ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class | Trading Symbol | Name of each Exchange on which registered |
☑ | Accelerated filer | ☐ | ||
Non-accelerated filer | ☐ | Smaller reporting company | ||
Emerging growth company |
Document | Part of the Form 10-K into which incorporated | |
Portions of Tenneco Inc.’s Definitive Proxy Statement for the Annual Meeting of Stockholders | Part III |
• | general economic, business and market conditions; |
• | our ability to successfully execute cost reduction and other performance improvement plans, including our accelerated performance improvement plan (“Accelerate”), and to realize the anticipated benefits from these plans; |
• | our ability to source and procure needed materials, components and other products, and services in accordance with customer demand and at competitive prices; |
• | the cost and outcome of existing and any future claims, legal proceedings or investigations, including, but not limited to, any of the foregoing arising in connection with the ongoing global antitrust investigation, product performance, product safety or intellectual property rights; |
• | changes in consumer demand for our original equipment (“OE”) products or aftermarket products, prices and our ability to have our products included on top selling vehicles, including any shifts in consumer preferences away from historically higher margin products for our customers and us, to other lower margin vehicles, for which we may or may not have supply arrangements; |
• | the cyclical nature of the global vehicle industry, including the performance of the global aftermarket sector and the impact of vehicle parts' longer product lives; |
• | changes in automotive and commercial vehicle manufacturers’ production rates and their actual and forecasted requirements for our products, due to difficult economic conditions and/or regulatory or legal changes affecting internal combustion engines and/or aftermarket products; |
• | our dependence on certain large customers, including the loss of any of our large OE manufacturer customers (on whom we depend for a significant portion of our revenues), or the loss of market shares by these customers if we are unable to achieve increased sales to other OE-customers or any change in customer demand due to delays in the adoption or enforcement of worldwide emissions regulations; |
• | new technologies that reduce the demand for certain of our products or otherwise render them obsolete; |
• | our ability to introduce new products and technologies that satisfy customers' needs in a timely fashion; |
• | the overall highly competitive nature of the automotive 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 over the life of the applicable program); |
• | 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; |
• | our ability to comply with the covenants contained in our debt instruments; |
• | our working capital requirements; |
• | risks inherent in operating a multi-national company, including economic conditions, such as currency exchange and inflation rates, political conditions in the countries where we operate or sell our products, adverse changes in trade agreements, tariffs, immigration policies, political instability, tax and other laws, and potential disruptions of production and supply; |
• | increasing competition from lower cost, private-label products; |
• | damage to the reputation of one or more of our leading brands; |
• | the impact of improvements in automotive parts on aftermarket demand for some of our products; |
• | industry-wide 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; |
• | developments relating to our intellectual property, including our ability to changes in technology; |
• | costs related to product warranties and other customer satisfaction actions; |
• | the failure or breach of our information technology systems, including the consequences of any misappropriation, exposure or corruption of sensitive information stored on such systems and the interruption to our business that such failure or breach may cause; |
• | the impact of consolidation among vehicle parts suppliers and customers on our ability to compete in the highly competitive automotive and commercial vehicle supplier industry; |
• | changes in distribution channels or competitive conditions in the markets and countries where we operate; |
• | the evolution towards autonomous vehicles, and car and ride sharing; |
• | customer acceptance of new products; |
• | our ability to successfully integrate, and benefit from, any acquisitions we complete; |
• | our ability to effectively manage our joint ventures and other third-party relationships; |
• | the potential impairment in the carrying value of our long-lived assets, goodwill, and other intangible assets or the inability to fully realize our deferred tax assets; |
• | the negative impact of fuel price volatility on transportation and logistics costs, raw material costs, discretionary purchases of vehicles or aftermarket products and demand for off-highway equipment; |
• | increases in the costs of raw materials or components, including our ability to successfully reduce the impact of any such cost increases through materials substitutions, cost reduction initiatives, customer recovery, and other methods; |
• | changes by the Financial Accounting Standards Board (“FASB”) or the Securities and Exchange Commission (“SEC”) of generally accepted accounting principles or other authoritative guidance; |
• | changes in accounting estimates and assumptions, including changes based on additional information; |
• | any changes by the International Organization for Standardization (“ISO”) or other such committees in their certification protocols for processes and products, which may have the effect of delaying or hindering our ability to bring new products to market; |
• | the impact of the extensive, increasing, and changing laws and regulations to which we are subject, including environmental laws and regulations, which may result in our incurrence of environmental liabilities in excess of the amount reserved or increased costs or loss of revenues relating to products subject to changing regulation; |
• | potential volatility in our effective tax rate; |
• | disasters, local and global public health emergencies or other catastrophic events, such as fires, earthquakes and flooding, pandemics or epidemics, where we or other customers do business and any resultant disruptions in the supply or production of goods or services to us or by us in demand by our customers or in the operation of our system, disaster recovery capabilities or business continuity capabilities; |
• | 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; |
• | pension obligations and other postretirement benefits; |
• | our hedging activities to address commodity price fluctuations; and |
• | the timing and occurrence (or non-occurrence) of other transactions, events and circumstances which may be beyond our control. |
• | the ability to identify and consummate strategic alternatives that yield additional value for shareholders; |
• | the timing, benefits and outcome of the Company’s strategic review process; |
• | the structure, terms and specific risk and uncertainties associated with any potential strategic alternative; |
• | potential disruptions in our business and stock price as a result of our exploration, review and pursuit of any strategic alternatives; |
• | the risk the Company may not complete a separation of its powertrain technology business and its aftermarket and ride performance business (or achieve some or all of the anticipated benefits of the separation); |
• | the risk the combined company and each separate company following the separation will underperform relative to our expectations; |
• | the ongoing transaction costs and risk we may incur greater costs following separation of the business; |
• | the risk the spin-off is determined to be a taxable transaction; |
• | the risk the benefits of the separation may not be fully realized or may take longer to realize than expected; |
• | the risk the separation may not advance our business strategy; and |
• | the risk the transaction may have an adverse effect on existing arrangements with us, including those related to transition, manufacturing and supply services and tax matters; our ability to retain and hire key personnel; or our ability to maintain relationships with customers, suppliers or other business partners. |
PART I | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
PART III | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
PART IV | ||
Item 15. | ||
Item 16. |
• | The Clean Air segment designs, manufactures and distributes a variety of products and systems designed to reduce pollution and optimize engine performance, acoustic tuning and weight on a vehicle for OEMs; and |
• | The Powertrain segment focuses on original equipment powertrain products for automotive, heavy duty, and industrial applications. |
• | The Motorparts segment designs, manufactures, markets and distributes a broad portfolio of brand-name products in the global vehicle aftermarket within seven product categories including shocks and struts, steering and suspension, braking, sealing, engine, emissions, and maintenance; and |
• | The Ride Performance segment designs, manufactures, markets, and distributes a variety of ride performance solutions and systems to a global OE customer base, including noise, vibration, and harshness performance materials, advanced suspension technologies, ride control, and braking. |
i. | the number of vehicles in operation (“VIO”); |
ii. | the average age of VIO; |
iii. | vehicle usage trends; and |
iv. | component failure and wear rates. |
Customer | 2019 | 2018 | 2017 | |||||
General Motors Company | 11 | % | 12 | % | 14 | % | ||
Ford Motor Company | 10 | % | 12 | % | 13 | % |
Product | Description |
Catalytic converters and diesel oxidation catalysts | Devices consisting of a substrate coated with precious metals enclosed in a steel casing used to reduce harmful gaseous emissions such as carbon monoxide. |
Diesel particulate filters (DPFs) | Devices to capture and regenerate particulate matter emitted from diesel engines. |
Burner systems | Devices which actively combust fuel and air inside the exhaust system to create extra heat for DPF regeneration, or to improve the efficiency of SCR systems. |
Lean NOx traps | Devices which reduce nitrogen oxide (NOx) emissions from diesel powertrains using capture and store technology. |
Hydrocarbon vaporizers and injectors | Devices to add fuel to a diesel exhaust system in order to regenerate particulate filters or Lean NOx traps. |
SCR systems | Devices which reduce NOx emissions from diesel powertrains using urea mixers and injected reductants such as Verband der Automobil industrie e.V.'s AdBlue® or Diesel Exhaust Fluid (DEF). |
SCR-coated diesel particulate filters (SDPF) systems | Lightweight and compact devices combining the SCR catalyst and the particulate filter onto the same substrate for reducing NOx and particulate matter emissions. |
Urea dosing systems | Systems comprised of a urea injector, pump, and control unit, among other parts, that dose liquid urea onto SCR catalysts. |
Four-way catalysts | Devices that combine a three-way catalyst and a particulate filter onto a single device by having the catalyst coating of a converter directly applied onto a particulate filter. |
Alternative NOx reduction technologies | Devices which reduce NOx emissions from diesel powertrains, by using, for example, alternative reductants such as diesel fuel, E85 (85% ethanol, 15% gasoline), or solid forms of ammonia. |
Mufflers and resonators | Devices to provide noise elimination and acoustic tuning. |
Fabricated exhaust manifolds | Components that collect gases from individual cylinders of a vehicle’s engine and direct them into a single exhaust pipe. Fabricated manifolds can form the core of an emissions module that includes an integrated catalytic converter (maniverter) and/or turbocharger. |
Pipes | Utilized to connect various parts of both the hot and cold ends of an exhaust system. |
Hydroformed assemblies | Forms in various geometric shapes, such as Y-pipes or T-pipes, which provide optimization in both design and installation as compared to conventional pipes. |
Elastomeric hangers and isolators | Used for system installation and elimination of noise and vibration, and for the improvement of useful life. |
