Pension Plans, Postretirement and Other Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2013

Pension plan assets were invested in the following classes of securities:



	Percentage of Fair Market Value
	December 31, 2013				December 31, 2012
	US		Foreign		US		Foreign
Equity Securities	71	%	62	%	70	%	59	%
Debt Securities	29	%	31	%	30	%	33	%
Real Estate	—		2	%	—		2	%
Other	—		5	%	—	%	6	%

Plan Assets using Fair Value Hierarchy

The following table presents our plan assets using the fair value hierarchy as of December 31, 2013 and 2012, respectively. The fair value hierarchy has three levels based on the methods used to determine the fair value. Level 1 assets refer to those asset values based on quoted market prices in active markets for identical assets at the measurement date. Level 2 assets refer to assets with values determined using significant other observable inputs, and Level 3 assets include values determined with non-observable inputs.



	Fair Value Level as of December 31, 2013
	US						Foreign
Asset Category	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
	(Millions)
Equity securities:
U.S. large cap	$	41	$	143	$	—	$	31	$	21	$	—
U.S. mid cap	—		—		—		4		4		—
U.S. Small Cap	—		27		—		—		—		—
Non-U.S. large cap	—		—		—		57		71		—
Non-U.S. mid cap	—		27		—		20		19		—
Non-U.S. small cap	—		—		—		1		7		—
Emerging markets	—		8		—		—		4		—
Debt securities:
U.S. corporate bonds	—		5		—		—		4		—
U.S. other fixed income	—		96		—		—		—		—
Non-U.S. treasuries/government bonds	—		—		—		35		25		—
Non-U.S. corporate bonds	—		—		—		18		18		—
Non-U.S. mortgage backed securities	—		—		—		—		4		—
Non-U.S. municipal obligations	—		—		—		1		—		—
Non-U.S. asset backed securities	—		—		—		—		3		—
Non-U.S. other fixed income	—		—		—		1		2		—
Real Estate:
Non-U.S. real estate	—		—		—		1		5		—
Other:
Insurance contracts	—		—		—		—		9		8
Cash held in bank accounts	—		—		—		6		—		—
Total	$	41	$	306	$	—	$	175	$	196	$	8



	Fair Value Level as of December 31, 2012
	US						Foreign
Asset Category	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
	(Millions)
Equity securities:
U.S. large cap	$	29	$	117	$	—	$	26	$	15	$	—
U.S. mid cap	—		—		—		2		5		—
U.S. Small Cap	—		20		—		—		—		—
Non-U.S. large cap	—		—		—		48		63		—
Non-U.S. mid cap	—		20		—		13		16		—
Non-U.S. small cap	—		—		—		1		4		—
Emerging markets	—		7		—		2		1		—
Debt securities:
U.S. treasuries/government bonds	—		—		—		—		—		—
U.S. corporate bonds	—		4		—		—		—		—
U.S. mortgage backed securities	—		—		—		—		—		—
U.S. asset backed securities	—		—		—		—		—		—
U.S. other fixed income	—		78		—		—		—		—
Non-U.S. treasuries/government bonds	—		—		—		36		24		—
Non-U.S. corporate bonds	—		—		—		18		24		—
Non-U.S. mortgage backed securities	—		—		—		—		3		—
Non-U.S. municipal obligations	—		—		—		1		—		—
Non-U.S. asset backed securities	—		—		—		—		3		—
Non-U.S. other fixed income	—		—		—		1		—		—
Real Estate:
Non-U.S. real estate	—		—		—		1		5		—
Other:
Insurance contracts	—		—		—		—		8		8
Cash held in bank accounts	—		—		—		4		—		—
Total	$	29	$	246	$	—	$	153	$	171	$	8

Changes in Fair Value of Level 3 Assets

The table below summarizes the changes in the fair value of the Level 3 assets:



	December 31, 2013				December 31, 2012
	Level 3 Assets				Level 3 Assets
	US		Foreign		US		Foreign
	(Millions)				(Millions)
Balance at December 31 of the previous year	$	—	$	8	$	—	$	6
Actual return on plan assets:
Relating to assets still held at the reporting date	—		—		—		2
Ending Balance at December 31	$	—	$	8	$	—	$	8

