Pension Plans, Postretirement and Other Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2016

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



	Percentage of Fair Market Value
	December 31, 2016				December 31, 2015
	US		Foreign		US		Foreign
Equity Securities	70	%	61	%	51	%	61	%
Debt Securities	30	%	34	%	49	%	30	%
Real Estate	—		2	%	—		2	%
Other	—		3	%	—	%	7	%

Plan Assets using Fair Value Hierarchy

The following table presents our plan assets using the fair value hierarchy as of December 31, 2016 and 2015, 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, 2016
	US								Foreign
Asset Category	Level 1		Level 2		Level 3		Assets Measurement at NAV		Level 1		Level 2		Level 3		Assets Measurement at NAV
	(Millions)
Equity securities:
U.S. large cap	$	22	$	—	$	—	$	77	$	2	$	30	$	—	$	26
U.S. mid cap	—		—		—		—		1		2		—		—
U.S. small cap	—		—		—		15		—		—		—		—
Non-U.S. large cap	—		—		—		—		7		67		—		46
Non-U.S. mid cap	—		—		—		15		—		15		—		8
Non-U.S. small cap	—		—		—		—		—		10		—		1
Emerging markets	—		—		—		5		2		3		—		1
Debt securities:
U.S. treasuries/government bonds	—		—		—		—		1		—		—		—
U.S. corporate bonds	—		—		—		2		—		1		—		—
U.S. other fixed income	—		—		—		54		—		—		—		—
Non-U.S. treasuries/government bonds	—		—		—		—		1		38		—		29
Non-U.S. corporate bonds	—		—		—		—		4		23		—		12
Non-U.S. municipal obligations	—		—		—		—		—		—		—		1
Non-U.S. other fixed income	—		—		—		—		1		—		—		—
Real Estate:
Non-U.S. real estate	—		—		—		—		1		5		—		—
Other:
Insurance contracts	—		—		—		—		—		13		9		—
Cash held in bank accounts	2		—		—		—		7		2		—		—
Total	$	24	$	—	$	—	$	168	$	27	$	209	$	9	$	124



	Fair Value Level as of December 31, 2015
	US								Foreign
Asset Category	Level 1		Level 2		Level 3		Asset Measurement at NAV		Level 1		Level 2		Level 3		Asset Measurement at NAV
	(Millions)
Equity securities:
U.S. large cap	$	33	$	—	$	—	$	63	$	5	$	24	$	—	$	23
U.S. mid cap	—		—		—		8		1		5		—		2
U.S. small cap	—		—		—		15		—		—		—		—
Non-U.S. large cap	—		—		—		—		13		65		—		34
Non-U.S. mid cap	—		—		—		25		1		15		—		15
Non-U.S. small cap	—		—		—		—		—		2		—		1
Emerging markets	—		—		—		8		2		4		—		—
Debt securities:
U.S. corporate bonds	—		—		—		35		—		3		—		—
U.S. other fixed income	—		—		—		113		—		—		—		—
Non-U.S. treasuries/government bonds	—		—		—		—		1		28		—		28
Non-U.S. corporate bonds	—		—		—		—		7		20		—		12
Non-U.S. mortgage backed securities	—		—		—		—		—		3		—		—
Non-U.S. municipal obligations	—		—		—		—		—		—		—		1
Non-U.S. asset backed securities	—		—		—		—		—		2		—		—
Non-U.S. other fixed income	—		—		—		—		2		—		—		—
Real Estate:
Non-U.S. real estate	—		—		—		—		1		5		—		1
Other:
Insurance contracts	—		—		—		—		—		12		8		—
Cash held in bank accounts	2		—		—		—		11		—		—		—
Total	$	35	$	—	$	—	$	267	$	44	$	188	$	8	$	117

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, 2016				December 31, 2015
	Level 3 Assets				Level 3 Assets
	US		Foreign		US		Foreign
	(Millions)				(Millions)
Balance at December 31 of the previous year	$	—	$	8	$	—	$	9
Actual return on plan assets:
Relating to assets still held at the reporting date	—		1		—		(1		)
Ending Balance at December 31	$	—	$	9	$	—	$	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)
2016:
Tenneco Stock	1	$	22	4.0	%
2015:
Tenneco Stock	1	$	33	5.0	%

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
	2016						2015						2016			2015
	US			Foreign			US			Foreign			US			US
	(Millions)
Change in benefit obligation:
Benefit obligation at December 31 of the previous year	$	416		$	425		$	448		$	483		$	141		$	143
Currency rate conversion	—			(38		)	—			(45		)	—			—
Settlement	(1		)	—			(8		)	(2		)	—			—
Service cost	1			8			1			9			—			—
Interest cost	15			14			17			15			6			6
Administrative expenses/taxes paid	—			(1		)	—			(2		)	—			—
Plan amendments	—			(1		)	—			2			—			—
Actuarial (gain)/loss	(7		)	50			(21		)	(17		)	5			1
Benefits paid	(152		)	(20		)	(21		)	(19		)	(9		)	(9		)
Participants’ contributions	—			1			—			1			—			—
Benefit obligation at December 31	$	272		$	438		$	416		$	425		$	143		$	141
Change in plan assets:
Fair value at December 31 of the previous year	$	304		$	355		$	334		$	392		$	—		$	—
Currency rate conversion	—			(33		)	—			(38		)	—			—
Settlement	(1		)	—			(8		)	(2		)	—			—
Actual return on plan assets	21			50			(11		)	8			—			—
Administrative expenses/taxes paid	—			(1		)	—			(2		)	—			—
Employer contributions	20			17			10			15			9			9
Participants’ contributions	—			1			—			1			—			—
Benefits paid	(152		)	(20		)	(21		)	(19		)	(9		)	(9		)
Fair value at December 31	$	192		$	369		$	304		$	355		$	—		$	—
Development of net amount recognized:
Unfunded status at December 31	$	(80	)	$	(69	)	$	(114	)	$	(68	)	$	(143	)	$	(141	)
Unrecognized cost:
Actuarial loss	146			145			232			144			48			49
Prior service cost/(credit)	—			4			—			5			(4		)	(6		)
Net amount recognized at December 31	$	66		$	80		$	118		$	81		$	(99	)	$	(98	)
Amounts recognized in the balance sheets as of December 31
Noncurrent assets	$	—		$	9		$	—		$	6		$	—		$	—
Current liabilities	(20		)	(2		)	(2		)	(3		)	(10		)	(9		)
Noncurrent liabilities	(60		)	(76		)	(112		)	(71		)	(133		)	(132		)
Net amount recognized	$	(80	)	$	(69	)	$	(114	)	$	(68	)	$	(143	)	$	(141	)