Aftertreatment control units | Computerized electronic devices that utilize embedded software to regulate the performance of active aftertreatment systems, including the control of sensors, injectors, vaporizers, pumps, heaters, valves, actuators, wiring harnesses, relays and other mechatronic components. |
Product | Description |
Pistons | Pistons convert the energy created by the combustion event into mechanical energy to drive a car; Pistons can be made from aluminum or steel, both casted and forged; Highly efficient engines impose high demands on pistons in terms of rigidity and temperature resistance. |
Piston rings | Piston rings are mounted on the piston to seal the combustion chamber while the piston is moving up and down; Modern rings need to resist high temperature and very abrasive environments without significant wear; Rings are critical for low oil consumptions. |
Cylinder liners | Cylinder liners, or sleeves, are specially engineered where surfaces formed within the engine block, working in tandem with the piston and ring, as the chamber in which the thermal energy of the combustion process is converted into mechanical energy. |
Valve seats and guides | Valve seats and guides are produced from powdered metal based on sophisticated metal-ceramic structures to meet extreme requirements for hardness. |
Bearings | Bearings provide the low-friction environment for rotating components like crankshafts and camshafts; Modern bearings are able to deal with very low viscosity oil even in highly repetitive motions like in stop/start-conditions. |
Spark plugs | Modern spark plugs for engines fueled by gasoline or natural gas have to ignite fuel even at very high combustion pressure and with very clean fuel-air mixture - combined with extended life expectation well over 100,000 miles for turbo-charged engines. |
Valvetrain products | Valvetrain products include mainly engine valves but also retainers, rotators, cotters, and tappets for use in both diesel and gas engines; the most demanding applications require sodium-filled hollow valves for fast heat dissipation. |
System protection | System protection products include protection sleeves for wire harness and for oil and water tubes as well as acoustic and EMI/RFI shielding, heat and abrasion protection, and safety/ crash protection for cables and tubes for engines and cars. |
Seals and gaskets | Cylinder-head gaskets and other hot and cold gaskets are sealing engines and engine components; dynamic and static seals protecting rotating engine and transmission components against oil and gas leakages. Such seals and gaskets are made from high-alloyed steel as well as from sophisticated rubber and polymers. |
Product | Description |
Shocks and Struts | Shock absorbers, strut assemblies, bare strut, coil springs, top mounts, and ride control accessories. |
Steering and Suspension | Control arms, ball joints, tie rod ends, wheel bearings, sway bar links, hub assembly, and universal joints. |
Braking | Shoes, pads, rotors, drums, and master cylinders. |
Product | Description |
Sealing | Head gaskets, valve cover gaskets, oil seals, and other gaskets. |
Engine | Pistons, piston ring set, engine bearings, valves, valve-train, camshafts, valve lifters, and oil pumps. |
Emissions | Catalytic converters, exhaust manifolds, exhaust pipes, and mufflers. |
Maintenance | Spark plugs, air filters, oil filters, cabin air filter, batteries, headlamps, glow plugs, and chemicals. |
Product | Description |
NVH Performance Materials | Highly engineered NVH isolation technology and value-added products for light vehicle and commercial vehicle markets. |
Advanced Suspension Technologies | Advanced passive and semi-active suspension with tuning support and controls capability for the light vehicle, two-wheel and motorsports markets. |
Ride Control | Providing conventional shocks, struts, and dampers with value-added tuning solutions for the light vehicle and commercial vehicle markets. |
Braking | Friction materials, including cutting edge formulations for the light vehicle, commercial vehicle, and rail markets. |
• | declare dividends or redeem or repurchase capital stock; |
• | prepay, redeem or purchase other debt; |
• | incur liens; |
• | make loans, guarantees, acquisitions and investments; |
• | incur additional indebtedness; |
• | amend or otherwise alter debt and other material agreements; |
• | engage in mergers, acquisitions or asset sales; and |
• | engage in transactions with affiliates. |
• | diversion of management’s attention to integration matters; |
• | challenges in learning day-to-day operations of a new business with new management and teams; |
• | difficulties in sustaining achieved cost savings, synergies, business opportunities and growth prospects from the Federal-Mogul Acquisition; |
• | unforeseen difficulties post the integration of operations and systems, including the risk that information technology-enabled process transformations do not achieve the desired levels of process efficiency, customer satisfaction and/or expected business benefits; |
• | difficulties in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures; |
• | difficulties in the assimilation of employees; |
• | difficulties in managing the expanded operations of a significantly larger and more complex company; |
• | challenges in attracting and retaining key personnel; |
• | the impact of potential liabilities we may be inheriting from Federal-Mogul; and |
• | coordinating a geographically dispersed organization. |
• | currency exchange rate fluctuations, including those in countries with hyperinflationary economies; |
• | exposure to local economic conditions and labor issues; |
• | exposure to local political conditions, including the risk of seizure of assets by a foreign government; |
• | exposure to local social conditions, including corruption and any acts of war, terrorism or similar events; |
• | exposure to local public health issues and the resultant impact on economic and political conditions; |
• | inflation in certain countries; |
• | limitations on the repatriation of cash, including imposition or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries; |
• | retaliatory tariffs and restrictions limiting free movement of goods and an unfavorable trade environment, including as a result of political conditions and changes in the laws in the United States and elsewhere and as described in more details below; and |
• | requirements for manufacturers to use locally produced goods. |
Reportable Segments | ||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Total | ||||||||||
Manufacturing plants: | ||||||||||||||
North America | 15 | 23 | 11 | 8 | 57 | |||||||||
Europe | 19 | 34 | 14 | 3 | 70 | |||||||||
South America | 2 | 5 | 3 | 2 | 12 | |||||||||
Asia Pacific | 23 | 23 | 12 | 4 | 62 | |||||||||
59 | 85 | 40 | 17 | 201 | ||||||||||
Engineering and technical facilities | 7 | 14 | 19 | 5 | 45 | |||||||||
Distribution centers and warehouses | — | — | — | 56 | 56 | |||||||||
Total as of December 31, 2019 | 66 | 99 | 59 | 78 | 302 | |||||||||
Lease | 42 | 25 | 28 | 48 | 143 | |||||||||
Own | 24 | 74 | 31 | 30 | 159 | |||||||||
Total | 66 | 99 | 59 | 78 | 302 |
Name and Age | Offices Held | |
Brian J. Kesseler (53) | Chief Executive Officer | |
Jason M. Hollar (46) | Executive Vice President Finance and Chief Financial Officer | |
Peng (Patrick) Guo (54) | Executive Vice President and President Clean Air | |
Rainer Jueckstock (60) | Executive Vice President and President Powertrain | |
Bradley S. Norton (56) | Executive Vice President and President Original Equipment | |
Scott Usitalo (61) | Executive Vice President and President Motorparts | |
Kaled Awada (45) | Senior Vice President and Chief Human Resources Officer | |
Brandon B. Smith (39) | Senior Vice President, General Counsel and Corporate Secretary | |
John S. Patouhas (53) | Vice President and Chief Accounting Officer |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES. |
Period | Total Number of Shares Purchased (1) | Average Price Paid | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Value of Shares That May Yet be Purchased Under These Plans or Programs | |||||||||
October 2019 | 21 | $ | 12.98 | — | $ | 231,000,000 | |||||||
November 2019 | — | — | — | 231,000,000 | |||||||||
December 2019 | — | — | — | $ | 231,000,000 | ||||||||
Total | 21 | $ | 12.98 | — |
(1) | Shares withheld upon vesting of restricted stock in the fourth quarter of 2019. |
*$100 invested on 12/31/14 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. |
Copyright© 2020 Standard & Poor's, a division of S&P Global. All rights reserved. |
As of December 31 | |||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||
Tenneco Inc. | $ | 100.00 | $ | 81.10 | $ | 110.35 | $ | 105.18 | $ | 50.37 | $ | 24.26 | |||||||||||
S&P 500 | $ | 100.00 | $ | 101.38 | $ | 113.51 | $ | 138.29 | $ | 132.33 | $ | 173.86 | |||||||||||
Peer Group | $ | 100.00 | $ | 76.39 | $ | 96.09 | $ | 113.51 | $ | 87.90 | $ | 116.73 |
Year Ended December 31 | |||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||
(Millions Except Share and Per Share Amounts) | |||||||||||||||||||
Statements of Income Data: | |||||||||||||||||||
Net sales and operating revenues | $ | 17,450 | $ | 11,763 | $ | 9,274 | $ | 8,597 | $ | 8,180 | |||||||||
Earnings before interest expense, income taxes, and noncontrolling interests(a) | $ | 121 | $ | 322 | $ | 413 | $ | 484 | $ | 507 | |||||||||
Net income (loss) | $ | (220 | ) | $ | 111 | $ | 265 | $ | 415 | $ | 291 | ||||||||
Net income (loss) attributable to Tenneco Inc. | $ | (334 | ) | $ | 55 | $ | 198 | $ | 347 | $ | 237 | ||||||||
Basic earnings (loss) per share | $ | (4.12 | ) | $ | 0.93 | $ | 3.75 | $ | 6.20 | $ | 3.98 | ||||||||
Diluted earnings (loss) per share | $ | (4.12 | ) | $ | 0.93 | $ | 3.73 | $ | 6.15 | $ | 3.94 | ||||||||
Cash dividends declared per share | $ | 0.25 | $ | 1.00 | $ | 1.00 | $ | — | $ | — | |||||||||
Balance Sheet Data: | |||||||||||||||||||
Total assets | $ | 13,226 | $ | 13,232 | $ | 4,796 | $ | 4,312 | $ | 3,937 | |||||||||
Short-term debt | $ | 185 | $ | 153 | $ | 103 | $ | 117 | $ | 103 | |||||||||
Long-term debt | $ | 5,371 | $ | 5,340 | $ | 1,358 | $ | 1,294 | $ | 1,124 | |||||||||
Redeemable noncontrolling interests | $ | 196 | $ | 138 | $ | 42 | $ | 40 | $ | 41 | |||||||||
Total equity | $ | 1,619 | $ | 1,916 | $ | 682 | $ | 573 | $ | 425 |
Year Ended December 31 | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Restructuring charges and asset impairments, net | $ | 126 | $ | 117 | $ | 47 | $ | 30 | $ | 63 |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
• | The Clean Air segment designs, manufactures, and distributes a variety of products and systems designed to reduce pollution and optimize engine performance, acoustic tuning, and weight on a vehicle for OEMs; and |
• | The Powertrain segment focuses on original equipment powertrain products for automotive, heavy duty, and industrial applications. |
• | The Motorparts segment engineers, manufactures, sources, and distributes a broad portfolio of products in the global vehicle aftermarket while also servicing the original equipment and original equipment servicers market with products, including vehicle braking systems and a wide variety of chassis, engine, sealing, wiper, filter, lighting, and other general maintenance applications; and |
• | The Ride Performance segment designs, manufactures, markets, and distributes a variety of ride performance solutions and systems to a global OE customer base, including noise, vibration, and harshness performance materials, advanced suspension technologies, ride control, and braking. |
• | an increase in selling, general, and administrative (“SG&A”) costs, primarily due to the effect of the Acquisitions of $410 million, which was partially offset by a net reduction in SG&A costs of $24 million; |
• | an increase in depreciation and amortization of $328 million primarily due to the Acquisitions; |
• | an increase in engineering, research, and development of $124 million primarily due to the Acquisitions; |
• | an increase in restructuring charges and asset impairments of $9 million; |
• | a goodwill impairment charge of $108 million and impairment of indefinite-lived intangible assets of $133 million; and |
• | an increase in interest expense and other financing charges of $174 million. |
