Earnings per average share of common stock
|
$ | 0.81 | $ | 0.66 | $ | 1.56 | $ | 0.77 | ||||||||
(9) | Common Stock |
20
Six Months |
||||||||
Ended |
||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
Stock Options Granted
|
||||||||
Weighted average grant date fair value, per share
|
$ | 26.13 | $ | 11.76 | ||||
Weighted average assumptions used:
|
||||||||
Expected volatility
|
70.1 | % | 75.4 | % | ||||
Expected lives
|
4.8 | 4.6 | ||||||
Risk-free interest rates
|
1.8 | % | 2.2 | % | ||||
Dividend yields
|
0.0 | % | 0.0 | % |
21
Six Months Ended June 30, 2011 | ||||||||||||||||
Weighted Avg. |
||||||||||||||||
Shares |
Weighted Avg. |
Remaining |
Aggregate |
|||||||||||||
Under |
Exercise |
Life in |
Intrinsic |
|||||||||||||
Option | Prices | Years | Value | |||||||||||||
(Millions) | ||||||||||||||||
Outstanding Stock Options
|
||||||||||||||||
Outstanding, January 1, 2011
|
3,129,241 | $ | 14.43 | 4.3 | $ | 68 | ||||||||||
Granted
|
201,133 | 45.42 | ||||||||||||||
Expired
|
(56,046 | ) | 3.66 | |||||||||||||
Forfeited
|
(13,184 | ) | 9.36 | |||||||||||||
Exercised
|
(125,624 | ) | 17.10 | 3 | ||||||||||||
Outstanding, March 31, 2011
|
3,135,520 | $ | 16.53 | 4.4 | $ | 80 | ||||||||||
Granted
|
2,711 | 43.51 | ||||||||||||||
Forfeited
|
(23,841 | ) | 14.26 | |||||||||||||
Exercised
|
(82,166 | ) | 11.50 | 3 | ||||||||||||
Outstanding, June 30, 2011
|
3,032,224 | $ | 16.71 | 4.2 | $ | 76 | ||||||||||
Six Months Ended |
||||||||
June 30, 2011 | ||||||||
Weighted Avg. |
||||||||
Grant Date |
||||||||
Shares | Fair Value | |||||||
Nonvested Restricted Shares
|
||||||||
Nonvested balance at January 1, 2011
|
558,198 | $ | 11.58 | |||||
Granted
|
141,036 | 45.42 | ||||||
Vested
|
(268,891 | ) | 12.00 | |||||
Forfeited
|
(4,822 | ) | 13.74 | |||||
Nonvested balance at March 31, 2011
|
425,521 | $ | 22.51 | |||||
Granted
|
1,381 | 43.51 | ||||||
Vested
|
(3,851 | ) | 15.47 | |||||
Forfeited
|
(7,190 | ) | 23.82 | |||||
Nonvested balance at June 30, 2011
|
415,861 | $ | 22.62 | |||||
22
(10) | Pension Plans, Postretirement and Other Employee Benefits |
Three Months Ended June 30, | ||||||||||||||||||||||||
Pension | Postretirement | |||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||
US | Foreign | US | Foreign | US | US | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Service cost benefits earned during the period
|
$ | | $ | 1 | $ | | $ | 2 | $ | | $ | 1 | ||||||||||||
Interest cost
|
5 | 5 | 5 | 4 | 2 | 2 | ||||||||||||||||||
Expected return on plan assets
|
(6 | ) | (5 | ) | (5 | ) | (5 | ) | | | ||||||||||||||
Net amortization:
|
||||||||||||||||||||||||
Actuarial loss
|
1 | 2 | 1 | 1 | 1 | 1 | ||||||||||||||||||
Prior service cost (credit)
|
| 1 | | 1 | (2 | ) | (2 | ) | ||||||||||||||||
Net pension and postretirement costs
|
$ | | $ | 4 | $ | 1 | $ | 3 | $ | 1 | $ | 2 | ||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||||||
Pension | Postretirement | |||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||
US | Foreign | US | Foreign | US | US | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Service cost benefits earned during the period
|
$ | | $ | 3 | $ | | $ | 3 | $ | | $ | 1 | ||||||||||||
Interest cost
|
10 | 10 | 10 | 9 | 4 | 4 | ||||||||||||||||||
Expected return on plan assets
|
(11 | ) | (10 | ) | (10 | ) | (10 | ) | | | ||||||||||||||
Net amortization:
|
||||||||||||||||||||||||
Actuarial loss
|
2 | 3 | 2 | 2 | 2 | 2 | ||||||||||||||||||
Prior service cost (credit)
|
| 1 | | 1 | (3 | ) | (3 | ) | ||||||||||||||||
Net pension and postretirement costs
|
$ | 1 | $ | 7 | $ | 2 | $ | 5 | $ | 3 | $ | 4 | ||||||||||||
23
(11) | Acquisitions |
(12) | New Accounting Pronouncements |
24
(13) | Guarantees |
25
(14) | Segment Information |
26
Segment | ||||||||||||||||||||
North |
Asia |
Reclass & |
||||||||||||||||||
America | Europe | Pacific | Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
For the Three Months Ended June 30, 2011
|
||||||||||||||||||||
Revenues from external customers
|
$ | 874 | $ | 817 | $ | 197 | $ | | $ | 1,888 | ||||||||||
Intersegment revenues
|
3 | 42 | 7 | (52 | ) | | ||||||||||||||
Earnings before interest expense, income taxes, and
noncontrolling interests
|
62 | 37 | 14 | | 113 | |||||||||||||||
For the Three Months Ended June 30, 2010
|
||||||||||||||||||||
Revenues from external customers
|
$ | 738 | $ | 606 | $ | 158 | $ | | $ | 1,502 | ||||||||||
Intersegment revenues
|
2 | 42 | 7 | (51 | ) | | ||||||||||||||
Earnings before interest expense, income taxes, and
noncontrolling interests
|
50 | 30 | 13 | | 93 | |||||||||||||||
At June 30, 2011 and for the Six Months Then Ended
|
||||||||||||||||||||
Revenues from external customers
|
$ | 1,725 | $ | 1,558 | $ | 365 | $ | | $ | 3,648 | ||||||||||
Intersegment revenues
|
6 | 79 | 13 | (98 | ) | | ||||||||||||||
Earnings before interest expense, income taxes, and
noncontrolling interests
|
124 | 61 | 22 | | 207 | |||||||||||||||
Total assets
|
1,436 | 1,548 | 549 | 25 | 3,558 | |||||||||||||||
At June 30, 2010 and for the Six Months Then Ended
|
||||||||||||||||||||
Revenues from external customers
|
$ | 1,343 | $ | 1,167 | $ | 308 | $ | | $ | 2,818 | ||||||||||
Intersegment revenues
|
5 | 71 | 12 | (88 | ) | | ||||||||||||||
Earnings before interest expense, income taxes, and
noncontrolling interests
|
86 | 42 | 24 | | 152 | |||||||||||||||
Total assets
|
1,310 | 1,254 | 397 | 19 | 2,980 |
(15) | Supplemental Guarantor Condensed Consolidating Financial Statements |
27
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 | |||||||||
28
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 | ||||||||
29
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 | |||||||||
30
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 | |||||||||
31
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 | |||||||||
32
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 | |||||||||
33
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. |
34
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. |
35
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. |
36
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. |
37
ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
38
Quarter ended June 30, 2010
|
$ | 1,222 | ||
Volume and mix
|
218 | |||
Material
|
16 | |||
Currency exchange rates
|
103 | |||
Restructuring
|
(3 | ) | ||
Other Costs
|
9 | |||
Quarter ended June 30, 2011
|
$ | 1,565 | ||
39
Six months ended June 30, 2010
|
$ | 2,295 | ||
Volume and mix
|
544 | |||
Material
|
39 | |||
Currency exchange rates
|
140 | |||
Restructuring
|
(6 | ) | ||
Other Costs
|
19 | |||
Six months ended June 30, 2011
|
$ | 3,031 | ||
40
41
Three Months Ended June 30, 2011 | ||||||||||||||||||||
Revenues |
||||||||||||||||||||
Substrate |
Excluding |
|||||||||||||||||||
Revenues |
Sales |
Currency and |
||||||||||||||||||
Currency |
Excluding |
Excluding |
Substrate |
|||||||||||||||||
Revenues | Impact | Currency | Currency | Sales | ||||||||||||||||
(Millions) | ||||||||||||||||||||
North America Original Equipment
|
||||||||||||||||||||
Ride Control
|
$ | 161 | $ | 2 | $ | 159 | $ | | $ | 159 | ||||||||||
Emission Control
|
520 | | 520 | 246 | 274 | |||||||||||||||
Total North America Original Equipment
|
681 | 2 | 679 | 246 | 433 | |||||||||||||||
North America Aftermarket
|
||||||||||||||||||||
Ride Control
|
145 | 2 | 143 | | 143 | |||||||||||||||
Emission Control
|
48 | | 48 | | 48 | |||||||||||||||
Total North America Aftermarket
|
193 | 2 | 191 | | 191 | |||||||||||||||
Total North America
|
874 | 4 | 870 | 246 | 624 | |||||||||||||||
Europe Original Equipment
|
||||||||||||||||||||
Ride Control
|
151 | 20 | 131 | | 131 | |||||||||||||||
Emission Control
|
385 | 51 | 334 | 112 | 222 | |||||||||||||||
Total Europe Original Equipment
|
536 | 71 | 465 | 112 | 353 | |||||||||||||||
Europe Aftermarket
|
||||||||||||||||||||
Ride Control
|
70 | 10 | 60 | | 60 | |||||||||||||||
Emission Control
|
44 | 6 | 38 | | 38 | |||||||||||||||
Total Europe Aftermarket
|
114 | 16 | 98 | | 98 | |||||||||||||||
South America & India
|
167 | 11 | 156 | 28 | 128 | |||||||||||||||
Total Europe, South America & India
|
817 | 98 | 719 | 140 | 579 | |||||||||||||||
Asia
|
155 | 8 | 147 | 23 | 124 | |||||||||||||||
Australia
|
42 | 8 | 34 | 2 | 32 | |||||||||||||||
Total Asia Pacific
|
197 | 16 | 181 | 25 | 156 | |||||||||||||||
Total Tenneco
|
$ | 1,888 | $ | 118 | $ | 1,770 | $ | 411 | $ | 1,359 | ||||||||||
42
Three Months Ended June 30, 2010 | ||||||||||||||||||||
Revenues |
||||||||||||||||||||
Substrate |
Excluding |
|||||||||||||||||||
Revenues |
Sales |
Currency and |
||||||||||||||||||
Currency |
Excluding |
Excluding |
Substrate |
|||||||||||||||||
Revenues | Impact | Currency | Currency | Sales | ||||||||||||||||
(Millions) | ||||||||||||||||||||
North America Original Equipment
|
||||||||||||||||||||
Ride Control
|
$ | 140 | $ | | $ | 140 | $ | | $ | 140 | ||||||||||
Emission Control
|
417 | | 417 | 181 | 236 | |||||||||||||||
Total North America Original Equipment
|
557 | | 557 | 181 | 376 | |||||||||||||||
North America Aftermarket
|
||||||||||||||||||||
Ride Control
|
138 | | 138 | | 138 | |||||||||||||||
Emission Control
|
43 | | 43 | | 43 | |||||||||||||||
Total North America Aftermarket
|
181 | | 181 | | 181 | |||||||||||||||
Total North America
|
738 | | 738 | 181 | 557 | |||||||||||||||
Europe Original Equipment
|
||||||||||||||||||||
Ride Control
|
114 | | 114 | | 114 | |||||||||||||||
Emission Control
|
266 | | 266 | 79 | 187 | |||||||||||||||
Total Europe Original Equipment
|
380 | | 380 | 79 | 301 | |||||||||||||||
Europe Aftermarket
|
||||||||||||||||||||
Ride Control
|
56 | | 56 | | 56 | |||||||||||||||
Emission Control
|
41 | | 41 | | 41 | |||||||||||||||
Total Europe Aftermarket
|
97 | | 97 | | 97 | |||||||||||||||
South America & India
|
129 | | 129 | 14 | 115 | |||||||||||||||
Total Europe, South America & India
|
606 | | 606 | 93 | 513 | |||||||||||||||
Asia
|
121 | | 121 | 27 | 94 | |||||||||||||||
Australia
|
37 | | 37 | 3 | 34 | |||||||||||||||
Total Asia Pacific
|
158 | | 158 | 30 | 128 | |||||||||||||||
Total Tenneco
|
$ | 1,502 | $ | | $ | 1,502 | $ | 304 | $ | 1,198 | ||||||||||
43
Three Months Ended June 30, 2011 |
||||||||||||||||
Versus Three Months Ended June 30, 2010 |
||||||||||||||||
Dollar and Percent Increase (Decrease) | ||||||||||||||||
Revenues |
||||||||||||||||
Excluding |
||||||||||||||||
Currency and |
||||||||||||||||
Substrate |
||||||||||||||||
Revenues | Percent | Sales | Percent | |||||||||||||
(Millions Except Percent Amounts) | ||||||||||||||||
North America Original Equipment
|
||||||||||||||||
Ride Control
|
$ | 21 | 15 | % | $ | 19 | 13 | % | ||||||||
Emission Control
|
103 | 25 | % | 38 | 16 | % | ||||||||||
Total North America Original Equipment
|
124 | 22 | % | 57 | 15 | % | ||||||||||
North America Aftermarket
|
||||||||||||||||
Ride Control
|
7 | 5 | % | 5 | 4 | % | ||||||||||
Emission Control
|
5 | 13 | % | 5 | 12 | % | ||||||||||
Total North America Aftermarket
|
12 | 7 | % | 10 | 6 | % | ||||||||||
Total North America
|
136 | 18 | % | 67 | 12 | % | ||||||||||
Europe Original Equipment
|
||||||||||||||||
Ride Control
|
37 | 32 | % | 17 | 14 | % | ||||||||||
Emission Control
|
119 | 44 | % | 35 | 18 | % | ||||||||||
Total Europe Original Equipment
|
156 | 40 | % | 52 | 17 | % | ||||||||||
Europe Aftermarket
|
||||||||||||||||
Ride Control
|
14 | 25 | % | 4 | 8 | % | ||||||||||
Emission Control
|
3 | 8 | % | (3 | ) | (7 | )% | |||||||||
Total Europe Aftermarket
|
17 | 18 | % | 1 | 2 | % | ||||||||||
South America & India
|
38 | 31 | % | 13 | 13 | % | ||||||||||
Total Europe, South America & India
|
211 | 35 | % | 66 | 13 | % | ||||||||||
Asia
|
34 | 29 | % | 30 | 32 | % | ||||||||||
Australia
|
5 | 11 | % | (2 | ) | (11 | )% | |||||||||
Total Asia Pacific
|
39 | 25 | % | 28 | 21 | % | ||||||||||
Total Tenneco
|
$ | 386 | 26 | % | $ | 161 | 13 | % | ||||||||
Three Months Ended June 30, | ||||||||||||||||
Increase |
||||||||||||||||
2011 | 2010 | (Decrease) | % Increase | |||||||||||||
(Number of Vehicles in Thousands) | ||||||||||||||||
North America
|
2,981 | 3,080 | (99 | ) | (3 | )% | ||||||||||
Europe
|
5,345 | 5,137 | 208 | 4 | % | |||||||||||
South America
|
1,126 | 1,046 | 80 | 8 | % | |||||||||||
India
|
876 | 743 | 133 | 18 | % | |||||||||||
Total Europe, South America & India
|
7,347 | 6,926 | 421 | 6 | % | |||||||||||
China
|
3,990 | 3,983 | 7 | | ||||||||||||
Australia
|
56 | 65 | (9 | ) | (15 | )% |
44
45
Six Months Ended June 30, 2011 | ||||||||||||||||||||
Substrate |
Revenues |
|||||||||||||||||||
Sales |
Excluding |
|||||||||||||||||||
Revenues |
Excluding |
Currency and |
||||||||||||||||||
Currency |
Excluding |
Currency |
Substrate |
|||||||||||||||||
Revenues | Impact | Currency | Impact | Sales | ||||||||||||||||
(Millions) | ||||||||||||||||||||
North America Original Equipment
|
||||||||||||||||||||
Ride Control
|
$ | 313 | $ | 4 | $ | 309 | $ | | $ | 309 | ||||||||||
Emission Control
|
