þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the Quarterly Period Ended September 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 | ||||||||
39 | ||||||||
70 | ||||||||
70 | ||||||||
Item 1. Legal Proceedings
|
* | |||||||
71 | ||||||||
71 | ||||||||
Item 3. Defaults Upon Senior Securities
|
* | |||||||
Item 4. Removed and Reserved
|
* | |||||||
Item 5. Other Information
|
* | |||||||
* | ||||||||
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; | |
| 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; | |
| the impact of consolidation among vehicle parts suppliers and customers on our ability to compete; |
2
| 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; | |
| natural disasters, such as the recent earthquake in Japan and flooding in Thailand, and any resultant disruptions in the supply of goods or services to us or in production or demand by our customers; | |
| acts of war and/or terrorism, as well as actions taken or to be taken by the United States and other governments as a result of further acts or threats of terrorism, and the impact of these acts on economic, financial and social conditions in the countries where we operate; and | |
| the timing and occurrence (or non-occurrence) of other transactions, events and circumstances which may be beyond our control. |
3
ITEM 1. | FINANCIAL STATEMENTS (UNAUDITED) |
4
Three Months |
Three Months |
Nine Months |
Nine Months |
|||||||||||||
Ended |
Ended |
Ended |
Ended |
|||||||||||||
September 30, |
September 30, |
September 30, |
September 30, |
|||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Millions Except Share and Per Share Amounts) | ||||||||||||||||
Revenues
|
||||||||||||||||
Net sales and operating revenues
|
$ | 1,773 | $ | 1,542 | $ | 5,421 | $ | 4,360 | ||||||||
Costs and expenses
|
||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown
below)
|
1,492 | 1,280 | 4,523 | 3,575 | ||||||||||||
Goodwill impairment charge
|
11 | | 11 | | ||||||||||||
Engineering, research, and development
|
32 | 30 | 102 | 90 | ||||||||||||
Selling, general, and administrative
|
101 | 109 | 328 | 307 | ||||||||||||
Depreciation and amortization of other intangibles
|
51 | 55 | 156 | 163 | ||||||||||||
1,687 | 1,474 | 5,120 | 4,135 | |||||||||||||
Other income (expense)
|
||||||||||||||||
Loss on sale of receivables
|
(1 | ) | (1 | ) | (4 | ) | (3 | ) | ||||||||
Other income (expense)
|
(1 | ) | | (6 | ) | (3 | ) | |||||||||
(2 | ) | (1 | ) | (10 | ) | (6 | ) | |||||||||
Earnings before interest expense, income taxes, and
noncontrolling interests
|
84 | 67 | 291 | 219 | ||||||||||||
Interest expense (net of interest capitalized of $1 million
in each of the three months ended September 30, 2011 and
2010, respectively and $3 million in each of the nine
months ended September 30, 2011 and 2010, respectively)
|
27 | 36 | 81 | 100 | ||||||||||||
Income tax expense
|
21 | 15 | 65 | 45 | ||||||||||||
Net income
|
36 | 16 | 145 | 74 | ||||||||||||
Less: Net income attributable to noncontrolling interests
|
6 | 6 | 18 | 17 | ||||||||||||
Net income attributable to Tenneco Inc.
|
$ | 30 | $ | 10 | $ | 127 | $ | 57 | ||||||||
Earnings per share
|
||||||||||||||||
Weighted average shares of common stock outstanding
|
||||||||||||||||
Basic
|
59,793,866 | 59,235,282 | 59,866,717 | 59,102,041 | ||||||||||||
Diluted
|
61,541,476 | 61,079,919 | 61,738,278 | 60,859,093 | ||||||||||||
Basic earnings per share of common stock
|
$ | 0.51 | $ | 0.17 | $ | 2.12 | $ | 0.97 | ||||||||
Diluted earnings per share of common stock
|
$ | 0.49 | $ | 0.17 | $ | 2.06 | $ | 0.94 |
5
September 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
(Millions) | ||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 163 | $ | 233 | ||||
Receivables
|
||||||||
Customer notes and accounts, net
|
1,073 | 796 | ||||||
Other
|
44 | 30 | ||||||
Inventories
|
||||||||
Finished goods
|
250 | 222 | ||||||
Work in process
|
194 | 164 | ||||||
Raw materials
|
131 | 118 | ||||||
Materials and supplies
|
46 | 43 | ||||||
Deferred income taxes
|
42 | 38 | ||||||
Prepayments and other
|
160 | 146 | ||||||
Total current assets
|
2,103 | 1,790 | ||||||
Other assets:
|
||||||||
Long-term receivables, net
|
13 | 9 | ||||||
Goodwill
|
75 | 89 | ||||||
Intangibles, net
|
33 | 32 | ||||||
Deferred income taxes
|
87 | 92 | ||||||
Other
|
99 | 105 | ||||||
307 | 327 | |||||||
Plant, property, and equipment, at cost
|
3,136 | 3,109 | ||||||
Less Accumulated depreciation and amortization
|
(2,110 | ) | (2,059 | ) | ||||
1,026 | 1,050 | |||||||
Total assets
|
$ | 3,436 | $ | 3,167 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||
Current liabilities:
|
||||||||
Short-term debt (including current maturities of long-term debt)
|
$ | 70 | $ | 63 | ||||
Trade payables
|
1,181 | 1,048 | ||||||
Accrued taxes
|
46 | 51 | ||||||
Accrued interest
|
23 | 13 | ||||||
Accrued liabilities
|
246 | 227 | ||||||
Other
|
56 | 66 | ||||||
Total current liabilities
|
1,622 | 1,468 | ||||||
Long-term debt
|
1,234 | 1,160 | ||||||
Deferred income taxes
|
50 | 56 | ||||||
Postretirement benefits
|
279 | 311 | ||||||
Deferred credits and other liabilities
|
121 | 125 | ||||||
Commitments and contingencies
|
||||||||
Total liabilities
|
3,306 | 3,120 | ||||||
Redeemable noncontrolling interests
|
10 | 12 | ||||||
Tenneco Inc. Shareholders equity:
|
||||||||
Common stock
|
1 | 1 | ||||||
Premium on common stock and other capital surplus
|
3,012 | 3,008 | ||||||
Accumulated other comprehensive loss
|
(265 | ) | (237 | ) | ||||
Retained earnings (accumulated deficit)
|
(2,409 | ) | (2,536 | ) | ||||
339 | 236 | |||||||
Less Shares held as treasury stock, at cost
|
256 | 240 | ||||||
Total Tenneco Inc. shareholders equity
|
83 | (4 | ) | |||||
Noncontrolling interests
|
37 | 39 | ||||||
Total equity
|
120 | 35 | ||||||
Total liabilities, redeemable noncontrolling interests and equity
|
$ | 3,436 | $ | 3,167 | ||||
6
Three Months |
Three Months |
Nine Months |
Nine Months |
|||||||||||||
Ended |
Ended |
Ended |
Ended |
|||||||||||||
September 30, |
September 30, |
September 30, |
September 30, |
|||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Millions) | ||||||||||||||||
Operating Activities
|
||||||||||||||||
Net income
|
$ | 36 | $ | 16 | $ | 145 | $ | 74 | ||||||||
Adjustments to reconcile net income to cash provided by
operating activities
|
||||||||||||||||
Goodwill impairment charge
|
11 | | 11 | | ||||||||||||
Depreciation and amortization of other intangibles
|
51 | 55 | 156 | 163 | ||||||||||||
Deferred income taxes
|
2 | (6 | ) | (3 | ) | (4 | ) | |||||||||
Stock-based compensation
|
2 | 2 | 6 | 7 | ||||||||||||
Loss on sale of assets
|
2 | | 3 | 3 | ||||||||||||
Changes in components of working capital
|
||||||||||||||||
(Increase) decrease in receivables
|
(24 | ) | (81 | ) | (314 | ) | (374 | ) | ||||||||
(Increase) decrease in inventories
|
(25 | ) | (52 | ) | (85 | ) | (123 | ) | ||||||||
(Increase) decrease in prepayments and other current assets
|
6 | (3 | ) | (18 | ) | (1 | ) | |||||||||
Increase (decrease) in payables
|
25 | 33 | 159 | 265 | ||||||||||||
Increase (decrease) in accrued taxes
|
(7 | ) | 12 | (7 | ) | 13 | ||||||||||
Increase (decrease) in accrued interest
|
9 | 7 | 9 | 8 | ||||||||||||
Increase (decrease) in other current liabilities
|
(2 | ) | 15 | 15 | 34 | |||||||||||
Changes in long-term assets
|
1 | 3 | (2 | ) | 4 | |||||||||||
Changes in long-term liabilities
|
(10 | ) | 18 | (31 | ) | (3 | ) | |||||||||
Other
|
3 | (2 | ) | | (2 | ) | ||||||||||
Net cash provided by operating activities
|
80 | 17 | 44 | 64 | ||||||||||||
Investing Activities
|
||||||||||||||||
Proceeds from the sale of assets
|
| 2 | 4 | 3 | ||||||||||||
Cash payments for plant, property, and equipment
|
(50 | ) | (33 | ) | (145 | ) | (105 | ) | ||||||||
Cash payments for software related intangible assets
|
(4 | ) | (3 | ) | (10 | ) | (11 | ) | ||||||||
Other
|
| (1 | ) | | 1 | |||||||||||
Net cash used by investing activities
|
(54 | ) | (35 | ) | (151 | ) | (112 | ) | ||||||||
Financing Activities
|
||||||||||||||||
Purchase of common stock under the share repurchase program
|
(5 | ) | | (16 | ) | | ||||||||||
Issuance of long-term debt
|
1 | 225 | 5 | 380 | ||||||||||||
Debt issuance cost of long-term debt
|
| (5 | ) | (1 | ) | (14 | ) | |||||||||
Retirement of long-term debt
|
| (246 | ) | (23 | ) | (383 | ) | |||||||||
Increase (decrease) in bank overdrafts
|
(5 | ) | 10 | 3 | 12 | |||||||||||
Net increase (decrease) in revolver borrowings and short-term
debt excluding current maturities of long-term debt
|
20 | 63 | 108 | 83 | ||||||||||||
Capital contribution from noncontrolling interest partner
|
| | 1 | | ||||||||||||
Purchase of additional noncontrolling equity interest
|
(4 | ) | | (4 | ) | | ||||||||||
Distributions to noncontrolling interest partners
|
(10 | ) | (3 | ) | (20 | ) | (14 | ) | ||||||||
Net cash provided (used) by financing activities
|
(3 | ) | 44 | 53 | 64 | |||||||||||
Effect of foreign exchange rate changes on cash and cash
equivalents
|
(21 | ) | 12 | (16 | ) | 1 | ||||||||||
Increase (decrease) in cash and cash equivalents
|
2 | 38 | (70 | ) | 17 | |||||||||||
Cash and cash equivalents, July 1 and January 1,
respectively
|
161 | 146 | 233 | 167 | ||||||||||||
Cash and cash equivalents, September 30 (Note)
|
$ | 163 | $ | 184 | $ | 163 | $ | 184 | ||||||||
Supplemental Cash Flow Information
|
||||||||||||||||
Cash paid during the period for interest
|
$ | 18 | $ | 28 | $ | 71 | $ | 89 | ||||||||
Cash paid during the period for income taxes (net of refunds)
|
25 | 18 | 58 | 42 | ||||||||||||
Non-cash Investing and Financing Activities
|
||||||||||||||||
Period end balance of trade payables for plant, property, and
equipment
|
$ | 23 | $ | 12 | $ | 23 | $ | 12 |
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
7
Nine Months Ended September 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
|
52,394 | | 172,022 | | ||||||||||||
Stock options exercised
|
323,039 | | 301,029 | | ||||||||||||
Balance September 30
|
61,917,193 | 1 | 61,262,790 | 1 | ||||||||||||
Premium on Common Stock and Other Capital Surplus
|
||||||||||||||||
Balance January 1
|
3,008 | 3,005 | ||||||||||||||
Purchase of additional noncontrolling equity interest
|
(2 | ) | (11 | ) | ||||||||||||
Premium on common stock issued pursuant to benefit plans
|
6 | 8 | ||||||||||||||
Balance September 30
|
3,012 | 3,002 | ||||||||||||||
Accumulated Other Comprehensive Loss
|
||||||||||||||||
Balance January 1
|
(237 | ) | (212 | ) | ||||||||||||
Other comprehensive loss
|
(28 | ) | (28 | ) | ||||||||||||
Balance September 30
|
(265 | ) | (240 | ) | ||||||||||||
Retained Earnings (Accumulated Deficit)
|
||||||||||||||||
Balance January 1
|
(2,536 | ) | (2,575 | ) | ||||||||||||
Net income attributable to Tenneco Inc.
|
127 | 57 | ||||||||||||||
Balance September 30
|
(2,409 | ) | (2,518 | ) | ||||||||||||
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
|
400,000 | 16 | | | ||||||||||||
Balance September 30
|
1,694,692 | 256 | 1,294,692 | 240 | ||||||||||||
Total Tenneco Inc. shareholders equity
|
$ | 83 | $ | 5 | ||||||||||||
Noncontrolling Interests:
|
||||||||||||||||
Balance January 1
|
$ | 39 | $ | 32 | ||||||||||||
Net income
|
13 | 11 | ||||||||||||||
Sale of twenty percent equity interest to Tenneco Inc.