• | an increase in equity earnings in nonconsolidated affiliates of $25 million, which was the result of the Federal-Mogul Acquisition; |
• | an increase in other income (expense), net of $63 million due primarily to the Acquisitions, a recovery of value-added tax in a foreign jurisdiction, and income from an EPA mandate to which we were the beneficiary; and |
• | a reduction in income tax expense of $44 million. |
Year Ended December 31 | Increase / (Decrease) | |||||||||||||
2019 | 2018 | $ Change | % Change (a) | |||||||||||
(Millions Except Percent, Share and Per Share Amounts) | ||||||||||||||
Revenues | ||||||||||||||
Net sales and operating revenues | $ | 17,450 | $ | 11,763 | $ | 5,687 | 48 | % | ||||||
Costs and expenses | ||||||||||||||
Cost of sales (exclusive of depreciation and amortization) | 14,912 | 10,002 | 4,910 | 49 | % | |||||||||
Selling, general, and administrative | 1,138 | 752 | 386 | 51 | % | |||||||||
Depreciation and amortization | 673 | 345 | 328 | 95 | % | |||||||||
Engineering, research, and development | 324 | 200 | 124 | 62 | % | |||||||||
Restructuring charges and asset impairments | 126 | 117 | 9 | 8 | % | |||||||||
Goodwill and intangible impairment charges | 241 | 3 | 238 | n/m | ||||||||||
17,414 | 11,419 | 5,995 | 53 | % | ||||||||||
Other income (expense) | ||||||||||||||
Non-service pension and postretirement benefit (costs) credits | (11 | ) | (20 | ) | 9 | (45 | )% | |||||||
Equity in earnings (losses) of nonconsolidated affiliates, net of tax | 43 | 18 | 25 | 139 | % | |||||||||
Loss on extinguishment of debt | — | (10 | ) | 10 | (100 | )% | ||||||||
Other income (expense), net | 53 | (10 | ) | 63 | n/m | |||||||||
85 | (22 | ) | 107 | n/m | ||||||||||
Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 121 | 322 | (201 | ) | (62 | )% | ||||||||
Interest expense | (322 | ) | (148 | ) | (174 | ) | 118 | % | ||||||
Earnings (loss) before income taxes and noncontrolling interests | (201 | ) | 174 | (375 | ) | (216 | )% | |||||||
Income tax (expense) benefit | (19 | ) | (63 | ) | 44 | (70 | )% | |||||||
Net income (loss) | (220 | ) | 111 | (331 | ) | n/m | ||||||||
Less: Net income attributable to noncontrolling interests | 114 | 56 | 58 | 104 | % | |||||||||
Net income (loss) attributable to Tenneco Inc. | $ | (334 | ) | $ | 55 | $ | (389 | ) | n/m | |||||
Earnings (loss) per share | ||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||
Earnings (loss) per share | $ | (4.12 | ) | $ | 0.93 | |||||||||
Weighted average shares outstanding | 80,904,060 | 58,625,087 | ||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||
Earnings (loss) per share | $ | (4.12 | ) | $ | 0.93 | |||||||||
Weighted average shares outstanding | 80,904,060 | 58,758,732 |
Year Ended December 31, 2018 | $ | 11,763 | |
Acquisitions | 5,600 | ||
Drivers in the change of organic revenues: | |||
Volume and mix | 370 | ||
Currency exchange rates | (310 | ) | |
Others | 27 | ||
Year Ended December 31, 2019 | $ | 17,450 |
Year Ended December 31, 2018 | $ | 10,002 | |
Acquisitions | 4,705 | ||
Drivers in the change of organic cost of sales: | |||
Volume and mix | 429 | ||
Material | 11 | ||
Currency exchange rates | (236 | ) | |
Others | 1 | ||
Year Ended December 31, 2019 | $ | 14,912 |
Year Ended December 31 | |||||||
2019 | 2018 | ||||||
EBITDA including noncontrolling interests by Segment: | |||||||
Clean Air | $ | 582 | $ | 599 | |||
Powertrain | 363 | 93 | |||||
Ride Performance | 8 | 69 | |||||
Motorparts | 184 | 161 | |||||
Corporate | (343 | ) | (255 | ) | |||
Depreciation and amortization | (673 | ) | (345 | ) | |||
Earnings before interest expense, income taxes, and noncontrolling interests | 121 | 322 | |||||
Interest expense | (322 | ) | (148 | ) | |||
Income tax (expense) benefit | (19 | ) | (63 | ) | |||
Net income (loss) | $ | (220 | ) | $ | 111 |
Segment Revenue | |||||||||||||||||||||||||||||||||||||||
New Tenneco | DRiV | ||||||||||||||||||||||||||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Total Revenue | |||||||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||||
Revenues | $ | 7,121 | $ | 6,707 | $ | 4,408 | $ | 1,112 | $ | 2,754 | $ | 2,164 | $ | 3,167 | $ | 1,780 | $ | 17,450 | $ | 11,763 | |||||||||||||||||||
Value-add revenues | 4,094 | 4,207 | 4,408 | 1,112 | 2,754 | 2,164 | 3,167 | 1,780 | 14,423 | 9,263 | |||||||||||||||||||||||||||||
Currency effect on value-add revenue | 113 | — | 12 | — | 75 | — | 42 | — | 242 | — | |||||||||||||||||||||||||||||
Value-add revenue excluding currency | $ | 4,207 | $ | 4,207 | $ | 4,420 | $ | 1,112 | $ | 2,829 | $ | 2,164 | $ | 3,209 | $ | 1,780 | $ | 14,665 | $ | 9,263 | |||||||||||||||||||
Substrate sales | $ | 3,027 | $ | 2,500 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 3,027 | $ | 2,500 | |||||||||||||||||||
Effect of Acquisitions | $ | — | $ | — | $ | 3,390 | $ | 1,112 | $ | 686 | $ | 215 | $ | 1,524 | $ | 559 | $ | 5,600 | $ | 1,886 |
Year Ended December 31 | |||||||||||
2019 | 2018 | Increase (Decrease) | % Increase (Decrease) | ||||||||
(Number of Vehicles in Thousands) | |||||||||||
North America | 16,290 | 16,959 | (669 | ) | (4 | )% | |||||
Europe | 21,058 | 21,979 | (921 | ) | (4 | )% | |||||
South America | 3,278 | 3,430 | (152 | ) | (4 | )% | |||||
China | 24,341 | 26,606 | (2,265 | ) | (9 | )% | |||||
India | 4,200 | 4,720 | (520 | ) | (11 | )% |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2019 vs 2018 Change | |||||||||
EBITDA including noncontrolling interests by Segment: | |||||||||||
Clean Air | $ | 582 | $ | 599 | $ | (17 | ) | ||||
Powertrain | $ | 363 | $ | 93 | $ | 270 | |||||
Ride Performance | $ | 8 | $ | 69 | $ | (61 | ) | ||||
Motorparts | $ | 184 | $ | 161 | $ | 23 |
Reportable Segments | |||||||||||||||||||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Total | Corporate | Reclass & Elims | Total | ||||||||||||||||||||||||
Year Ended December 31, 2019 | |||||||||||||||||||||||||||||||
Costs to achieve synergies (1): | |||||||||||||||||||||||||||||||
Restructuring related to synergy initiatives | $ | 6 | $ | 1 | $ | 2 | $ | 11 | $ | 20 | $ | 2 | $ | — | $ | 22 | |||||||||||||||
Other cost to achieve synergies | — | 1 | — | — | 1 | 6 | — | 7 | |||||||||||||||||||||||
Total costs to achieve synergies | 6 | 2 | 2 | 11 | 21 | 8 | — | 29 | |||||||||||||||||||||||
Restructuring and related expenses: | |||||||||||||||||||||||||||||||
Other restructuring charges and costs(2) | 23 | 30 | 68 | 3 | 124 | 9 | — | 133 | |||||||||||||||||||||||
Asset impairments | 1 | — | 3 | 1 | 5 | — | — | 5 | |||||||||||||||||||||||
Impairment of assets held for sale | — | — | — | 8 | 8 | — | — | 8 | |||||||||||||||||||||||
Total restructuring and related expenses | 24 | 30 | 71 | 12 | 137 | 9 | — | 146 | |||||||||||||||||||||||
Cost reduction initiatives (3) | — | — | — | — | — | 15 | — | 15 | |||||||||||||||||||||||
Acquisition and expected separation costs(4) | — | — | — | 1 | 1 | 126 | — | 127 | |||||||||||||||||||||||
Purchase accounting adjustments(5) | — | 12 | 4 | 41 | 57 | — | — | 57 | |||||||||||||||||||||||
Brazil tax credit(6) | (9 | ) | — | (6 | ) | (7 | ) | (22 | ) | — | — | (22 | ) | ||||||||||||||||||
Antitrust reserve change in estimate(7) | (9 | ) | — | — | — | (9 | ) | — | — | (9 | ) | ||||||||||||||||||||
Out of period adjustment(8) | — | — | 5 | — | 5 | — | — | 5 | |||||||||||||||||||||||
Process harmonization(9) | 13 | — | 4 | 9 | 26 | — | — | 26 | |||||||||||||||||||||||
Warranty charge(10) | — | — | — | 8 | 8 | — | — | 8 | |||||||||||||||||||||||
Pension settlement(11) | — | — | — | — | — | (2 | ) | — | (2 | ) | |||||||||||||||||||||
Goodwill and intangibles impairment charge(12) | — | 18 | 69 | 154 | 241 | — | — | 241 | |||||||||||||||||||||||
Total adjustments | $ | 25 | $ | 62 | $ | 149 | $ | 229 | $ | 465 | $ | 156 | $ | — | $ | 621 | |||||||||||||||
Year Ended December 31, 2018 | |||||||||||||||||||||||||||||||
Costs to achieve synergies (1): | |||||||||||||||||||||||||||||||
Restructuring related to synergy initiatives | $ | 3 | $ | — | $ | 10 | $ | 35 | $ | 48 | $ | 7 | $ | — | $ | 55 | |||||||||||||||
Other cost to achieve synergies | — | — | 1 | 1 | 2 | 5 | — | 7 | |||||||||||||||||||||||
Total costs to achieve synergies | 3 | — | 11 | 36 | 50 | 12 | — | 62 | |||||||||||||||||||||||
Restructuring and related expenses: | |||||||||||||||||||||||||||||||
Other restructuring charges | 11 | (2 | ) | 43 | 7 | 59 | (2 | ) | — | 57 | |||||||||||||||||||||
Asset impairments | — | — | 3 | — | 3 | 2 | — | 5 | |||||||||||||||||||||||
Total restructuring and related expenses | 11 | (2 | ) | 46 | 7 | 62 | — | — | 62 | ||||||||||||||||||||||
Cost reduction initiatives (3) | — | — | 10 | — | 10 | 8 | — | 18 | |||||||||||||||||||||||
Warranty charge (10) | — | — | 5 | — | 5 | — | — | 5 | |||||||||||||||||||||||
Litigation settlement accrual | — | — | 9 | — | 9 | 1 | — | 10 | |||||||||||||||||||||||
Acquisition and expected separation costs(4) | — | — | — | — | — | 96 | — | 96 | |||||||||||||||||||||||
Loss on extinguishment of debt (13) | — | — | — | — | — | 10 | — | 10 | |||||||||||||||||||||||
Environmental charge (14) | — | — | — | — | — | 4 | — | 4 | |||||||||||||||||||||||
Anti-dumping duty charge (15) | — | — | — | 16 | 16 | — | — | 16 | |||||||||||||||||||||||
Pension charges (11) | — | — | 3 | — | 3 | — | — | 3 | |||||||||||||||||||||||
Purchase accounting adjustments (5) | — | 44 | 5 | 57 | 106 | — | — | 106 | |||||||||||||||||||||||
Goodwill impairment charge (16) | — | — | 3 | — | 3 | — | — | 3 | |||||||||||||||||||||||
Total adjustments | $ | 14 | $ | 42 | $ | 92 | $ | 116 | $ | 264 | $ | 131 | $ | — | $ | 395 |
Year Ended December 31 | Increase / (Decrease) | |||||||||||||
2018 | 2017 | $ Change | % Change (a) | |||||||||||
(Millions Except Percent, Share and Per Share Amounts) | ||||||||||||||
Revenues | ||||||||||||||
Net sales and operating revenues | $ | 11,763 | $ | 9,274 | $ | 2,489 | 27 | % | ||||||
Costs and expenses | ||||||||||||||
Cost of sales (exclusive of depreciation and amortization) | 10,002 | 7,771 | 2,231 | 29 | % | |||||||||
Selling, general, and administrative | 752 | 632 | 120 | 19 | % | |||||||||
Depreciation and amortization | 345 | 226 | 119 | 53 | % | |||||||||
Engineering, research, and development | 200 | 158 | 42 | 27 | % | |||||||||
Restructuring charges and asset impairments | 117 | 47 | 70 | 149 | % | |||||||||
Goodwill and intangible impairment charges | 3 | 11 | (8 | ) | (73 | )% | ||||||||
11,419 | 8,845 | 2,574 | 29 | % | ||||||||||
Other income (expense) | ||||||||||||||
Non-service pension and postretirement benefit (costs) credits | (20 | ) | (16 | ) | (4 | ) | 25 | % | ||||||
Equity in earnings (losses) of nonconsolidated affiliates, net of tax | 18 | (1 | ) | 19 | n/m | |||||||||
Loss on extinguishment of debt | (10 | ) | (1 | ) | (9 | ) | n/m | |||||||
Other expense (income), net | (10 | ) | 2 | (12 | ) | n/m | ||||||||
(22 | ) | (16 | ) | (6 | ) | 38 | % | |||||||
Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 322 | 413 | (91 | ) | (22 | )% | ||||||||
Interest expense | (148 | ) | (77 | ) | (71 | ) | 92 | % | ||||||
Earnings (loss) before income taxes and noncontrolling interests | 174 | 336 | (162 | ) | (48 | )% | ||||||||
Income tax (expense) benefit | (63 | ) | (71 | ) | 8 | (11 | )% | |||||||
Net income (loss) | 111 | 265 | (154 | ) | (58 | )% | ||||||||
Less: Net income attributable to noncontrolling interests | 56 | 67 | (11 | ) | (16 | )% | ||||||||
Net income (loss) attributable to Tenneco Inc. | $ | 55 | $ | 198 | $ | (143 | ) | (72 | )% | |||||
Earnings (loss) per share | ||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||
Earnings (loss) per share | $ | 0.93 | $ | 3.75 | ||||||||||
Weighted average shares outstanding | 58,625,087 | 52,796,184 | ||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||
Earnings (loss) per share | $ | 0.93 | $ | 3.73 | ||||||||||
Weighted average shares outstanding | 58,758,732 | 53,026,911 |
Year ended December 31, 2017 | $ | 9,274 | |
Federal-Mogul Acquisition | 1,886 | ||
Drivers in the change of organic revenues: | |||
Volume and mix | 597 | ||
Currency exchange rates | 12 | ||
Others | (6 | ) | |
Year ended December 31, 2018 | $ | 11,763 |
Year ended December 31, 2017 | $ | 7,771 | |
Federal-Mogul Acquisition | 1,637 | ||
Drivers in the change of organic cost of sales: | |||
Volume and mix | 556 | ||
Material | 13 | ||
Currency exchange rates | 6 | ||
Others | 19 | ||
Year ended December 31, 2018 | $ | 10,002 |