1,046 | | 1,046 | 495 | 551 | |||||||||||||||
Total North America Original Equipment
|
1,359 | 4 | 1,355 | 495 | 860 | |||||||||||||||
North America Aftermarket
|
||||||||||||||||||||
Ride Control
|
272 | 3 | 269 | | 269 | |||||||||||||||
Emission Control
|
94 | 1 | 93 | | 93 | |||||||||||||||
Total North America Aftermarket
|
366 | 4 | 362 | | 362 | |||||||||||||||
Total North America
|
1,725 | 8 | 1,717 | 495 | 1,222 | |||||||||||||||
Europe Original Equipment
|
||||||||||||||||||||
Ride Control
|
290 | 23 | 267 | | 267 | |||||||||||||||
Emission Control
|
761 | 67 | 694 | 234 | 460 | |||||||||||||||
Total Europe Original Equipment
|
1,051 | 90 | 961 | 234 | 727 | |||||||||||||||
Europe Aftermarket
|
||||||||||||||||||||
Ride Control
|
114 | 11 | 103 | | 103 | |||||||||||||||
Emission Control
|
74 | 7 | 67 | | 67 | |||||||||||||||
Total Europe Aftermarket
|
188 | 18 | 170 | | 170 | |||||||||||||||
South America & India
|
319 | 18 | 301 | 53 | 248 | |||||||||||||||
Total Europe, South America & India
|
1,558 | 126 | 1,432 | 287 | 1,145 | |||||||||||||||
Asia
|
286 | 13 | 273 | 43 | 230 | |||||||||||||||
Australia
|
79 | 13 | 66 | 5 | 61 | |||||||||||||||
Total Asia Pacific
|
365 | 26 | 339 | 48 | 291 | |||||||||||||||
Total Tenneco
|
$ | 3,648 | $ | 160 | $ | 3,488 | $ | 830 | $ | 2,658 | ||||||||||
46
Six Months Ended June 30, 2010 | ||||||||||||||||||||
Substrate |
Revenues |
|||||||||||||||||||
Sales |
Excluding |
|||||||||||||||||||
Revenues |
Excluding |
Currency and |
||||||||||||||||||
Currency |
Excluding |
Currency |
Substrate |
|||||||||||||||||
Revenues | Impact | Currency | Impact | Sales | ||||||||||||||||
(Millions) | ||||||||||||||||||||
North America Original Equipment
|
||||||||||||||||||||
Ride Control
|
$ | 268 | $ | | $ | 268 | $ | | $ | 268 | ||||||||||
Emission Control
|
743 | | 743 | 316 | 427 | |||||||||||||||
Total North America Original Equipment
|
1,011 | | 1,011 | 316 | 695 | |||||||||||||||
North America Aftermarket
|
||||||||||||||||||||
Ride Control
|
251 | | 251 | | 251 | |||||||||||||||
Emission Control
|
81 | | 81 | | 81 | |||||||||||||||
Total North America Aftermarket
|
332 | | 332 | | 332 | |||||||||||||||
Total North America
|
1,343 | | 1,343 | 316 | 1,027 | |||||||||||||||
Europe Original Equipment
|
||||||||||||||||||||
Ride Control
|
230 | | 230 | | 230 | |||||||||||||||
Emission Control
|
535 | | 535 | 165 | 370 | |||||||||||||||
Total Europe Original Equipment
|
765 | | 765 | 165 | 600 | |||||||||||||||
Europe Aftermarket
|
||||||||||||||||||||
Ride Control
|
95 | | 95 | | 95 | |||||||||||||||
Emission Control
|
68 | | 68 | | 68 | |||||||||||||||
Total Europe Aftermarket
|
163 | | 163 | | 163 | |||||||||||||||
South America & India
|
239 | | 239 | 27 | 212 | |||||||||||||||
Total Europe, South America & India
|
1,167 | | 1,167 | 192 | 975 | |||||||||||||||
Asia
|
232 | | 232 | 52 | 180 | |||||||||||||||
Australia
|
76 | | 76 | 5 | 71 | |||||||||||||||
Total Asia Pacific
|
308 | | 308 | 57 | 251 | |||||||||||||||
Total Tenneco
|
$ | 2,818 | $ | | $ | 2,818 | $ | 565 | $ | 2,253 | ||||||||||
47
Six Months Ended June 30, 2011 |
||||||||||||||||
Versus Six Months Ended June 30, 2010 |
||||||||||||||||
Dollar and Percent Increase (Decrease) | ||||||||||||||||
Revenues |
||||||||||||||||
Excluding |
||||||||||||||||
Currency and |
||||||||||||||||
Substrate |
||||||||||||||||
Revenues | Percent | Sales | Percent | |||||||||||||
(Millions Except Percent Amounts) | ||||||||||||||||
North America Original Equipment
|
||||||||||||||||
Ride Control
|
$ | 45 | 17 | % | $ | 41 | 15 | % | ||||||||
Emission Control
|
303 | 41 | % | 124 | 29 | % | ||||||||||
Total North America Original Equipment
|
348 | 34 | % | 165 | 24 | % | ||||||||||
North America Aftermarket
|
||||||||||||||||
Ride Control
|
21 | 8 | % | 18 | 7 | % | ||||||||||
Emission Control
|
13 | 16 | % | 12 | 14 | % | ||||||||||
Total North America Aftermarket
|
34 | 10 | % | 30 | 9 | % | ||||||||||
Total North America
|
382 | 28 | % | 195 | 19 | % | ||||||||||
Europe Original Equipment
|
||||||||||||||||
Ride Control
|
60 | 26 | % | 37 | 16 | % | ||||||||||
Emission Control
|
226 | 42 | % | 90 | 24 | % | ||||||||||
Total Europe Original Equipment
|
286 | 37 | % | 127 | 21 | % | ||||||||||
Europe Aftermarket
|
||||||||||||||||
Ride Control
|
19 | 20 | % | 8 | 9 | % | ||||||||||
Emission Control
|
6 | 9 | % | (1 | ) | (1 | )% | |||||||||
Total Europe Aftermarket
|
25 | 16 | % | 7 | 4 | % | ||||||||||
South America & India
|
80 | 34 | % | 36 | 17 | % | ||||||||||
Total Europe, South America & India
|
391 | 34 | % | 170 | 17 | % | ||||||||||
Asia
|
54 | 23 | % | 50 | 28 | % | ||||||||||
Australia
|
3 | 3 | % | (10 | ) | (14 | )% | |||||||||
Total Asia Pacific
|
57 | 18 | % | 40 | 16 | % | ||||||||||
Total Tenneco
|
$ | 830 | 29 | % | $ | 405 | 18 | % | ||||||||
Six Months Ended June 30, | ||||||||||||||||
Increase |
||||||||||||||||
2011 | 2010 | (Decrease) | % Increase | |||||||||||||
(Number of Vehicles in Thousands) | ||||||||||||||||
North America
|
6,354 | 5,974 | 380 | 6 | % | |||||||||||
Europe
|
10,732 | 9,978 | 754 | 8 | % | |||||||||||
South America
|
2,124 | 1,967 | 157 | 8 | % | |||||||||||
India
|
1,825 | 1,522 | 303 | 20 | % | |||||||||||
Total Europe, South America & India
|
14,681 | 13,467 | 1,214 | 9 | % | |||||||||||
China
|
8,489 | 8,167 | 322 | 4 | % | |||||||||||
Australia
|
107 | 127 | (20 | ) | (16 | )% |
48
Three Months Ended |
||||||||||||
June 30, | ||||||||||||
2011 | 2010 | Change | ||||||||||
(Millions) | ||||||||||||
North America
|
$ | 62 | $ | 50 | $ | 12 | ||||||
Europe, South America and India
|
37 | 30 | 7 | |||||||||
Asia Pacific
|
14 | 13 | 1 | |||||||||
$ | 113 | $ | 93 | $ | 20 | |||||||
49
Three Months |
||||||||
Ended |
||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
(Millions) | ||||||||
North America
|
||||||||
Restructuring and related expenses
|
$ | 1 | $ | 3 | ||||
Europe, South America and India
|
||||||||
Restructuring and related expenses
|
1 | 1 | ||||||
Asia Pacific
|
||||||||
Restructuring and related expenses
|
| |
Three Months |
||||||||
Ended |
||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
North America
|
7 | % | 7 | % | ||||
Europe, South America & India
|
5 | % | 5 | % | ||||
Asia Pacific
|
7 | % | 8 | % | ||||
Total Tenneco
|
6 | % | 6 | % |
50
Six Months |
||||||||||||
Ended |
||||||||||||
June 30, | ||||||||||||
2011 | 2010 | Change | ||||||||||
(Millions) | ||||||||||||
North America
|
$ | 124 | $ | 86 | $ | 38 | ||||||
Europe, South America & India
|
61 | 42 | 19 | |||||||||
Asia Pacific
|
22 | 24 | (2 | ) | ||||||||
$ | 207 | $ | 152 | $ | 55 | |||||||
Six Months |
||||||||
Ended |
||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
(Millions) | ||||||||
North America
|
||||||||
Restructuring and related expenses
|
$ | 1 | $ | 7 | ||||
Europe, South America & India
|
||||||||
Restructuring and related expenses
|
2 | 2 | ||||||
Asia Pacific
|
||||||||
Restructuring and related expenses
|
| |
51
Six Months |
||||||||
Ended |
||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
North America
|
7 | % | 6 | % | ||||
Europe, South America & India
|
4 | % | 4 | % | ||||
Asia Pacific
|
6 | % | 8 | % | ||||
Total Tenneco
|
6 | % | 5 | % |
52
December 31, |
June 30, |
|||||||||||||||||||
2010 |
2011 |
Impact of |
2011 |
|||||||||||||||||
Restructuring |
Cash |
Exchange |
Reserve |
Restructuring |
||||||||||||||||
Reserve | Payments | Rates | Adjustments | Reserve | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Severance
|
$ | 7 | (4 | ) | | | $ | 3 |
53
Three Months Ended |
||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
(Millions) | ||||||||
Cash provided (used) by:
|
||||||||
Operating activities
|
$ | 67 | $ | 104 | ||||
Investing activities
|
(52 | ) | (39 | ) | ||||
Financing activities
|
(58 | ) | (98 | ) |
54
Six Months Ended |
||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
(Millions) | ||||||||
Cash provided (used) by:
|
||||||||
Operating activities
|
$ | (36 | ) | $ | 47 | |||
Investing activities
|
(97 | ) | (77 | ) | ||||
Financing activities
|
56 | 20 |
55
56
| Future reversals of existing taxable temporary differences; |
57
| Taxable income or loss, based on recent results, exclusive of reversing temporary differences and carryforwards; and | |
| Tax-planning strategies. |
58
June 30, |
December 31, |
|||||||||||
2011 | 2010 | % Change | ||||||||||
(Millions) | ||||||||||||
Short-term debt and maturities classified as current
|
$ | 67 | $ | 63 | 6 | % | ||||||
Long-term debt
|
1,227 | 1,160 | 6 | |||||||||
Total debt
|
1,294 | 1,223 | 6 | |||||||||
Total redeemable noncontrolling interests
|
10 | 12 | (17 | ) | ||||||||
Total noncontrolling interests
|
35 | 39 | (10 | ) | ||||||||
Tenneco Inc. shareholders equity
|
140 | (4 | ) | NM | ||||||||
Total equity
|
175 | 35 | 400 | |||||||||
Total capitalization
|
$ | 1,479 | $ | 1,270 | 16 | |||||||
59
60
61
8/14/2009 |
3/1/2010 |
6/3/2010 |
2/28/2011 |
|||||||||||||||||
thru |
thru |
thru |
thru |
Beginning |
||||||||||||||||
2/28/2010 | 6/2/2010 | 2/27/2011 | 5/15/2011 | 5/16/2011 | ||||||||||||||||
Applicable Margin over LIBOR for Revolving Loans
|
5.50 | % | 4.50 | % | 4.50 | % | 4.25 | % | 4.50 | %* | ||||||||||
Applicable Margin over LIBOR for Term Loan B Loans
|
| | 4.75 | % | 4.50 | % | 4.75 | %* | ||||||||||||
Applicable Margin over LIBOR for Term Loan A Loans
|
5.50 | % | 4.50 | % | | | | |||||||||||||
Applicable Margin over LIBOR for
Tranche B-1
Loans
|
5.50 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | ||||||||||
Applicable Margin over Prime-based Loans
|
4.50 | % | 3.50 | % | | | | |||||||||||||
Applicable Margin over Prime for Revolving Loans
|
| | 3.50 | % | 3.25 | % | 3.50 | %* | ||||||||||||
Applicable Margin over Prime for Term Loan B Loans
|
| | 3.75 | % | 3.50 | % | 3.75 | %* | ||||||||||||
Applicable Margin over Prime for
Tranche B-1
Loans
|
| | 4.00 | % | 4.00 | % | 4.00 | % | ||||||||||||
Applicable Margin over Federal Funds for Revolving Loans
|
| | 3.50 | % | 3.25 | % | 3.50 | %* | ||||||||||||
Applicable Margin over Federal Funds for Term Loan B Loans
|
| | 3.75 | % | 3.50 | % | 3.75 | %* | ||||||||||||
Applicable Margin over Federal Funds for
Tranche B-1
Loans
|
5.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | ||||||||||
Commitment Fee
|
0.75 | % | 0.50 | % | 0.75 | % | 0.50 | % | 0.75 | %* |
* | In August 2011, the margin we pay on borrowings will decrease by 25 basis points, as a result of a decrease in our consolidated net leverage ratio from 2.32 at March 31, 2011 to 2.17 at June 30, 2011. |
Quarter Ended | ||||||||||||||||
March 31, |
June 30, |
|||||||||||||||
2011 | 2011 | |||||||||||||||
Req. | Act. | Req. | Act. | |||||||||||||
Leverage Ratio (maximum)
|
4.00 | 2.32 | 3.75 | 2.17 | ||||||||||||
Interest Coverage Ratio (minimum)
|
2.55 | 4.37 | 2.55 | 4.76 |
Interest |
||||||||
Leverage |
Coverage |
|||||||
Period Ending | Ratio | Ratio | ||||||
September 30, 2011
|
3.50 | 2.55 | ||||||
December 31, 2011
|
3.50 | 2.55 | ||||||
Each quarter thereafter
|
3.50 | 2.75 |
62
Aggregate Senior |
||||
Note Maximum |
||||
Proforma Consolidated Leverage Ratio | Amount | |||
(Millions) | ||||
Greater than or equal to 3.0x
|
$ | 20 | ||
Greater than or equal to 2.5x
|
$ | 100 | ||
Less than 2.5x
|
$ | 125 |
63
64
Notional Amount |
||||||
in Foreign Currency | ||||||
(Millions) | ||||||
Australian dollars
|
Purchase | 2 | ||||
British pounds
|
Purchase | 4 | ||||
European euro
|
Sell | (12 | ) | |||
Japanese yen
|
Purchase | 532 | ||||
South African rand
|
Purchase | 164 | ||||
U.S. dollars
|
Purchase | 14 | ||||
Sell | (22 | ) | ||||
Other
|
Purchase | 1 | ||||
Sell | (13 | ) |
65
66
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
67
ITEM 4. | CONTROLS AND PROCEDURES |
68
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Total Number |
Maximum |
|||||||||||||||
of Shares |
Number of |
|||||||||||||||
Purchased as |
Shares That |
|||||||||||||||
Part of |
May Yet be |
|||||||||||||||
Publicly |
Purchased |
|||||||||||||||
Announced |
Under |
|||||||||||||||
Total Number of |
Average |
Plans or |
These Plans |
|||||||||||||
Period | Shares Purchased | Price Paid | Programs | or Programs | ||||||||||||
April 2011
|
145 | $ | 44.85 | | | |||||||||||
May 2011
|
648 | $ | 43.51 | | | |||||||||||
June 2011
|
271,090 | $ | 38.76 | 270,500 | 129,500 | |||||||||||
Total
|
271,883 | $ | 38.77 | 270,500 | 129,500 |
69
By: |
/s/ Kenneth
R. Trammell
|
70
Exhibit |
||||||
Number | Description | |||||
*12 | | Computation of Ratio of Earnings to Fixed Charges. | ||||
*15 | .1 | | Letter of PricewaterhouseCoopers regarding interim financial information. | |||
*31 | .1 | | Certification of Gregg M. Sherrill 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 Gregg M. Sherrill 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. |
71
Six Months |
||||||||
Ended |
||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
(Dollars in Millions) | ||||||||
Net income attributable to Tenneco Inc.