|
| (4 | ) | |||||||||||||
Other comprehensive income
|
(1 | ) | 2 | |||||||||||||
Dividends declared
|
(14 | ) | (8 | ) | ||||||||||||
Balance September 30
|
$ | 37 | $ | 33 | ||||||||||||
Total equity
|
$ | 120 | $ | 38 | ||||||||||||
8
Three Months Ended September 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
|
$ | 30 | $ | 6 | $ | 36 | ||||||||||||||||||
Accumulated Other Comprehensive Income (Loss)
|
||||||||||||||||||||||||
Cumulative Translation Adjustment
|
||||||||||||||||||||||||
Balance July 1
|
$ | 59 | $ | 5 | $ | 64 | ||||||||||||||||||
Translation of foreign currency statements
|
(82 | ) | (82 | ) | (1 | ) | (1 | ) | (83 | ) | (83 | ) | ||||||||||||
Balance September 30
|
(23 | ) | 4 | (19 | ) | |||||||||||||||||||
Additional Liability for Pension Benefits
|
||||||||||||||||||||||||
Balance July 1
|
(246 | ) | | (246 | ) | |||||||||||||||||||
Additional Liability for Pension and Postretirement Benefits,
net of tax
|
4 | 4 | 4 | 4 | ||||||||||||||||||||
Balance September 30
|
(242 | ) | | (242 | ) | |||||||||||||||||||
Balance September 30
|
$ | (265 | ) | $ | 4 | $ | (261 | ) | ||||||||||||||||
Other Comprehensive Income (Loss)
|
(78 | ) | (1 | ) | (79 | ) | ||||||||||||||||||
Comprehensive Income (Loss)
|
$ | (48 | ) | $ | 5 | $ | (43 | ) | ||||||||||||||||
Three Months Ended September 30, 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
|
$ | 10 | $ | 6 | $ | 16 | ||||||||||||||||||
Accumulated Other Comprehensive Income (Loss)
|
||||||||||||||||||||||||
Cumulative Translation Adjustment
|
||||||||||||||||||||||||
Balance July 1
|
$ | (72 | ) | $ | 3 | $ | (69 | ) | ||||||||||||||||
Translation of foreign currency statements
|
75 | 75 | 1 | 1 | 76 | 76 | ||||||||||||||||||
Balance September 30
|
3 | 4 | 7 | |||||||||||||||||||||
Additional Liability for Pension Benefits
|
||||||||||||||||||||||||
Balance July 1
|
(246 | ) | | (246 | ) | |||||||||||||||||||
Additional Liability for Pension and Postretirement Benefits,
net of tax
|
3 | 3 | | 3 | 3 | |||||||||||||||||||
Balance September 30
|
(243 | ) | | (243 | ) | |||||||||||||||||||
Balance September 30
|
$ | (240 | ) | $ | 4 | $ | (236 | ) | ||||||||||||||||
Other Comprehensive Income
|
78 | 1 | 79 | |||||||||||||||||||||
Comprehensive Income
|
$ | 88 | $ | 7 | $ | 95 | ||||||||||||||||||
9
Nine Months Ended September 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
|
$ | 127 | $ | 18 | $ | 145 | ||||||||||||||||||
Accumulated Other Comprehensive Income (Loss)
|
||||||||||||||||||||||||
Cumulative Translation Adjustment
|
||||||||||||||||||||||||
Balance January 1
|
$ | 8 | $ | 5 | $ | 13 | ||||||||||||||||||
Translation of foreign currency statements
|
(31 | ) | (31 | ) | (1 | ) | (1 | ) | (32 | ) | (32 | ) | ||||||||||||
Balance September 30
|
(23 | ) | 4 | (19 | ) | |||||||||||||||||||
Additional Liability for Pension Benefits
|
||||||||||||||||||||||||
Balance January 1
|
(250 | ) | | (250 | ) | |||||||||||||||||||
Additional Liability for Pension and Postretirement Benefits,
net of tax
|
8 | 8 | 8 | 8 | ||||||||||||||||||||
Balance September 30
|
(242 | ) | | (242 | ) | |||||||||||||||||||
Balance September 30
|
$ | (265 | ) | $ | 4 | $ | (261 | ) | ||||||||||||||||
Other Comprehensive Income (Loss)
|
(23 | ) | (1 | ) | (24 | ) | ||||||||||||||||||
Comprehensive Income
|
$ | 104 | $ | 17 | $ | 121 | ||||||||||||||||||
Nine Months Ended September 30, 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
|
$ | 57 | $ | 17 | $ | 74 | ||||||||||||||||||
Accumulated Other Comprehensive Income (Loss)
|
||||||||||||||||||||||||
Cumulative Translation Adjustment
|
||||||||||||||||||||||||
Balance January 1
|
$ | 37 | $ | | $ | 37 | ||||||||||||||||||
Translation of foreign currency statements
|
(34 | ) | (34 | ) | 4 | 4 | (30 | ) | (30 | ) | ||||||||||||||
Balance September 30
|
3 | 4 | 7 | |||||||||||||||||||||
Additional Liability for Pension Benefits
|
||||||||||||||||||||||||
Balance January 1
|
(249 | ) | | (249 | ) | |||||||||||||||||||
Additional Liability for Pension and Postretirement Benefits,
net of tax
|
6 | 6 | 6 | 6 | ||||||||||||||||||||
Balance September 30
|
(243 | ) | | (243 | ) | |||||||||||||||||||
Balance September 30
|
$ | (240 | ) | $ | 4 | $ | (236 | ) | ||||||||||||||||
Other Comprehensive Income (Loss)
|
(28 | ) | 4 | (24 | ) | |||||||||||||||||||
Comprehensive Income
|
$ | 29 | $ | 21 | $ | 50 | ||||||||||||||||||
10
(1) | Consolidation and Presentation |
(2) | Financial Instruments |
September 30, 2011 | December 31, 2010 | |||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
(Millions) | ||||||||||||||||
Long-term debt (including current maturities)
|
$ | 1,236 | $ | 1,245 | $ | 1,162 | $ | 1,201 | ||||||||
Instruments with off-balance sheet risk:
|
||||||||||||||||
Foreign exchange forward contracts:
|
||||||||||||||||
Asset derivative contracts
|
| | 2 | 2 | ||||||||||||
Liability derivative contracts
|
2 | 2 | | |
11
Fair Value of Derivative Instruments | ||||||||||||||||||||||||
September 30, 2011 | December 31, 2010 | |||||||||||||||||||||||
Asset |
Liability |
Asset |
Liability |
|||||||||||||||||||||
Derivatives | Derivatives | Total | Derivatives | Derivatives | Total | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Foreign exchange forward contracts
|
$ | | $ | 2 | $ | 2 | $ | 2 | $ | | $ | 2 |
September 30, 2011 | December 31, 2010 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Financial Assets:
|
||||||||||||||||||||||||
Foreign exchange contracts
|
n/a | $ | | n/a | n/a | $ | 2 | n/a | ||||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||||||
Foreign exchange contracts
|
n/a | $ | 2 | n/a | n/a | $ | | n/a |
Notional Amount |
||||||
in Foreign Currency | ||||||
(Millions) | ||||||
Australian dollars | Purchase | 2 | ||||
British pounds
|
Purchase | 4 | ||||
European euro
|
Sell | (9 | ) | |||
Japanese Yen
|
Purchase | 442 | ||||
South African rand
|
Purchase | 162 | ||||
U.S. dollars
|
Purchase | 1 | ||||
Sell | (23 | ) | ||||
Other
|
Sell | (1 | ) |
(3) | Long-Term Debt and Financing Arrangements |
12
Interest |
||||||||
Leverage |
Coverage |
|||||||
Period Ending | Ratio | Ratio | ||||||
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 Goodwill Impairment Charge |
December 31, |
September 30, |
|||||||||||||||||||||||
2010 |
2011 |
Impact of |
2011 |
|||||||||||||||||||||
Restructuring |
2011 |
Cash |
Exchange |
Reserve |
Restructuring |
|||||||||||||||||||
Reserve | Expenses | Payments | Rates | Adjustments | Reserve | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Severance
|
$ | 7 | 7 | (12 | ) | | (1 | ) | $ | 1 |
17
(7) | Environmental Matters, Litigation and Product Warranties |
18
19
Nine Months |
||||||||
Ended |
||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
(Millions) | ||||||||
Beginning Balance January 1,
|
$ | 33 | $ | 32 | ||||
Accruals related to product warranties
|
7 | 13 | ||||||
Reductions for payments made
|
(13 | ) | (12 | ) | ||||
Ending Balance September 30,
|
$ | 27 | $ | 33 | ||||
(8) | Earnings Per Share |
Three Months |
Three Months |
Nine Months |
Nine Months |
|||||||||||||
Ended |
Ended |
Ended |
Ended |
|||||||||||||
September 30, |
September 30, |
September 30, |
September 30, |
|||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Millions Except Share and Per Share Amounts) | ||||||||||||||||
Basic earnings per share
|
||||||||||||||||
Net income attributable to Tenneco Inc.
|
$ | 30 | $ | 10 | $ | 127 | $ | 57 | ||||||||
Average shares of common stock outstanding
|
59,793,866 | 59,235,282 | 59,866,717 | 59,102,041 | ||||||||||||
Earnings per average share of common stock
|
$ | 0.51 | $ | 0.17 | $ | 2.12 | $ | 0.97 | ||||||||
Diluted earnings per share
|
||||||||||||||||
Net income attributable to Tenneco Inc.
|
$ | 30 | $ | 10 | $ | 127 | $ | 57 | ||||||||
Average shares of common stock outstanding
|
59,793,866 | 59,235,282 | 59,866,717 | 59,102,041 | ||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Restricted stock
|
227,243 | 411,115 | 275,333 | 417,262 | ||||||||||||
Stock options
|
1,520,367 | 1,433,522 | 1,596,228 | 1,339,790 | ||||||||||||
Average shares of common stock outstanding including dilutive
securities
|
61,541,476 | 61,079,919 | 61,738,278 | 60,859,093 | ||||||||||||
Earnings per average share of common stock
|
$ | 0.49 | $ | 0.17 | $ | 2.06 | $ | 0.94 | ||||||||
20
(9) | Common Stock |
Nine Months |
||||||||
Ended |
||||||||
September 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
Nine Months Ended September 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 | ||||||||||
Granted
|
1,649 | 44.02 | ||||||||||||||
Forfeited
|
(450 | ) | 4.03 | |||||||||||||
Exercised
|
(115,249 | ) | 8.94 | 3 | ||||||||||||
Outstanding, September 30, 2011
|
2,918,174 | $ | 17.03 | 4.0 | $ | 54 | ||||||||||
22
Nine Months Ended |
||||||||
September 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 | |||||
Granted
|
1,042 | 44.02 | ||||||
Vested
|
(3,206 | ) | 15.41 | |||||
Forfeited
|
(158 | ) | 1.86 | |||||
Nonvested balance at September 30, 2011
|
413,539 | $ | 22.74 | |||||
23
(10) | Pension Plans, Postretirement and Other Employee Benefits |
Three Months Ended September 30, | ||||||||||||||||||||||||
Pension | Postretirement | |||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||
US | Foreign | US | Foreign | US | US | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Service cost benefits earned during the period
|
$ | 1 | $ | 2 | $ | 1 | $ | 1 | $ | | $ | | ||||||||||||
Interest cost
|
5 | 5 | 5 | 5 | 2 | 2 | ||||||||||||||||||
Expected return on plan assets
|
(6 | ) | (5 | ) | (5 | ) | (5 | ) | | | ||||||||||||||
Settlement loss
|
| | 4 | | | | ||||||||||||||||||
Net amortization:
|
||||||||||||||||||||||||
Actuarial loss
|
1 | 1 | | 1 | 1 | 2 | ||||||||||||||||||
Prior service cost (credit)
|
| | | | (1 | ) | (2 | ) | ||||||||||||||||
Net pension and postretirement costs
|
$ | 1 | $ | 3 | $ | 5 | $ | 2 | $ | 2 | $ | 2 | ||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||
Pension | Postretirement | |||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||
US | Foreign | US | Foreign | US | US | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Service cost benefits earned during the period
|
$ | 1 | $ | 5 | $ | 1 | $ | 4 | $ | | $ | 1 | ||||||||||||
Interest cost
|
15 | 15 | 15 | 14 | 6 | 6 | ||||||||||||||||||
Expected return on plan assets
|
(17 | ) | (15 | ) | (15 | ) | (15 | ) | | | ||||||||||||||
Settlement loss
|
| | 4 | | | | ||||||||||||||||||
Net amortization:
|
||||||||||||||||||||||||
Actuarial loss
|
3 | 4 | 2 | 3 | 3 | 4 | ||||||||||||||||||
Prior service cost (credit)
|
| 1 | | 1 | (4 | ) | (5 | ) | ||||||||||||||||
Net pension and postretirement costs
|
$ | 2 | $ | 10 | $ | 7 | $ | 7 | $ | 5 | $ | 6 | ||||||||||||
24
(11) | Acquisitions |
(12) | New Accounting Pronouncements |
25
(13) | Guarantees |
26
(14) | Segment Information |
27
Segment | ||||||||||||||||||||
North |
Asia |
Reclass & |
||||||||||||||||||
America | Europe | Pacific | Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
For the Three Months Ended September 30, 2011
|
||||||||||||||||||||
Revenues from external customers
|
$ | 842 | $ | 727 | $ | 204 | $ | | $ | 1,773 | ||||||||||
Intersegment revenues
|
3 | 43 | 6 | (52 | ) | | ||||||||||||||
Earnings before interest expense, income taxes, and
noncontrolling interests
|
46 | 36 | 2 | (1) | | 84 | ||||||||||||||
For the Three Months Ended September 30, 2010
|
||||||||||||||||||||
Revenues from external customers
|
$ | 762 | $ | 613 | $ | 167 | $ | | $ | 1,542 | ||||||||||
Intersegment revenues
|
3 | 44 | 9 | (56 | ) | | ||||||||||||||
Earnings before interest expense, income taxes, and
noncontrolling interests
|
42 | 15 | 10 | | 67 | |||||||||||||||
At September 30, 2011 and for the Nine Months Then
Ended
|
||||||||||||||||||||
Revenues from external customers
|
$ | 2,567 | $ | 2,285 | $ | 569 | $ | | $ | 5,421 | ||||||||||
Intersegment revenues
|
9 | 122 | 19 | (150 | ) | | ||||||||||||||
Earnings before interest expense, income taxes, and
noncontrolling interests
|
170 | 97 | 24 | (1) | | 291 | ||||||||||||||
Total assets
|
$ | 1,473 | $ | 1,408 | $ | 528 | $ | 27 | $ | 3,436 | ||||||||||
At September 30, 2010 and for the Nine Months Then
Ended
|
||||||||||||||||||||
Revenues from external customers
|
$ | 2,105 | $ | 1,780 | $ | 475 | $ | | $ | 4,360 | ||||||||||
Intersegment revenues
|
8 | 115 | 21 | (144 | ) | | ||||||||||||||
Earnings before interest expense, income taxes, and
noncontrolling interests
|
128 | 57 | 34 | | 219 | |||||||||||||||
Total assets
|
$ | 1,345 | $ | 1,450 | $ | 459 | $ | 16 | $ | 3,270 |
(1) | Includes a goodwill impairment charge of $11 million related to our Australian reporting unit (see Note 6). |
(15) | Supplemental Guarantor Condensed Consolidating Financial Statements |
28
For the Three Months Ended September 30, 2011 | ||||||||||||||||||||
Tenneco Inc. |
||||||||||||||||||||
Guarantor |
Nonguarantor |
(Parent |
Reclass & |
|||||||||||||||||
Subsidiaries | Subsidiaries | Company) | Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Revenues
|
||||||||||||||||||||
Net sales and operating revenues
|
||||||||||||||||||||
External
|
$ | 761 | $ | 1,012 | $ | | $ | | $ | 1,773 | ||||||||||
Affiliated companies
|
40 | 126 | | (166 | ) | | ||||||||||||||
801 | 1,138 | | (166 | ) | 1,773 | |||||||||||||||
Costs and expenses
|
||||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown
below)
|
568 | 1,090 | | (166 | ) | 1,492 | ||||||||||||||
Goodwill impairment charge
|
| 11 | | | 11 | |||||||||||||||
Engineering, research, and development
|
14 | 18 | | | 32 | |||||||||||||||
Selling, general, and administrative
|
34 | 65 | 2 | | 101 | |||||||||||||||
Depreciation and amortization of other intangibles
|
18 | 33 | | | 51 | |||||||||||||||
634 | 1,217 | 2 | (166 | ) | 1,687 | |||||||||||||||
Other income (expense)
|
||||||||||||||||||||
Loss on sale of receivables
|
| (1 | ) | | | (1 | ) | |||||||||||||
Other income (expense)
|
(3 | ) | 2 | | | (1 | ) | |||||||||||||
(3 | ) | 1 | | | (2 | ) | ||||||||||||||
Earnings before interest expense, income taxes,
noncontrolling interests, and equity in net income from
affiliated companies
|
164 | (78 | ) | (2 | ) | | 84 | |||||||||||||
Interest expense
|
||||||||||||||||||||
External (net of interest capitalized)
|
| 2 | 25 | | 27 | |||||||||||||||
Affiliated companies (net of interest income)
|
54 | (18 | ) | (36 | ) | | | |||||||||||||
Income tax expense
|
3 | 18 | | | 21 | |||||||||||||||
Equity in net income (loss) from affiliated companies
|
(89 | ) | | 21 | 68 | | ||||||||||||||
Net income (loss)
|
18 | (80 | ) | 30 | 68 | 36 | ||||||||||||||
Less: Net income attributable to noncontrolling interests
|
| 6 | | | 6 | |||||||||||||||
Net income (loss) attributable to Tenneco Inc.