Year Ended December 31 | |||||||
2018 | 2017 | ||||||
EBITDA including noncontrolling interests by Segment: | |||||||
Clean Air | $ | 599 | $ | 564 | |||
Powertrain | 93 | — | |||||
Ride Performance | 69 | 125 | |||||
Motorparts | 161 | 195 | |||||
Corporate | (255 | ) | (245 | ) | |||
Depreciation and amortization | (345 | ) | (226 | ) | |||
Earnings before interest expense, income taxes, and noncontrolling interests | 322 | 413 | |||||
Interest expense | (148 | ) | (77 | ) | |||
Income tax (expense) benefit | (63 | ) | (71 | ) | |||
Net income (loss) | $ | 111 | $ | 265 |
Segment Revenue | |||||||||||||||||||||||||||||||||||||||
New Tenneco | DRiV | ||||||||||||||||||||||||||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Total Revenue | |||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||
Revenues | $ | 6,707 | $ | 6,216 | $ | 1,112 | $ | — | $ | 2,164 | $ | 1,807 | $ | 1,780 | $ | 1,251 | $ | 11,763 | $ | 9,274 | |||||||||||||||||||
Value-add revenues | 4,207 | 4,029 | 1,112 | — | 2,164 | 1,807 | 1,780 | 1,251 | 9,263 | 7,087 | |||||||||||||||||||||||||||||
Currency effect on value-add revenue | (31 | ) | — | — | — | 4 | — | 29 | — | 2 | — | ||||||||||||||||||||||||||||
Value-add revenue excluding currency | $ | 4,176 | $ | 4,029 | $ | 1,112 | $ | — | $ | 2,168 | $ | 1,807 | $ | 1,809 | $ | 1,251 | $ | 9,265 | $ | 7,087 | |||||||||||||||||||
Substrate sales | $ | 2,500 | $ | 2,187 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 2,500 | $ | 2,187 | |||||||||||||||||||
Effect of Acquisitions | $ | — | $ | — | $ | 1,112 | $ | — | $ | 215 | $ | — | $ | 559 | $ | — | $ | 1,886 | $ | — |
Year Ended December 31 | |||||||||||
2018 | 2017 | Increase (Decrease) | % Increase (Decrease) | ||||||||
(Number of Vehicles in Thousands) | |||||||||||
North America | 16,959 | 17,064 | (105 | ) | (1 | )% | |||||
Europe | 21,979 | 22,216 | (237 | ) | (1 | )% | |||||
South America | 3,430 | 3,291 | 139 | 4 | % | ||||||
China | 26,606 | 27,726 | (1,120 | ) | (4 | )% | |||||
India | 4,720 | 4,457 | 263 | 6 | % |
Year Ended December 31 | |||||||||||
2018 | 2017 | 2018 vs 2017 Change | |||||||||
EBITDA including noncontrolling interests by Segment: | |||||||||||
Clean Air | $ | 599 | $ | 564 | $ | 35 | |||||
Powertrain | $ | 93 | $ | — | $ | 93 | |||||
Ride Performance | $ | 69 | $ | 125 | $ | (56 | ) | ||||
Motorparts | $ | 161 | $ | 195 | $ | (34 | ) |
Reportable Segments | |||||||||||||||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Total | Corporate | Total | |||||||||||||||||||||
(Millions) | |||||||||||||||||||||||||||
Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Costs to achieve synergies (1): | |||||||||||||||||||||||||||
Restructuring related to synergy initiatives | $ | 3 | $ | — | $ | 10 | $ | 35 | $ | 48 | $ | 7 | $ | 55 | |||||||||||||
Other cost to achieve synergies | — | — | 1 | 1 | 2 | 5 | 7 | ||||||||||||||||||||
Total costs to achieve synergies | 3 | — | 11 | 36 | 50 | 12 | 62 | ||||||||||||||||||||
Restructuring and related expenses: | |||||||||||||||||||||||||||
Other restructuring charges | 11 | (2 | ) | 43 | 7 | 59 | (2 | ) | 57 | ||||||||||||||||||
Asset impairments | — | — | 3 | — | 3 | 2 | 5 | ||||||||||||||||||||
Total restructuring and related expenses | 11 | (2 | ) | 46 | 7 | 62 | — | 62 | |||||||||||||||||||
Cost reduction initiatives (3) | — | — | 10 | — | 10 | 8 | 18 | ||||||||||||||||||||
Warranty charge (10) | — | — | 5 | — | 5 | — | 5 | ||||||||||||||||||||
Litigation settlement accrual | — | — | 9 | — | 9 | 1 | 10 | ||||||||||||||||||||
Acquisition and expected separation costs(4) | — | — | — | — | — | 96 | 96 | ||||||||||||||||||||
Loss on extinguishment of debt (13) | — | — | — | — | — | 10 | 10 | ||||||||||||||||||||
Environmental charge (14) | — | — | — | — | — | 4 | 4 | ||||||||||||||||||||
Anti-dumping duty charge (15) | — | — | — | 16 | 16 | — | 16 | ||||||||||||||||||||
Pension charges (11) | — | — | 3 | — | 3 | — | 3 | ||||||||||||||||||||
Purchase accounting adjustments (5) | — | 44 | 5 | 57 | 106 | — | 106 | ||||||||||||||||||||
Goodwill impairment charge (16) | — | — | 3 | — | 3 | — | 3 | ||||||||||||||||||||
Total adjustments | $ | 14 | $ | 42 | $ | 92 | $ | 116 | $ | 264 | $ | 131 | $ | 395 | |||||||||||||
Year Ended December 31, 2017 | |||||||||||||||||||||||||||
Restructuring and related expenses | $ | 23 | $ | — | $ | 16 | $ | 7 | $ | 46 | $ | 1 | $ | 47 | |||||||||||||
Cost reduction initiatives (3) | 4 | — | 12 | 3 | 19 | 3 | 22 | ||||||||||||||||||||
Loss on extinguishment of debt (13) | — | — | — | — | — | 1 | 1 | ||||||||||||||||||||
Warranty settlement (10) | — | — | 7 | — | 7 | — | 7 | ||||||||||||||||||||
Goodwill impairment charge (16) | — | — | 7 | 4 | 11 | — | 11 | ||||||||||||||||||||
Pension charges/ stock vesting charges (17) | — | — | — | — | — | 13 | 13 | ||||||||||||||||||||
Antitrust settlement accrual (18) | — | — | — | — | — | 132 | 132 | ||||||||||||||||||||
Gain on sale of unconsolidated JV | — | — | — | — | — | (5 | ) | (5 | ) | ||||||||||||||||||
Total adjustments | $ | 27 | $ | — | $ | 42 | $ | 14 | $ | 83 | $ | 145 | $ | 228 |
Year Ended December 31 | % Change | |||||||||
2019 | 2018 | |||||||||
(millions) | ||||||||||
Short-term debt and maturities classified as current | $ | 185 | $ | 153 | 21 | % | ||||
Long-term debt | 5,371 | 5,340 | 1 | % | ||||||
Total debt | 5,556 | 5,493 | 1 | % | ||||||
Total redeemable noncontrolling interests | 196 | 138 | 42 | % | ||||||
Total noncontrolling interests | 194 | 190 | 2 | % | ||||||
Tenneco Inc. shareholders’ equity | 1,425 | 1,726 | (17 | )% | ||||||
Total equity | 1,619 | 1,916 | (16 | )% | ||||||
Total capitalization | $ | 7,371 | $ | 7,547 | (2 | )% |
Committed Credit Facilities(a) as of December 31, 2019 | |||||||||||||||||
Term | Commitments | Borrowings | Letters of Credit(b) | Available | |||||||||||||
(millions) | |||||||||||||||||
Tenneco Inc. revolving credit agreement | 2023 | $ | 1,500 | $ | 183 | $ | — | $ | 1,317 | ||||||||
Tenneco Inc. Term Loan A | 2023 | 1,615 | 1,615 | — | — | ||||||||||||
Tenneco Inc. Term Loan B | 2025 | 1,683 | 1,683 | — | — | ||||||||||||
Subsidiaries’ credit agreements | 2020-2028 | 168 | 159 | — | 9 | ||||||||||||
$ | 4,966 | $ | 3,640 | $ | — | $ | 1,326 |
(a) | We are generally required to pay commitment fees on the unused portion of the total commitment. |
(b) | Letters of credit reduce the available borrowings under the revolving credit agreement. |
Pro forma Consolidated Leverage Ratio | Prior to Spin-Off | Post Spin-Off | |||
(millions) | |||||
Greater than 2.25x | $ | 360 | $360 x Post Spin-Off EBITDA/Pre Spin-Off EBITDA | ||
Equal to or less than 2.25x | unlimited | unlimited |
2019 | ||||||||||
Principal | Carrying Amount(a) | Effective Interest Rate | ||||||||
(millions) | ||||||||||
Senior Unsecured Notes | ||||||||||
$225 million of 5.375% Senior Notes due 2024 | $ | 225 | $ | 222 | 5.609 | % | ||||
$500 million of 5.000% Senior Notes due 2026 | $ | 500 | $ | 494 | 5.219 | % | ||||
Senior Secured Notes | ||||||||||
€415 million 4.875% Euro Fixed Rate Notes due 2022 | $ | 465 | $ | 479 | 3.599 | % | ||||
€300 million of Euribor plus 4.875% Euro Floating Rate Notes due 2024 | $ | 336 | $ | 340 | 4.620 | % | ||||
€350 million of 5.000% Euro Fixed Rate Notes due 2024 | $ | 392 | $ | 413 | 3.823 | % |
As of December 31 | ||||||||
2019 | 2018 | |||||||
(millions) | ||||||||
Borrowings on securitization programs | $ | 4 | $ | 6 |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
(millions) | |||||||||||
Loss on sale of receivables (a) | $ | 31 | $ | 16 | $ | 5 |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
(millions) | |||||||||||
Operational cash flow before changes in operating assets and liabilities | $ | 532 | $ | 433 | $ | 502 | |||||
Changes in operating assets and liabilities: | |||||||||||
Receivables | (225 | ) | (174 | ) | (76 | ) | |||||
Inventories | 284 | 27 | (94 | ) | |||||||
Payables and accrued expenses | (66 | ) | 291 | 136 | |||||||
Accrued interest and income taxes | 3 | (19 | ) | 1 | |||||||
Other assets and liabilities | (84 | ) | (119 | ) | 48 | ||||||
Total change in operating assets and liabilities | (88 | ) | 6 | 15 | |||||||
Net cash provided (used) by operating activities | $ | 444 | $ | 439 | $ | 517 |
• | an improvement in operational cash flow before changes in operating assets and liabilities of $99 million resulting from the full year inclusion of the operating results of Federal-Mogul; and |
• | offset by an increase in cash used by working capital of $94 million. The $94 million decrease in working capital items was primarily driven by an increase in factored receivables that are shown as proceeds from deferred purchase price of factored receivables in the investing activities, partially offset by a reduction of inventory levels. |
• | cash flows provided by the operations of Federal-Mogul, which was acquired in the fourth quarter of 2018, of approximately $234 million, this included a cash outflow of $61 million related to the settlement of a litigation matter that was assumed as part of the Federal-Mogul Acquisition (see Note 3, Acquisitions and Divestitures for further information); |
• | offset by a $88 million outflow in working capital items (excluding changes in working capital of the acquired Federal-Mogul operations); |
• | an increase in cash payments for interest of $36 million; and |
• | other one-time charges of approximately $180 million, including, among other items, transactional related costs and advisory fees in connection with the Federal-Mogul Acquisition, and an antitrust settlement payment. |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
(millions) | |||||||||||
Acquisitions, net of cash acquired | $ | (158 | ) | $ | (2,194 | ) | $ | — | |||
Proceeds from sale of assets | 20 | 9 | 8 | ||||||||
Net proceeds from sale of business | 22 | — | — | ||||||||
Proceeds from sale of investment in nonconsolidated affiliates | 2 | — | 9 | ||||||||
Cash payments for plant, property, and equipment | (744 | ) | (507 | ) | (419 | ) | |||||
Proceeds from deferred purchase price of factored receivables | 250 | 174 | 112 | ||||||||
Other | 2 | 4 | (10 | ) | |||||||
Net cash provided (used) by investing activities | $ | (606 | ) | $ | (2,514 | ) | $ | (300 | ) |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
(millions) | |||||||||||
Proceeds from term loans and notes | $ | 200 | $ | 3,426 | $ | 160 | |||||
Repayments of term loans and notes | (341 | ) | (453 | ) | (36 | ) | |||||
Borrowings on revolving lines of credit | 9,120 | 5,149 | 6,664 | ||||||||
Payments on revolving lines of credit | (8,884 | ) | (5,405 | ) | (6,737 | ) | |||||
Repurchase of common shares | (2 | ) | (1 | ) | (1 | ) | |||||
Cash dividends | (20 | ) | (59 | ) | (53 | ) | |||||
Debt issuance cost of long-term debt | — | (95 | ) | (8 | ) | ||||||
Purchase of common stock under the share repurchase program | — | — | (169 | ) | |||||||
Net decrease in bank overdrafts | (13 | ) | (5 | ) | (7 | ) | |||||
Acquisition of additional ownership interest in consolidated affiliates | (10 | ) | — | — | |||||||
Distributions to noncontrolling interest partners | (43 | ) | (51 | ) | (64 | ) | |||||
Other | (4 | ) | (30 | ) | — | ||||||
Net cash provided (used) by financing activities | $ | 3 | $ | 2,476 | $ | (251 | ) |
Payments due by period: | |||||||||||||||||||
Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
(millions) | |||||||||||||||||||
Revolver borrowings | $ | 183 | $ | — | $ | — | $ | 183 | $ | — | |||||||||
Senior term loans | 3,298 | 102 | 332 | 1,266 | 1,598 | ||||||||||||||
Senior notes | 1,918 | — | 465 | 953 | 500 | ||||||||||||||
Other subsidiary debt and finance lease obligations | 14 | 4 | 5 | 3 | 2 | ||||||||||||||
Short-term debt (including bank overdrafts) | 181 | 181 | — | — | — | ||||||||||||||
Total debt obligations | 5,594 | 287 | 802 | 2,405 | 2,100 | ||||||||||||||
Pension obligations | 1,048 | 117 | 228 | 224 | 479 | ||||||||||||||
Operating leases | 367 | 111 | 145 | 71 | 40 | ||||||||||||||
Purchase obligations (a) | 240 | 240 | — | — | — | ||||||||||||||
Interest payments | 958 | 244 | 414 | 261 | 39 | ||||||||||||||
Capital commitments | 106 | 106 | — | — | — | ||||||||||||||
Total payments | $ | 8,313 | $ | 1,105 | $ | 1,589 | $ | 2,961 | $ | 2,658 |
Pension Benefits | Other Postretirement | |||||||
U.S. | Non-U.S. | |||||||
Plans | Plans | Benefits | ||||||
Used to calculate net periodic benefit cost | 4.2 | % | 2.6 | % | 4.3 | % | ||