Significant Concentrations of Risk

The following table contains information about significant concentrations of risk, including all individual assets that make up more than 5 percent of the total assets and any direct investments in Tenneco stock:



Asset Category	Fair Value Level	Value		Percentage of Total Assets
	(Millions)
2013:
Tenneco Stock	1	$	41	5.6	%
2012:
Tenneco Stock	1	$	29	4.7	%

Amounts Recognized in Balance Sheets for Pension Plans and Postretirement Benefit Plan

A summary of the change in benefit obligation, the change in plan assets, the development of net amount recognized, and the amounts recognized in the balance sheets for the pension plans and postretirement benefit plan follows:



	Pension												Postretirement
	2013						2012						2013			2012
	US			Foreign			US			Foreign			US			US
	(Millions)
Change in benefit obligation:
Benefit obligation at December 31 of the previous year	$	461		$	431		$	414		$	370		$	131		$	140
Currency rate conversion	—			(2		)	—			13			—			—
Settlement	—			(1		)	—			(4		)	—			—
Curtailment	—			(1		)
Service cost	1			9			1			7			—			—
Interest cost	19			17			20			18			5			6
Administrative expenses/taxes paid	—			(2		)	—			(1		)	—			—
Plan amendments	—			1			—			—			—			—
Actuarial (gain)/loss	(41		)	6			44			42			(16		)	(6		)
Benefits paid	(19		)	(18		)	(18		)	(16		)	(8		)	(9		)
Participants’ contributions	—			2			—			2			—			—
Benefit obligation at December 31	$	421		$	442		$	461		$	431		$	112		$	131
Change in plan assets:
Fair value at December 31 of the previous year	$	275		$	332		$	239		$	290		$	—		$	—
Currency rate conversion	—			(3		)	—			11			—			—
Settlement	—			(1		)	—			(4		)	—			—
Actual return on plan assets	60			43			28			27			—			—
Administrative expenses/taxes paid	—			(2		)	—			—			—			—
Employer contributions	31			26			26			22			8			10
Prescription drug subsidy received	—			—			—			—			—			(1		)
Participants’ contributions	—			2			—			2			—			—
Benefits paid	(19		)	(18		)	(18		)	(16		)	(8		)	(9		)
Fair value at December 31	$	347		$	379		$	275		$	332		$	—		$	—
Development of net amount recognized:
Unfunded status at December 31	$	(74	)	$	(62	)	$	(186	)	$	(99	)	$	(112	)	$	(131	)
Unrecognized cost:
Actuarial loss	190			137			278			168			32			52
Prior service cost/(credit)	1			7			1			8			(16		)	(22		)
Net amount recognized at December 31	$	117		$	82		$	93		$	77		$	(96	)	$	(101	)
Amounts recognized in the balance sheets as of December 31
Noncurrent assets	—			11			—			—			—			—
Current liabilities	(6		)	(2		)	(3		)	(2		)	(8		)	(8		)
Noncurrent liabilities	(68		)	(71		)	(183		)	(97		)	(104		)	(123		)
Net amount recognized	$	(74	)	$	(62	)	$	(186	)	$	(99	)	$	(112	)	$	(131	)

Components of Net Periodic Benefit Cost

Net periodic pension costs for the years 2013, 2012 and 2011, consist of the following components:



	2013						2012						2011
	US			Foreign			US			Foreign			US			Foreign
	(Millions)
Service cost — benefits earned during the year	$	1		$	9		$	1		$	7		$	1		$	6
Interest cost	19			17			20			18			20			19
Expected return on plan assets	(22		)	(20		)	(22		)	(20		)	(23		)	(20		)
Curtailment loss	—			—			—			—			—			—
Settlement loss	—			1			—			1			—			1
Net amortization:
Actuarial loss	9			10			7			7			4			5
Prior service cost	—			1			—			2			—			2
Net pension costs	$	7		$	18		$	6		$	15		$	2		$	13

Net periodic postretirement benefit cost for the years 2013, 2012, and 2011, consists of the following components:



	2013			2012			2011
	(Millions)
Service cost — benefits earned during the year	$	—		$	1		$	1
Interest on accumulated postretirement benefit obligation	5			6			7
Net amortization:
Actuarial loss	4			5			4
Prior service credit	(6		)	(6		)	(6		)
Net periodic postretirement benefit cost	$	3		$	6		$	6