|
$ | 18 | $ | (86 | ) | $ | 30 | $ | 68 | $ | 30 | |||||||||
29
For the Three Months Ended September 30, 2010 | ||||||||||||||||||||
Tenneco Inc. |
||||||||||||||||||||
Guarantor |
Nonguarantor |
(Parent |
Reclass & |
|||||||||||||||||
Subsidiaries | Subsidiaries | Company) | Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Revenues
|
||||||||||||||||||||
Net sales and operating revenues
|
||||||||||||||||||||
External
|
$ | 699 | $ | 843 | $ | | $ | | $ | 1,542 | ||||||||||
Affiliated companies
|
33 | 125 | | (158 | ) | | ||||||||||||||
732 | 968 | | (158 | ) | 1,542 | |||||||||||||||
Costs and expenses
|
||||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown
below)
|
655 | 783 | | (158 | ) | 1,280 | ||||||||||||||
Engineering, research, and development
|
14 | 16 | | | 30 | |||||||||||||||
Selling, general, and administrative
|
42 | 66 | 1 | | 109 | |||||||||||||||
Depreciation and amortization of other intangibles
|
23 | 32 | | | 55 | |||||||||||||||
734 | 897 | 1 | (158 | ) | 1,474 | |||||||||||||||
Other income (expense)
|
||||||||||||||||||||
Loss on sale of receivables
|
| (1 | ) | | | (1 | ) | |||||||||||||
Other income (expense)
|
5 | (4 | ) | | (1 | ) | | |||||||||||||
5 | (5 | ) | | (1 | ) | (1 | ) | |||||||||||||
Earnings (loss) before interest expense, income taxes,
noncontrolling interests, and equity in net income from
affiliated companies
|
3 | 66 | (1 | ) | (1 | ) | 67 | |||||||||||||
Interest expense
|
||||||||||||||||||||
External (net of interest capitalized)
|
| 2 | 34 | | 36 | |||||||||||||||
Affiliated companies (net of interest income)
|
49 | (17 | ) | (32 | ) | | | |||||||||||||
Income tax expense (benefit)
|
1 | 14 | | | 15 | |||||||||||||||
Equity in net income (loss) from affiliated companies
|
57 | | 13 | (70 | ) | | ||||||||||||||
Net income (loss)
|
10 | 67 | 10 | (71 | ) | 16 | ||||||||||||||
Less: Net income attributable to noncontrolling interests
|
| 6 | | | 6 | |||||||||||||||
Net income (loss) attributable to Tenneco Inc.
|
$ | 10 | $ | 61 | $ | 10 | $ | (71 | ) | $ | 10 | |||||||||
30
For the Nine Months Ended September 30, 2011 | ||||||||||||||||||||
Tenneco Inc. |
||||||||||||||||||||
Guarantor |
Nonguarantor |
(Parent |
Reclass & |
|||||||||||||||||
Subsidiaries | Subsidiaries | Company) | Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Revenues
|
||||||||||||||||||||
Net sales and operating revenues
|
||||||||||||||||||||
External
|
$ | 2,331 | $ | 3,090 | $ | | $ | | $ | 5,421 | ||||||||||
Affiliated companies
|
121 | 383 | | (504 | ) | | ||||||||||||||
2,452 | 3,473 | | (504 | ) | 5,421 | |||||||||||||||
Costs and expenses
|
||||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown
below)
|
2,013 | 3,014 | | (504 | ) | 4,523 | ||||||||||||||
Goodwill impairment charge
|
| 11 | | | 11 | |||||||||||||||
Engineering, research, and development
|
42 | 60 | | | 102 | |||||||||||||||
Selling, general, and administrative
|
106 | 219 | 3 | | 328 | |||||||||||||||
Depreciation and amortization of other intangibles
|
55 | 101 | | | 156 | |||||||||||||||
2,216 | 3,405 | 3 | (504 | ) | 5,120 | |||||||||||||||
Other income (expense)
|
||||||||||||||||||||
Loss on sale of receivables
|
| (4 | ) | | | (4 | ) | |||||||||||||
Other income (expense)
|
29 | | | (35 | ) | (6 | ) | |||||||||||||
29 | (4 | ) | | (35 | ) | (10 | ) | |||||||||||||
Earnings before interest expense, income taxes,
noncontrolling interests, and equity in net income from
affiliated companies
|
265 | 64 | (3 | ) | (35 | ) | 291 | |||||||||||||
Interest expense
|
||||||||||||||||||||
External (net of interest capitalized)
|
| 4 | 77 | | 81 | |||||||||||||||
Affiliated companies (net of interest income)
|
156 | (52 | ) | (104 | ) | | | |||||||||||||
Income tax expense
|
8 | 57 | | | 65 | |||||||||||||||
Equity in net income (loss) from affiliated companies
|
29 | | 103 | (132 | ) | | ||||||||||||||
Net income (loss)
|
130 | 55 | 127 | (167 | ) | 145 | ||||||||||||||
Less: Net income attributable to noncontrolling interests
|
| 18 | | | 18 | |||||||||||||||
Net income (loss) attributable to Tenneco Inc.
|
$ | 130 | $ | 37 | $ | 127 | $ | (167 | ) | $ | 127 | |||||||||
31
For the Nine Months Ended September 30, 2010 | ||||||||||||||||||||
Tenneco Inc. |
||||||||||||||||||||
Guarantor |
Nonguarantor |
(Parent |
Reclass & |
|||||||||||||||||
Subsidiaries | Subsidiaries | Company) | Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Revenues
|
||||||||||||||||||||
Net sales and operating revenues
|
||||||||||||||||||||
External
|
$ | 1,919 | $ | 2,441 | $ | | $ | | $ | 4,360 | ||||||||||
Affiliated companies
|
95 | 360 | | (455 | ) | | ||||||||||||||
2,014 | 2,801 | | (455 | ) | 4,360 | |||||||||||||||
Costs and expenses
|
||||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown
below)
|
1,707 | 2,323 | | (455 | ) | 3,575 | ||||||||||||||
Engineering, research, and development
|
40 | 50 | | | 90 | |||||||||||||||
Selling, general, and administrative
|
115 | 189 | 3 | | 307 | |||||||||||||||
Depreciation and amortization of other intangibles
|
66 | 97 | | | 163 | |||||||||||||||
1,928 | 2,659 | 3 | (455 | ) | 4,135 | |||||||||||||||
Other income (expense)
|
||||||||||||||||||||
Loss on sale of receivables
|
| (3 | ) | | | (3 | ) | |||||||||||||
Other income (expense)
|
14 | (2 | ) | 1 | (16 | ) | (3 | ) | ||||||||||||
14 | (5 | ) | 1 | (16 | ) | (6 | ) | |||||||||||||
Earnings (loss) before interest expense, income taxes,
noncontrolling interests, and equity in net income from
affiliated companies
|
100 | 137 | (2 | ) | (16 | ) | 219 | |||||||||||||
Interest expense
|
||||||||||||||||||||
External (net of interest capitalized)
|
(1 | ) | 6 | 95 | | 100 | ||||||||||||||
Affiliated companies (net of interest income)
|
136 | (40 | ) | (96 | ) | | | |||||||||||||
Income tax expense (benefit)
|
5 | 40 | | | 45 | |||||||||||||||
Equity in net income (loss) from affiliated companies
|
104 | | 58 | (162 | ) | | ||||||||||||||
Net income (loss)
|
64 | 131 | 57 | (178 | ) | 74 | ||||||||||||||
Less: Net income attributable to noncontrolling interests
|
| 17 | | | 17 | |||||||||||||||
Net income (loss) attributable to Tenneco Inc.