Used to calculate benefit obligations | 3.2 | % | 1.7 | % | 3.2 | % |
Pension Benefits | Other Postretirement Benefits | ||||||||||||||||||||||
U.S. Plans | Non-U.S. Plans | ||||||||||||||||||||||
Change in 2020 pension expense | Change in PBO | Change in 2020 pension expense | Change in PBO | Change in 2020 pension expense | Change in PBO | ||||||||||||||||||
25 basis point (“bp”) decrease in discount rate | $ | (1 | ) | $ | 33 | $ | 2 | $ | 41 | $ | — | $ | 7 | ||||||||||
25 bp increase in discount rate | $ | 2 | $ | (31 | ) | $ | (1 | ) | $ | (37 | ) | $ | — | $ | (6 | ) | |||||||
25 bp decrease in return on assets rate | $ | 2 | n/a | $ | 1 | n/a | n/a | n/a | |||||||||||||||
25 bp increase in return on assets rate | $ | (2 | ) | n/a | $ | (1 | ) | n/a | n/a | n/a |
Total service and interest cost | APBO | ||||||
100 bp increase in health care cost trend rate | $ | — | $ | 21 | |||
100 bp decrease in health care cost trend rate | $ | (1 | ) | $ | (18 | ) |
Notional Amount in Foreign Currency | ||||
(millions) | ||||
British pounds | —Purchase | 4 | ||
—Sell | (1 | ) | ||
Canadian dollars | —Sell | (2 | ) | |
European euro | —Sell | (21 | ) | |
Japanese yen | —Sell | (251 | ) | |
Polish zloty | —Purchase | 71 | ||
Singapore dollars | —Sell | (17 | ) | |
South African rand | —Sell | (49 | ) | |
Mexican pesos | —Purchase | 14 | ||
U.S. dollars | —Purchase | 20 |
Years Ended December 31 | ||||||||
2019 | 2018 | |||||||
(millions) | ||||||||
Translation gains (losses) recorded in accumulated other comprehensive income (loss) | $ | 16 | $ | (134 | ) | |||
Transaction gains (losses) recorded in earnings | $ | (11 | ) | $ | 15 |
Page | |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
(Millions Except Share and Per Share Amounts) | |||||||||||
Revenues | |||||||||||
Net sales and operating revenues | $ | $ | $ | ||||||||
Costs and expenses | |||||||||||
Cost of sales (exclusive of depreciation and amortization) | |||||||||||
Selling, general, and administrative | |||||||||||
Depreciation and amortization | |||||||||||
Engineering, research, and development | |||||||||||
Restructuring charges and asset impairments | |||||||||||
Goodwill and intangible impairment charges | |||||||||||
Other income (expense) | |||||||||||
Non-service pension and postretirement benefit (costs) credits | ( | ) | ( | ) | ( | ) | |||||
Equity in earnings (losses) of nonconsolidated affiliates, net of tax | ( | ) | |||||||||
Loss on extinguishment of debt | ( | ) | ( | ) | |||||||
Other income (expense), net | ( | ) | |||||||||
( | ) | ( | ) | ||||||||
Earnings (loss) before interest expense, income taxes, and noncontrolling interests | |||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | |||||
Earnings (loss) before income taxes and noncontrolling interests | ( | ) | |||||||||
Income tax (expense) benefit | ( | ) | ( | ) | ( | ) | |||||
Net income (loss) | ( | ) | |||||||||
Less: Net income attributable to noncontrolling interests | |||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | ( | ) | $ | $ | ||||||
Earnings (loss) per share | |||||||||||
Basic earnings (loss) per share: | |||||||||||
Earnings (loss) per share | $ | ( | ) | $ | $ | ||||||
Weighted average shares outstanding | |||||||||||
Diluted earnings (loss) per share: | |||||||||||
Earnings (loss) per share | $ | ( | ) | $ | $ | ||||||
Weighted average shares outstanding |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
(Millions) | |||||||||||
Net income (loss) | $ | ( | ) | $ | $ | ||||||
Other comprehensive income (loss)—net of tax | |||||||||||
Foreign currency translation adjustments | ( | ) | |||||||||
Defined benefit plans | ( | ) | ( | ) | |||||||
( | ) | ( | ) | ||||||||
Comprehensive income (loss) | ( | ) | ( | ) | |||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | |||||||||||
Comprehensive income (loss) attributable to common shareholders | $ | ( | ) | $ | ( | ) | $ |
December 31 | |||||||
2019 | 2018 | ||||||
(Millions, except shares) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash | |||||||
Receivables: | |||||||
Customer notes and accounts, net | |||||||
Other | |||||||
Inventories | |||||||
Prepayments and other current assets | |||||||
Total current assets | |||||||
Property, plant and equipment, net | |||||||
Long-term receivables, net | |||||||
Goodwill | |||||||
Intangibles, net | |||||||
Investments in nonconsolidated affiliates | |||||||
Deferred income taxes | |||||||
Other assets | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Short-term debt, including current maturities of long-term debt | $ | $ | |||||
Accounts payable | |||||||
Accrued compensation and employee benefits | |||||||
Accrued income taxes | |||||||
Accrued expenses and other current liabilities | |||||||
Total current liabilities | |||||||
Long-term debt | |||||||
Deferred income taxes | |||||||
Pension and postretirement benefits | |||||||
Deferred credits and other liabilities | |||||||
Commitments and contingencies (Note 15) | |||||||
Total liabilities | |||||||
Redeemable noncontrolling interests | |||||||
Tenneco Inc. shareholders’ equity: | |||||||
Preferred stock—$0.01 par value; none issued | |||||||
Class A voting common stock—$0.01 par value; shares issued: (2019—71,727,061; 2018—71,675,379) | |||||||
Class B non-voting convertible common stock—$0.01 par value; shares issued: 2019 and 2018—23,793,669 | |||||||
Additional paid-in capital | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Accumulated deficit | ( | ) | ( | ) | |||
Shares held as treasury stock—at cost: 2019 and 2018—14,592,888 shares | ( | ) | ( | ) | |||
Total Tenneco Inc. shareholders’ equity | |||||||
Noncontrolling interests | |||||||
Total equity | |||||||
Total liabilities, redeemable noncontrolling interests, and equity | $ | $ |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
(Millions) | |||||||||||
Operating Activities | |||||||||||
Net income (loss) | $ | ( | ) | $ | $ | ||||||
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities: | |||||||||||
Goodwill and intangible impairment charge | |||||||||||
Depreciation and amortization | |||||||||||
Deferred income taxes | ( | ) | ( | ) | ( | ) | |||||
Stock-based compensation | |||||||||||
Restructuring charges and asset impairments, net of cash paid | |||||||||||
Change in pension and postretirement benefit plans | ( | ) | ( | ) | ( | ) | |||||
Equity in earnings of nonconsolidated affiliates | ( | ) | ( | ) | |||||||
Cash dividends received from nonconsolidated affiliates | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Receivables | ( | ) | ( | ) | ( | ) | |||||
Inventories | ( | ) | |||||||||
Payables and accrued expenses | ( | ) | |||||||||
Accrued interest and income taxes | ( | ) | |||||||||
Other assets and liabilities | ( | ) | ( | ) | |||||||
Net cash provided (used) by operating activities | |||||||||||
Investing Activities | |||||||||||
Acquisitions, net of cash acquired | ( | ) | ( | ) | |||||||
Proceeds from sale of assets | |||||||||||
Net proceeds from sale of business | |||||||||||
Proceeds from sale of investment in nonconsolidated affiliates | |||||||||||
Cash payments for plant, property, and equipment | ( | ) | ( | ) | ( | ) | |||||
Proceeds from deferred purchase price of factored receivables | |||||||||||
Other | ( | ) | |||||||||
Net cash provided (used) by investing activities | ( | ) | ( | ) | ( | ) | |||||
Financing Activities | |||||||||||
Proceeds from term loans and notes | |||||||||||
Repayments of term loans and notes | ( | ) | ( | ) | ( | ) | |||||
Borrowings on revolving lines of credit | |||||||||||
Payments on revolving lines of credit | ( | ) | ( | ) | ( | ) | |||||
Repurchase of common shares | ( | ) | ( | ) | ( | ) | |||||
Cash dividends | ( | ) | ( | ) | ( | ) | |||||
Debt issuance cost of long-term debt | ( | ) | ( | ) | |||||||
Purchase of common stock under the share repurchase program | ( | ) | |||||||||
Net decrease in bank overdrafts | ( | ) | ( | ) | ( | ) | |||||
Acquisition of additional ownership interest in consolidated affiliates | ( | ) | |||||||||
Distributions to noncontrolling interest partners | ( | ) | ( | ) | ( | ) | |||||
Other | ( | ) | ( | ) | |||||||
Net cash provided (used) by financing activities | ( | ) | |||||||||
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | ( | ) | |||||||||
Increase (decrease) in cash, cash equivalents, and restricted cash | ( | ) | ( | ) | |||||||
Cash, cash equivalents, and restricted cash, beginning of period | |||||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | $ | $ | ||||||||
Supplemental Cash Flow Information | |||||||||||
Cash paid during the year for interest | $ | $ | $ | ||||||||
Cash paid during the year for income taxes, net of refunds | $ | $ | $ | ||||||||
Non-cash Investing and Financing Activities | |||||||||||
Period end balance of trade payables for plant, property, and equipment | $ | $ | $ | ||||||||
Deferred purchase price of receivables factored in the period in investing | $ | $ | $ | ||||||||
Stock issued for acquisition of Federal-Mogul | $ | $ | ( | ) | $ | ||||||
Stock transferred for acquisition of Federal-Mogul | $ | $ | $ | ||||||||
Redeemable noncontrolling interest transaction with owner | $ | $ | $ |
Tenneco Inc. Shareholders' equity | |||||||||||||||||||||||||||||||
$0.01 Par Value Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Treasury Stock | Total Tenneco Inc. Shareholders' Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||
(Millions) | |||||||||||||||||||||||||||||||
Balance as of December 31, 2016 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||
Net income (loss) | — | — | — | — | |||||||||||||||||||||||||||
Other comprehensive income (loss)—net of tax: | |||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | ( | ) | |||||||||||||||||||||||||
Defined benefit plans | — | — | — | — | — | ||||||||||||||||||||||||||
Comprehensive income (loss) | |||||||||||||||||||||||||||||||
Stock-based compensation, net | — | — | — | — | — | ||||||||||||||||||||||||||
Cash dividends ($1.00 per share) | — | — | — | ( | ) | — | ( | ) | — | ( | ) | ||||||||||||||||||||
Purchases of treasury stock | — | — | — | — | ( | ) | ( | ) | — | ( | ) | ||||||||||||||||||||
Distributions declared to noncontrolling interests | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||
Balance as of December 31, 2017 | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
Net income (loss) | — | — | — | — | |||||||||||||||||||||||||||
Other comprehensive income (loss)—net of tax: | |||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | ( | ) | — | — | ( | ) | ( | ) | |||||||||||||||||||||
Defined benefit plans | — | — | ( | ) | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||
Comprehensive income (loss) | ( | ) | ( | ) | |||||||||||||||||||||||||||
Adjustments to adopt new accounting standards(a) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Common stock issued | — | — | — | — | — | ||||||||||||||||||||||||||
Acquisitions | — | — | — | — | — | — | |||||||||||||||||||||||||
Stock-based compensation, net | — | — | — | — | — | ||||||||||||||||||||||||||
Cash dividends ($1.00 per share) | — | — | — | ( | ) | — | ( | ) | — | ( | ) | ||||||||||||||||||||
Distributions declared to noncontrolling interests | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||
Balance as of December 31, 2018 | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
Net income (loss) | — | — | — | ( | ) | — | ( | ) | ( | ) | |||||||||||||||||||||
Other comprehensive income (loss)—net of tax: | |||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | ||||||||||||||||||||||||||
Defined benefit plans | — | — | ( | ) | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||
Comprehensive income (loss) | ( | ) | ( | ) | |||||||||||||||||||||||||||
Acquisition of additional ownership interest in consolidated affiliates | — | ( | ) | — | — | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
Stock-based compensation, net | — | — | — | — | — | ||||||||||||||||||||||||||
Purchase accounting measurement period adjustment | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||
Cash dividends ($0.25 per share) | — | — | — | ( | ) | — | ( | ) | — | ( | ) | ||||||||||||||||||||
Distributions declared to noncontrolling interests | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||
Redeemable noncontrolling interest transaction with owner | — | — | — | — | — | ||||||||||||||||||||||||||