|
$ | 97 | $ | 47 | ||||
Add:
|
||||||||
Interest expense
|
54 | 64 | ||||||
Portion of rentals representative of the interest factor
|
9 | 7 | ||||||
Income tax expense and other taxes on income
|
44 | 30 | ||||||
Noncontrolling interest
|
12 | 11 | ||||||
Amortization of interest capitalized
|
2 | 2 | ||||||
Undistributed (earnings) losses of affiliated companies in which
less than a 50% voting interest is owned
|
| | ||||||
Earnings as defined
|
$ | 218 | $ | 161 | ||||
Interest expense
|
$ | 54 | $ | 64 | ||||
Interest capitalized
|
2 | 2 | ||||||
Portion of rentals representative of the interest factor
|
9 | 7 | ||||||
Fixed charges as defined
|
$ | 65 | $ | 73 | ||||
Ratio of earnings to fixed charges
|
3.35 | 2.21 | ||||||
Condensed Consolidated Statements of Income (Unaudited) (Parenthetical) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Condensed Consolidated Statements of Income [Abstract] | ||||
Interest capitalized | $ 1 | $ 1 | $ 2 | $ 2 |
Pension Plans, Postretirement and Other Employee Benefits (Details Textual) (USD $)
In Millions |
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Pension Plans, Defined Benefit [Member]
|
|
Pension and Postretirement Benefit Plans (Textuals) [Abstract] | |
Expected Contribution | $ 25 |
United States Pension Plans of US Entity, Defined Benefit [Member]
|
|
Pension and Postretirement Benefit Plans (Textuals) [Abstract] | |
Pension and Postretirement Contributions | 8 |
Foreign Pension Plans, Defined Benefit [Member]
|
|
Pension and Postretirement Benefit Plans (Textuals) [Abstract] | |
Pension and Postretirement Contributions | 11 |
United States Postretirement Benefit Plans of US Entity, Defined Benefit [Member]
|
|
Pension and Postretirement Benefit Plans (Textuals) [Abstract] | |
Pension and Postretirement Contributions | 4 |
Expected Contribution | $ 6 |
Financial Instruments (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
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Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying and estimated fair value |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange forward contracts fair value on gross basis |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of financial assets on recurring basis |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarization for foreign currency forward purchase and sale contracts |
|
Document and Entity Information (USD $)
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
Jul. 29, 2011
|
Jun. 30, 2010
|
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | TENNECO INC | ||
Entity Central Index Key | 0001024725 | ||
Document Type | 10-Q | ||
Document Period End Date | Jun. 30, 2011 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q2 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,217,326,736 | ||
Entity Common Stock, Shares Outstanding | 60,207,236 |
Common Stock (Details 1) (USD $)
In Millions, except Share data, unless otherwise specified |
3 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Mar. 31, 2011
|
|
Stock options status and activity | ||
Shares Under Option Outstanding Beginning Balance | 3,135,520 | 3,129,241 |
Weighted Avg. Exercise Prices, Outstanding, Beginning Balance | $ 16.53 | $ 14.43 |
Weighted Avg. Remaining Life In Years, Beginning Balance | 4.4 | 4.3 |
Aggregate Intrinsic Value, Outstanding, Beginning Balance | $ 80 | $ 68 |
Shares Under Option, Granted | 2,711 | 201,133 |
Weighted Avg. Exercise Prices, Granted | $ 43.51 | $ 45.42 |
Shares Under Option Expired | (56,046) | |
Weighted Avg Exercise Price Expired | $ 3.66 | |
Shares Under Option, Forfeited | (23,841) | (13,184) |
Weighted Avg. Exercise Prices, Forfeited | $ 14.26 | $ 9.36 |
Shares Under Option, Exercised | (82,166) | (125,624) |
Weighted Avg. Exercise Prices, Exercised | $ 11.5 | $ 17.10 |
Aggregate Intrinsic Value, Exercised | 3 | 3 |
Shares Under Option Outstanding Ending Balance | 3,032,224 | 3,135,520 |
Weighted Avg. Exercise Prices, Outstanding, Ending Balance | $ 16.71 | $ 16.53 |
Weighted Avg. Remaining Life In Years, Ending Balance | 4.2 | 4.4 |
Aggregate Intrinsic Value, Outstanding, Ending Balance | $ 76 | $ 80 |
Environmental Matters, Litigation and Product Warranties (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Environmental Matters, Litigation and Product Warranties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warranty accrual rollforward |
|
Common Stock (Details) (USD $)
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Stock Options Granted | ||
Weighted average grant date fair value, per share | $ 26.13 | $ 11.76 |
Weighted average assumptions used: | ||
Expected volatility | 70.10% | 75.40% |
Expected lives | 4.8 | 4.6 |
Risk-free interest rates | 1.80% | 2.20% |
Dividend yields | 0.00% | 0.00% |
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Accounts Receivable Securitization
|
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2011
|
|||||
Accounts Receivable Securitization [Abstract] | |||||
Accounts Receivable Securitization |
We securitize some of our accounts receivable on a limited
recourse basis in North America 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 North America, 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 March 2011, the North American program was
amended and extended to March 23, 2012. The first priority
facility continues to provide financing of up to
$110 million and the second priority facility, which is
subordinated to the first priority facility, continues to
provide up to an additional $40 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. or Canada that would
otherwise be ineligible under the first priority securitization
facility. The amendments to the North American program expand
the trade receivables that are eligible for purchase under the
program and decrease the margin we pay to our banks. We had no
outstanding third party investments in our securitized accounts
receivable under the North American program at June 30,
2011 and December 31, 2010, respectively.
Each facility contains customary covenants for financings of
this type, including restrictions related to liens, payments,
mergers or consolidation 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 seven 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
cancelled with notice 90 days prior to renewal. In some
instances, the arrangement provides for cancellation by the
applicable financial institution at any time upon 15 days,
or less, notification. The amount of outstanding third party
investments in our securitized accounts receivable in Europe was
$136 million and $91 million at June 30, 2011 and
December 31, 2010, respectively.
If we were not able to securitize receivables under either the
North American or European securitization programs, our
borrowings under our revolving credit agreements 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 agreements.
In our North American accounts receivable securitization
programs, 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 North
American 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 in
interest expense in each of the three month periods ended
June 30, 2011 and 2010, respectively, and $2 million
for each of the six month periods ended June 30, 2011 and
2010 respectively, relating to our North American securitization
program. In addition, we recognized a loss of $2 million
and $1 million in the three month periods ended
June 30, 2011 and 2010, respectively, and $3 million
and $2 million for the six month periods ended
June 30, 2011 and 2010, respectively, 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 three percent and five
percent during the first half of 2011 and 2010, respectively.
|
Earnings Per Share (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Earnings per share of common stock |
|
Restructuring and Other Charges (Details Textual) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | 12 Months Ended | 24 Months Ended | |
---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
Dec. 31, 2010
|
|
Restructuring And Other Charges (Textual) [Abstract] | |||||
Restructuring and Related Costs | 2 | 3 | $ 19 | ||
Restructuring and Other Charges (Textuals) [Abstract] | |||||
Allowable Exclusion of Cash Charges and Expenses, before taxes related to cost reduction initiatives, from our calculation of financial covenant ratios under our senior credit agreement | 60 | 60 | |||
Cumulative amount of allowable exclusions recognized in our calculation of financial covenant ratios | 12 | 12 | |||
Net decrease in number of positions | 60 | 60 | |||
Cost of sales [Member]
|
|||||
Restructuring And Other Charges (Textual) [Abstract] | |||||
Restructuring and Related Costs | 2 | 3 | 14 | ||
Depreciation And Amortization Expenses [Member]
|
|||||
Restructuring And Other Charges (Textual) [Abstract] | |||||
Restructuring and Related Costs | 5 | ||||
Cozad Plant Closing [Member]
|
|||||
Restructuring And Other Charges (Textual) [Abstract] | |||||
Restructuring and Related Costs | 10 | 11 | |||
Expected Restructuring and Related Costs settled with Cash | $ 16 | ||||
Restructuring Related Costs, Expected Number of Positions Eliminated | 500 | 500 | |||
Percentage of expected number of positions eliminated realized | 95.00% | 95.00% |
Long Term Debt and Financing Arrangements (Details Textual) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | 1 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2011
|
Jun. 30, 2011
|
Jun. 30, 2011
7 3/4 percent senior notes due August 15, 2018 [Member]
|
Feb. 14, 2011
7 3/4 percent senior notes due August 15, 2018 [Member]
|
Sep. 02, 2010
7 3/4 percent senior notes due August 15, 2018 [Member]
|
Aug. 03, 2010
7 3/4 percent senior notes due August 15, 2018 [Member]
|
Dec. 23, 2010
6 7/8 percent senior notes due December 23, 2010 [Member]
|
Dec. 31, 2010
10 1/4 percent senior secured notes due in 2013 [Member]
|
Sep. 02, 2010
10 1/4 percent senior secured notes due in 2013 [Member]
|
Aug. 03, 2010
10 1/4 percent senior secured notes due in 2013 [Member]
|
Jun. 30, 2011
8 1/8 percent senior notes due November 15, 2015 [Member]
|
Jan. 07, 2011
8 5/8 percent senior notes due November 16, 2014 [Member]
|
Dec. 09, 2010
8 5/8 percent senior notes due November 16, 2014 [Member]
|
Dec. 31, 2010
8 5/8 percent senior subordinated notes due November 15, 2014 [Member]
|
Mar. 31, 2011
8 5/8 percent senior subordinated notes due November 15, 2014 [Member]
|
Jun. 30, 2011
6 7/8 percent senior notes [Member]
|
Mar. 14, 2011
6 7/8 percent senior notes [Member]
|
Dec. 31, 2011
Senior Credit Facility [Member]
|
Jun. 30, 2011
Senior Credit Facility [Member]
|
Jun. 03, 2010
Term Loan A Facility, Senior Credit Facility [Member]
|
Jun. 30, 2011
Revolving credit facility, matures May 31, 2014 [Member]
|
Jun. 30, 2011
Senior credit facility, matures March 16, 2012 [Member]
|
Jun. 30, 2011
Tranche B One Letter of Credit and Revolving Loan Facilities, Senior Credit Facility [Member]
|
Jun. 30, 2011
Tranche B One Letter of Credit and Revolving Loan Facilities, Senior Credit Facility [Member]
|
Jun. 30, 2011
Term Loan B Facility, Senior Credit Facility [Member]
|
Jun. 30, 2011
Term Loan B and Revolving Credit Facility, Senior Credit Facility [Member]
|
Jun. 30, 2011
Term Loan B and Revolving Credit Facility, Senior Credit Facility [Member]
|
Jun. 30, 2011
Other Debt [Member]
|
Jun. 30, 2011
Letters of Credit, Senior Credit Facility [Member]
|
Jun. 30, 2011
Letters of Credit, Senior Credit Facility [Member]
|
|
Long Term Debt (Textuals) [Abstract] | ||||||||||||||||||||||||||||||
Repayment of Term Loan A, senior credit facility | $ 128 | |||||||||||||||||||||||||||||
Final principal repayment due June 3, 2016 | 141 | |||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 556 | 622 | 130 | 130 | 150 | |||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 752 | 752 | ||||||||||||||||||||||||||||
Line of credit facility, revolver, expiration of commitments matures in March 16, 2012 | 66 | |||||||||||||||||||||||||||||
Senior notes rate | 7.75% | 10.25% | ||||||||||||||||||||||||||||
Line of Credit Facility, Maturity Date | May, 2014 | March, 2014 | June, 2016 | |||||||||||||||||||||||||||
Debt covenants leverage ratio | 2.32 | 2.24 | 2.17 | |||||||||||||||||||||||||||
Notes Payable | 225 | 250 | 500 | 149 | 85 | |||||||||||||||||||||||||
Debt instrument issued amount | 225 | 500 | ||||||||||||||||||||||||||||
Unused borrowings capacity | 614 | 614 | ||||||||||||||||||||||||||||
Expenses related to redemption | 5 | 20 | 1 | |||||||||||||||||||||||||||
Outstanding borrowings in senior secured credit facility | 85 | 85 | ||||||||||||||||||||||||||||
Line of credit facility letters of credit outstanding | 53 | 53 | ||||||||||||||||||||||||||||
Line of credit facility interest rate description | either (i) Libor plus a margin of 500 basis points, or (ii) a rate consisting of the greater of (a) the JPMorgan Chase prime rate plus a margin of 400 basis points, (b) the Federal Funds rate plus 50 basis points plus a margin of 400 basis points, and (c) the Eurodollar Rate plus 100 basis points plus a margin of 400 basis points. | either (i) Libor plus a margin of 500 basis points, or (ii) a rate consisting of the greater of (a) the JPMorgan Chase prime rate plus a margin of 400 basis points, (b) the Federal Funds rate plus 50 basis points plus a margin of 400 basis points, and (c) the Eurodollar Rate plus 100 basis points plus a margin of 400 basis points. | either (i) LIBOR plus a margin of 475 and 450 basis points, respectively, or (ii) a rate consisting of the greater of (a) the JPMorgan Chase prime rate plus a margin of 375 and 350 basis points, respectively, (b) the Federal Funds rate plus 50 basis points plus a margin of 375 and 350 basis points, respectively, and (c) the Eurodollar Rate plus 100 basis points plus a margin of 375 and 350 basis points, respectively | either (i) Libor plus a margin of 475 and 450 basis points, respectively, or (ii) a rate consisting of the greater of (a) the JPMorgan Chase prime rate plus a margin of 375 and 350 basis points, respectively, (b) the Federal Funds rate plus 50 basis points plus a margin of 375 and 350 basis points, respectively, and (c) the Eurodollar Rate plus 100 basis points plus a margin of 375 and 350 basis points, respectively | ||||||||||||||||||||||||||
Basis Point reduction in interest rate on borrowings if Consolidated net leverage ratio is less than 2.25 | 0.0025 | 0.0025 | ||||||||||||||||||||||||||||
Additional reduction in interest rate on borrowings if Consolidated net leverage ratio is less than 2.0 | 0.0025 | 0.0025 | ||||||||||||||||||||||||||||
Basis Point increase in interest rate on borrowings if Consolidated net leverage ratio is greater than or equal to 4.0 | 0.0050 | 0.0050 | ||||||||||||||||||||||||||||
Additional increase in interest rate on borrowings if Consolidated net leverage ratio is greater than or equal to 5.0 | 0.005 | 0.005 | 0.0050 | 0.0050 | ||||||||||||||||||||||||||
Debt instrument redemption price as percentage of principal amount | 101.708% | 102.875% | ||||||||||||||||||||||||||||