|
$ | 64 | $ | 114 | $ | 57 | $ | (178 | ) | $ | 57 | |||||||||
32
September 30, 2011 | ||||||||||||||||||||
Tenneco Inc. |
||||||||||||||||||||
Guarantor |
Nonguarantor |
(Parent |
Reclass |
|||||||||||||||||
Subsidiaries | Subsidiaries | Company) | & Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 2 | $ | 161 | $ | | $ | | $ | 163 | ||||||||||
Receivables, net
|
616 | 1,358 | 25 | (882 | ) | 1,117 | ||||||||||||||
Inventories
|
251 | 370 | | | 621 | |||||||||||||||
Deferred income taxes
|
77 | | | (35 | ) | 42 | ||||||||||||||
Prepayments and other
|
29 | 131 | | | 160 | |||||||||||||||
Total current assets
|
975 | 2,020 | 25 | (917 | ) | 2,103 | ||||||||||||||
Other assets:
|
||||||||||||||||||||
Investment in affiliated companies
|
412 | | 770 | (1,182 | ) | | ||||||||||||||
Notes and advances receivable from affiliates
|
4,144 | 1,010 | 5,986 | (11,140 | ) | | ||||||||||||||
Long-term receivables, net
|
1 | 12 | | | 13 | |||||||||||||||
Goodwill
|
22 | 53 | | | 75 | |||||||||||||||
Intangibles, net
|
13 | 20 | | | 33 | |||||||||||||||
Deferred income taxes
|
32 | 22 | 33 | | 87 | |||||||||||||||
Other
|
25 | 45 | 29 | | 99 | |||||||||||||||
4,649 | 1,162 | 6,818 | (12,322 | ) | 307 | |||||||||||||||
Plant, property, and equipment, at cost
|
1,013 | 2,123 | | | 3,136 | |||||||||||||||
Less Accumulated depreciation and amortization
|
(735 | ) | (1,375 | ) | | | (2,110 | ) | ||||||||||||
278 | 748 | | | 1,026 | ||||||||||||||||
Total assets
|
$ | 5,902 | $ | 3,930 | $ | 6,843 | $ | (13,239 | ) | $ | 3,436 | |||||||||
LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||
Short-term debt (including current maturities of long-term debt)
|
||||||||||||||||||||
Short-term debt non-affiliated
|
$ | | $ | 69 | $ | 1 | $ | | $ | 70 | ||||||||||
Short-term debt affiliated
|
210 | 517 | 10 | (737 | ) | | ||||||||||||||
Trade payables
|
483 | 813 | | (115 | ) | 1,181 | ||||||||||||||
Accrued taxes
|
21 | 25 | | | 46 | |||||||||||||||
Other
|
126 | 213 | 51 | (65 | ) | 325 | ||||||||||||||
Total current liabilities
|
840 | 1,637 | 62 | (917 | ) | 1,622 | ||||||||||||||
Long-term debt non-affiliated
|
| 11 | 1,223 | | 1,234 | |||||||||||||||
Long-term debt affiliated
|
4,678 | 1,024 | 5,438 | (11,140 | ) | | ||||||||||||||
Deferred income taxes
|
| 50 | | | 50 | |||||||||||||||
Postretirement benefits and other liabilities
|
324 | 72 | | 4 | 400 | |||||||||||||||
Commitments and contingencies
|
||||||||||||||||||||
Total liabilities
|
5,842 | 2,794 | 6,723 | (12,053 | ) | 3,306 | ||||||||||||||
Redeemable noncontrolling interests
|
| 10 | | | 10 | |||||||||||||||
Tenneco Inc. Shareholders equity
|
60 | 1,089 | 120 | (1,186 | ) | 83 | ||||||||||||||
Noncontrolling interests
|
| 37 | | | 37 | |||||||||||||||
Total equity
|
60 | 1,126 | 120 | (1,186 | ) | 120 | ||||||||||||||
Total liabilities, redeemable noncontrolling interests and equity
|
$ | 5,902 | $ | 3,930 | $ | 6,843 | $ | (13,239 | ) | $ | 3,436 | |||||||||
33
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 | |||||||||
34
Three Months Ended September 30, 2011 | ||||||||||||||||||||
Tenneco Inc. |
||||||||||||||||||||
Guarantor |
Nonguarantor |
(Parent |
Reclass |
|||||||||||||||||
Subsidiaries | Subsidiaries | Company) | & Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Operating Activities
|
||||||||||||||||||||
Net cash provided (used) by operating activities
|
$ | 74 | $ | 57 | $ | (51 | ) | $ | | $ | 80 | |||||||||
Investing Activities
|
||||||||||||||||||||
Cash payments for plant, property, and equipment
|
(14 | ) | (36 | ) | | | (50 | ) | ||||||||||||
Cash payments for software related intangible assets
|
(1 | ) | (3 | ) | | | (4 | ) | ||||||||||||
Net cash used by investing activities
|
(15 | ) | (39 | ) | | | (54 | ) | ||||||||||||
Financing Activities
|
||||||||||||||||||||
Issuance of long-term debt
|
| 1 | | | 1 | |||||||||||||||
Increase (decrease) in bank overdrafts
|
| (5 | ) | | | (5 | ) | |||||||||||||
Net increase (decrease) in revolver borrowings and short-term
debt excluding current maturities of long-term debt
|
| 8 | 12 | | 20 | |||||||||||||||
Intercompany dividends and net increase (decrease) in
intercompany obligations
|
(57 | ) | 13 | 44 | | | ||||||||||||||
Purchase of additional noncontrolling equity interest
|
| (4 | ) | | | (4 | ) | |||||||||||||
Distributions to noncontrolling interest partners
|
| (10 | ) | | | (10 | ) | |||||||||||||
Purchase of common stock under the share repurchase program
|
| | (5 | ) | | (5 | ) | |||||||||||||
Net cash provided (used) by financing activities
|
(57 | ) | 3 | 51 | | (3 | ) | |||||||||||||
Effect of foreign exchange rate changes on cash and cash
equivalents
|
| (21 | ) | | | (21 | ) | |||||||||||||
Increase (decrease) in cash and cash equivalents
|
2 | | | | 2 | |||||||||||||||
Cash and cash equivalents, July 1
|
| 161 | | | 161 | |||||||||||||||
Cash and cash equivalents, September 30 (Note)
|
$ | 2 | $ | 161 | $ | | $ | | $ | 163 | ||||||||||
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
35
Three Months Ended September 30, 2010 | ||||||||||||||||||||
Tenneco Inc. |
||||||||||||||||||||
Guarantor |
Nonguarantor |
(Parent |
Reclass |
|||||||||||||||||
Subsidiaries | Subsidiaries | Company) | & Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Operating Activities
|
||||||||||||||||||||
Net cash provided (used) by operating activities
|
$ | (25 | ) | $ | 65 | $ | (23 | ) | $ | | $ | 17 | ||||||||
Investing Activities
|
||||||||||||||||||||
Proceeds from the sale of assets
|
1 | 1 | | | 2 | |||||||||||||||
Cash payments for plant, property, and equipment
|
(11 | ) | (22 | ) | | | (33 | ) | ||||||||||||
Cash payments for software related intangible assets
|
(2 | ) | (1 | ) | | | (3 | ) | ||||||||||||
Investments and other
|
| (1 | ) | | | (1 | ) | |||||||||||||
Net cash used by investing activities
|
(12 | ) | (23 | ) | | | (35 | ) | ||||||||||||
Financing Activities
|
||||||||||||||||||||
Issuance of long-term debt
|
| | 225 | | 225 | |||||||||||||||
Debt issuance cost on long-term debt
|
| | (5 | ) | | (5 | ) | |||||||||||||
Retirement of long-term debt
|
| (1 | ) | (245 | ) | | (246 | ) | ||||||||||||
Increase (decrease) in bank overdrafts
|
| 10 | | | 10 | |||||||||||||||
Net increase (decrease) in revolver borrowings and short-term
debt excluding current maturities of long-term debt
|
| 2 | 61 | | 63 | |||||||||||||||
Intercompany dividends and net increase (decrease) in
intercompany obligations
|
35 | (22 | ) | (13 | ) | | | |||||||||||||
Distribution to noncontrolling interests partners
|
| (3 | ) | | | (3 | ) | |||||||||||||
Net cash provided (used) by financing activities
|
35 | (14 | ) | 23 | | 44 | ||||||||||||||
Effect of foreign exchange rate changes on cash and cash
equivalents
|
| 12 | | | 12 | |||||||||||||||
Increase (decrease) in cash and cash equivalents
|
(2 | ) | 40 | | | 38 | ||||||||||||||
Cash and cash equivalents, July 1
|
2 | 144 | | | 146 | |||||||||||||||
Cash and cash equivalents, September 30 (Note)
|
$ | | $ | 184 | $ | | $ | | $ | 184 | ||||||||||
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
36
Nine Months Ended September 30, 2011 | ||||||||||||||||||||
Tenneco Inc. |
||||||||||||||||||||
Guarantor |
Nonguarantor |
(Parent |
Reclass |
|||||||||||||||||
Subsidiaries | Subsidiaries | Company) | & Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Operating Activities
|
||||||||||||||||||||
Net cash provided (used) by operating activities
|
$ | 226 | $ | (13 | ) | $ | (169 | ) | $ | | $ | 44 | ||||||||
Investing Activities
|
||||||||||||||||||||
Proceeds from sale of assets
|
3 | 1 | | | 4 | |||||||||||||||
Cash payments for plant, property, and equipment
|
(44 | ) | (101 | ) | | | (145 | ) | ||||||||||||
Cash payments for software related intangible assets
|
(3 | ) | (7 | ) | | | (10 | ) | ||||||||||||
Net cash used by investing activities
|
(44 | ) | (107 | ) | | | (151 | ) | ||||||||||||
Financing Activities
|
||||||||||||||||||||
Issuance of long-term debt
|
| 5 | | | 5 | |||||||||||||||
Debt issuance cost of long-term debt
|
| | (1 | ) | | (1 | ) | |||||||||||||
Retirement of long-term debt
|
| (1 | ) | (22 | ) | | (23 | ) | ||||||||||||
Increase (decrease) in bank overdrafts
|
| 3 | | | 3 | |||||||||||||||
Net increase (decrease) in revolver borrowings and short-term
debt excluding current maturities of long-term debt
|
| 11 | 97 | | 108 | |||||||||||||||
Intercompany dividends and net increase (decrease) in
intercompany obligations
|
(180 | ) | 69 | 111 | | | ||||||||||||||
Capital contribution from noncontrolling interest partner
|
| 1 | | | 1 | |||||||||||||||
Purchase of additional noncontrolling equity interest
|
| (4 | ) | | | (4 | ) | |||||||||||||
Distribution to noncontrolling interest partners
|
| (20 | ) | | | (20 | ) | |||||||||||||
Purchase of common stock under the share repurchase program
|
| | (16 | ) | | (16 | ) | |||||||||||||
Net cash provided (used) by financing activities
|
(180 | ) | 64 | 169 | | 53 | ||||||||||||||
Effect of foreign exchange rate changes on cash and cash
equivalents
|
| (16 | ) | | | (16 | ) | |||||||||||||
Increase (decrease) in cash and cash equivalents
|
2 | (72 | ) | | | (70 | ) | |||||||||||||
Cash and cash equivalents, January 1
|
| 233 | | | 233 | |||||||||||||||
Cash and cash equivalents, September 30 (Note)
|
$ | 2 | $ | 161 | $ | | $ | | $ | 163 | ||||||||||
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
37
Nine Months Ended September 30, 2010 | ||||||||||||||||||||
Tenneco Inc. |
||||||||||||||||||||
Guarantor |
Nonguarantor |
(Parent |
Reclass |
|||||||||||||||||
Subsidiaries | Subsidiaries | Company) | & Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Operating Activities
|
||||||||||||||||||||
Net cash provided (used) by operating activities
|
$ | (88 | ) | $ | 292 | $ | (140 | ) | $ | | $ | 64 | ||||||||
Investing Activities
|
||||||||||||||||||||
Proceeds from sale of assets
|
1 | 2 | | | 3 | |||||||||||||||
Cash payments for plant, property, and equipment
|
(40 | ) | (65 | ) | | | (105 | ) | ||||||||||||
Cash payments for software related intangible assets
|
(7 | ) | (4 | ) | | | (11 | ) | ||||||||||||
Investments and other
|
| 1 | | | 1 | |||||||||||||||
Net cash used by investing activities
|
(46 | ) | (66 | ) | | | (112 | ) | ||||||||||||
Financing Activities
|
||||||||||||||||||||
Issuance of long-term debt
|
| 5 | 375 | | 380 | |||||||||||||||
Debt issuance cost on long-term debt
|
| | (14 | ) | | (14 | ) | |||||||||||||
Retirement of long-term debt
|
| (3 | ) | (380 | ) | | (383 | ) | ||||||||||||
Increase (decrease) in bank overdrafts
|
| 12 | | | 12 | |||||||||||||||
Net increase (decrease) in revolver borrowings and short-term
debt excluding current maturities of long-term debt
|
| (3 | ) | 86 | | 83 | ||||||||||||||
Intercompany dividends and net increase (decrease) in
intercompany obligations
|
114 | (187 | ) | 73 | | | ||||||||||||||
Distribution to noncontrolling interests partners
|
| (14 | ) | | | (14 | ) | |||||||||||||
Net cash provided (used) by financing activities
|
114 | (190 | ) | 140 | | 64 | ||||||||||||||
Effect of foreign exchange rate changes on cash and cash
equivalents
|
| 1 | | | 1 | |||||||||||||||
Increase (decrease) in cash and cash equivalents
|
(20 | ) | 37 | | | 17 | ||||||||||||||
Cash and cash equivalents, January 1
|
20 | 147 | | | 167 | |||||||||||||||
Cash and cash equivalents, September 30 (Note)
|
$ | | $ | 184 | $ | | $ | | $ | 184 | ||||||||||
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
38
ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Quarter ended September 30, 2010
|
$ | 1,280 | ||
Volume and mix
|
155 | |||
Material
|
15 | |||
Currency exchange rates
|
45 | |||
Restructuring
|
(4 | ) | ||
Other Costs
|
1 | |||
Quarter ended September 30, 2011
|
$ | 1,492 | ||
39
40
Nine months ended September 30, 2010
|
$ | 3,575 | ||
Volume and mix
|
698 | |||
Material
|
54 | |||
Currency exchange rates
|
186 | |||
Restructuring
|
(11 | ) | ||
Other Costs
|
21 | |||
Nine months ended September 30, 2011
|
$ | 4,523 | ||
41
42
Three Months Ended September 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
|
$ | 149 | $ | 1 | $ | 148 | $ | | $ | 148 | ||||||||||
Emission Control
|
500 | | 500 | 225 | 275 | |||||||||||||||
Total North America Original Equipment
|
649 | 1 | 648 | 225 | 423 | |||||||||||||||
North America Aftermarket
|
||||||||||||||||||||
Ride Control
|
133 | 1 | 132 | | 132 | |||||||||||||||
Emission Control
|
60 | 1 | 59 | | 59 | |||||||||||||||
Total North America Aftermarket
|
193 | 2 | 191 | | 191 | |||||||||||||||
Total North America
|
842 | 3 | 839 | 225 | 614 | |||||||||||||||
Europe Original Equipment
|
||||||||||||||||||||
Ride Control
|
138 | 8 | 130 | | 130 | |||||||||||||||
Emission Control
|
335 | 19 | 316 | 110 | 206 | |||||||||||||||
Total Europe Original Equipment
|
473 | 27 | 446 | 110 | 336 | |||||||||||||||
Europe Aftermarket
|
||||||||||||||||||||
Ride Control
|
57 | 2 | 55 | | 55 | |||||||||||||||
Emission Control
|
35 | 2 | 33 | | 33 | |||||||||||||||
Total Europe Aftermarket
|
92 | 4 | 88 | | 88 | |||||||||||||||
South America & India
|
162 | 3 | 159 | 26 | 133 | |||||||||||||||
Total Europe, South America & India
|
727 | 34 | 693 | 136 | 557 | |||||||||||||||
Asia
|
159 | 8 | 151 | 26 | 125 | |||||||||||||||
Australia
|
45 | 6 | 39 | 3 | 36 | |||||||||||||||
Total Asia Pacific
|
204 | 14 | 190 | 29 | 161 | |||||||||||||||
Total Tenneco
|
$ | 1,773 | $ | 51 | $ | 1,722 | $ | 390 | $ | 1,332 | ||||||||||
43
Three Months Ended September 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
|
$ | 133 | $ | | $ | 133 | $ | | $ | 133 | ||||||||||