Balance as of December 31, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | $ |
• | A |
• | A redeemable noncontrolling interests for a subsidiary in India acquired by the Company as part of the Federal-Mogul Acquisition on October 1, 2018. In accordance with local regulations, the Company initiated the process to make a tender offer of the shares it does not own due to the change in control triggered by the Federal-Mogul Acquisition. As of December 31, 2019, the related shares are currently redeemable and the tender offer price to redeem the shares exceeded the carrying value. The Company recognized the change in the carrying value and recorded an adjustment of $ |
December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
Balance at beginning of period | $ | $ | $ | ||||||||
Net income attributable to redeemable noncontrolling interests | |||||||||||
Other comprehensive (loss) income | ( | ) | ( | ) | |||||||
Acquisition and other | |||||||||||
Purchase accounting measurement period adjustments | ( | ) | |||||||||
Contributions received | |||||||||||
Redemption value remeasurement adjustments | |||||||||||
Distributions to noncontrolling interests | ( | ) | ( | ) | ( | ) | |||||
Balance at end of period | $ | $ | $ |
Initial Allocation | Adjustments | Final Allocation | |||||||||
Cash, cash equivalents, and restricted cash | $ | $ | — | $ | |||||||
Customer notes and accounts receivable | — | ||||||||||
Inventories | — | ||||||||||
Prepayments and other current assets | — | ||||||||||
Property, plant, and equipment | — | ||||||||||
Goodwill | |||||||||||
Intangibles | ( | ) | |||||||||
Other assets | — | ||||||||||
Total assets acquired | |||||||||||
Short-term debt, including current maturities of long-term debt | — | ||||||||||
Accounts payable | — | ||||||||||
Accrued compensation and employee benefits | — | ||||||||||
Deferred income taxes | |||||||||||
Deferred credits and other liabilities | — | ||||||||||
Total liabilities assumed | |||||||||||
Redeemable noncontrolling interest | — | ||||||||||
Net assets acquired | $ | $ | $ |
Estimated Fair Value | Weighted-Average Useful Lives | ||||
Definite-lived intangible assets: | |||||
Customer platforms and relationships | $ | ||||
Technology rights | |||||
Total definite-lived intangible assets | |||||
Indefinite-lived intangible assets: | |||||
Trade names and trademarks | |||||
Total | $ |
Tenneco shares issued for purchase of Federal-Mogul | |||
Tenneco share price at October 1, 2018 | $ | ||
Fair value of the Stock Consideration | |||
Cash Consideration(a) | |||
Repayment of Federal-Mogul debt and accrued interest (b) | |||
Total consideration | $ |
Initial Allocation | Adjustments | Final Allocation | |||||||||
Cash, cash equivalents, and restricted cash | $ | $ | — | $ | |||||||
Customer notes and accounts receivable | ( | ) | |||||||||
Other receivables | — | ||||||||||
Inventories | ( | ) | |||||||||
Prepayments and other current assets | — | ||||||||||
Property, plant, and equipment | ( | ) | |||||||||
Long-term receivables | — | ||||||||||
Goodwill | ( | ) | |||||||||
Intangibles | |||||||||||
Investments in nonconsolidated affiliates | ( | ) | |||||||||
Deferred income taxes | |||||||||||
Other assets | ( | ) | |||||||||
Total assets acquired | |||||||||||
Short-term debt, including current maturities of long-term debt | — | ||||||||||
Accounts payable | |||||||||||
Accrued compensation and employee benefits | — | ||||||||||
Accrued income taxes | — | ||||||||||
Accrued expenses and other current liabilities | ( | ) | |||||||||
Long-term debt | — | ||||||||||
Deferred income taxes | |||||||||||
Pension and postretirement benefits | — | ||||||||||
Deferred credits and other liabilities | ( | ) | |||||||||
Total liabilities assumed | |||||||||||
Redeemable noncontrolling interests | ( | ) | |||||||||
Noncontrolling interests | ( | ) | |||||||||
Net assets and noncontrolling interests acquired | $ | $ | — | $ |
Estimated Fair Value | Weighted-Average Useful Lives | ||||
Definite-lived intangible assets: | |||||
Customer platforms and relationships | $ | ||||
Technology rights | |||||
Packaged kits know-how | |||||
Catalogs | |||||
Licensing agreements | |||||
Land use rights | |||||
Total definite-lived intangible assets | |||||
Indefinite-lived intangible assets: | |||||
Trade names and trademarks | |||||
Total | $ |
Actual | Pro Forma | ||||||||||
For the Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
Net sales and operating revenues | $ | $ | $ | ||||||||
Earnings (loss) before income taxes and noncontrolling interests | $ | ( | ) | $ | $ | ||||||
Net income (loss) attributable to Tenneco Inc. | $ | ( | ) | $ | $ | ||||||
Basic earnings (loss) per share of common stock | $ | ( | ) | $ | $ | ||||||
Diluted earnings (loss) per share of common stock | $ | ( | ) | $ | $ |
December 31 | |||||||
2019 | 2018 | ||||||
Assets | |||||||
Receivables | $ | $ | |||||
Inventories | |||||||
Other current assets | |||||||
Long-lived assets | |||||||
Goodwill | |||||||
Impairment on carrying value | ( | ) | |||||
Total assets held for sale | $ | $ | |||||
Liabilities | |||||||
Accounts payable | |||||||
Accrued liabilities | |||||||
Other liabilities | |||||||
Total liabilities held for sale | $ | $ |
Year Ended December 31, 2019 | |||||||||||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Corporate | Total | ||||||||||||||||||
Severance and other charges, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Restructuring asset impairments | |||||||||||||||||||||||
Other non-restructuring asset impairments | |||||||||||||||||||||||
Impairment of assets held for sale | |||||||||||||||||||||||
Total asset impairment charges | |||||||||||||||||||||||
Total restructuring charges, asset impairments, and other | $ | $ | $ | $ | $ | $ |
Year Ended December 31, 2018 | |||||||||||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Corporate | Total | ||||||||||||||||||
Severance and other charges, net | $ | $ | ( | ) | $ | $ | $ | $ | |||||||||||||||
Restructuring asset impairments | |||||||||||||||||||||||
Other non-restructuring asset impairments | |||||||||||||||||||||||
Total asset impairment charges | |||||||||||||||||||||||
Total restructuring charges, asset impairments, and other | $ | $ | ( | ) | $ | $ | $ | $ |
Year Ended December 31, 2017 | |||||||||||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Corporate | Total | ||||||||||||||||||
Severance and other charges, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Total asset impairment charges | |||||||||||||||||||||||
Total restructuring charges, asset impairments, and other | $ | $ | $ | $ | $ | $ |
• | The Company incurred $ |
• | The Company incurred $ |
• | The Company incurred $ |
• | The Company incurred $ |
• | The Company incurred $ |
• | The Company incurred $ |
• | The Company incurred $ |
• | The Company incurred $ |
• | In October 2018, the Company announced a plan to close its ride performance plants in Owen Sound, Ontario and Hartwell, Georgia as part of an initiative to realign its manufacturing footprint to enhance operational efficiency and respond to changing market conditions and capacity requirements. The Company recorded charges of $ |
• | The Company incurred a $ |
• | The Company incurred an additional $ |
• | On June 29, 2017, the Company announced a restructuring initiative to close its Clean Air manufacturing plant in O'Sullivan Beach, Australia and downsize its Ride Performance plant in Clovelly Park, Australia when General Motors and Toyota ended vehicle production in the country in October 2017. All such restructuring activities related to this initiative were completed in 2018. The Company recorded total charges related to this initiative of $ |
• | In the fourth quarter of 2017, the Company began to accelerate a required move of its Beijing Ride Performance plant outside of Beijing area. The Company incurred $ |
• | The Company recognized a $ |
• | The Company incurred an additional $ |
Clean Air | Powertrain | Ride Performance | Motorparts | Total Reportable Segments | Corporate | Total | |||||||||||||||||||||
Balance at December 31, 2016 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Provisions | |||||||||||||||||||||||||||
Payments | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Foreign currency | |||||||||||||||||||||||||||
Balance at December 31, 2017 | |||||||||||||||||||||||||||
Federal-Mogul Acquisition | |||||||||||||||||||||||||||
Provisions | |||||||||||||||||||||||||||
Held for sale | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Revisions to estimates | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Payments | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||
Foreign currency | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Balance at December 31, 2018 | |||||||||||||||||||||||||||
Provisions | |||||||||||||||||||||||||||
Revisions to estimates | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Payments | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ | $ | $ |
Employee Costs | Facility Closure and Other Costs | Total | |||||||||
Balance at December 31, 2016 | $ | $ | $ | ||||||||
Provisions | |||||||||||
Payments | ( | ) | ( | ) | ( | ) | |||||
Foreign currency | |||||||||||
Balance at December 31, 2017 | |||||||||||
Federal-Mogul Acquisition | |||||||||||
Provisions | |||||||||||
Held for sale | ( | ) | ( | ) | |||||||
Revisions to estimates | ( | ) | ( | ) | |||||||
Payments | ( | ) | ( | ) | ( | ) | |||||
Foreign currency | ( | ) | ( | ) | |||||||
Balance at December 31, 2018 | |||||||||||
Provisions | |||||||||||
Revisions to estimates | ( | ) | ( | ) | |||||||
Payments | ( | ) | ( | ) | ( | ) | |||||
Balance at December 31, 2019 | $ | $ | $ |
December 31 | |||||||
2019 | 2018 | ||||||
Finished goods | $ | $ | |||||
Work in process | |||||||
Raw materials | |||||||
Materials and supplies | |||||||
Total inventories | $ | $ |
December 31 | Useful Life | ||||||||
2019 | 2018 | ||||||||
Land | $ | $ | — | ||||||
Buildings and improvements | 10 to 50 years | ||||||||
Machinery, equipment and tooling | 3 to 25 years | ||||||||
Capitalized software | 3 to 12 years | ||||||||
Other, including construction in progress | — | ||||||||
Property, plant and equipment, cost | |||||||||
Less: Accumulated depreciation and amortization | ( | ) | ( | ) | |||||
Property, plant and equipment, net | $ | $ |
December 31, 2019 | |||||||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Total | |||||||||||||||
Gross carrying amount at beginning of period | $ | $ | $ | $ | $ | ||||||||||||||
Measurement period adjustments | ( | ) | ( | ) | |||||||||||||||
Acquisitions | |||||||||||||||||||
Reclassification to assets held for sale | ( | ) | ( | ) | |||||||||||||||
Foreign exchange | ( | ) | ( | ) | |||||||||||||||
Gross carrying amount at end of period | |||||||||||||||||||
Accumulated impairment loss at beginning of period | ( | ) | ( | ) | ( | ) | |||||||||||||
Impairment | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Foreign exchange | |||||||||||||||||||
Accumulated impairment loss at end of period | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Net carrying value at end of period | $ | $ | $ | $ | $ |
December 31, 2018 | |||||||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Total | |||||||||||||||
Gross carrying amount at beginning of period | $ | $ | $ | $ | $ | ||||||||||||||
Acquisitions | |||||||||||||||||||
Foreign exchange | ( | ) | ( | ) | ( | ) | |||||||||||||
Gross carrying amount at end of period | |||||||||||||||||||
Accumulated impairment loss at beginning of period | ( | ) | ( | ) | ( | ) | |||||||||||||
Impairment | ( | ) | ( | ) | |||||||||||||||
Foreign exchange | |||||||||||||||||||
Accumulated impairment loss at end of period | ( | ) | ( | ) | ( | ) | |||||||||||||
Net carrying value at end of period | $ | $ | $ | $ | $ |
• | an increase of $ |
• | a net decrease of $ |
• | During the first quarter of 2019, the Company reorganized the reporting structure of its Aftermarket, Ride Performance, and Motorparts segments and the underlying reporting units within those segments. The Company reassigned assets and liabilities (excluding goodwill) to the reporting units affected. Goodwill was then reassigned to the reporting units using a relative fair value approach based on the fair value of the elements transferred and the fair value of the elements remaining within the original reporting units. The Company tested goodwill for impairment on a pre-reorganization basis and determined there was no impairment for the affected reporting units. The Company also performed an impairment analysis on a post-reorganization basis and determined $ |