Debt instrument redemption price as percentage of principal amount expires December 22, 2010 | 103.25% | |||||||||||||||||||||||||||||
Debt instrument redemption price as a percentage of principal amount expires January 6, 2011 | 100.25% | |||||||||||||||||||||||||||||
Amount of debt offered for exchange by the company | 225 | 225 | 500 | 500 | ||||||||||||||||||||||||||
Amount of debt tendered for exchange by the holders | $ 225 | $ 225 | $ 20 | $ 500 | ||||||||||||||||||||||||||
Debt instrument maturity date | Aug. 15, 2018 | Dec. 15, 2020 | ||||||||||||||||||||||||||||
Long Term Debt Additional (Textuals) [Abstract] | ||||||||||||||||||||||||||||||
Maximum percentage of stock of certain first-tier foreign subsidiaries pledged to secure our senior credit facility | 66.00% | |||||||||||||||||||||||||||||
Interest return on the funds deposited with the administrative agent by the lenders | Libor less 25 basis points |
Restructuring and Other Charges (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Restructuring and Other Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rollforward of Restructuring Reserve |
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Pension Plans, Postretirement and Other Employee Benefits
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Jun. 30, 2011
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Pension Plans, Postretirement and Other Employee Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans, Postretirement and Other Employee Benefits |
Net periodic pension costs (income) and postretirement benefit
costs (income) consist of the following components:
For the six months ended June 30, 2011, we made pension
contributions of $8 million for our domestic pension plans
and $11 million for our foreign pension plans. Based on
current actuarial estimates, we believe we will be required to
make approximately $25 million in contributions for the
remainder of 2011. Pension contributions beyond 2011 will be
required, but those amounts will vary based upon many factors,
including the performance of our pension fund investments during
2011.
We made postretirement contributions of approximately
$4 million during the first six months of 2011. Based on
current actuarial estimates, we believe we will be required to
make approximately $6 million in contributions for the
remainder of 2011.
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 recent accounting guidance on
fair value measurement.
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Consolidation and Presentation
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6 Months Ended | ||||
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Jun. 30, 2011
|
|||||
Consolidation and Presentation [Abstract] | |||||
Consolidation and Presentation |
As you read the accompanying financial statements you should
also read our Annual Report on
Form 10-K
for the year ended December 31, 2010.
In our opinion, the accompanying unaudited financial statements
contain all adjustments (consisting of normal recurring
adjustments) necessary to present fairly Tenneco Inc.’s
financial position, results of operations, cash flows, changes
in shareholders’ equity, and comprehensive income (loss)
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. We have
evaluated all subsequent events through the date the financial
statements were issued.
|
Financial Instruments (Details 2) (Foreign Exchange Forward [Member], Level 2 [Member], Fair Value, Measurements, Recurring [Member], USD $)
In Millions |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Foreign Exchange Forward [Member] | Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
|
||
Financial Assets: | ||
Foreign Currency Contract Asset At Fair Value | $ 0 | $ 2 |
Environmental Matters, Litigation and Product Warranties
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Environmental Matters, Litigation and Product Warranties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Environmental Matters, Litigation and Product Warranties |
We are involved in environmental remediation matters, legal
proceedings, claims, investigations and warranty obligations
that are 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 on currently available facts, existing
technology, and presently enacted laws and regulations 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. Further, 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. All
other environmental liabilities are recorded at their
undiscounted amounts. We evaluate recoveries separately from the
liability and, when they are assured, recoveries are recorded
and reported separately from the associated liability in our
condensed consolidated financial statements.
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
June 30, 2011, we have the obligation to remediate or
contribute towards the remediation of certain sites, including
two existing Federal Superfund sites. At June 30, 2011, our
aggregated estimated share of environmental remediation costs
for all these sites on a discounted basis was approximately
$16 million, of which $5 million is recorded in other
current liabilities and $11 million is recorded in deferred
credits and other liabilities in our condensed consolidated
balance sheet. For those locations in which the liability was
discounted, the weighted average discount rate used was
3.0 percent. The undiscounted value of the estimated
remediation costs was $21 million. 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 towards 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 sites, or as a liable party at the other locations
referenced herein, will be material to our condensed
consolidated results of operations, financial position or cash
flows.
We also from time to time are involved in legal proceedings,
claims or investigations. Some of these proceedings allege
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, employment matters, and commercial or contractual
disputes, sometimes related to acquisitions or divestitures. For
example, one of our Argentine subsidiaries is currently
defending against a criminal complaint alleging the failure to
comply with laws requiring the proceeds of export transactions
to be collected, reported
and/or
converted to local currency within specified time periods. As
another example, we are subject to an audit in 11 states of
our practices with respect to the payment of unclaimed property
to those states, which could cover over 30 years. We now
have practices in place which we believe ensure that we pay
unclaimed property as required. We vigorously defend ourselves
against all of these claims. In future periods, we could be
subject to cash costs or charges to earnings if any of these
matters are resolved on unfavorable terms. However, 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, we do not
expect that these legal proceedings or claims will have any
material adverse impact on our future consolidated financial
position, results of operations or cash flows.
In addition, we are subject to a number of lawsuits initiated by
a significant number of claimants alleging health problems as a
result of exposure to asbestos. In the early 2000’s we were
named in nearly 20,000 complaints, most of which were filed in
Mississippi state court and the vast majority of which made no
allegations of exposure to asbestos from our product categories.
Most of these claims have been dismissed and our current docket
of active and inactive cases is less than 500 cases nationwide.
A small number of claims have been asserted by railroad workers
alleging exposure to asbestos products in railroad cars
manufactured by The Pullman Company, one of our subsidiaries.
The balance of the claims is related to alleged exposure to
asbestos in our automotive emission control products. Only a
small percentage of the claimants allege that they were
automobile mechanics and a significant number appear to involve
workers in other industries or otherwise do not include
sufficient information to determine whether there is any basis
for a claim against us. We believe, based on scientific and
other evidence, it is unlikely that mechanics were exposed to
asbestos by our former muffler 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 of each in some cases
exceeding 100 defendants from a variety of industries.
Additionally, the plaintiffs either do not specify any, or
specify the jurisdictional minimum, dollar amount for damages.
As major asbestos manufacturers 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 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 condition, results of
operations or cash flows.
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 on OE 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:
|
New Accounting Pronouncements
|
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2011
|
|||||
New Accounting Pronouncements [Abstract] | |||||
New Accounting Pronouncements |
In April 2011, the Financial Accounting Standards Board
(“FASB”) issued an amendment to the accounting
guidance for transfers of financial assets which changes the
criteria that must be met to achieve sales accounting. This
amendment removes from the assessment of effective control the
criterion relating to the transferor’s ability to
repurchase or redeem financial assets on substantially the
agreed terms, even in the event of default by the transferee. In
addition, this amendment eliminates the requirement to
demonstrate that the transferor possesses adequate collateral to
fund substantially all the cost of purchasing replacement
financial assets. This amendment is effective for a reporting
entity’s first interim or annual period beginning on or
after December 15, 2011. We do not believe the adoption of
this amendment to the accounting guidance for transfers of
financial assets on January 1, 2012 will have a material
impact on our condensed consolidated financial statements.
In May 2011, the FASB issued an amendment to achieve common fair
value measurement and disclosure requirements in U.S. GAAP
and IFRS. The amendment includes (1) that the concepts of
highest and best use and valuation premise in a fair value
measurement are relevant only when measuring the fair value of
nonfinancial assets, (2) provides specific requirements for
measuring the fair value of an instrument classified in a
reporting entity’s shareholders’ equity,
(3) requires disclosure of quantitative information about
unobservable inputs used in a fair value measurement that is
categorized within Level 3 of the fair value hierarchy,
(4) allows the use of a price, that would be received to
sell a net asset position for a particular risk or to transfer a
net liability position for a particular risk, in measuring the
fair value of financial instruments that are managed within a
portfolio, (5) in the absence of a Level 1 input a
reporting entity should apply premiums or discounts when market
participants would do so when pricing an asset or liability and
(6) additional disclosure about fair value measurements.
This amendment is effective for a reporting entity’s
interim and annual periods beginning after December 15,
2011. We do not believe the adoption of this amendment for fair
value measurements on January 1, 2012 will have a material
impact on the measurement of our financial assets and
liabilities. We will add additional fair value disclosures, as
required by this amendment, beginning with our first interim
reporting period ending March 31, 2012.
In June 2011, the FASB issued an amendment to the accounting
guidance for the presentation on comprehensive income. This
amendment removes one of the three presentation options for
presenting the components of other comprehensive income as part
of the statement of changes in stockholders’ equity and
requires either a single continuous statement of comprehensive
income or a two statement approach. If a reporting entity elects
the two statement approach, this amendment requires consecutive
presentation of the statement of net income followed by the
statement of other comprehensive income. In addition, this
amendment requires an entity to present reclassification
adjustments on the face of the financial statements from other
comprehensive income to net income. This amendment shall be
applied retrospectively and is effective for fiscal years, and
interim periods within those fiscal years, beginning after
December 15, 2011. We do not believe the adoption of this
amendment to the accounting
guidance for the presentation of comprehensive income on
January 1, 2012 will have a material impact on our
condensed consolidated financial statements.
|
Earnings Per Share
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share |
Earnings per share of common stock outstanding were computed as
follows:
Options to purchase 200,360 and 1,393,879 shares of common
stock were outstanding as of June 30, 2011 and 2010,
respectively, but not included in the computation of diluted
earnings per share respectively, because the options were
anti-dilutive.
|
Consolidation and Presentation (Details)
|
Jun. 30, 2011
|
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Maximum [Member]
|
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Consolidation and Presentation (Textuals) (Abstract) | |
Range of percentages of investments, equity method investments | 50.00% |
Minimum [Member]
|
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Consolidation and Presentation (Textuals) (Abstract) | |
Range of percentages of investments, equity method investments | 20.00% |
Restructuring and Other Charges
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Restructuring and Other Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. In 2010, we incurred $19 million in restructuring
and related costs, of which $14 million was recorded in
cost of sales and $5 million was recorded in depreciation
and amortization expense. In the second quarter of 2011, we
incurred $2 million in restructuring and related costs, all
of which was recorded in cost of sales. For the first six months
of 2011, we incurred $3 million in restructuring and
related costs, primarily related to headcount reductions in
Europe and the closure of our ride control plant in Cozad,
Nebraska, all of which was recorded in cost of sales.
Amounts related to activities that are part of our restructuring
plans are as follows:
Under the terms of our amended and extended senior credit
agreement that took effect on June 3, 2010, we are allowed
to exclude $60 million of cash charges and expenses, before
taxes, related to cost reduction initiatives incurred after
June 3, 2010 from the calculation of the financial covenant
ratios required under our senior credit facility. As of
June 30, 2011, we have excluded $12 million in
cumulative allowable charges relating to restructuring
initiatives against the $60 million available under the
terms of the senior credit facility.
On September 22, 2009, we announced that we will be closing
our original equipment ride control plant in Cozad, Nebraska.