Emission Control
|
457 | | 457 | 216 | 241 | |||||||||||||||
Total North America Original Equipment
|
590 | | 590 | 216 | 374 | |||||||||||||||
North America Aftermarket
|
||||||||||||||||||||
Ride Control
|
125 | | 125 | | 125 | |||||||||||||||
Emission Control
|
47 | | 47 | | 47 | |||||||||||||||
Total North America Aftermarket
|
172 | | 172 | | 172 | |||||||||||||||
Total North America
|
762 | | 762 | 216 | 546 | |||||||||||||||
Europe Original Equipment
|
||||||||||||||||||||
Ride Control
|
110 | | 110 | | 110 | |||||||||||||||
Emission Control
|
270 | | 270 | 88 | 182 | |||||||||||||||
Total Europe Original Equipment
|
380 | | 380 | 88 | 292 | |||||||||||||||
Europe Aftermarket
|
||||||||||||||||||||
Ride Control
|
50 | | 50 | | 50 | |||||||||||||||
Emission Control
|
40 | | 40 | | 40 | |||||||||||||||
Total Europe Aftermarket
|
90 | | 90 | | 90 | |||||||||||||||
South America & India
|
143 | | 143 | 24 | 119 | |||||||||||||||
Total Europe, South America & India
|
613 | | 613 | 112 | 501 | |||||||||||||||
Asia
|
127 | | 127 | 26 | 101 | |||||||||||||||
Australia
|
40 | | 40 | 3 | 37 | |||||||||||||||
Total Asia Pacific
|
167 | | 167 | 29 | 138 | |||||||||||||||
Total Tenneco
|
$ | 1,542 | $ | | $ | 1,542 | $ | 357 | $ | 1,185 | ||||||||||
44
Three Months Ended September 30, 2011 |
||||||||||||||||
Versus Three Months Ended September 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
|
$ | 16 | 13 | % | $ | 15 | 12 | % | ||||||||
Emission Control
|
43 | 9 | % | 34 | 14 | % | ||||||||||
Total North America Original Equipment
|
59 | 10 | % | 49 | 13 | % | ||||||||||
North America Aftermarket
|
||||||||||||||||
Ride Control
|
8 | 7 | % | 7 | 6 | % | ||||||||||
Emission Control
|
13 | 25 | % | 12 | 24 | % | ||||||||||
Total North America Aftermarket
|
21 | 12 | % | 19 | 11 | % | ||||||||||
Total North America
|
80 | 10 | % | 68 | 12 | % | ||||||||||
Europe Original Equipment
|
||||||||||||||||
Ride Control
|
28 | 26 | % | 20 | 19 | % | ||||||||||
Emission Control
|
65 | 24 | % | 24 | 14 | % | ||||||||||
Total Europe Original Equipment
|
93 | 25 | % | 44 | 16 | % | ||||||||||
Europe Aftermarket
|
||||||||||||||||
Ride Control
|
7 | 12 | % | 5 | 8 | % | ||||||||||
Emission Control
|
(5 | ) | (12 | )% | (7 | ) | (18 | )% | ||||||||
Total Europe Aftermarket
|
2 | 1 | % | (2 | ) | (3 | )% | |||||||||
South America & India
|
19 | 13 | % | 14 | 12 | % | ||||||||||
Total Europe, South America & India
|
114 | 19 | % | 56 | 11 | % | ||||||||||
Asia
|
32 | 25 | % | 24 | 24 | % | ||||||||||
Australia
|
5 | 14 | % | (1 | ) | (2 | )% | |||||||||
Total Asia Pacific
|
37 | 23 | % | 23 | 17 | % | ||||||||||
Total Tenneco
|
$ | 231 | 15 | % | $ | 147 | 13 | % | ||||||||
Three Months Ended September 30, | ||||||||||||||||
Increase |
% Increase |
|||||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(Number of Vehicles in Thousands) | ||||||||||||||||
North America
|
3,150 | 2,981 | 169 | 6 | % | |||||||||||
Europe
|
4,527 | 4,418 | 109 | 2 | % | |||||||||||
South America
|
1,144 | 1,103 | 41 | 4 | % | |||||||||||
India
|
879 | 850 | 29 | 3 | % | |||||||||||
Total Europe, South America & India
|
6,550 | 6,371 | 179 | 3 | % | |||||||||||
China
|
4,099 | 3,783 | 316 | 8 | % | |||||||||||
Australia
|
65 | 63 | 2 | 3 | % |
45
46
Nine Months Ended September 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
|
$ | 462 | $ | 5 | $ | 457 | $ | | $ | 457 | ||||||||||
Emission Control
|
1,546 | | 1,546 | 720 | 826 | |||||||||||||||
Total North America Original Equipment
|
2,008 | 5 | 2,003 | 720 | 1,283 | |||||||||||||||
North America Aftermarket
|
||||||||||||||||||||
Ride Control
|
405 | 4 | 401 | | 401 | |||||||||||||||
Emission Control
|
154 | 2 | 152 | | 152 | |||||||||||||||
Total North America Aftermarket
|
559 | 6 | 553 | | 553 | |||||||||||||||
Total North America
|
2,567 | 11 | 2,556 | 720 | 1,836 | |||||||||||||||
Europe Original Equipment
|
||||||||||||||||||||
Ride Control
|
428 | 31 | 397 | | 397 | |||||||||||||||
Emission Control
|
1,096 | 86 | 1,010 | 344 | 666 | |||||||||||||||
Total Europe Original Equipment
|
1,524 | 117 | 1,407 | 344 | 1,063 | |||||||||||||||
Europe Aftermarket
|
||||||||||||||||||||
Ride Control
|
171 | 13 | 158 | | 158 | |||||||||||||||
Emission Control
|
109 | 9 | 100 | | 100 | |||||||||||||||
Total Europe Aftermarket
|
280 | 22 | 258 | | 258 | |||||||||||||||
South America & India
|
481 | 21 | 460 | 79 | 381 | |||||||||||||||
Total Europe, South America & India
|
2,285 | 160 | 2,125 | 423 | 1,702 | |||||||||||||||
Asia
|
445 | 21 | 424 | 69 | 355 | |||||||||||||||
Australia
|
124 | 19 | 105 | 8 | 97 | |||||||||||||||
Total Asia Pacific
|
569 | 40 | 529 | 77 | 452 | |||||||||||||||
Total Tenneco
|
$ | 5,421 | $ | 211 | $ | 5,210 | $ | 1,220 | $ | 3,990 | ||||||||||
47
Nine Months Ended September 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
|
$ | 401 | $ | | $ | 401 | $ | | $ | 401 | ||||||||||
Emission Control
|
1,200 | | 1,200 | 532 | 668 | |||||||||||||||
Total North America Original Equipment
|
1,601 | | 1,601 | 532 | 1,069 | |||||||||||||||
North America Aftermarket
|
||||||||||||||||||||
Ride Control
|
376 | | 376 | | 376 | |||||||||||||||
Emission Control
|
128 | | 128 | | 128 | |||||||||||||||
Total North America Aftermarket
|
504 | | 504 | | 504 | |||||||||||||||
Total North America
|
2,105 | | 2,105 | 532 | 1,573 | |||||||||||||||
Europe Original Equipment
|
||||||||||||||||||||
Ride Control
|
340 | | 340 | | 340 | |||||||||||||||
Emission Control
|
805 | | 805 | 253 | 552 | |||||||||||||||
Total Europe Original Equipment
|
1,145 | | 1,145 | 253 | 892 | |||||||||||||||
Europe Aftermarket
|
||||||||||||||||||||
Ride Control
|
145 | | 145 | | 145 | |||||||||||||||
Emission Control
|
108 | | 108 | | 108 | |||||||||||||||
Total Europe Aftermarket
|
253 | | 253 | | 253 | |||||||||||||||
South America & India
|
382 | | 382 | 51 | 331 | |||||||||||||||
Total Europe, South America & India
|
1,780 | | 1,780 | 304 | 1,476 | |||||||||||||||
Asia
|
359 | | 359 | 78 | 281 | |||||||||||||||
Australia
|
116 | | 116 | 8 | 108 | |||||||||||||||
Total Asia Pacific
|
475 | | 475 | 86 | 389 | |||||||||||||||
Total Tenneco
|
$ | 4,360 | $ | | $ | 4,360 | $ | 922 | $ | 3,438 | ||||||||||
48
Nine Months Ended September 30, 2011 |
||||||||||||||||
Versus Nine Months Ended September 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
|
$ | 61 | 15 | % | $ | 56 | 14 | % | ||||||||
Emission Control
|
346 | 29 | % | 158 | 23 | % | ||||||||||
Total North America Original Equipment
|
407 | 25 | % | 214 | 20 | % | ||||||||||
North America Aftermarket
|
||||||||||||||||
Ride Control
|
29 | 8 | % | 25 | 7 | % | ||||||||||
Emission Control
|
26 | 20 | % | 24 | 18 | % | ||||||||||
Total North America Aftermarket
|
55 | 11 | % | 49 | 10 | % | ||||||||||
Total North America
|
462 | 22 | % | 263 | 17 | % | ||||||||||
Europe Original Equipment
|
||||||||||||||||
Ride Control
|
88 | 26 | % | 57 | 17 | % | ||||||||||
Emission Control
|
291 | 36 | % | 114 | 21 | % | ||||||||||
Total Europe Original Equipment
|
379 | 33 | % | 171 | 19 | % | ||||||||||
Europe Aftermarket
|
||||||||||||||||
Ride Control
|
26 | 17 | % | 13 | 9 | % | ||||||||||
Emission Control
|
1 | 1 | % | (8 | ) | (7 | )% | |||||||||
Total Europe Aftermarket
|
27 | 11 | % | 5 | 2 | % | ||||||||||
South America & India
|
99 | 26 | % | 50 | 15 | % | ||||||||||
Total Europe, South America & India
|
505 | 28 | % | 226 | 15 | % | ||||||||||
Asia
|
86 | 24 | % | 74 | 26 | % | ||||||||||
Australia
|
8 | 7 | % | (11 | ) | (10 | )% | |||||||||
Total Asia Pacific
|
94 | 20 | % | 63 | 16 | % | ||||||||||
Total Tenneco
|
$ | 1,061 | 24 | % | $ | 552 | 16 | % | ||||||||
Nine Months Ended September 30, | ||||||||||||||||
Increase |
% Increase |
|||||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(Number of Vehicles in Thousands) | ||||||||||||||||
North America
|
9,649 | 8,968 | 681 | 8 | % | |||||||||||
Europe
|
15,211 | 14,229 | 982 | 7 | % | |||||||||||
South America
|
3,297 | 3,084 | 213 | 7 | % | |||||||||||
India
|
2,726 | 2,380 | 346 | 15 | % | |||||||||||
Total Europe, South America & India
|
21,234 | 19,693 | 1,541 | 8 | % | |||||||||||
China
|
12,548 | 11,740 | 808 | 7 | % | |||||||||||
Australia
|
173 | 191 | (18 | ) | (9 | )% |
49
Three Months |
||||||||||||
Ended |
||||||||||||
September 30, | ||||||||||||
2011 | 2010 | Change | ||||||||||
(Millions) | ||||||||||||
North America
|
$ | 46 | $ | 42 | $ | 4 | ||||||
Europe, South America and India
|
36 | 15 | 21 | |||||||||
Asia Pacific
|
2 | 10 | (8 | ) | ||||||||
$ | 84 | $ | 67 | $ | 17 | |||||||
50
Three Months |
||||||||
Ended |
||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
(Millions) | ||||||||
North America
|
||||||||
Restructuring and related expenses
|
$ | | $ | 5 | ||||
Pension Charge(1)
|
| 4 | ||||||
Europe, South America and India
|
||||||||
Restructuring and related expenses
|
1 | | ||||||
Asia Pacific
|
||||||||
Restructuring and related expenses
|
3 | 1 | ||||||
Goodwill impairment charge(2)
|
11 | |
(1) | Represents a charge related to an actuarial loss for a lump-sum pension payment in a non-qualified pension plan in which one current and three former employees were participants. Lump-sum pension payments are required when participants retire or when they turn 55. One former employee turned 55 in the third quarter 2010. | |
(2) | Non-cash asset impairment charge related to goodwill for Tennecos Australian reporting unit. |
51
Three Months |
||||||||
Ended |
||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
North America
|
6 | % | 6 | % | ||||
Europe, South America & India
|
5 | % | 2 | % | ||||
Asia Pacific
|
1 | % | 6 | % | ||||
Total Tenneco
|
5 | % | 4 | % |
Nine Months |
||||||||||||
Ended |
||||||||||||
September 30, | ||||||||||||
2011 | 2010 | Change | ||||||||||
(Millions) | ||||||||||||
North America
|
$ | 170 | $ | 128 | $ | 42 | ||||||
Europe, South America & India
|
97 | 57 | 40 | |||||||||
Asia Pacific
|
24 | 34 | (10 | ) | ||||||||
$ | 291 | $ | 219 | $ | 72 | |||||||
Nine Months |
||||||||
Ended |
||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
(Millions) | ||||||||
North America
|
||||||||
Restructuring and related expenses
|
$ | 1 | $ | 12 | ||||
Pension Charge(1)
|
| 4 | ||||||
Europe, South America & India
|
||||||||
Restructuring and related expenses
|
3 | 2 | ||||||
Asia Pacific
|
||||||||
Restructuring and related expenses
|
3 | 1 | ||||||
Goodwill impairment charge(2)
|
11 | |
52
(1) | Represents a charge related to an actuarial loss for a lump-sum pension payment. | |
(2) | Non-cash asset impairment charge related to goodwill for Tennecos Australian reporting unit. |
Nine Months |
||||||||
Ended |
||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
North America
|
7 | % | 6 | % | ||||
Europe, South America & India
|
4 | % | 3 | % | ||||
Asia Pacific
|
4 | % | 7 | % | ||||
Total Tenneco
|
5 | % | 5 | % |
53
54
December 31, |
September 30, |
|||||||||||||||||||||||
2010 |
2011 |
Impact of |
2011 |
|||||||||||||||||||||
Restructuring |
2011 |
Cash |
Exchange |
Reserve |
Restructuring |
|||||||||||||||||||
Reserve | Expenses | Payments | Rates | Adjustments | Reserve | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Severance
|
$ | 7 | 7 | (12 | ) | | (1 | ) | $ | 1 |
55
Three Months |
||||||||
Ended |
||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
(Millions) | ||||||||
Cash provided (used) by:
|
||||||||
Operating activities
|
$ | 80 | $ | 17 | ||||
Investing activities
|
(54 | ) | (35 | ) | ||||
Financing activities
|
(3 | ) | 44 |
56
Nine Months |
||||||||
Ended |
||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
(Millions) | ||||||||
Cash provided (used) by:
|
||||||||
Operating activities
|
$ | 44 | $ | 64 | ||||
Investing activities
|
(151 | ) | (112 | ) | ||||
Financing activities
|
53 | 64 |
57
58
59
| 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. |
60
61
September 30, |
December 31, |
|||||||||||
2011 | 2010 | % Change | ||||||||||
(Millions) | ||||||||||||
Short-term debt and maturities classified as current
|
$ | 70 | $ | 63 | 11 | % | ||||||
Long-term debt
|
1,234 | 1,160 | 6 | |||||||||
Total debt
|
1,304 | 1,223 | 7 | |||||||||
Total redeemable noncontrolling interests
|
10 | 12 | (17 | ) | ||||||||
Total noncontrolling interests
|
37 | 39 | (5 | ) | ||||||||
Tenneco Inc. shareholders equity
|
83 | (4 | ) | NM | ||||||||
Total equity
|
120 | 35 | 243 | |||||||||
Total capitalization
|
$ | 1,434 | $ | 1,270 | 13 | |||||||
62
63
8/14/2009 |
3/1/2010 |
6/3/2010 |
2/28/2011 |
5/16/2011 |
||||||||||||||||||||
thru |
thru |
thru |
thru |
thru |
Beginning |
|||||||||||||||||||
2/28/2010 | 6/2/2010 | 2/27/2011 | 5/15/2011 | 8/7/2011 | 8/8/2011 | |||||||||||||||||||
Applicable Margin over:
|
||||||||||||||||||||||||
LIBOR for Revolving Loans
|
5.50 | % | 4.50 | % | 4.50 | % | 4.25 | % | 4.50 | % | 4.25 | % | ||||||||||||
LIBOR for Term Loan B Loans
|
| | 4.75 | % | 4.50 | % | 4.75 | % | 4.50 | % | ||||||||||||||
LIBOR for Term Loan A Loans
|
5.50 | % | 4.50 | % | | | | | ||||||||||||||||
LIBOR for
Tranche B-1
Loans
|
5.50 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | ||||||||||||
Prime-based Loans
|
4.50 | % | 3.50 | % | | | | | ||||||||||||||||
Prime for Revolving Loans
|
| | 3.50 | % | 3.25 | % | 3.50 | % | 3.25 | % | ||||||||||||||
Prime for Term Loan B Loans
|
| | 3.75 | % | 3.50 | % | 3.75 | % | 3.50 | % | ||||||||||||||
Prime for
Tranche B-1
Loans
|
| | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | ||||||||||||||
Federal Funds for Revolving Loans
|
| | 3.50 | % | 3.25 | % | 3.50 | % | 3.25 | % | ||||||||||||||
Federal Funds for Term Loan B Loans