• | During the third quarter of 2019, the Company finalized purchase accounting for the Federal-Mogul Acquisition. As a result, the final goodwill allocation was reassigned to the reorganized segments and reporting unit structure that occurred in the first quarter of 2019 using a relative fair value approach and the Company determined an incremental $ |
• | As a result of the annual goodwill impairment analysis performed in the fourth quarter of 2019, the estimated fair value of one of the reporting units in the Motorparts segment was lower than its carrying value and an impairment charge of $ |
Segments | |||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | ||||||||||||
Number of reporting units with goodwill | |||||||||||||||
Number of reporting units where fair value exceeds carrying value: | |||||||||||||||
Greater than 10% | |||||||||||||||
Less than 10% | |||||||||||||||
Goodwill for reporting units where fair value exceeds carrying value: | |||||||||||||||
Greater than 10% | $ | $ | $ | $ | |||||||||||
Less than 10% | |||||||||||||||
$ | $ | $ | $ |
December 31, 2019 | December 31, 2018 | |||||||||||||||||||||||
Useful Lives | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||
Definite-lived intangible assets: | ||||||||||||||||||||||||
Customer relationships and platforms | 10 years | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||
Customer contract | 10 years | ( | ) | ( | ) | |||||||||||||||||||
Patents | 10 to 17 years | ( | ) | ( | ) | |||||||||||||||||||
Technology rights | 10 to 30 years | ( | ) | ( | ) | |||||||||||||||||||
Packaged kits know-how | 10 years | ( | ) | ( | ) | |||||||||||||||||||
Catalogs | 10 years | ( | ) | |||||||||||||||||||||
Licensing agreements | 3 to 5 years | ( | ) | ( | ) | |||||||||||||||||||
Land use rights | 28 to 46 years | ( | ) | ( | ) | |||||||||||||||||||
$ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||
Trade names and trademarks | ||||||||||||||||||||||||
Total | $ | $ |
• | a decrease of $ |
• | a net increase of $ |
2020 | 2021 | 2022 | 2023 | 2024 | 2025 and thereafter | Total | ||||||||||||||||||||||
Expected Amortization Expense | $ | $ | $ | $ | $ | $ | $ |
At December 31 | |||||
2019 | 2018 | ||||
Anqing TP Goetze Piston Ring Company Limited (China) | % | % | |||
Anqing TP Powder Metallurgy Co., Ltd (China) | % | % | |||
Dongsuh Federal-Mogul Industrial Co. Ltd. (Korea) | % | % | |||
Farloc Argentina SAIC Y F (Argentina) | % | % | |||
Federal-Mogul Powertrain Otomotiv A.S. (Turkey) | % | % | |||
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti. (Turkey) | % | % | |||
Federal-Mogul TP Liners, Inc. (USA) | % | % | |||
Frenos Hidraulicos Automotrices, S.A. de C.V. (Mexico) | % | % | |||
JURID do Brasil Sistemas Automotivos Ltda. (Brazil) | % | % | |||
KB Autosys Co., Ltd. (Korea) | % | % | |||
Montagewerk Abgastechnik Emden GmbH (Germany)(a) | % | % |
At December 31 | |||||||
2019 | 2018 | ||||||
Investments in nonconsolidated affiliates | $ | $ |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
Equity earnings (losses) of nonconsolidated affiliates, net of tax | $ | $ | $ | ( | ) | ||||||
Cash dividends received from nonconsolidated affiliates | $ | $ | $ |
Year Ended December 31, 2019 | |||||||||||||||
Statements of Income | Otomotiv A.S. | Anqing TP Goetze | Other | Total | |||||||||||
Sales | $ | $ | $ | $ | |||||||||||
Gross profit | $ | $ | $ | $ | |||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Net income | $ | $ | $ | $ |
December 31, 2019 | |||||||||||||||
Balance Sheets | Otomotiv A.S. | Anqing TP Goetze | Other | Total | |||||||||||
Current assets | $ | $ | $ | $ | |||||||||||
Noncurrent assets | $ | $ | $ | $ | |||||||||||
Current liabilities | $ | $ | $ | $ | |||||||||||
Noncurrent liabilities | $ | $ | $ | $ |
Year Ended December 31, 2018 | |||||||||||||||
Statements of Income | Otomotiv A.S. | Anqing TP Goetze | Other | Total | |||||||||||
Sales | $ | $ | $ | $ | |||||||||||
Gross profit | $ | $ | $ | $ | |||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Net income | $ | $ | $ | $ |
December 31, 2018 | |||||||||||||||
Balance Sheets | Otomotiv A.S. | Anqing TP Goetze | Other | Total | |||||||||||
Current assets | $ | $ | $ | $ | |||||||||||
Noncurrent assets | $ | $ | $ | $ | |||||||||||
Current liabilities | $ | $ | $ | $ | |||||||||||
Noncurrent liabilities | $ | $ | $ | $ |
Notional Amount in Foreign Currency | ||||
British pounds | —Purchase | |||
—Sell | ( | ) | ||
Canadian dollars | —Sell | ( | ) | |
European euro | —Sell | ( | ) | |
Japanese yen | —Sell | ( | ) | |
Polish zloty | —Purchase | |||
Singapore dollars | —Sell | ( | ) | |
South African rand | —Sell | ( | ) | |
Mexican pesos | —Purchase | |||
U.S. dollars | —Purchase |
December 31 | ||||||||||
Balance sheets classification | 2019 | 2018 | ||||||||
Commodity price hedge contracts designated as cash flow hedges | Accrued expenses and other current liabilities | $ | $ | ( | ) | |||||
Foreign currency borrowings designated as net investment hedges | Long-term debt | $ | $ |
Amount of gain (loss) recognized in accumulated OCI or OCL (effective portion) | |||||||
December 31 | |||||||
2019 | 2018 | ||||||
Commodity price hedge contracts designated as cash flow hedges | $ | $ | |||||
Foreign currency borrowings designated as net investment hedges | $ | $ | ( | ) |
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 the Company's own assumptions. |
December 31, 2019 | December 31, 2018 | ||||||||||||||||
Fair value hierarchy | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Derivative instruments: | |||||||||||||||||
Equity swap agreement | Level 2 | $ | ( | ) | $ | ( | ) | $ | 4 | $ | |||||||
Commodity contracts | Level 2 | $ | $ | $ | ( | ) | $ | ( | ) |
December 31, 2019 | December 31, 2018 | ||||||||||||||||
Fair value hierarchy | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Long-term debt (including current maturities): | |||||||||||||||||
Term loans and senior notes | Level 2 | $ | $ | $ | $ |
2019 | 2018 | ||||||||||||||||||||
Principal | Carrying Amount(a) | Effective Interest Rate | Principal | Carrying Amount(a) | Effective Interest Rate | ||||||||||||||||
Credit Facilities | |||||||||||||||||||||
Revolver Borrowings | |||||||||||||||||||||
Due 2023 | $ | $ | % | $ | $ | % | |||||||||||||||
Term Loans | |||||||||||||||||||||
LIBOR plus 1.75% Term Loan A due 2019 through 2023(b) | % | % | |||||||||||||||||||
LIBOR plus 3.00% Term Loan B due 2019 through 2025(c) | % | % | |||||||||||||||||||
Senior Unsecured Notes | |||||||||||||||||||||
$225 million of 5.375% Senior Notes due 2024(d) | % | % | |||||||||||||||||||
$500 million of 5.000% Senior Notes due 2026(e) | % | % | |||||||||||||||||||
Senior Secured Notes (i) | |||||||||||||||||||||
€415 million 4.875% Euro Fixed Rate Notes due 2022(f) | % | % | |||||||||||||||||||
€300 million of Euribor plus 4.875% Euro Floating Rate Notes due 2024(g) | % | % | |||||||||||||||||||
€350 million of 5.000% Euro Fixed Rate Notes due 2024(h) | % | % | |||||||||||||||||||
Other debt, primarily foreign instruments(j) | |||||||||||||||||||||
Less - maturities classified as current(j) | |||||||||||||||||||||
Total long-term debt | $ | $ |
Aggregate Maturities | |||
2020 | $ | ||
2021 | $ | ||
2022 | $ | ||
2023 | $ | ||
2024 | $ |
2019 | 2018 | 2017 | ||||||||||
Amortization of debt issuance fees | $ | $ | $ |
At December 31 | |||||||
2019 | 2018 | ||||||
Maturities classified as current (b) | $ | $ | |||||
Short-term borrowings(a)(b) | |||||||
Bank overdrafts | |||||||
Total short-term debt | $ | $ |
Weighted average interest rate on outstanding short-term borrowings at end of year | % | % |
Committed Credit Facilities(a) as of December 31, 2019 | |||||||||||||||||
Term | Commitments | Borrowings | Letters of Credit(b) | Available | |||||||||||||
Tenneco Inc. revolving credit agreement | 2023 | $ | $ | $ | $ | ||||||||||||
Tenneco Inc. Term Loan A | 2023 | ||||||||||||||||
Tenneco Inc. Term Loan B | 2025 | ||||||||||||||||
Subsidiaries’ credit agreements | 2020-2028 | ||||||||||||||||
$ | $ | $ | $ |
(a) | The Company generally is required to pay commitment fees on the unused portion of the total commitment. |
(b) | Letters of credit reduce the available borrowings under the revolving credit agreement. |
At December 31 | ||||||||
2019 | 2018 | |||||||
Borrowings on securitization programs | $ | $ |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
Loss on sale of receivables (a) | $ | $ | $ |
December 31 | |||||||
2019 | 2018 | ||||||
Accrued rebates | $ | $ | |||||
Product return reserves | |||||||
Restructuring liabilities | |||||||
Legal reserves | |||||||
Non-income tax payable | |||||||
Pension and postretirement benefits liability | |||||||
Accrued freight | |||||||
Liabilities held for sale | |||||||
Accrued warranty | |||||||
Accrued interest | |||||||
Accrued professional services | |||||||
Environmental reserve | |||||||
Operating lease liability | — | ||||||
Other | |||||||
$ | $ |
Pension Plans | Other Postretirement Benefits Plans | ||||||||||||||||||||||
U.S. | Non-U.S. | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||
Benefit obligation, beginning of year | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Federal-Mogul acquisition | |||||||||||||||||||||||
Service cost | |||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Settlement | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Curtailment | ( | ) | |||||||||||||||||||||
Administrative expenses/taxes paid | ( | ) | ( | ) | |||||||||||||||||||
Plan amendments | ( | ) | ( | ) | |||||||||||||||||||
Actuarial (gain)/loss | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Benefits paid | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Medicare subsidies received | |||||||||||||||||||||||
Participants’ contributions | |||||||||||||||||||||||
Held for sale | ( | ) | |||||||||||||||||||||
Currency rate conversion and other | ( | ) | |||||||||||||||||||||
Benefit obligation, end of year | |||||||||||||||||||||||
Change in plan assets: | |||||||||||||||||||||||
Fair value of plan assets, beginning of year | |||||||||||||||||||||||
Federal-Mogul acquisition | |||||||||||||||||||||||
Settlement | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Actual return on plan assets | ( | ) | ( | ) | |||||||||||||||||||
Administrative expenses/taxes paid | ( | ) | |||||||||||||||||||||
Employer contributions | |||||||||||||||||||||||
Medicare subsidies received | |||||||||||||||||||||||
Participants’ contributions | |||||||||||||||||||||||
Benefits paid | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Held for sale | ( | ) | |||||||||||||||||||||
Currency rate conversion and other | ( | ) | |||||||||||||||||||||
Fair value of plan assets, end of year | |||||||||||||||||||||||
Funded status of the plans | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Pension Plans | Other Postretirement Benefits Plans | ||||||||||||||||||||||
U.S. | Non-U.S. | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Noncurrent assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Current liabilities | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Noncurrent liabilities (a) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
$ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Pension Plans | Other Postretirement Benefits Plans | ||||||||||||||||||||||
U.S. | Non-U.S. | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Actuarial loss | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Prior service cost/(credit) | ( | ) | ( | ) | |||||||||||||||||||
Total | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) |
Pension Plans | Other Postretirement Benefits Plans | ||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||
U.S. | Non-U.S. | U.S. | Non-U.S. | 2019 | 2018 | ||||||||||||||||||
Projected benefit obligation | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Fair value of plan assets | $ | $ | $ | $ | $ | $ |
December 31, 2019 | December 31, 2018 | ||||||||||||||
U.S. | Non-U.S. | U.S. | Non-U.S. | ||||||||||||
Projected benefit obligation | $ | $ | $ | $ | |||||||||||
Accumulated benefit obligation | $ | $ | $ | $ | |||||||||||
Fair value of plan assets | $ | $ | $ | $ |
Pension Plans | Other Postretirement Benefits Plans | ||||||||||||||||||||||||||||||||||