Approximately 500 positions are being eliminated at the Cozad
plant. As of June 30, 2011, 95 percent of those
positions have been eliminated. We are hiring at other
facilities as we move production from Cozad to those facilities,
which will result in a net decrease of approximately 60
positions. We originally planned to have completed the closing
of this facility by the end of 2010, however, as a result of
increased customer demand and to better optimize the transfer of
some of the manufacturing activities, we are supplying certain
of our other facilities with components from Cozad to support
this increased demand until capacity adjustments are completed
at our other facilities. During 2009 and 2010, we recorded
$11 million and $10 million, respectively, of
restructuring and related expenses related to this initiative,
of which approximately $16 million represents cash
expenditures.
|
Pension Plans, Postretirement and Other Employee Benefits (Details 1) (United States Postretirement Benefit Plans of US Entity, Defined Benefit [Member], USD $)
In Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
United States Postretirement Benefit Plans of US Entity, Defined Benefit [Member]
|
||||
Postretirement Costs | ||||
Service cost-benefits earned during the period | $ 1 | $ 1 | ||
Interest cost | 2 | 2 | 4 | 4 |
Net amortization: | ||||
Actuarial loss | 1 | 1 | 2 | 2 |
Prior service cost (credit) | (2) | (2) | (3) | (3) |
Net pension and postretirement costs | $ 1 | $ 2 | $ 3 | $ 4 |
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (USD $)
In Millions, except Share data |
Total
|
Common Stock
|
Premium on Common Stock and Other Capital Surplus
|
Accumulated Other Comprehensive Loss
|
Retained Earnings (Accumulated Deficit)
|
Less - Common Stock Held as Treasury Stock, at Cost
|
Tenneco Inc. Shareholders
|
Noncontrolling interests
|
---|---|---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2009 | $ 1 | $ 3,005 | $ (212) | $ (2,575) | $ 240 | $ 32 | ||
Beginning balance, shares at Dec. 31, 2009 | 60,789,739 | 1,294,692 | ||||||
Purchase of additional noncontrolling equity interest | (11) | |||||||
Sale of twenty percent equity interest to Tenneco Inc. | (4) | |||||||
Premium on common stock issued pursuant to benefit plans, shares | 141,246 | |||||||
Premium on common stock issued pursuant to benefit plans, value | 5 | |||||||
Stock options exercised, shares | 92,921 | |||||||
Other comprehensive income (loss) | (106) | |||||||
Other Comprehensive Income (loss) attributable to noncontrolling interests | 2 | |||||||
Net Income attributable to Tenneco Inc. | 47 | 47 | ||||||
Net Income Attributable to Noncontrolling Interests Excluding Redeemable Noncontrolling Interests | 7 | |||||||
Dividend declared | (8) | |||||||
Ending balance at Jun. 30, 2010 | (57) | 1 | 2,999 | (318) | (2,528) | 240 | (86) | 29 |
Ending balance, shares at Jun. 30, 2010 | 61,023,906 | 1,294,692 | ||||||
Beginning balance at Dec. 31, 2010 | 35 | 1 | 3,008 | (237) | (2,536) | 240 | 39 | |
Beginning balance, shares at Dec. 31, 2010 | 61,541,760 | 1,294,692 | ||||||
Premium on common stock issued pursuant to benefit plans, shares | 53,302 | |||||||
Premium on common stock issued pursuant to benefit plans, value | 3 | |||||||
Purchase of common stock through share repurchase program, shares | 270,500 | 270,500 | ||||||
Purchase of common stock through stock repurchase program, value | 11 | |||||||
Stock options exercised, shares | 207,790 | |||||||
Other comprehensive income (loss) | 55 | |||||||
Net Income attributable to Tenneco Inc. | 97 | 97 | ||||||
Net Income Attributable to Noncontrolling Interests Excluding Redeemable Noncontrolling Interests | 10 | |||||||
Dividend declared | (14) | |||||||
Ending balance at Jun. 30, 2011 | $ 175 | $ 1 | $ 3,011 | $ (182) | $ (2,439) | $ 251 | $ 140 | $ 35 |
Ending balance, shares at Jun. 30, 2011 | 61,802,852 | 1,565,192 |
Financial Instruments
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Financial Instruments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments |
The carrying and estimated fair values of our financial
instruments by class at June 30, 2011 and December 31,
2010 were as follows:
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. 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.
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 condensed 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 condensed consolidated balance sheet. The
fair value of our foreign exchange forward contracts, presented
on a gross basis by derivative contract at June 30, 2011
and December 31, 2010, respectively, was as follows:
The fair value of our recurring financial assets at
June 30, 2011 and December 31, 2010, respectively, are
as follows:
The fair value hierarchy definition prioritizes the inputs used
in measuring fair value into the following levels:
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.
The following table summarizes by major currency the notional
amounts for foreign currency forward purchase and sale contracts
as of June 30, 2011 (all of which mature in 2011):
|
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Income Taxes (Textuals) [Abstract] | ||||
Income tax expense | $ 30 | $ 15 | $ 44 | $ 30 |
U.S. federal statutory rate | 35.00% | |||
Change in valuation allowance related to NOL's | 11 | |||
Deferred tax assets related to NOL's | $ 90 | $ 90 | ||
Federal [Member]
|
||||
Income Taxes (Additional Textuals) [Abstract] | ||||
NOL's expiration period | tax years ending in 2020 through 2029 | |||
State [Member]
|
||||
Income Taxes (Additional Textuals) [Abstract] | ||||
NOL's expiration period | tax years ending through 2029 |
Supplemental Guarantor Condensed Consolidating Financial Statements (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Supplemental Guarantor Condensed Consolidating Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of Income (Loss) |
|
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Balance Sheet |
|
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Statement of Cash Flows |
|
Supplemental Guarantor Condensed Consolidating Financial Statements (Details 1) (USD $)
In Millions |
Jun. 30, 2011
|
Mar. 31, 2011
|
Dec. 31, 2010
|
Jun. 30, 2010
|
Mar. 31, 2010
|
Dec. 31, 2009
|
||||
---|---|---|---|---|---|---|---|---|---|---|
Current assets: | ||||||||||
Cash and cash equivalents | $ 161 | [1] | $ 199 | $ 233 | $ 146 | [1] | $ 193 | $ 167 | ||
Receivables, net | 1,136 | 826 | ||||||||
Inventories | 626 | 547 | ||||||||
Deferred income taxes | 42 | 38 | ||||||||
Prepayments and other | 177 | 146 | ||||||||
Total current assets | 2,142 | 1,790 | ||||||||
Other assets: | ||||||||||
Investment in affiliated companies | 0 | 0 | ||||||||
Notes and advances receivable from affiliates | 0 | 0 | ||||||||
Long-term receivables, net | 12 | 9 | ||||||||
Goodwill | 91 | 89 | ||||||||
Intangibles, net | 34 | 32 | ||||||||
Deferred income taxes | 92 | 92 | ||||||||
Other | 104 | 105 | ||||||||
Total other assets | 333 | 327 | ||||||||
Plant, property, and equipment, at cost | 3,282 | 3,109 | ||||||||
Less - Accumulated depreciation and amortization | (2,199) | (2,059) | ||||||||
Total plant, property, and equipment, net | 1,083 | 1,050 | ||||||||
Total assets | 3,558 | 3,167 | 2,980 | |||||||
Short-term debt (including current maturities of long-term debt) | ||||||||||
Short-term debt - non-affiliated | 67 | 63 | ||||||||
Short-term debt - affiliated | 0 | 0 | ||||||||
Trade payables | 1,208 | 1,048 | ||||||||
Accrued taxes | 55 | 51 | ||||||||
Other | 340 | 306 | ||||||||
Total current liabilities | 1,670 | 1,468 | ||||||||
Long-term debt - non-affiliated | 1,227 | 1,160 | ||||||||
Long-term debt - affiliated | 0 | 0 | ||||||||
Deferred income taxes | 58 | 56 | ||||||||
Postretirement benefits and other liabilities | 418 | 436 | ||||||||
Commitments and Contingencies | ||||||||||
Total liabilities | 3,373 | 3,120 | ||||||||
Redeemable noncontrolling interests | 10 | 12 | ||||||||
Total Tenneco Inc. shareholders' equity | 140 | (4) | ||||||||
Noncontrolling interests | 35 | 39 | ||||||||
Total equity | 175 | 35 | (57) | |||||||
Total liabilities, redeemable noncontrolling interests and equity | 3,558 | 3,167 | ||||||||
Guarantor Subsidiaries [Member]
|
||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 0 | 2 | 0 | 2 | 20 | |||||
Receivables, net | 512 | 402 | ||||||||
Inventories | 233 | 221 | ||||||||
Deferred income taxes | 73 | 103 | ||||||||
Prepayments and other | 28 | 35 | ||||||||
Total current assets | 846 | 761 | ||||||||
Other assets: | ||||||||||
Investment in affiliated companies | 495 | 391 | ||||||||
Notes and advances receivable from affiliates | 4,149 | 4,119 | ||||||||
Long-term receivables, net | 1 | 1 | ||||||||
Goodwill | 22 | 22 | ||||||||
Intangibles, net | 14 | 14 | ||||||||
Deferred income taxes | 41 | 37 | ||||||||
Other | 25 | 26 | ||||||||
Total other assets | 4,747 | 4,610 | ||||||||
Plant, property, and equipment, at cost | 998 | 997 | ||||||||
Less - Accumulated depreciation and amortization | (723) | (713) | ||||||||
Total plant, property, and equipment, net | 275 | 284 | ||||||||
Total assets | 5,868 | 5,655 | ||||||||
Short-term debt (including current maturities of long-term debt) | ||||||||||
Short-term debt - non-affiliated | 0 | 0 | ||||||||
Short-term debt - affiliated | 219 | 214 | ||||||||
Trade payables | 445 | 367 | ||||||||
Accrued taxes | 27 | 20 | ||||||||
Other | 132 | 130 | ||||||||
Total current liabilities | 823 | 731 | ||||||||
Long-term debt - non-affiliated | 0 | 0 | ||||||||
Long-term debt - affiliated | 4,649 | 4,583 | ||||||||
Deferred income taxes | 0 | 0 | ||||||||
Postretirement benefits and other liabilities | 332 | 347 | ||||||||
Commitments and Contingencies | ||||||||||
Total liabilities | 5,804 | 5,661 | ||||||||
Redeemable noncontrolling interests | 0 | 0 | ||||||||
Total Tenneco Inc. shareholders' equity | 64 | (6) | ||||||||
Noncontrolling interests | 0 | 0 | ||||||||
Total equity | 64 | (6) | ||||||||
Total liabilities, redeemable noncontrolling interests and equity | 5,868 | 5,655 | ||||||||
Non-Guarantor Subsidiaries [Member]
|
||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 161 | 197 | 233 | 144 | 193 | 147 | ||||
Receivables, net | 1,374 | 1,106 | ||||||||
Inventories | 393 | 326 | ||||||||
Deferred income taxes | 0 | 0 | ||||||||
Prepayments and other | 149 | 111 | ||||||||
Total current assets | 2,077 | 1,776 | ||||||||
Other assets: | ||||||||||
Investment in affiliated companies | 0 | 0 | ||||||||
Notes and advances receivable from affiliates | 963 | 788 | ||||||||
Long-term receivables, net | 11 | 8 | ||||||||
Goodwill | 69 | 67 | ||||||||
Intangibles, net | 20 | 18 | ||||||||
Deferred income taxes | 24 | 21 | ||||||||
Other | 48 | 46 | ||||||||
Total other assets | 1,135 | 948 | ||||||||
Plant, property, and equipment, at cost | 2,284 | 2,112 | ||||||||
Less - Accumulated depreciation and amortization | (1,476) | (1,346) | ||||||||
Total plant, property, and equipment, net | 808 | 766 | ||||||||
Total assets | 4,020 | 3,490 | ||||||||
Short-term debt (including current maturities of long-term debt) | ||||||||||
Short-term debt - non-affiliated | 66 | 62 | ||||||||
Short-term debt - affiliated | 394 | 371 | ||||||||
Trade payables | 873 | 773 | ||||||||
Accrued taxes | 28 | 31 | ||||||||
Other | 238 | 213 | ||||||||
Total current liabilities | 1,599 | 1,450 | ||||||||
Long-term debt - non-affiliated | 16 | 11 | ||||||||
Long-term debt - affiliated | 990 | 768 | ||||||||
Deferred income taxes | 58 | 56 | ||||||||
Postretirement benefits and other liabilities | 82 | 85 | ||||||||
Commitments and Contingencies | ||||||||||
Total liabilities | 2,745 | 2,370 | ||||||||
Redeemable noncontrolling interests | 10 | 12 | ||||||||
Total Tenneco Inc. shareholders' equity | 1,230 | 1,069 | ||||||||
Noncontrolling interests | 35 | 39 | ||||||||
Total equity | 1,265 | 1,108 | ||||||||
Total liabilities, redeemable noncontrolling interests and equity | 4,020 | 3,490 | ||||||||
Parent Company [Member]
|
||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 0 | 0 | ||||||||
Receivables, net | 24 | 24 | ||||||||
Inventories | 0 | 0 | ||||||||
Deferred income taxes | 0 | 0 | ||||||||
Prepayments and other | 0 | 0 | ||||||||
Total current assets | 24 | 24 | ||||||||
Other assets: | ||||||||||
Investment in affiliated companies | 830 | 707 | ||||||||
Notes and advances receivable from affiliates | 5,950 | 5,853 | ||||||||
Long-term receivables, net | 0 | 0 | ||||||||
Goodwill | 0 | 0 | ||||||||
Intangibles, net | 0 | 0 | ||||||||
Deferred income taxes | 27 | 34 | ||||||||
Other | 31 | 33 | ||||||||
Total other assets | 6,838 | 6,627 | ||||||||
Plant, property, and equipment, at cost | 0 | 0 | ||||||||
Less - Accumulated depreciation and amortization | 0 | 0 | ||||||||
Total plant, property, and equipment, net | 0 | 0 | ||||||||
Total assets | 6,862 | 6,651 | ||||||||
Short-term debt (including current maturities of long-term debt) | ||||||||||
Short-term debt - non-affiliated | 1 | 1 | ||||||||
Short-term debt - affiliated | 10 | 10 | ||||||||
Trade payables | 1 | 0 | ||||||||
Accrued taxes | 0 | 0 | ||||||||
Other | 41 | 47 | ||||||||
Total current liabilities | 53 | 58 | ||||||||
Long-term debt - non-affiliated | 1,211 | 1,149 | ||||||||
Long-term debt - affiliated | 5,423 | 5,409 | ||||||||
Deferred income taxes | 0 | 0 | ||||||||
Postretirement benefits and other liabilities | 0 | 0 | ||||||||
Commitments and Contingencies | ||||||||||
Total liabilities | 6,687 | 6,616 | ||||||||
Redeemable noncontrolling interests | 0 | 0 | ||||||||
Total Tenneco Inc. shareholders' equity | 175 | 35 | ||||||||
Noncontrolling interests | 0 | 0 | ||||||||
Total equity | 175 | 35 | ||||||||
Total liabilities, redeemable noncontrolling interests and equity | 6,862 | 6,651 | ||||||||
Reclass & Elims [Member]
|
||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 0 | 0 | ||||||||
Receivables, net | (774) | (706) | ||||||||
Inventories | 0 | 0 | ||||||||
Deferred income taxes | (31) | (65) | ||||||||
Prepayments and other | 0 | 0 | ||||||||
Total current assets | (805) | (771) | ||||||||
Other assets: | ||||||||||
Investment in affiliated companies | (1,325) | (1,098) | ||||||||
Notes and advances receivable from affiliates | (11,062) | (10,760) | ||||||||
Long-term receivables, net | 0 | 0 | ||||||||
Goodwill | 0 | 0 | ||||||||
Intangibles, net | 0 | 0 | ||||||||
Deferred income taxes | 0 | 0 | ||||||||
Other | 0 | 0 | ||||||||
Total other assets | (12,387) | (11,858) | ||||||||
Plant, property, and equipment, at cost | 0 | 0 | ||||||||
Less - Accumulated depreciation and amortization | 0 | 0 | ||||||||
Total plant, property, and equipment, net | 0 | 0 | ||||||||
Total assets | (13,192) | (12,629) | ||||||||
Short-term debt (including current maturities of long-term debt) | ||||||||||
Short-term debt - non-affiliated | 0 | 0 | ||||||||
Short-term debt - affiliated | (623) | (595) | ||||||||
Trade payables | (111) | (92) | ||||||||
Accrued taxes | 0 | 0 | ||||||||
Other | (71) | (84) | ||||||||
Total current liabilities | (805) | (771) | ||||||||
Long-term debt - non-affiliated | 0 | 0 | ||||||||
Long-term debt - affiliated | (11,062) | (10,760) | ||||||||
Deferred income taxes | 0 | 0 | ||||||||
Postretirement benefits and other liabilities | 4 | 4 | ||||||||
Commitments and Contingencies | ||||||||||
Total liabilities | (11,863) | (11,527) | ||||||||
Redeemable noncontrolling interests | 0 | 0 | ||||||||
Total Tenneco Inc. shareholders' equity | (1,329) | (1,102) | ||||||||
Noncontrolling interests | 0 | 0 | ||||||||
Total equity | (1,329) | (1,102) | ||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ (13,192) | $ (12,629) | ||||||||
|
Pension Plans, Postretirement and Other Employee Benefits (Details) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
United States Pension Plans of US Entity, Defined Benefit [Member]
|
||||
Pension Costs | ||||
Interest cost | $ 5 | $ 5 | $ 10 | $ 10 |
Expected return on plan assets | (6) | (5) | (11) | (10) |
Net amortization: | ||||
Actuarial loss | 1 | 1 | 2 | 2 |
Net pension and postretirement costs | 1 | 1 | 2 | |
Foreign Pension Plans, Defined Benefit [Member]
|
||||
Pension Costs | ||||
Service cost-benefits earned during the period | 1 | 2 | 3 | 3 |
Interest cost | 5 | 4 | 10 | 9 |
Expected return on plan assets | (5) | (5) | (10) | (10) |
Net amortization: | ||||
Actuarial loss | 2 | 1 | 3 | 2 |
Prior service cost (credit) | 1 | 1 | 1 | 1 |
Net pension and postretirement costs | $ 4 | $ 3 | $ 7 | $ 5 |
Long-Term Debt and Financing Arrangements
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt and Financing Arrangements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 June 3, 2010, we completed an amendment and extension of
our senior secured credit facility by extending the term of our
revolving credit facility and replacing our $128 million
term loan A with a larger and longer maturity term loan B
facility. As a result of the amendment and extension, as of
June 30, 2011, the senior credit facility
provides us with a total revolving credit facility size of
$622 million until March 16, 2012, when commitments of
$66 million will expire. After March 16, 2012, the
extended revolving credit facility will provide
$556 million of revolving credit and will mature on
May 31, 2014. The extended facility will mature earlier on
December 15, 2013, if our $130 million
tranche B-1
letter of credit/revolving loan facility is not refinanced by
that date. Prior to maturity, funds may be borrowed, repaid and
re-borrowed under the two revolving credit facilities without
premium or penalty.