|
| | 3.75 | % | 3.50 | % | 3.75 | % | 3.50 | % | ||||||||||||||
Federal Funds for
Tranche B-1
Loans
|
5.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | ||||||||||||
Commitment Fee
|
0.75 | % | 0.50 | % | 0.75 | % | 0.50 | % | 0.75 | % | 0.50 | % |
Quarter Ended | ||||||||||||||||||||||||
March 31, |
June 30, |
September 30, |
||||||||||||||||||||||
2011 | 2011 | 2011 | ||||||||||||||||||||||
Req. | Act. | Req. | Act. | Req. | Act. | |||||||||||||||||||
Leverage Ratio (maximum)
|
4.00 | 2.32 | 3.75 | 2.17 | 3.50 | 2.07 | ||||||||||||||||||
Interest Coverage Ratio (minimum)
|
2.55 | 4.37 | 2.55 | 4.76 | 2.55 | 5.17 |
64
Interest |
||||||||
Leverage |
Coverage |
|||||||
Period Ending | Ratio | Ratio | ||||||
December 31, 2011
|
3.50 | 2.55 | ||||||
Each quarter thereafter
|
3.50 | 2.75 |
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 |
65
66
67
Notional Amount |
||||||
in Foreign Currency | ||||||
(Millions) | ||||||
Australian dollars
|
Purchase | 2 | ||||
British pounds
|
Purchase | 4 | ||||
European euro
|
Sell | (9 | ) | |||
Japanese yen
|
Purchase | 442 | ||||
South African rand
|
Purchase | 162 | ||||
U.S. dollars
|
Purchase | 1 | ||||
Sell | (23 | ) | ||||
Other
|
Sell | (1 | ) |
68
69
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
70
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 | ||||||||||||
July 2011
|
76,684 | $ | 43.28 | 75,500 | 54,000 | |||||||||||
August 2011
|
54,018 | $ | 40.43 | 54,000 | | |||||||||||
Total
|
130,702 | $ | 42.10 | 129,500 | |
71
By: |
/s/ Kenneth
R. Trammell
|
72
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. |
73
Nine Months |
||||||||
Ended |
||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
(Dollars in Millions) | ||||||||
Net income attributable to Tenneco Inc.
|
$ | 127 | $ | 57 | ||||
Add:
|
||||||||
Interest expense
|
81 | 100 | ||||||
Portion of rentals representative of the interest factor
|
13 | 11 | ||||||
Income tax expense and other taxes on income
|
65 | 45 | ||||||
Noncontrolling interest
|
18 | 17 | ||||||
Amortization of interest capitalized
|
3 | 3 | ||||||
Earnings as defined
|
$ | 307 | $ | 233 | ||||
Interest expense
|
$ | 81 | $ | 100 | ||||
Interest capitalized
|
3 | 3 | ||||||
Portion of rentals representative of the interest factor
|
13 | 11 | ||||||
Fixed charges as defined
|
$ | 97 | $ | 114 | ||||
Ratio of earnings to fixed charges
|
3.16 | 2.04 | ||||||
Common Stock (Details Textual) (USD $) In Millions, except Share data | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2011
Nonqualified Stock Option [Member] | Sep. 30, 2010
Nonqualified Stock Option [Member] | Sep. 30, 2011
Nonqualified Stock Option [Member] | Sep. 30, 2010
Nonqualified Stock Option [Member] | |
Impact of recognizing compensation expense | ||||||
Compensation expense related to nonqualified stock options | $ 1 | $ 2 | $ 2 | |||
Compensation expense related to nonqualified stock options | less than 1 million | |||||
Decrease in basic earnings per share | $ 0.01 | $ 0.01 | $ 0.04 | $ 0.04 | ||
Decrease in diluted earnings per share | $ 0.01 | $ 0.01 | $ 0.04 | $ 0.04 | ||
Common Stock (Textual) [Abstract] | ||||||
Authorized Outstanding common stock for repurchase | 400,000 | |||||
Stock Repurchase Duration | 12 months | |||||
Repurchased stock | 400,000 | |||||
Treasury Stock Shares | 1,694,692 | 1,294,692 | ||||
Payment for treasury shares | $ 16 |
Condensed Consolidated Statements of Income (Unaudited) (Parenthetical) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Condensed Consolidated Statements of Income [Abstract] | ||||
Interest capitalized | $ 1 | $ 1 | $ 3 | $ 3 |
Pension Plans, Postretirement and Other Employee Benefits (Details Textual) (USD $) In Millions | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Pension and Postretirement Benefit Plans (Textual) [Abstract] | |
Expected Contribution | $ 11 |
United States Pension Plans Of US Entity Defined Benefit [Member] | |
Pension and Postretirement Benefit Plans (Textual) [Abstract] | |
Pension and Postretirement Contributions | 17 |
Foreign Pension Plans Defined Benefit [Member] | |
Pension and Postretirement Benefit Plans (Textual) [Abstract] | |
Pension and Postretirement Contributions | 16 |
United States Postretirement Benefit Plans Of US Entity Defined Benefit [Member] | |
Pension and Postretirement Benefit Plans (Textual) [Abstract] | |
Pension and Postretirement Contributions | 6 |
Expected Contribution | $ 3 |
Financial Instruments (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying and estimated fair value |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange forward contracts fair value on gross basis |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of financial assets and liabilities on recurring basis |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarization for foreign currency forward purchase and sale contracts |
|
Document and Entity Information (USD $) | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | Oct. 31, 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 | Sep. 30, 2011 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q3 | ||
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 | 60,296,327 |
Common Stock (Details 1) (USD $) In Millions, except Share data, unless otherwise specified | 3 Months Ended | ||
---|---|---|---|
Sep. 30, 2011
Year | Jun. 30, 2011
Year | Mar. 31, 2011
Year | |
Stock options status and activity | |||
Shares Under Option Outstanding Beginning Balance | 3,032,224 | 3,135,520 | 3,129,241 |
Weighted Avg. Exercise Prices, Outstanding, Beginning Balance | $ 16.71 | $ 16.53 | $ 14.43 |
Weighted Avg. Remaining Life In Years, Beginning Balance | 4.2 | 4.4 | 4.3 |
Aggregate Intrinsic Value, Outstanding, Beginning Balance | $ 76 | $ 80 | $ 68 |
Shares Under Option, Granted | 1,649 | 2,711 | 201,133 |
Weighted Avg. Exercise Prices, Granted | $ 44.02 | $ 43.51 | $ 45.42 |
Shares Under Option Expired | (56,046) | ||
Weighted Avg Exercise Price Expired | $ 3.66 | ||
Shares Under Option, Forfeited | (450) | (23,841) | (13,184) |
Weighted Avg. Exercise Prices, Forfeited | $ 4.03 | $ 14.26 | $ 9.36 |
Shares Under Option, Exercised | (115,249) | (82,166) | (125,624) |
Weighted Avg. Exercise Prices, Exercised | $ 8.94 | $ 11.50 | $ 17.10 |
Aggregate Intrinsic Value, Exercised | 3 | 3 | 3 |
Shares Under Option Outstanding Ending Balance | 2,918,174 | 3,032,224 | 3,135,520 |
Weighted Avg. Exercise Prices, Outstanding, Ending Balance | $ 17.03 | $ 16.71 | $ 16.53 |
Weighted Avg. Remaining Life In Years, Ending Balance | 4.0 | 4.2 | 4.4 |
Aggregate Intrinsic Value, Outstanding, Ending Balance | $ 54 | $ 76 | $ 80 |
Environmental Matters, Litigation and Product Warranties (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Environmental Matters, Litigation and Product Warranties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warranty accrual rollforward |
|
Common Stock (Details) (USD $) | 9 Months Ended | |
---|---|---|
Sep. 30, 2011
Year
Claim
State | Sep. 30, 2010
Year | |
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 | 9 Months Ended | ||||
---|---|---|---|---|---|
Sep. 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 September 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
$140 million and $91 million at September 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 interest expense of
less than $1 million in the three month period ending
September 30, 2011 and $1 million in the three month
period ended September 30, 2010, and $2 million and
$3 million for each of the nine month periods ended
September 30, 2011 and 2010 respectively, relating to our
North American securitization program. In addition, we
recognized a loss of $1 million in each of the three month
periods ended September 30, 2011 and 2010, respectively,
and $4 million and $3 million for the nine month
periods ended September 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
four percent during the first nine months of 2011 and 2010,
respectively.
|
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Earnings per share of common stock |
|
Restructuring and Goodwill Impairment Charge (Details Textual) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 24 Months Ended | 3 Months Ended | ||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2010 | Sep. 30, 2011
Cost of sales [Member] | Sep. 30, 2011
Cost of sales [Member] | Dec. 31, 2010
Cost of sales [Member] | Dec. 31, 2010
Depreciation And Amortization Expenses [Member] | Sep. 30, 2011
Cozad Plant Closing [Member]
Position | Dec. 31, 2010
Cozad Plant Closing [Member] | Dec. 31, 2009
Cozad Plant Closing [Member] | Dec. 31, 2010
Cozad Plant Closing [Member] | Sep. 30, 2011
Australia Reporting Unit [Member]
Position | |
Restructuring and Other Charges (Textual) [Abstract] | ||||||||||||||
Restructuring and Related Costs | $ 19 | $ 4 | $ 7 | $ 14 | $ 5 | $ 10 | $ 11 | |||||||
Restructuring and Related Costs settled with Cash | 1 | 16 | 3 | |||||||||||
Percentage of expected number of positions eliminated realized | More than 95% | |||||||||||||
Net decrease in number of positions | 60 | 53 | ||||||||||||
Restructuring Related Costs, Expected Number of Positions Eliminated | 500 | |||||||||||||
Goodwill impairment charge | 11 | 0 | 11 | 0 | 11 | |||||||||
Additional Restructuring and Other Charges (Textual) [Abstract] | ||||||||||||||
Restructuring And Related Cost Allowed To Be Excluded From The Calculation Of Financial Covenant Ratios | 60 | 60 | ||||||||||||
Cumulative amount of allowable exclusions recognized in calculation of financial covenant ratios | $ 17 | $ 17 |
Long Term Debt and Financing Arrangements (Details Textual) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 12 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2011 | Sep. 30, 2011 | Sep. 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] | Sep. 30, 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] | Sep. 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] | Sep. 30, 2011
6 7/8 percent senior notes due December 15, 2020 [Member] | Mar. 14, 2011
6 7/8 percent senior notes due December 15, 2020 [Member] | Dec. 23, 2010
6 7/8 percent senior notes due December 15, 2020 [Member] | Sep. 30, 2011
Senior Credit Facility [Member] | Dec. 31, 2010
Senior Credit Facility [Member] | Jun. 03, 2010
Term Loan A Facility, Senior Credit Facility [Member] | Sep. 30, 2011
Revolving credit facility, matures May 31, 2014 [Member] | Sep. 30, 2011
Revolving credit facility March 17, 2012 thru May 31, 2014 [Member] | Sep. 30, 2011
Senior credit facility, matures March 16, 2012 [Member] | Sep. 30, 2011
Tranche B One Letter of Credit and Revolving Loan Facilities, Senior Credit Facility [Member]
InterestRate | Sep. 30, 2011
Tranche B One Letter of Credit and Revolving Loan Facilities, Senior Credit Facility [Member]
InterestRate | Sep. 30, 2011
Term Loan B Facility, Senior Credit Facility [Member] | Sep. 30, 2011
Term Loan B and Revolving Credit Facility, Senior Credit Facility [Member]
InterestRate | Sep. 30, 2011
Term Loan B and Revolving Credit Facility, Senior Credit Facility [Member]
InterestRate | Sep. 30, 2011
Other Debt [Member] | Sep. 30, 2011
Letters of Credit, Senior Credit Facility [Member] | Sep. 30, 2011
Letters of Credit, Senior Credit Facility [Member] | Sep. 30, 2011
Senior Credit Facility Matures March 2014 [Member] | |
Long Term Debt (Textual) [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 | 752 | 752 | 148 | 130 | ||||||||||||||||||||||||||
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 | June, 2016 | March, 2014 | |||||||||||||||||||||||||||||
Debt covenants leverage ratio | 2.32% | 2.07% | 2.24% | |||||||||||||||||||||||||||||
Unsecured Debt | 225 | 250 | 500 | 84 | ||||||||||||||||||||||||||||
Secured Debt | 148 | |||||||||||||||||||||||||||||||
Debt instrument issued amount | 225 | 500 | ||||||||||||||||||||||||||||||
Unused borrowings capacity | 601 | 601 | ||||||||||||||||||||||||||||||
Expenses related to redemption | 5 | 20 | 1 | |||||||||||||||||||||||||||||
Outstanding borrowings in senior secured credit facility | 97 | 97 | ||||||||||||||||||||||||||||||
Line of credit facility letters of credit outstanding | 54 | 54 | ||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
Additional increase in interest rate on borrowings if Consolidated net leverage ratio is greater than or equal to 5.0 | 0.005 | 0.005 | ||||||||||||||||||||||||||||||
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 (Textual) [Abstract] | ||||||||||||||||||||||||||||||||
Maximum percentage of stock of certain first-tier foreign subsidiaries pledged to secure 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 Goodwill Impairment Charge (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restructuring and Goodwill Impairment Charge [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rollforward of Restructuring Reserve |
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Pension Plans, Postretirement and Other Employee Benefits | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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 nine months ended September 30, 2011, we made
pension contributions of $17 million for our domestic
pension plans and $16 million for our foreign pension
plans. Based on current actuarial estimates, we believe we will
be required to make approximately $11 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
$6 million during the first nine months of 2011. Based on
current actuarial estimates, we believe we will be required to
make approximately $3 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.