Components of Net Periodic Benefit Cost

Net periodic pension costs for the years 2016, 2015 and 2014, consist of the following components:



	2016						2015						2014
	US			Foreign			US			Foreign			US			Foreign
	(Millions)
Service cost — benefits earned during the year	$	1		$	8		$	1		$	9		$	1		$	8
Interest cost	15			14			17			15			20			18
Expected return on plan assets	(23		)	(20		)	(23		)	(21		)	(25		)	(23		)
Settlement loss	72			—			4			—			21			—
Net amortization:
Actuarial loss	8			7			8			8			7			7
Prior service cost	—			1			—			1			—			2
Net pension costs	$	73		$	10		$	7		$	12		$	24		$	12

Net periodic postretirement benefit cost for the years 2016, 2015, and 2014, consists of the following components:



	2016			2015			2014
	(Millions)
Service cost — benefits earned during the year	$	—		$	—		$	—
Interest on accumulated postretirement benefit obligation	6			6			6
Net amortization:
Actuarial loss	5			6			4
Prior service credit	(1		)	(4		)	(7		)
Prior period correction	—			—			9
Net periodic postretirement benefit cost	$	10		$	8		$	12

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:



	2016				2015
	US		Foreign		US		Foreign
	(Millions)
Net actuarial loss	$	146	$	145	$	232	$	144
Prior service cost	—		4		—		5
	$	146	$	149	$	232	$	149

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, 2016 and 2015 include the following components:



	Year Ended December 31,
	2016									2015
	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 gain (loss)	$	51		$	(21	)	$	30		$	(7	)	$	2		$	(5	)
Amortization of prior service cost included in net periodic pension and postretirement cost	(1		)	—			(1		)	(3		)	—			(3		)
Amortization of actuarial gain (loss) included in net periodic pension and postretirement cost	20			(8		)	12			23			(4		)	19
Other comprehensive income — pension benefits	$	70		$	(29	)	$	41		$	13		$	(2	)	$	11

Components of Net Periodic Benefit Cost

In 2017, we expect to recognize the following amounts, which are currently reflected in accumulated other comprehensive loss, as components of net periodic benefit cost:



	2017
	US		Foreign
	(Millions)
Net actuarial loss	$	10	$	8
Prior service cost	—		1
	$	10	$	9

In 2017, we expect to recognize the following amounts, which are currently reflected in accumulated other comprehensive loss, as components of net periodic benefit cost:



	2017
	(Millions)
Net actuarial loss	$	5
Prior service credit	(1		)
	$	4

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, 2016 and 2015 were as follows:



	December 31, 2016				December 31, 2015
	US		Foreign		US		Foreign
	(Millions)
Projected benefit obligation	$	272	$	266	$	416	$	337
Accumulated benefit obligation	272		261		416		332
Fair value of plan assets	192		188		302		262

Estimated Pension Plan Benefit Payments

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



Year	US		Foreign
	(Millions)
2017	$	33	$	15
2018	14		15
2019	15		16
2020	16		18
2021	15		17
2022-2026	77		95

Assumptions used in accounting for Pension Plans

The following assumptions were used in the accounting for the pension plans for the years of 2016, 2015, and 2014:



	2016				2015
	US		Foreign		US		Foreign
Weighted-average assumptions used to determine benefit obligations
Discount rate	4.2	%	2.8	%	4.3	%	3.5	%
Rate of compensation increase	N/A		2.5	%	N/A		2.7	%



	2016				2015				2014
	US		Foreign		US		Foreign		US		Foreign
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate	4.3	%	3.5	%	4.1	%	3.2	%	4.8	%	4.3	%
Expected long-term return on plan assets	7.6	%	5.7	%	7.8	%	5.9	%	7.8	%	6.1	%
Rate of compensation increase	N/A		2.7	%	N/A		3.0	%	N/A		3.3	%

Estimated Postretirement Benefit Payments

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



Year	Postretirement Benefits
	(Millions)
2017	$	10
2018	10
2019	10
2020	10
2021	9
2022-2026	45

Postretirement Cost

The following assumptions were used in the accounting for postretirement cost for the years of 2016, 2015 and 2014:



	2016		2015
Weighted-average assumptions used to determine benefit obligations
Discount rate	4.2	%	4.3	%
Rate of compensation increase	N/A		N/A



	2016		2015		2014
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate	4.3	%	4.1	%	4.8	%
Rate of compensation increase	N/A		N/A		N/A