As of June 30, 2011, the senior credit facility also
provides a six-year, $150 million term loan B maturing in
June 2016, and a seven-year $130 million
tranche B-1
letter of credit/revolving loan facility maturing in March 2014.
We are required to make quarterly principal payments of $375
thousand on the term loan B, beginning on September 20,
2010 through March 31, 2016 with a final payment of
$141 million due June 3, 2016. The
tranche B-1
letter of credit/revolving loan facility requires repayment by
March 2014. We can enter into revolving loans and issue letters
of credit under the $130 million
tranche B-1
letter of credit/revolving loan facility. The
tranche B-1
letter of credit/revolving loan 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.
There is no additional cost to us for issuing letters of credit
under the
tranche B-1
letter of credit/revolving loan facility. However, outstanding
letters of credit reduce our availability to enter into
revolving loans under the facility. We pay the
tranche B-1
lenders interest equal to the London Interbank Offered Rate
(“LIBOR”) plus a margin on all borrowings under the
facility. Funds deposited with the administrative agent by the
lenders and not borrowed by the Company earn interest at an
annual rate approximately equal to LIBOR less 25 basis
points.
The financial ratios required under the senior credit facility
for the remainder of 2011 and beyond are set forth below. As of
June 30, 2011, we were in compliance with all the financial
covenants and operational restrictions of the senior credit
facility.
Beginning June 3, 2010, our term loan B and revolving
credit facility bear interest at an annual rate equal to, at our
option, either (i) LIBOR plus a margin of 475 and
450 basis points, respectively, or (ii) a rate
consisting of the greater of (a) the JPMorgan Chase prime
rate plus a margin of 375 and 350 basis points,
respectively, (b) the Federal Funds rate plus 50 basis
points plus a margin of 375 and 350 basis points,
respectively, and (c) the Eurodollar Rate plus
100 basis points plus a margin of 375 and 350 basis
points, respectively. The margin we pay on these borrowings will
be reduced by 25 basis points following each fiscal quarter
for which our consolidated net leverage ratio is less than 2.25
for extending lenders and for the term loan B and will be
further reduced by an additional 25 basis points following
each fiscal quarter for which the consolidated net leverage
ratio is less than 2.0 for extending lenders. The margin we pay
on these borrowings for extending lenders will increase by
50 basis points following each fiscal quarter for which our
consolidated net leverage ratio is greater than or equal to 4.00
and will be further increased by an additional 50 basis
points following each fiscal quarter for which the consolidated
net leverage ratio is greater than or equal to 5.00. Our
consolidated net leverage ratio was 2.17 and 2.24 as of
June 30, 2011 and December 31, 2010, respectively. As
a result, the margin we pay on these borrowings was reduced in
February 2011 by 25 basis points for extending lenders.
However, since the ratio increased during the first quarter to
2.32, the margin we pay on borrowings increased by 25 basis
points beginning in May 2011 and will remain at such level until
August 2011 when it will decrease again by 25 basis points.
The borrowings under our
tranche B-1
letter of credit/revolving loan facility incur interest at an
annual rate equal to, at our option, either (i) LIBOR plus
a margin of 500 basis points, or (ii) a rate
consisting of the greater of
(a) the JPMorgan Chase prime rate plus a margin of
400 basis points, (b) the Federal Funds rate plus
50 basis points plus a margin of 400 basis points, and
(c) the Eurodollar Rate plus 100 basis points plus a
margin of 400 basis points. The rate will increase by
50 basis points following each fiscal quarter for which our
consolidated net leverage ratio is greater than or equal to 5.00.
At June 30, 2011, of the $752 million available under
the two revolving credit facilities within our senior secured
credit facility, we had unused borrowing capacity of
$614 million with $85 million in outstanding
borrowings and $53 million in letters of credit
outstanding. As of June 30, 2011, our outstanding debt also
included $250 million of
81/8
percent senior notes due November 15, 2015,
$149 million term loan B due June 3, 2016,
$225 million of
73/4
percent senior notes due August 15, 2018, $500 million
of
67/8
percent senior notes due December 15, 2020, and
$85 million of other debt.
On December 9, 2010, we commenced a cash tender offer of
our outstanding $500 million
85/8
percent senior subordinated notes due in 2014 and a consent
solicitation to amend the indenture governing these notes. The
consent solicitation expired on December 22, 2010 and the
cash tender offer expired on January 6, 2011. On
December 23, 2010, we issued $500 million of
67/8
percent senior notes due December 15, 2020 in a private
offering. The net proceeds of this transaction, together with
cash and available liquidity, were used to finance the purchase
of our
85/8
percent senior subordinated notes pursuant to the tender offer
at a price of 103.25 percent of the principal amount, plus
accrued and unpaid interest for holders who tendered prior to
the expiration of the consent solicitation, and
100.25 percent of the principal amount, plus accrued and
unpaid interest, for other participants. On January 7,
2011, we redeemed all remaining outstanding $20 million of
senior subordinated notes that were not previously tendered, at
a price of 102.875 percent of the principal amount, plus
accrued and unpaid interest. To facilitate these transactions,
we amended our senior credit agreement to permit us to refinance
our senior subordinated notes with new senior unsecured notes.
We did not incur any fee in connection with this amendment. The
new notes are general senior obligations of Tenneco Inc. and are
not secured by assets of Tenneco Inc. or any of our subsidiaries
that guarantee the new notes. We recorded $20 million of
pre-tax charges in December 2010 and an additional
$1 million of pre-tax charges in the first quarter of 2011
related to our repurchase and redemption of our
85/8
percent senior subordinated notes. On March 14, 2011, we
completed an offer to exchange the $500 million of
67/8
percent senior notes due in 2020 which have been registered
under the Securities Act of 1933, for and in replacement of all
outstanding unregistered
67/8
percent senior notes due in 2020. We received tenders from
holders of all $500 million of the aggregate outstanding
amount of the original notes. The terms of the new notes are
substantially identical to the terms of the original notes for
which they were exchanged, except that the transfer restrictions
and the registration rights applicable to the original notes
generally do not apply to the new notes.
On August 3, 2010, we issued $225 million of
73/4
percent senior notes due August 15, 2018 in a private
offering. The net proceeds of this transaction, together with
cash and available liquidity, were used to finance the
redemption of our
101/4
percent senior secured notes due in 2013. We called the senior
secured notes for redemption on August 3, 2010, and
completed the redemption on September 2, 2010 at a price of
101.708 percent of the principal amount, plus accrued and
unpaid interest. We recorded $5 million of expense related
to our redemption of our
101/4
percent senior secured notes in the third quarter of 2010. The
new notes are general senior obligations of Tenneco Inc. and are
not secured by assets of Tenneco Inc. or any of our subsidiaries
that guarantee the new notes. On February 14, 2011, we
completed an offer to exchange the $225 million of
73/4
percent senior notes due in 2018 which have been registered
under the Securities Act of 1933, for and in replacement of all
outstanding unregistered
73/4
percent senior notes due in 2018. We received tenders from
holders of all $225 million of the aggregate outstanding
amount of the original notes. The terms of the new notes are
substantially identical to the terms of the original notes for
which they were exchanged, except that the transfer restrictions
and the registration rights applicable to the original notes
generally do not apply to the new notes.
|
Restructuring and Other Charges (Details) (Severance [Member], USD $)
In Millions |
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Severance [Member]
|
|
Restructuring Reserve Rollforward | |
Beginning balance, Restructuring Reserve | $ 7 |
Cash Payments | (4) |
Impact of Exchange Rates | 0 |
Reserve Adjustments | 0 |
Ending balance, Restructuring Reserve | $ 3 |
Common Stock (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Common Stock [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assumptions used for calculating the fair values of stock option awards |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options status and activity |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonvested restricted shares |
|
Financial Instruments (Details) (USD $)
In Millions |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Carrying Amount [Member]
|
||
Carrying and estimated fair value | ||
Long-term debt (including current maturities) | $ 1,230 | $ 1,162 |
Carrying Amount [Member] | Foreign Exchange Forward [Member]
|
||
Instruments with off-balance sheet risk: | ||
Fair Value of Derivative Instruments | 0 | 2 |
Fair Value [Member]
|
||
Carrying and estimated fair value | ||
Long-term debt (including current maturities) | 1,265 | 1,201 |
Fair Value [Member] | Foreign Exchange Forward [Member]
|
||
Instruments with off-balance sheet risk: | ||
Fair Value of Derivative Instruments | $ 0 | $ 2 |
Accounts Receivable Securitization (Details Textual) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Mar. 31, 2011
|
Dec. 31, 2010
|
|
Accounts Receivable Securitization (Textuals) [Abstract] | ||||||
Discount rate on sale of securitized receivables | 3.00% | 5.00% | ||||
North America [Member]
|
||||||
Securitization Of Receivables (Textual) [Abstract] | ||||||
Outstanding third party investments in securitized accounts receivable bank program | $ 0 | $ 0 | $ 0 | |||
Amendment to North American program to expand maximum facility size | 110 | |||||
Additional financing from second priority facility to the North American program | 40 | 40 | ||||
Interest expense recognized from securitization of receivables | 1 | 1 | 2 | 2 | ||
Europe [Member]
|
||||||
Securitization Of Receivables (Textual) [Abstract] | ||||||
Outstanding third party investments in securitized accounts receivable bank program | 136 | 136 | 91 | |||
Bank facility cancellation notification | 90 days prior to renewal and in some cases upon 15 days or less. | 90 days prior to renewal and in some cases upon 15 days or less. | ||||
Loss on sale of trade accounts receivable | $ 2 | $ 1 | $ 3 | $ 2 |
Segments (Tables)
|
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Jun. 30, 2011
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Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information |
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Acquisitions
|
6 Months Ended | ||||
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Jun. 30, 2011
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Acquisitions [Abstract] | |||||
Acquisitions |
In January 2010, we purchased an additional 20 percent
equity interest in our Tenneco Tongtai (Dalian) Exhaust System
Co. Ltd. joint venture investment in China for $15 million
in cash. As a result of this purchase, our equity ownership
percentage of this joint venture investment increased to
80 percent from 60 percent.
|
Segments (Details) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
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Segments Reporting [Abstract] | |||||
Revenues from external customers | $ 1,888 | $ 1,502 | $ 3,648 | $ 2,818 | |
Earnings (loss) before interest expense, income taxes, noncontrolling interests and equity in net income from affiliated companies | 113 | 93 | 207 | 152 | |
Total assets | 3,558 | 2,980 | 3,558 | 2,980 | 3,167 |
North America [Member]
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Segments Reporting [Abstract] | |||||
Revenues from external customers | 874 | 738 | 1,725 | 1,343 | |
Intersegment revenues | 3 | 2 | 6 | 5 | |
Earnings (loss) before interest expense, income taxes, noncontrolling interests and equity in net income from affiliated companies | 62 | 50 | 124 | 86 | |
Total assets | 1,436 | 1,310 | 1,436 | 1,310 | |
Europe [Member]
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Segments Reporting [Abstract] | |||||
Revenues from external customers | 817 | 606 | 1,558 | 1,167 | |
Intersegment revenues | 42 | 42 | 79 | 71 | |
Earnings (loss) before interest expense, income taxes, noncontrolling interests and equity in net income from affiliated companies | 37 | 30 | 61 | 42 | |
Total assets | 1,548 | 1,254 | 1,548 | 1,254 | |
Asia Pacific [Member]
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Segments Reporting [Abstract] | |||||
Revenues from external customers | 197 | 158 | 365 | 308 | |
Intersegment revenues | 7 | 7 | 13 | 12 | |
Earnings (loss) before interest expense, income taxes, noncontrolling interests and equity in net income from affiliated companies | 14 | 13 | 22 | 24 | |
Total assets | 549 | 397 | 549 | 397 | |
Reclass and Elims [Member]
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Segments Reporting [Abstract] | |||||
Intersegment revenues | (52) | (51) | (98) | (88) | |
Total assets | $ 25 | $ 19 | $ 25 | $ 19 |
Income Taxes
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6 Months Ended | ||||||||||||||||||
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Jun. 30, 2011
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Income Taxes [Abstract] | |||||||||||||||||||
Income Taxes |
We evaluate our deferred income taxes quarterly to determine if
valuation allowances are required or should be adjusted.