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Consolidation and Presentation | 9 Months Ended | ||||
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Sep. 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.
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Financial Instruments (Details 2) (Foreign Exchange Forward [Member], Level 2 [Member], Fair Value, Measurements, Recurring [Member], USD $) In Millions | Sep. 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 |
Financial Liabilities: | ||
Foreign Currency Contracts Liability At Fair Value | $ 2 | $ 0 |
Environmental Matters, Litigation and Product Warranties | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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
September 30, 2011, we have the obligation to remediate or
contribute towards the remediation of certain sites, including
one Federal Superfund site. At September 30, 2011, our
aggregated estimated share of environmental remediation costs
for all these sites on a discounted basis was approximately
$18 million, of which $5 million is recorded in other
current liabilities and $13 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
1.9 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 site, 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 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 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 | 9 Months Ended | ||||
---|---|---|---|---|---|
Sep. 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.
In September 2011, the FASB issued an amendment to the
accounting guidance for testing goodwill for impairment. This
amendment provides a reporting entity the option to first assess
qualitative factors to determine whether the existence of events
and circumstances leads to a determination that it is more
likely than not that the fair
value of a reporting unit is less than its carrying amount. If
the reporting entity’s assessment after considering all
events and circumstances is that it is not more likely than not
that its fair value is less than its carrying amount, then
performing the two-step impairment test is not required. If the
reporting entity concludes that it is more likely than not that
its fair value is less than its carrying amount then the first
step of the two-step impairment test is required. If the
carrying amount of the reporting unit exceeds its fair value,
then the reporting unit is required to perform the second step
of the goodwill impairment test to measure the amount of the
impairment loss. This amendment is effective for annual and
interim goodwill impairment tests performed for fiscal years
beginning after December 15, 2011. We do not believe the
adoption of this amendment on January 1, 2012 for testing
goodwill for impairment will have a material impact on our
condensed consolidated financial statements.
In September 2011, the FASB issued an amendment to the
accounting guidance relating to employers’ disclosures for
multiemployer pension and multiemployer other postretirement
benefit plans. The amendment requires additional disclosures
including a description of the nature of the plan benefits, a
qualitative description of an employer’s responsibility for
the obligations of the plan, including benefits earned by
employees during employment with another employer and other
quantitative information to help readers understand the
financial information about the plan such as total plan assets,
actuarial present value of accumulated plan benefits and total
contributions received by the plan. The amendment is effective
for annual periods for fiscal years ending after
December 15, 2011. We do not believe the adoption of this
amendment on January 1, 2012 will have a material impact on
our condensed consolidated financial statements. We will add
additional disclosures relating to our participation in
multiemployer pension plans beginning with the annual reporting
period ending December 31, 2011.
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Earnings Per Share | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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 202,009 and 1,385,988 shares of common
stock were outstanding as of September 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) | Sep. 30, 2011 |
---|---|
Maximum [Member] | |
Consolidation and Presentation (Textual) (Abstract) | |
Range of percentages of investments, equity method investments | 50.00% |
Minimum [Member] | |
Consolidation and Presentation (Textual) (Abstract) | |
Range of percentages of investments, equity method investments | 20.00% |
Restructuring and Goodwill Impairment Charge | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Goodwill Impairment Charge [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Goodwill Impairment Charge |
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 third quarter of 2011, we
incurred $4 million in restructuring and related costs, all
of which was recorded in cost of sales. For the first nine
months of 2011, we incurred $7 million in restructuring and
related costs, primarily related to headcount reductions in
Europe and Australia 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
September 30, 2011, we have excluded $17 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 were closing
our original equipment ride control plant in Cozad, Nebraska.
The closure of the Cozad plant will eliminate approximately 500
positions. 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. Much of the
production is being shifted from Cozad to our plant in Hartwell,
Georgia.
During the transition of production from our Cozad facility to
our Hartwell facility, several customer programs, which were
planned to phase out, were reinstated and volumes increased
beyond the amount in our original restructuring plan. To meet
the higher volume requirements, we have taken a number of
actions over the past few months to stabilize the production
environment in Hartwell including reinforcing several core
processes, realigning assembly lines, upgrading equipment to
increase output and accelerating our Lean manufacturing
activities. Based on the higher volumes, we are adjusting our
consolidation plan. Our revised consolidation plan includes
temporarily continuing some basic production operations in
Cozad, and redirecting some programs from our Hartwell facility
to our other North American facilities to better balance
production. These actions will take place over the next several
quarters. As of September 30, 2011, more than
95 percent of the positions at our Cozad facility have been
eliminated.
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. For the first
nine months of 2011, we have recorded an additional cash charge
of $1 million related to this initiative.
During the third quarter of 2011, we recorded $3 million of
restructuring and related expenses, all of which represented
cash expenditures, related to the permanent elimination of 53
positions in our Australia operations as a result of the
continued decline in industry production volumes in that region.
In addition, during the third quarter of 2011, we performed an
impairment evaluation within the Asia Pacific segment, of our
Australian reporting unit’s goodwill balance as a result of
continued deterioration of that reporting unit’s financial
performance driven primarily by significant declines in industry
production volumes in that region. The goodwill impairment test
consists of a two-step process. In step one, we compared the
estimated fair value for
our Australian reporting unit to the carrying value of its
assets and liabilities to determine if impairment exists. We
estimated the fair value of our Australian reporting unit using
the income approach which is based on the present value of
estimated future cash flows. The income approach is dependent on
a number of factors, including estimates of market trends,
forecast revenues and expenses, capital expenditures, weighted
average cost of capital and other variables. A separate discount
rate derived by a combination of published sources, internal
estimates and weighted based on our consolidated debt and equity
structure, was used to calculate the discounted cash flows of
our Australian reporting unit. These estimates are based on
assumptions that we believe to be reasonable, but which are
inherently uncertain and outside of the control of management.
We identified in our step one test that the carrying value of
our Australian reporting unit was higher than its fair value
which is an indication that impairment may exist which required
us to perform step two of the goodwill impairment test to
measure the amount of the impairment loss.
Step two of the goodwill impairment evaluation required us to
calculate the implied fair value of goodwill of our Australian
reporting unit by allocating the estimated fair value to the
assets and liabilities of this reporting unit as if the
reporting unit had been acquired in a business combination and
the fair value of the reporting unit was the acquisition price.
As a result of performing steps one and two of the goodwill
impairment test, we concluded that the remaining amount of
goodwill related to our Australian reporting unit was impaired
and accordingly, we recorded a goodwill impairment charge of
$11 million during the third quarter of 2011.
|
Pension Plans, Postretirement and Other Employee Benefits (Details) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
United States Pension Plans of US Entity, Defined Benefit [Member] | ||||
Pension Costs/Postretirement Costs | ||||
Service cost-benefits earned during the period | $ 1 | $ 1 | $ 1 | $ 1 |
Interest cost | 5 | 5 | 15 | 15 |
Expected return on plan assets | (6) | (5) | (17) | (15) |
Settlement Loss | 4 | 4 | ||
Net amortization: | ||||
Actuarial loss | 1 | 3 | 2 | |
Prior service cost (credit) | 0 | |||
Net pension and postretirement costs | 1 | 5 | 2 | 7 |
United States Postretirement Benefit Plans of US Entity, Defined Benefit [Member] | ||||
Pension Costs/Postretirement Costs | ||||
Service cost-benefits earned during the period | 0 | 0 | 1 | |
Interest cost | 2 | 2 | 6 | 6 |
Expected return on plan assets | 0 | 0 | ||
Settlement Loss | 0 | 0 | ||
Net amortization: | ||||
Actuarial loss | 1 | 2 | 3 | 4 |
Prior service cost (credit) | (1) | (2) | (4) | (5) |
Net pension and postretirement costs | 2 | 2 | 5 | 6 |
Foreign Pension Plans, Defined Benefit [Member] | ||||
Pension Costs/Postretirement Costs | ||||
Service cost-benefits earned during the period | 2 | 1 | 5 | 4 |
Interest cost | 5 | 5 | 15 | 14 |
Expected return on plan assets | (5) | (5) | (15) | (15) |
Net amortization: | ||||
Actuarial loss | 1 | 1 | 4 | 3 |
Prior service cost (credit) | 0 | 1 | 1 | |
Net pension and postretirement costs | $ 3 | $ 2 | $ 10 | $ 7 |
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 Equity | 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 | ||||||
Common Stock issued pursuant to benefit plans, shares | 172,022 | |||||||
Purchase of additional noncontrolling equity interest | (11) | |||||||
Premium on common stock issued pursuant to benefit plans | 8 | |||||||
Stock options exercised, shares | 301,029 | |||||||
Net income attributable to Tenneco Inc. | 57 | 57 | ||||||
Net income Attributable to Noncontrolling Interests Excluding Redeemable Noncontrolling Interests | 11 | |||||||
Sale of twenty percent equity interest to Tenneco Inc. | (4) | |||||||
Other comprehensive loss | (28) | |||||||
Other Comprehensive Income (loss) attributable to noncontrolling interests | 2 | |||||||
Dividends declared | (8) | |||||||
Ending balance at Sep. 30, 2010 | 38 | 1 | 3,002 | (240) | (2,518) | 240 | 5 | 33 |
Ending balance, shares at Sep. 30, 2010 | 61,262,790 | 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 | ||||||
Common Stock issued pursuant to benefit plans, shares | 52,394 | |||||||
Purchase of additional noncontrolling equity interest | (2) | |||||||
Premium on common stock issued pursuant to benefit plans | 6 | |||||||
Purchase of common stock through share repurchase program, shares | 400,000 | 400,000 | ||||||
Purchase of common stock through stock repurchase program | 16 | |||||||
Stock options exercised, shares | 323,039 | |||||||
Net income attributable to Tenneco Inc. | 127 | 127 | ||||||
Net income Attributable to Noncontrolling Interests Excluding Redeemable Noncontrolling Interests | 13 | |||||||
Other comprehensive loss | (28) | |||||||
Other Comprehensive Income (loss) attributable to noncontrolling interests | (1) | |||||||
Dividends declared | (14) | |||||||
Ending balance at Sep. 30, 2011 | $ 120 | $ 1 | $ 3,012 | $ (265) | $ (2,409) | $ 256 | $ 83 | $ 37 |
Ending balance, shares at Sep. 30, 2011 | 61,917,193 | 1,694,692 |
Financial Instruments | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments |
The carrying and estimated fair values of our financial
instruments by class at September 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 September 30, 2011 and
December 31, 2010, respectively, was as follows:
The fair value of our recurring financial assets and liabilities
at September 30, 2011 and December 31, 2010 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 September 30, 2011 (all of which mature in 2011):
|
Income Taxes (Details) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Income Taxes (Textual) [Abstract] | ||||
Income tax expense | $ 21 | $ 15 | $ 65 | $ 45 |
U.S. federal statutory rate | 35.00% | |||
Change in valuation allowance related to NOL's | 9 | |||
Deferred tax assets related to NOL's | $ 90 | $ 90 | ||
Federal [Member] | ||||
Income Taxes (Additional Textual) [Abstract] | ||||
NOL's expiration period | tax years ending in 2021 through 2029 | |||
State [Member] | ||||
Income Taxes (Additional Textual) [Abstract] | ||||
NOL's expiration period | tax years ending through 2029 |
Supplemental Guarantor Condensed Consolidating Financial Statements (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Guarantor Condensed Consolidating Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of Income (Loss) |
STATEMENT
OF INCOME (LOSS)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet |
BALANCE
SHEET
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of Cash Flows |
STATEMENT
OF CASH FLOWS
|
Supplemental Guarantor Condensed Consolidating Financial Statements (Details 1) (USD $) In Millions | Sep. 30, 2011 | Jun. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 | Jun. 30, 2010 | Dec. 31, 2009 | ||||
---|---|---|---|---|---|---|---|---|---|---|
Current assets: | ||||||||||
Cash and cash equivalents | $ 163 | [1] | $ 161 | $ 233 | [1] | $ 184 | $ 146 | $ 167 | ||
Receivables, net | 1,117 | 826 | ||||||||
Inventories | 621 | 547 | ||||||||
Deferred income taxes | 42 | 38 | ||||||||
Prepayments and other | 160 | 146 | ||||||||
Total current assets | 2,103 | 1,790 | ||||||||
Other assets: | ||||||||||
Investment in affiliated companies | 0 | 0 | ||||||||
Notes and advances receivable from affiliates | 0 | 0 | ||||||||
Long-term receivables, net | 13 | 9 | ||||||||
Goodwill | 75 | 89 | ||||||||
Intangibles, net | 33 | 32 | ||||||||
Deferred income taxes | 87 | 92 | ||||||||
Other | 99 | 105 | ||||||||
Total other assets | 307 | 327 | ||||||||
Plant, property, and equipment, at cost | 3,136 | 3,109 | ||||||||
Less - Accumulated depreciation and amortization | (2,110) | (2,059) | ||||||||
Total plant, property, and equipment, net | 1,026 | 1,050 | ||||||||
Total assets | 3,436 | 3,167 | 3,270 | |||||||
Short-term debt (including current maturities of long-term debt) | ||||||||||
Short-term debt - non-affiliated | 70 | 63 | ||||||||
Short-term debt - affiliated | 0 | 0 | ||||||||
Trade payables | 1,181 | 1,048 | ||||||||
Accrued taxes | 46 | 51 | ||||||||
Other | 325 | 306 | ||||||||
Total current liabilities | 1,622 | 1,468 | ||||||||
Long-term debt - non-affiliated | 1,234 | 1,160 | ||||||||
Long-term debt - affiliated | 0 | 0 | ||||||||
Deferred income taxes | 50 | 56 | ||||||||
Postretirement benefits and other liabilities | 400 | 436 | ||||||||
Commitments and Contingencies | ||||||||||
Total liabilities | 3,306 | 3,120 | ||||||||
Redeemable noncontrolling interests | 10 | 12 | ||||||||
Total Tenneco Inc. shareholders' equity | 83 | (4) | ||||||||
Noncontrolling interests | 37 | 39 | ||||||||
Total equity | 120 | 35 | 38 | |||||||
Total liabilities, redeemable noncontrolling interests and equity | 3,436 | 3,167 | ||||||||
Guarantor Subsidiaries [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 2 | 0 | 0 | 0 | 2 | 20 | ||||
Receivables, net | 616 | 402 | ||||||||
Inventories | 251 | 221 | ||||||||
Deferred income taxes | 77 | 103 | ||||||||
Prepayments and other | 29 | 35 | ||||||||
Total current assets | 975 | 761 | ||||||||
Other assets: | ||||||||||
Investment in affiliated companies | 412 | 391 | ||||||||
Notes and advances receivable from affiliates | 4,144 | 4,119 | ||||||||
Long-term receivables, net | 1 | 1 | ||||||||
Goodwill | 22 | 22 | ||||||||
Intangibles, net | 13 | 14 | ||||||||
Deferred income taxes | 32 | 37 | ||||||||
Other | 25 | 26 | ||||||||
Total other assets | 4,649 | 4,610 | ||||||||
Plant, property, and equipment, at cost | 1,013 | 997 | ||||||||
Less - Accumulated depreciation and amortization | (735) | (713) | ||||||||
Total plant, property, and equipment, net | 278 | 284 | ||||||||
Total assets | 5,902 | 5,655 | ||||||||
Short-term debt (including current maturities of long-term debt) | ||||||||||
Short-term debt - non-affiliated | 0 | 0 | ||||||||
Short-term debt - affiliated | 210 | 214 | ||||||||
Trade payables | 483 | 367 | ||||||||
Accrued taxes | 21 | 20 | ||||||||
Other | 126 | 130 | ||||||||
Total current liabilities | 840 | 731 | ||||||||
Long-term debt - non-affiliated | 0 | 0 | ||||||||
Long-term debt - affiliated | 4,678 | 4,583 | ||||||||
Deferred income taxes | 0 | 0 | ||||||||
Postretirement benefits and other liabilities | 324 | 347 | ||||||||
Commitments and Contingencies | ||||||||||
Total liabilities | 5,842 | 5,661 | ||||||||
Redeemable noncontrolling interests | 0 | 0 | ||||||||
Total Tenneco Inc. shareholders' equity | 60 | (6) | ||||||||
Noncontrolling interests | 0 | 0 | ||||||||
Total equity | 60 | (6) | ||||||||
Total liabilities, redeemable noncontrolling interests and equity | 5,902 | 5,655 | ||||||||
Non-Guarantor Subsidiaries [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 161 | 161 | 233 | 184 | 144 | 147 | ||||
Receivables, net | 1,358 | 1,106 | ||||||||
Inventories | 370 | 326 | ||||||||
Deferred income taxes | 0 | 0 | ||||||||
Prepayments and other | 131 | 111 | ||||||||
Total current assets | 2,020 | 1,776 | ||||||||
Other assets: | ||||||||||
Investment in affiliated companies | 0 | 0 | ||||||||
Notes and advances receivable from affiliates | 1,010 | 788 | ||||||||
Long-term receivables, net | 12 | 8 | ||||||||
Goodwill | 53 | 67 | ||||||||
Intangibles, net | 20 | 18 | ||||||||
Deferred income taxes | 22 | 21 | ||||||||
Other | 45 | 46 | ||||||||
Total other assets | 1,162 | 948 | ||||||||
Plant, property, and equipment, at cost | 2,123 | 2,112 | ||||||||
Less - Accumulated depreciation and amortization | (1,375) | (1,346) | ||||||||
Total plant, property, and equipment, net | 748 | 766 | ||||||||
Total assets | 3,930 | 3,490 | ||||||||
Short-term debt (including current maturities of long-term debt) | ||||||||||
Short-term debt - non-affiliated | 69 | 62 | ||||||||
Short-term debt - affiliated | 517 | 371 | ||||||||
Trade payables | 813 | 773 | ||||||||
Accrued taxes | 25 | 31 | ||||||||
Other | 213 | 213 | ||||||||
Total current liabilities | 1,637 | 1,450 | ||||||||
Long-term debt - non-affiliated | 11 | 11 | ||||||||
Long-term debt - affiliated | 1,024 | 768 | ||||||||
Deferred income taxes | 50 | 56 | ||||||||
Postretirement benefits and other liabilities | 72 | 85 | ||||||||
Commitments and Contingencies | ||||||||||
Total liabilities | 2,794 | 2,370 | ||||||||
Redeemable noncontrolling interests | 10 | 12 | ||||||||
Total Tenneco Inc. shareholders' equity | 1,089 | 1,069 | ||||||||
Noncontrolling interests | 37 | 39 | ||||||||
Total equity | 1,126 | 1,108 | ||||||||
Total liabilities, redeemable noncontrolling interests and equity | 3,930 | 3,490 | ||||||||
Parent Company [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 0 | 0 | ||||||||
Receivables, net | 25 | 24 | ||||||||
Inventories | 0 | 0 | ||||||||
Deferred income taxes | 0 | 0 | ||||||||
Prepayments and other | 0 | 0 | ||||||||
Total current assets | 25 | 24 | ||||||||
Other assets: | ||||||||||
Investment in affiliated companies | 770 | 707 | ||||||||
Notes and advances receivable from affiliates | 5,986 | 5,853 | ||||||||
Long-term receivables, net | 0 | 0 | ||||||||
Goodwill | 0 | 0 | ||||||||
Intangibles, net | 0 | 0 | ||||||||
Deferred income taxes | 33 | 34 | ||||||||
Other | 29 | 33 | ||||||||
Total other assets | 6,818 | 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 | 6,843 | 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 | 0 | 0 | ||||||||
Accrued taxes | 0 | 0 | ||||||||
Other | 51 | 47 | ||||||||
Total current liabilities | 62 | 58 | ||||||||
Long-term debt - non-affiliated | 1,223 | 1,149 | ||||||||
Long-term debt - affiliated | 5,438 | 5,409 | ||||||||
Deferred income taxes | 0 | 0 | ||||||||
Postretirement benefits and other liabilities | 0 | 0 | ||||||||
Commitments and Contingencies | ||||||||||
Total liabilities | 6,723 | 6,616 | ||||||||
Redeemable noncontrolling interests | 0 | 0 | ||||||||
Total Tenneco Inc. shareholders' equity | 120 | 35 | ||||||||
Noncontrolling interests | 0 | 0 | ||||||||
Total equity | 120 | 35 | ||||||||
Total liabilities, redeemable noncontrolling interests and equity | 6,843 | 6,651 | ||||||||
Reclass & Elims [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Receivables, net | (882) | (706) | ||||||||
Inventories | 0 | 0 | ||||||||
Deferred income taxes | (35) | (65) | ||||||||
Prepayments and other | 0 | 0 | ||||||||
Total current assets | (917) | (771) | ||||||||
Other assets: | ||||||||||
Investment in affiliated companies | (1,182) | (1,098) | ||||||||
Notes and advances receivable from affiliates | (11,140) | (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 | (12,322) | (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 | (13,239) | (12,629) | ||||||||
Short-term debt (including current maturities of long-term debt) | ||||||||||
Short-term debt - non-affiliated | 0 | 0 | ||||||||
Short-term debt - affiliated | (737) | (595) | ||||||||
Trade payables | (115) | (92) | ||||||||
Accrued taxes | 0 | 0 | ||||||||
Other | (65) | (84) | ||||||||
Total current liabilities | (917) | (771) | ||||||||
Long-term debt - non-affiliated | 0 | 0 | ||||||||
Long-term debt - affiliated | (11,140) | (10,760) | ||||||||
Deferred income taxes | 0 | 0 | ||||||||
Postretirement benefits and other liabilities | 4 | 4 | ||||||||
Commitments and Contingencies | ||||||||||
Total liabilities | (12,053) | (11,527) | ||||||||
Redeemable noncontrolling interests | 0 | 0 | ||||||||
Total Tenneco Inc. shareholders' equity | (1,186) | (1,102) | ||||||||
Noncontrolling interests | 0 | 0 | ||||||||
Total equity | (1,186) | (1,102) | ||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ (13,239) | $ (12,629) | ||||||||
|
Common Stock (Details Textual 1) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Share-based Compensation, Aggregate Disclosure | ||||
Stock-based compensation | $ 2 | $ 2 | $ 6 | $ 7 |
Restricted Stock [Member] | ||||
Share-based Compensation, Aggregate Disclosure | ||||
Unrecognized compensation costs | 6 | 6 | ||
Unrecognized compensation costs, Weighted Average Period | 2.1 | |||
Stock Option [Member] | ||||
Share-based Compensation, Aggregate Disclosure | ||||
Unrecognized compensation costs | 6 | 6 | ||
Unrecognized compensation costs, Weighted Average Period | 0.9 | |||
Cash received from stock option exercises | 4 | 2 | ||
Unrecorded tax benefit from stock options exercised | 3 | 2 | ||
Restricted Stock Units Long Term Performance Units SARs [Member] | ||||
Share-based Compensation, Aggregate Disclosure | ||||
Unrecognized compensation costs | 10 | 10 | ||
Unrecognized compensation costs, Weighted Average Period | 1.6 | |||
Stock-based compensation | $ 8 | $ 8 |
Long-Term Debt and Financing Arrangements | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 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
September 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 September 30, 2011, the senior credit facility also
provides a six-year, $148 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, 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
September 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 2.00 for extending lenders. Our consolidated
net leverage ratio was 2.07 and 2.24 as of September 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 remained at such level until August 2011 when it
decreased 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 September 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
$601 million with $97 million in outstanding
borrowings and $54 million in letters of credit
outstanding. As of September 30, 2011, our outstanding debt
also included $250 million of
81/8
percent senior notes due November 15, 2015,
$148 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
$84 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 Goodwill Impairment Charge (Details) (Severance [Member], USD $) In Millions | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Severance [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve, Beginning Balance | $ 7 |
Expenses | 7 |
Cash Payments | (12) |
Impact of Exchange Rates | 0 |
Reserve Adjustments | (1) |
Restructuring Reserve, Ending Balance | $ 1 |
Common Stock (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Common Stock [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assumptions used for calculating the fair values of stock option awards |
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Stock options status and activity |
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Nonvested restricted shares |
|
Financial Instruments (Details) (USD $) In Millions | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Carrying Amount [Member] | ||
Carrying and estimated fair value | ||
Long-term debt (including current maturities) | $ 1,236 | $ 1,162 |
Instruments with off-balance sheet risk: | ||
Asset derivative contracts | 0 | 2 |
Liability derivative contracts | 2 | 0 |
Fair Value [Member] | ||
Carrying and estimated fair value | ||
Long-term debt (including current maturities) | 1,245 | 1,201 |
Instruments with off-balance sheet risk: | ||
Asset derivative contracts | 0 | 2 |
Liability derivative contracts | $ 2 | $ 0 |
Accounts Receivable Securitization (Details Textual) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2010 | |
North America [Member] | |||||
Securitization of Receivables (Textual) [Abstract] | |||||
Outstanding third party investments in securitized accounts receivable bank program | $ 0 | $ 0 | $ 0 | ||
North American program maximum facility size | 110 | 110 | |||
Additional Financing from second priority facility | 40 | 40 | |||
Interest expense recognized from securitization of receivables | 1 | 2 | 3 | ||
Interest expense recognized from securitization of receivables | less than $1 million | ||||
Europe [Member] | |||||
Securitization of Receivables (Textual) [Abstract] | |||||
Outstanding third party investments in securitized accounts receivable bank program | 140 | 140 | 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 | $ 1 | $ 1 | $ 4 | $ 3 | |
Discount rate on sale of securitized receivables | 3.00% | 4.00% |
Segments (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information |
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Acquisitions | 9 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2011 | |||||
Acquisitions [Abstract] | |||||
Acquisitions |
In August 2011, we purchased the remaining 25 percent
equity interest in our Tenneco Automotive (Thailand) Limited
emission control joint venture in Thailand for $4 million
in cash. As a result of this purchase, our equity ownership of
this joint venture investment changed to 100 percent from
75 percent.
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.
|