Amounts recognized in accumulated other comprehensive loss for pension benefits

Amounts recognized in accumulated other comprehensive loss for pension benefits consist of the following components:



	2013				2012
	US		Foreign		US		Foreign
	(Millions)
Net actuarial loss	$	190	$	137	$	278	$	168
Prior service cost	1		7		1		8
	$	191	$	144	$	279	$	176

Amounts Recognized for Pension and Postretirement Benefits in Other Comprehensive Income

Amounts recognized for pension and postretirement benefits in other comprehensive income for the year ended December 31, 2013 and 2012 include the following components:



	Year Ended December 31,
	2013									2012
	Before-Tax Amount			Tax Benefit			Net-of-Tax Amount			Before-Tax Amount			Tax Benefit			Net-of-Tax Amount
	(Millions)
Defined benefit pension and postretirement plans:
Change in total actuarial loss	$	113		$	(41	)	$	72		$	(66	)	$	22		$	(44	)
Amortization of prior service cost included in net periodic pension and postretirement cost	(5		)	2			(3		)	(4		)	2			(2		)
Amortization of actuarial loss included in net periodic pension and postretirement cost	23			(7		)	16			20			(6		)	14
Other comprehensive income — pension benefits	$	131		$	(46	)	$	85		$	(50	)	$	18		$	(32	)

Components of Net Periodic Benefit Cost

In 2014, we expect to recognize the following amounts, which are currently reflected in accumulated other comprehensive loss, as components of net periodic benefit cost:



	2014
	(Millions)
Net actuarial loss	$	2
Prior service credit	(6		)
	$	(4	)

In 2014, we expect to recognize the following amounts, which are currently reflected in accumulated other comprehensive loss, as components of net periodic benefit cost:



	2014
	US		Foreign
	(Millions)
Net actuarial loss	$	7	$	7
Prior service cost	—		1
	$	7	$	8

Projected Benefit Obligation Accumulated Benefit Obligation and Fair Value of Plan Assets for all Pension Plans

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for all pension plans with accumulated benefit obligations in excess of plan assets at December 31, 2013 and 2012 were as follows:



	December 31, 2013				December 31, 2012
	US		Foreign		US		Foreign
	(Millions)
Projected benefit obligation	$	421	$	289	$	461	$	400
Accumulated benefit obligation	421		286		461		389
Fair value of plan assets	347		218		275		301

Estimated Pension Plan Benefit Payments

The following estimated benefit payments are payable from the pension plans to participants:



Year	US		Foreign
	(Millions)
2014	$	24	$	17
2015	21		17
2016	21		19
2017	28		18
2018	22		19
2019-2022	131		140

Assumptions used in accounting for Pension Plans

The following assumptions were used in the accounting for the pension plans for the years of 2013, 2012, and 2011:



	2013				2012
	US		Foreign		US		Foreign
Weighted-average assumptions used to determine benefit obligations
Discount rate	4.8	%	4.3	%	4.1	%	4.2	%
Rate of compensation increase	N/A		3.3	%	N/A		3.4	%



	2013				2012				2011
	US		Foreign		US		Foreign		US		Foreign
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate	4.1	%	4.2	%	4.8	%	4.9	%	5.6	%	5.4	%
Expected long-term return on plan assets	7.8	%	6.2	%	8.3	%	6.3	%	8.3	%	6.4	%
Rate of compensation increase	N/A		3.4	%	N/A		3.5	%	N/A		3.5	%

Estimated Postretirement Benefit Payments

The following estimated postretirement benefit payments are payable from the plan to participants:



Year	Postretirement Benefits
	(Millions)
2014	$	8
2015	8
2016	8
2017	8
2018	8
2019-2022	38

Postretirement Cost

The following assumptions were used in the accounting for postretirement cost for the years of 2013, 2012 and 2011:



	2013		2012
Weighted-average assumptions used to determine benefit obligations
Discount rate	4.8	%	4.1	%
Rate of compensation increase	N/A		N/A



	2013		2012		2011
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate	4.1	%	4.8	%	5.6	%
Rate of compensation increase	N/A		N/A		N/A