U.S. GAAP requires that companies assess whether valuation
allowances should be established against their deferred tax
assets based on consideration of all available evidence, both
positive and negative, using a “more likely than not”
standard. This assessment considers, among other matters, the
nature, frequency and amount of recent losses, the duration of
statutory carryforward periods, and tax planning strategies. In
making such judgments, significant weight is given to evidence
that can be objectively verified.
Valuation allowances have been established for deferred tax
assets based on a “more likely than not” threshold.
The ability to realize deferred tax assets depends on our
ability to generate sufficient taxable income within the
carryforward periods provided for in the tax law for each tax
jurisdiction. We have considered the following possible sources
of taxable income when assessing the realization of our deferred
tax assets:
We reported income tax expense of $30 million and
$44 million in the three month and six month periods ending
June 30, 2011, respectively. The tax expense recorded for
the first six months of 2011 differs from the expense that would
be recorded using a U.S. Federal statutory rate of
35 percent due to a net tax benefit of $11 million
primarily related to U.S. taxable income with no associated
tax expense due to our net operating loss (“NOL”)
carryforward and income generated in lower tax rate
jurisdictions, partially offset by adjustments to prior year
income tax estimates and the impact of recording a valuation
allowance against the tax benefit for losses in certain foreign
jurisdictions. In evaluating the requirements to record a
valuation allowance, accounting standards do not permit us to
consider an economic recovery in the U.S. or new business
we have won. Consequently, beginning in 2008, given our
historical losses, we concluded that our ability to fully
utilize our NOLs was limited due to projecting the continuation
of the negative economic environment and the impact of the
negative operating environment on our tax planning strategies.
As a result of our tax planning strategies which have not yet
been implemented and which do not depend upon generating future
taxable income, we carry deferred tax assets in the U.S. of
$90 million relating to the expected utilization of those
NOLs. The federal NOLs expire beginning in tax years ending in
2020 through 2029. The state NOLs expire in various tax years
through 2029.
If our operating performance improves on a sustained basis, our
conclusion regarding the need for a valuation allowance could
change, resulting in the reversal of some or all of the
valuation allowance in the future. The charge to establish the
U.S. valuation allowance also includes items related to the
losses allocable to certain state jurisdictions where it was
determined that tax attributes related to those jurisdictions
were potentially not realizable.
We are required to record a valuation allowance against deferred
tax assets generated by taxable losses in each period in the
U.S. as well as in other foreign jurisdictions. Our future
provision for income taxes will include no tax benefit with
respect to losses incurred and no tax expense with respect to
income generated in these jurisdictions until the respective
valuation allowance is eliminated. This will cause variability
in our effective tax rate.
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Segment Information
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Jun. 30, 2011
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Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information |
We are a global manufacturer with three geographic reportable
segments: (1) North America, (2) Europe, South America
and India (“Europe”), and (3) Asia Pacific. Each
segment manufactures and distributes ride control and emission
control products primarily for the automotive industry. We have
not aggregated individual operating segments within these
reportable segments. 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.
The following table summarizes certain Tenneco Inc. segment
information:
|
Long-Term Debt and Financing Arrangements (Details Textual 1) (Term Loan B Facility, Senior Credit Facility [Member], USD $)
In Thousands |
6 Months Ended |
---|---|
Jun. 30, 2011
|
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Term Loan B Facility, Senior Credit Facility [Member]
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Debt Instrument [Line Items] | |
Quarterly principal repayment of term loan | $ 375 |
Pension Plans, Postretirement and Other Employee Benefits (Tables)
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Jun. 30, 2011
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Pension Plans, Postretirement and Other Employee Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net periodic pension costs (income) and postretirement benefit costs (income) |
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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|||||||
Operating Activities | ||||||||||
Net income | $ 57 | $ 46 | $ 109 | $ 58 | ||||||
Adjustments to reconcile net income to cash provided (used) by operating activities - | ||||||||||
Depreciation and amortization of other intangibles | 54 | 53 | 105 | 108 | ||||||
Deferred income taxes | 5 | (5) | 2 | |||||||
Stock-based compensation | 2 | 2 | 4 | 5 | ||||||
Loss on sale of assets | 1 | 1 | 1 | 3 | ||||||
Changes in components of working capital - | ||||||||||
(Increase) decrease in receivables | (39) | (102) | (290) | (293) | ||||||
(Increase) decrease in inventories | 17 | (27) | (60) | (71) | ||||||
(Increase) decrease in prepayments and other current assets | (9) | 9 | (24) | 2 | ||||||
Increase (decrease) in payables | (5) | 112 | 134 | 232 | ||||||
Increase (decrease) in accrued taxes | (8) | (6) | 1 | |||||||
Increase (decrease) in accrued interest | (8) | (8) | 1 | |||||||
Increase (decrease) in other current liabilities | 16 | 25 | 17 | 19 | ||||||
Changes in long-term assets | 2 | (3) | 1 | |||||||
Changes in long-term liabilities | (9) | (10) | (21) | (21) | ||||||
Other | (2) | 2 | (3) | |||||||
Net cash provided (used) by operating activities | 67 | 104 | (36) | 47 | ||||||
Investing Activities | ||||||||||
Proceeds from the sale of assets | 4 | 1 | ||||||||
Cash payments for plant, property, and equipment | (49) | (34) | (95) | (72) | ||||||
Cash payments for software related intangible assets | (3) | (6) | (6) | (8) | ||||||
Other | 1 | 2 | ||||||||
Net cash used by investing activities | (52) | (39) | (97) | (77) | ||||||
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 | 155 | 4 | 155 | ||||||
Debt issuance cost of long-term debt | (1) | (9) | (1) | (9) | ||||||
Retirement of long-term debt | (1) | (129) | (23) | (137) | ||||||
Increase (decrease) in bank overdrafts | 1 | 3 | 8 | 2 | ||||||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by account receivable | 41 | 18 | 88 | 20 | ||||||
Net decrease in short-term borrowings secured by accounts receivable | (82) | (126) | ||||||||
Distributions to noncontrolling interest partners | (10) | (10) | (10) | (11) | ||||||
Net cash provided (used) by financing activities | (58) | (98) | 56 | 20 | ||||||
Effect of foreign exchange rate changes on cash and cash equivalents | 5 | (14) | 5 | (11) | ||||||
Decrease in cash and cash equivalents | (38) | (47) | (72) | (21) | ||||||
Cash and cash equivalents, April 1 and January 1, respectively | 199 | 193 | 233 | 167 | ||||||
Cash and cash equivalents, June 30 (Note) | 161 | [1] | 146 | [1] | 161 | [1] | 146 | [1] | ||
Supplemental Cash Flow Information | ||||||||||
Cash paid during the period for interest | 34 | 39 | 53 | 61 | ||||||
Cash paid during the period for income taxes (net of refunds) | 23 | 16 | 33 | 24 | ||||||
Non-cash Investing and Financing Activities | ||||||||||
Period end balance of trade payables for plant, property, and equipment | $ 22 | $ 11 | $ 22 | $ 11 | ||||||
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Supplemental Guarantor Condensed Consolidating Financial Statements
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Supplemental Guarantor Condensed Consolidating Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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)
STATEMENT
OF INCOME (LOSS)
STATEMENT
OF INCOME (LOSS)
STATEMENT
OF INCOME (LOSS)
BALANCE
SHEET
BALANCE
SHEET
STATEMENT
OF CASH FLOWS
STATEMENT
OF CASH FLOWS
STATEMENT
OF CASH FLOWS
STATEMENT
OF CASH FLOWS
|
Environmental Matters, Litigation and Product Warranties (Details) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Warranty accrual rollforward | ||
Product Warranty Accrual, beginning balance | $ 33 | $ 32 |
Product Warranty Accrual, Warranties Issued | 2 | 8 |
Reductions for payments made | (6) | (8) |
Product Warranty Accrual, ending balance | 29 | 32 |
Environmental Matters, Litigation and Product Warranties (Textuals) [Abstract] | ||
Environmental remediation accrual, discounted basis | 16 | |
Portion of environmental remediation costs recorded in other current liability | 5 | |
Portion of environmental remediation costs recorded in deferred credits and other liabilities | 11 | |
Weighted average discount rate | 3.00% | |
Environmental remediation accrual, undiscounted basis | $ 21 | |
Number of states for which we are subject to an audit with respect to payment of unclaimed property | 11 | |
Number of years subject to audit with respect to payment of unclaimed property | 30 years | |
Number of complaints filed alleging exposure to asbestos from our product categories | 20,000 | |
Current docket of active and inactive cases nationwide relating to alleged exposure to asbestos from our product categories | less than 500 cases | |
Number of defendants in many asbestos related cases | exceeding 100 defendants |
Long Term Debt and Financing Arrangements (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Long-Term Debt and Financing Arrangements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Ratios Under Senior Credit Facility |
|
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||||
Net Income attributable to Tenneco Inc. | $ 50 | $ 40 | $ 97 | $ 47 |
Net Income attributable to Noncontrolling Interests | 7 | 6 | 12 | 11 |
Net Income | 57 | 46 | 109 | 58 |
Cumulative Translation Adjustment | ||||
Beginning balance attributable to Tenneco Inc. | 38 | 5 | 8 | 37 |
Beginning balance attributable to Noncontrolling Interests | 6 | 5 | ||
Beginning balance | 44 | 5 | 13 | 37 |
Accumulated Translation of foreign currency statements attributable to Tenneco Inc. | 21 | (77) | 51 | (109) |
Translation of foreign currency statements attributable to Tenneco Inc. | 21 | (77) | 51 | (109) |
Accumulated Translation of foreign currency statements, attributable to Noncontrolling Interests | (1) | 3 | 3 | |
Translation of foreign currency statements, attributable to Noncontrolling Interests | (1) | 3 | 3 | |
Accumulated Translation of foreign currency statements | 20 | (74) | 51 | (106) |
Translation of foreign currency statements | 20 | (74) | 51 | (106) |
Ending balance attributable to Tenneco Inc. | 59 | (72) | 59 | (72) |
Ending balance attributable to Noncontrolling Interests | 5 | 3 | 5 | 3 |
Ending balance | 64 | (69) | 64 | (69) |
Additional Liability for Pension Benefits | ||||
Beginning balance attributable to parent | (249) | (248) | (250) | (249) |
Beginning balance | (249) | (248) | (250) | (249) |
Accumulated Additional Liability for Pension and Postretirement Benefits, net of tax attributable to parent | 3 | 2 | 4 | 3 |
Additional Liability for Pension and Postretirement Benefits Attributable to Parent, net of tax | 3 | 2 | 4 | 3 |
Accumulated Additional Liability for Pension and Postretirement Benefits, net of tax | 3 | 2 | 4 | 3 |
Additional Liability for Pension and Postretirement Benefits, net of tax | 3 | 2 | 4 | 3 |
Ending balance attributable to parent | (246) | (246) | (246) | (246) |
Ending balance | (246) | (246) | (246) | (246) |
Ending balance attributable to Tenneco Inc. | (187) | (318) | (187) | (318) |
Ending Balance attributable to Noncontrolling Interests | 5 | 3 | 5 | 3 |
Ending Balance | (182) | (315) | (182) | (315) |
Other comprehensive income (loss) attributable to Tenneco Inc. | 24 | (75) | 55 | (106) |
Other comprehensive income (loss) attributable to Noncontrolling Interests | (1) | 3 | 3 | |
Other comprehensive income (loss) | 23 | (72) | 55 | (103) |
Comprehensive Income (Loss) attributable to Tenneco Inc. | 74 | (35) | 152 | (59) |
Comprehensive Income (Loss) attributable to Noncontrolling Interests | 6 | 9 | 12 | 14 |
Comprehensive Income (Loss) | $ 80 | $ (26) | $ 164 | $ (45) |
Common Stock
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Common Stock [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 have recorded
$1 million in compensation expense in both the three months
ended June 30, 2011 and 2010, and $2 million in
compensation expense in both the six months ended June 30,
2011 and 2010, related to nonqualified stock options as part of
our selling, general and administrative expense. This resulted
in a decrease of $0.01 and $0.02 in basic and diluted earnings
per share for the three month periods ended June 30, 2011
and 2010, respectively, and a decrease of $0.03 in basic and
diluted earnings per share for both the six month periods ended
June 20, 2011 and 2010.
We immediately expense stock options and restricted stock
awarded to employees who are eligible to retire. When employees
become eligible to retire during the vesting period, we
recognize the remaining expense associated with their stock
options and restricted stock.
As of June 30, 2011, there was approximately
$6 million of unrecognized compensation costs related to
our stock options awards that we expect to recognize over a
weighted average period of 1.2 years.
Compensation expense for restricted stock, restricted stock
units, long-term performance units and SARs was $7 million
and $5 million for the six month periods ended
June 30, 2011 and 2010 respectively, and was recorded in
selling, general, and administrative expense on the statement of
income.
Cash received from stock option exercises for the six months
ended June 30, 2011 and 2010 was $3 million, and
$1 million, respectively. Stock option exercises in the
first six months of 2011 and 2010 would have generated an excess
tax benefit of $2 million and less than $1 million,
respectively. We did not record the excess tax benefit as we
have federal and state net operating losses which are not
currently being utilized.
Assumptions — We calculated the fair values of
stock option awards using the Black-Scholes option pricing model
with the weighted average assumptions listed below. The fair
value of share-based awards is determined at the time the awards
are granted which is generally in January of each year, and
requires judgment in estimating employee and market behavior.
Expected volatility is calculated based on current implied
volatility and historical realized volatility for the Company.
Expected lives of options are based upon the historical and
expected time to post-vesting forfeiture and exercise. We
believe this method is the best estimate of the future exercise
patterns currently available.
The risk-free interest rates are based upon the Constant
Maturity Rates provided by the U.S. Treasury. For our
valuations, we used the continuous rate with a term equal to the
expected life of the options.
Stock Options — The following table reflects
the status and activity for all options to purchase common stock
for the period indicated:
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 equal to the
average market price of our stock at the date of grant. As of
June 30, 2011, approximately $7 million of total
unrecognized compensation costs related to restricted stock
awards is expected to be recognized over a weighted-average
period of approximately 2.1 years.
Share Repurchase Program — In May 2011, our
Board of Directors approved a share repurchase program,
authorizing our company to repurchase up to 400,000 shares
of our outstanding common stock over a 12 month period. Our
share repurchase program is intended to offset dilution from
shares of restricted stock and stock options that were issued in
2011 to employees. As of June 30, 2011, we purchased
270,500 shares at a total cost of
$10.5 million through this program. These repurchased
shares are held as part of our treasury stock which increased to
1,565,192 shares at June 30, 2011 from
1,294,692 shares at December 31, 2010. We completed
the repurchase of the remaining 129,500 shares by
August 3, 2011, at a total cost of $5.5 million
through this program. We have acquired all of these shares
through open market purchases, which were funded through cash
from operations.
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 June 30, 2011,
$14 million of unrecognized compensation costs is expected
to be recognized over a weighted-average period of approximately
1.9 years.
|
Guarantees (Details Textual) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Guarantees (Textuals) [Abstract] | ||
Maximum percentage of stock of certain first-tier foreign subsidiaries pledged to secure our senior credit facility | 66.00% | |
Maximum amount payable for pension performance guarantees | $ 26 | |
Percentage of liability considered to determine maximum amount payable for pension performance guarantees | 105.00% | |
Percentage of the pension obligation recognized for participating employers | 100.00% | |
Pension obligation of participating employers recognized on the balance sheet | 7 | 9 |
Negotiable financial instruments collected before maturity date and sold at discount | 6 | 6 |
Negotiable financial instruments not redeemed and used for vendor payment | 13 | 8 |
Negotiable financial instruments received from OE customer not redeemed | 18 | 11 |
Negotiable financial instruments received, classified as other current assets | 17 | 11 |
Negotiable financial instruments received classified as customer notes and accounts, net | 1 | |
Maximum amount reimbursable to guarantor | 4 | |
Letter of Credit [Member]
|
||
Guarantor Obligations [Line Items] | ||
Issued Letters of credit, Amount | $ 53 |
Supplemental Guarantor Condensed Consolidating Financial Statements (Details 2) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
Guarantor Subsidiaries [Member]
|
Jun. 30, 2010
Guarantor Subsidiaries [Member]
|
Jun. 30, 2011
Guarantor Subsidiaries [Member]
|
Jun. 30, 2010
Guarantor Subsidiaries [Member]
|
Jun. 30, 2011
Non-Guarantor Subsidiaries [Member]
|
Jun. 30, 2010
Non-Guarantor Subsidiaries [Member]
|
Jun. 30, 2011
Non-Guarantor Subsidiaries [Member]
|
Jun. 30, 2010
Non-Guarantor Subsidiaries [Member]
|
Jun. 30, 2011
Parent Company [Member]
|
Jun. 30, 2010
Parent Company [Member]
|
Jun. 30, 2011
Parent Company [Member]
|
Jun. 30, 2010
Parent Company [Member]
|
Jun. 30, 2011
Reclass & Elims [Member]
|
Dec. 31, 2010
Reclass & Elims [Member]
|
|||||||
Operating Activities | ||||||||||||||||||||||||
Net cash provided (used) by operating activities | $ 67 | $ 104 | $ (36) | $ 47 | $ 46 | $ (91) | $ 152 | $ (63) | $ 90 | $ 263 | $ (70) | $ 227 | $ (69) | $ (68) | $ (118) | $ (117) | ||||||||
Investing Activities | ||||||||||||||||||||||||
Proceeds from the sale of assets | 4 | 1 | (1) | 3 | 1 | 1 | 1 | |||||||||||||||||
Cash payments for plant, property, and equipment | (49) | (34) | (95) | (72) | (16) | (14) | (30) | (29) | (33) | (20) | (65) | (43) | ||||||||||||
Cash payments for software related intangible assets | (3) | (6) | (6) | (8) | (1) | (4) | (2) | (5) | (2) | (2) | (4) | (3) | ||||||||||||
Other | 1 | 2 | 1 | 2 | ||||||||||||||||||||
Net cash used by investing activities | (52) | (39) | (97) | (77) | (18) | (18) | (29) | (34) | (34) | (21) | (68) | (43) | ||||||||||||
Financing Activities | ||||||||||||||||||||||||
Capital contribution from noncontrolling interest partner | 1 | 1 | 1 | 1 | ||||||||||||||||||||
Purchase of common stock under the share repurchase program | (11) | (11) | (11) | (11) | ||||||||||||||||||||
Issuance of long-term debt | 4 | 155 | 4 | 155 | 4 | 5 | 4 | 5 | 150 | 150 | ||||||||||||||
Retirement of long-term debt | (1) | (129) | (23) | (137) | (1) | (1) | (1) | (2) | (128) | (22) | (135) | |||||||||||||
Debt issuance cost of long-term debt | (1) | (9) | (1) | (9) | (1) | (9) | (1) | (9) | ||||||||||||||||
Increase (decrease) in bank overdrafts | 1 | 3 | 8 | 2 | 1 | 3 | 8 | 2 | ||||||||||||||||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt | 41 | 18 | 88 | 20 | 3 | (7) | 3 | (5) | 38 | 25 | 85 | 25 | ||||||||||||
Net increase (decrease) in short-term borrowings secured by accounts receivable | (82) | (126) | (82) | (126) | ||||||||||||||||||||
Intercompany dividends and net increase (decrease) in intercompany obligations | (30) | 111 | (123) | 79 | (13) | (141) | 56 | (165) | 43 | 30 | 67 | 86 | ||||||||||||
Distributions to noncontrolling interest partners | (10) | (10) | (10) | (11) | (10) | (10) | (10) | (11) | ||||||||||||||||
Net cash provided (used) by financing activities | (58) | (98) | 56 | 20 | (30) | 111 | (123) | 79 | (97) | (277) | 61 | (176) | 69 | 68 | 118 | 117 | ||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | 5 | (14) | 5 | (11) | 5 | (14) | 5 | (11) | ||||||||||||||||
Increase (decrease) in cash and cash equivalents | (38) | (47) | (72) | (21) | (2) | 2 | (18) | (36) | (49) | (72) | (3) | |||||||||||||
Cash and cash equivalents, April 1 and January 1, respectively | 199 | 193 | 233 | 167 | 2 | 0 | 20 | 197 | 193 | 233 | 147 | 0 | 0 | 0 | ||||||||||
Cash and cash equivalents, June 30 (Note) | $ 161 | [1] | $ 146 | [1] | $ 161 | [1] | $ 146 | [1] | $ 0 | $ 2 | $ 0 | $ 2 | $ 161 | $ 144 | $ 161 | $ 144 | $ 0 | $ 0 | $ 0 | $ 0 | ||||
|
Financial Instruments (Details 1) (Foreign Exchange Forward [Member], USD $)
In Millions |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Foreign Exchange Forward [Member]
|
||
Foreign exchange forward contracts fair value on gross basis | ||
Fair Value of Derivative Instruments, Asset Derivatives | $ 0 | $ 2 |
Fair Value of Derivative Instruments, Liability Derivatives | 0 | 0 |
Fair Value of Derivative Instruments | $ 0 | $ 2 |
Guarantees
|
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2011
|
|||||
Guarantees [Abstract] | |||||
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 wholly-owned 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 of our direct or
indirect foreign subsidiaries secure our senior notes. For
additional information, refer to Note 15 of the condensed
consolidated financial statements of Tenneco Inc., where we
present the Supplemental Guarantor Condensed Consolidating
Financial Statements.
In March 2011, we entered into 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 event of a payment
default by the sponsoring or participating employers of the
Walker Plans. As a result of our decision to enter into these
performance guarantee agreements, the levy due to the U.K.
Pension Protection Fund will be reduced. The Walker Plans are
comprised of employees from Tenneco Walker (U.K.) Limited and
our Futaba Tenneco U.K. joint venture. Employer contributions
are funded by both Tenneco Walker (U.K.) Limited, as the
sponsoring employer and Futaba Tenneco U.K., as a participating
employer. 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. The maximum amount payable for these pension
performance guarantees is approximately $26 million as of
June 30, 2011 which is determined by taking
105 percent of the liability of the Walker Plans calculated
under section 179 of the U.K. Pension Act of 2004 offset by
plan assets. We did not record an additional liability in March
2011 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
$7 million and $9 million at June 30, 2011 and
December 31, 2010, respectively. At June 30, 2011, 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
requires Futaba to indemnify TMEL for any cost, loss or
liability which TMEL may incur under the performance guarantee
agreements. The maximum amount reimbursable by Futaba to TMEL
under this indemnity agreement is 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. At June 30, 2011 the maximum
amount reimbursable by Futaba to TMEL is approximately
$4 million.
We have issued guarantees through letters of credit in
connection with some obligations of our affiliates. As of
June 30, 2011, we have guaranteed $53 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.
Negotiable Financial Instruments — One of our
European subsidiaries receives payment from one of its OE
customers whereby the accounts receivable are satisfied through
the delivery of negotiable financial instruments. We may collect
these financial instruments before their maturity date by either
selling them at a discount or using them to satisfy accounts
receivable that have previously been sold to a European bank.
Any of these financial instruments which are not sold are
classified as other current assets. The amount of these
financial instruments that was collected before their maturity
date and sold at a discount totaled $6 million at
June 30, 2011 and December 31,
2010, respectively. No negotiable financial instruments were
held by our European subsidiary as of June 30, 2011 and
December 31, 2010, respectively.
In certain instances, several of our Chinese subsidiaries
receive payment from OE customers and satisfy vendor payments
through the receipt and delivery of negotiable financial
instruments. Financial instruments used to satisfy vendor
payables and not redeemed totaled $13 million and
$8 million at June 30, 2011 and December 31,
2010, respectively, and were classified as notes payable.
Financial instruments received from OE customers and not
redeemed totaled $18 million and $11 million at
June 30, 2011 and December 31, 2010, respectively. We
classify financial instruments received from our OE 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 $17 million in other current
assets and $1 million in customer notes and accounts, net
at June 30, 2011. At December 31, 2010, we classified
$11 million in other current assets. Some of our Chinese
subsidiaries that issue their own negotiable financial
instruments to pay vendors are required to maintain a cash
balance if they exceed certain credit limits with the financial
institution that guarantees those financial instruments. A
restricted cash balance was not required at those Chinese
subsidiaries at June 30, 2011 and December 31, 2010,
respectively.
The negotiable financial instruments received by one of our
European subsidiaries and some of our Chinese subsidiaries are
checks drawn by our OE customers and guaranteed by their banks
that are payable at a future date. The use of these instruments
for payment follows local commercial practice. Because
negotiable financial instruments are financial obligations of
our customers and 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.
|
Condensed Consolidated Statements of Income (Unaudited) (USD $)
In Millions, except Share data |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Revenues | ||||
Net sales and operating revenues | $ 1,888 | $ 1,502 | $ 3,648 | $ 2,818 |
Costs and expenses | ||||
Cost of sales (exclusive of depreciation and amortization shown below) | 1,565 | 1,222 | 3,031 | 2,295 |
Engineering, research, and development | 35 | 33 | 70 | 60 |
Selling, general, and administrative | 118 | 98 | 227 | 198 |
Depreciation and amortization of other intangibles | 54 | 53 | 105 | 108 |
Total costs and expenses | 1,772 | 1,406 | 3,433 | 2,661 |
Other income (expense) | ||||
Loss on sale of receivables | (2) | (1) | (3) | (2) |
Other income (expense) | (1) | (2) | (5) | (3) |
Total other income (expense) | (3) | (3) | (8) | (5) |
Earnings before interest expense, income taxes, and noncontrolling interests | 113 | 93 | 207 | 152 |
Interest expense (net of interest capitalized of $1 million in each of the three months ended June 30, 2011 and 2010, respectively and $2 million in each of the six months ended June 30, 2011 and 2010, respectively) | 26 | 32 | 54 | 64 |
Income tax expense | 30 | 15 | 44 | 30 |
Net income | 57 | 46 | 109 | 58 |
Less: Net income attributable to noncontrolling interests | 7 | 6 | 12 | 11 |
Net Income attributable to Tenneco Inc. | $ 50 | $ 40 | $ 97 | $ 47 |
Weighted average shares of common stock outstanding - | ||||
Basic | 59,980,866 | 59,142,946 | 59,901,929 | 59,033,416 |
Diluted | 61,813,474 | 60,999,029 | 61,913,337 | 60,892,967 |
Basic earnings per share of common stock | $ 0.84 | $ 0.68 | $ 1.62 | $ 0.79 |
Diluted earnings per share of common stock | $ 0.81 | $ 0.66 | $ 1.56 | $ 0.77 |
Financial Instruments (Details 3) (USD $)
In Millions |
Jun. 30, 2011
|
---|---|
Australian Dollars [Member]
|
|
Summarization for foreign currency forward purchase and sale contracts | |
Notional Amount in Foreign Currency, Purchase | $ 2 |
British Pounds [Member]
|
|
Summarization for foreign currency forward purchase and sale contracts | |
Notional Amount in Foreign Currency, Purchase | 4 |
European Euro [Member]
|
|
Summarization for foreign currency forward purchase and sale contracts | |
Notional Amount in Foreign Currency, Sell | (12) |
Japanese Yen [Member]
|
|
Summarization for foreign currency forward purchase and sale contracts | |
Notional Amount in Foreign Currency, Purchase | 532 |
South African Rand [Member]
|
|
Summarization for foreign currency forward purchase and sale contracts | |
Notional Amount in Foreign Currency, Purchase | 164 |
U.S. Dollars [Member]
|
|
Summarization for foreign currency forward purchase and sale contracts | |
Notional Amount in Foreign Currency, Purchase | 14 |
Notional Amount in Foreign Currency, Sell | (22) |
Other Currency [Member]
|
|
Summarization for foreign currency forward purchase and sale contracts | |
Notional Amount in Foreign Currency, Purchase | 1 |
Notional Amount in Foreign Currency, Sell | $ (13) |