U.S. | Non-U.S. | ||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
Curtailment loss (gain) | ( | ) | |||||||||||||||||||||||||||||||||
Settlement loss | |||||||||||||||||||||||||||||||||||
Net amortization: | |||||||||||||||||||||||||||||||||||
Actuarial loss | |||||||||||||||||||||||||||||||||||
Prior service cost (credit) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Net periodic costs | $ | ( | ) | $ | $ | $ | $ | $ | $ | $ | $ |
Pension Plans | Other Postretirement Benefits Plans | |||||||||||||||||||||||||
U.S. | Non-U.S. | |||||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
Weighted-average assumptions used to determine benefit obligations: | ||||||||||||||||||||||||||
Discount rate | % | % | % | % | % | % | % | % | % | |||||||||||||||||
Rate of compensation increase | n/a | n/a | n/a | % | % | % | n/a | n/a | n/a | |||||||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost: | ||||||||||||||||||||||||||
Discount rate | % | % | % | % | % | % | % | % | % | |||||||||||||||||
Expected long-term return on plan assets | % | % | % | % | % | % | n/a | n/a | n/a | |||||||||||||||||
Rate of compensation increase | n/a | n/a | n/a | % | % | % | n/a | n/a | n/a |
2020 | |||||||||||
Pension Plans | Other Postretirement Benefits Plans | ||||||||||
U.S. | Non-U.S | ||||||||||
Net actuarial loss | $ | $ | $ | ||||||||
Prior service (credit) | ( | ) | |||||||||
$ | $ | $ | ( | ) |
Pension Plans | Other Postretirement Benefits Plans | ||||||||||
Year | U.S. | Non-U.S. | |||||||||
2020 | $ | $ | $ | ||||||||
2021 | $ | $ | $ | ||||||||
2022 | $ | $ | $ | ||||||||
2023 | $ | $ | $ | ||||||||
2024 | $ | $ | $ | ||||||||
2025-2029 | $ | $ | $ |
Other Postretirement Benefits Plans | ||||||||
2019 | 2018 | 2017 | ||||||
Initial health care cost trend rate | % | % | % | |||||
Ultimate health care cost trend rate | % | % | % | |||||
Year ultimate health care cost trend rate reached | 2027 | 2027 | 2027 |
Total Service and Interest Cost | Postretirement Benefits Obligation | ||||||
100 basis point ("bp") increase in health care cost trend rate | $ | $ | |||||
100 bp decrease in health care cost trend rate | $ | ( | ) | $ | ( | ) |
Percentage of Fair Market Value | |||||
December 31, 2019 | |||||
U.S. | Non-U.S. | ||||
Equity securities | % | % | |||
Fixed income securities | % | % | |||
Debt securities | % | % | |||
Insurance contracts | % | % | |||
Other | % | % |
Fair Value Level as of December 31, 2019 | |||||||||||||||||||||||||||||||
U.S. | Non-U.S. | ||||||||||||||||||||||||||||||
Asset Category | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Investments with registered investment companies: | |||||||||||||||||||||||||||||||
Equity securities | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Fixed income securities | |||||||||||||||||||||||||||||||
Real estate and other | |||||||||||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||||||||||
Corporate and other | |||||||||||||||||||||||||||||||
Government | |||||||||||||||||||||||||||||||
Real Estate and other | |||||||||||||||||||||||||||||||
Insurance contracts | |||||||||||||||||||||||||||||||
Hedge funds | |||||||||||||||||||||||||||||||
Cash and equivalents | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Plan assets measured at net asset value | |||||||||||||||||||||||||||||||
Equity securities | $ | $ | |||||||||||||||||||||||||||||
Government debt securities | |||||||||||||||||||||||||||||||
Corporate and other debt securities | |||||||||||||||||||||||||||||||
Total plan assets measured at net asset value | |||||||||||||||||||||||||||||||
Net plan assets | $ | $ |
Fair Value Level as of December 31, 2018 | |||||||||||||||||||||||||||||||
U.S. | Non-U.S. | ||||||||||||||||||||||||||||||
Asset Category | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Investments with registered investment companies: | |||||||||||||||||||||||||||||||
Equity securities | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Fixed income securities | |||||||||||||||||||||||||||||||
Real estate and other | |||||||||||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||||||||||
Corporate and other | |||||||||||||||||||||||||||||||
Government | |||||||||||||||||||||||||||||||
Real Estate and other | |||||||||||||||||||||||||||||||
Insurance contracts | |||||||||||||||||||||||||||||||
Hedge funds | |||||||||||||||||||||||||||||||
Cash and equivalents | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Plan assets measured at net asset value | |||||||||||||||||||||||||||||||
Equity securities | $ | $ | |||||||||||||||||||||||||||||
Government debt securities | |||||||||||||||||||||||||||||||
Corporate and other debt securities | |||||||||||||||||||||||||||||||
Total plan assets measured at net asset value | |||||||||||||||||||||||||||||||
Net plan assets | $ | $ |
December 31, 2019 | December 31, 2018 | ||||||||||||||
Level 3 Assets | Level 3 Assets | ||||||||||||||
U.S. | Non-U.S. | U.S. | Non-U.S. | ||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||
Net realized/unrealized gains (loss) | ( | ) | |||||||||||||
Purchases and settlements, net | |||||||||||||||
Sales, net | ( | ) | ( | ) | |||||||||||
Transfers into (out) of Level 3 | |||||||||||||||
Acquisitions | |||||||||||||||
Held for sale | ( | ) | |||||||||||||
Foreign exchange | ( | ) | |||||||||||||
Balance at end of period | $ | $ | $ | $ |
Asset Category | Fair Value Level | Fair Value | Percentage of Total Assets | ||||||
2019: | |||||||||
Tenneco stock | 1 | $ | % | ||||||
2018: | |||||||||
Tenneco stock | 1 | $ | % |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
U.S. income earnings (loss) before income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Foreign earnings (loss) before income taxes | |||||||||||
Earnings (loss) before income taxes and noncontrolling interests | $ | ( | ) | $ | $ |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
Current — | |||||||||||
U.S. federal | $ | $ | $ | ( | ) | ||||||
State and local | |||||||||||
Foreign | |||||||||||
Deferred — | |||||||||||
U.S. federal | ( | ) | ( | ) | |||||||
State and local | ( | ) | ( | ) | ( | ) | |||||
Foreign | ( | ) | ( | ) | ( | ) | |||||
( | ) | ( | ) | ( | ) | ||||||
Income tax expense (benefit) | $ | $ | $ |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
Income tax expense (benefit) computed at the statutory U.S. federal income tax rate | $ | ( | ) | $ | $ | ||||||
Increases (reductions) in income tax expense resulting from: | |||||||||||
Foreign income taxed at different rates | ( | ) | |||||||||
Transition tax under Tax Cuts and Jobs Act ("TCJA") | |||||||||||
Remeasurement of worldwide deferred taxes | |||||||||||
State and local taxes on income, net of U.S. federal income tax benefit | ( | ) | ( | ) | ( | ) | |||||
Changes in valuation allowance for tax loss carryforwards and credits | ( | ) | |||||||||
Investment and R&D tax credits | ( | ) | ( | ) | ( | ) | |||||
Foreign earnings subject to U.S. federal income tax | ( | ) | |||||||||
Non-deductible expenses | |||||||||||
Goodwill impairment | |||||||||||
Tax contingencies | ( | ) | ( | ) | |||||||
Gains on transfers of subsidiaries | |||||||||||
Nonconsolidated affiliates | ( | ) | ( | ) | |||||||
Other | ( | ) | ( | ) | |||||||
Income tax expense (benefit) | $ | $ | $ |
December 31 | |||||||
2019 | 2018 | ||||||
Deferred tax assets — | |||||||
Tax loss carryforwards: | |||||||
State | $ | $ | |||||
Foreign (a) | |||||||
Tax credits | |||||||
Postretirement benefits other than pensions | |||||||
Pensions | |||||||
Payroll accruals | |||||||
Book over tax depreciation | |||||||
Research expense capitalized for tax | |||||||
Other accruals | |||||||
Valuation allowance (a) | ( | ) | ( | ) | |||
Total deferred tax assets | |||||||
Deferred tax liabilities — | |||||||
Amortization of intangibles | |||||||
Total deferred tax liabilities | |||||||
Net deferred tax assets | $ | $ |
At December 31 | |||||||
2019 | 2018 | ||||||
Consolidated Balance Sheets: | |||||||
Non-current portion — deferred tax asset | $ | $ | |||||
Non-current portion — deferred tax liability | ( | ) | ( | ) | |||
Net deferred tax assets | $ | $ |
2019 | 2018 | 2017 | |||||||||
Uncertain tax positions — | |||||||||||
Balance at beginning of period | $ | $ | $ | ||||||||
Gross increases in tax positions due to acquisition | |||||||||||
Gross increases in tax positions in current period | |||||||||||
Gross increases in tax positions in prior period | |||||||||||
Gross decreases in tax positions in prior period | ( | ) | ( | ) | ( | ) | |||||
Gross decreases — settlements | ( | ) | ( | ) | |||||||
Gross decreases — statute of limitations expired | ( | ) | ( | ) | ( | ) | |||||
Balance at end of period | $ | $ | $ |
Years ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
Tax benefits, that if recognized, would affect the effective tax rate | $ | $ | $ | ||||||||
Income tax expense for accrued interest | $ | $ | $ |
At December 31 | |||||||
2019 | 2018 | ||||||
Accrued liability for penalties on uncertain tax positions | $ | $ | |||||
Accrued liability for interest on uncertain tax positions | $ | $ |
Open To Tax Year | |
United States | |
Belgium | |
Brazil | |
China | |
France | |
Germany | |
India | |
Italy | |
Mexico | |
Poland | |
Spain | |
United Kingdom |
December 31 | |||||||
2019 | 2018 | ||||||
Accrued expenses and other current liabilities | $ | $ | |||||
Deferred credits and other liabilities | |||||||
$ | $ |
2020 | 2021 | 2022 | 2023 | 2024 | 2025 and thereafter | ||||||||||||||||||
Expected payments | $ | $ | $ | $ | $ | $ |
December 31 | |||||||
2019 | 2018 | ||||||
Accrued expenses and other current liabilities | $ | $ | |||||
Deferred credits and other liabilities | |||||||
$ | $ |
Balance at December 31, 2017 | $ | ||
Acquisitions | |||
Liabilities incurred | |||
Liabilities settled/adjustments | |||
Balance at December 31, 2018 | |||
Liabilities incurred | |||
Liabilities settled/adjustments | |||
Foreign currency | |||
Balance at December 31, 2019 | $ |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
Balance at beginning of period | $ | $ | $ | ||||||||
Acquisitions | |||||||||||
Accruals related to product warranties | |||||||||||
Reductions for payments made | ( | ) | ( | ) | ( | ) | |||||
Balance at end of period | $ | $ | $ |
Year Ended December 31, 2019 | |||
Operating lease expense | $ | ||
Finance lease expense | |||
Amortization of right-of-use assets | |||
Short-term lease expense | |||
Variable lease expense | |||
Sublease income | ( | ) | |
Total lease expense | $ |
Year Ended December 31, 2019 | |||
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ | ||
Financing cash flows from finance leases | $ | ||
Right-of-use assets obtained in exchange for lease obligations: | |||
Operating leases | $ |
December 31, 2019 | |||
Operating leases | |||
Operating lease right-of-use assets (a) | $ | ||
Other current liabilities (b) | $ | ||
Other long-term liabilities (c) | |||
Total operating lease liabilities | $ | ||
Finance leases | |||
Property, plant and equipment, gross | $ | ||
Accumulated depreciation | ( | ) | |
Total finance lease right-of-use assets | $ | ||
Other current liabilities (b) | $ | ||
Other long-term liabilities (c) | |||
Total finance lease liabilities | $ |
December 31, 2019 | ||||
Weighted average remaining lease term | Weighted average discount rate | |||
Operating leases | % | |||
Finance leases | % |
Year ending December 31 | Operating leases | Finance leases | |||||
2020 | $ | $ | |||||
2021 | |||||||
2022 | |||||||
2023 | |||||||
2024 | |||||||
Thereafter | |||||||
Total future undiscounted lease payments | |||||||
Less imputed interest | ( | ) | |||||
Total reported lease liability | $ | $ |
Year Ended December 31, 2019 | ||||||||||||
Shares Under Option | Weighted Avg. Exercise Prices | Weighted Avg. Remaining Life in Years | Aggregate Intrinsic Value | |||||||||
(Millions) | ||||||||||||
Options outstanding at beginning of period | $ | $ | ||||||||||
Granted | ||||||||||||
Exercised | ( | ) | ||||||||||
Forfeited/expired | ( | ) | ||||||||||
Options outstanding at end of period | $ | $ |
Restricted Stock | Share-Settled RSUs | PSUs | ||||||||||||||||||
Shares | Weighted Avg. Grant Date Fair Value | Units | Weighted Avg. Grant Date Fair Value | Units | Weighted Avg. Grant Date Fair Value | |||||||||||||||
Nonvested balance at beginning of period | $ | $ | $ | |||||||||||||||||
Granted | ||||||||||||||||||||
Vested | ( | ) | ( | ) | ||||||||||||||||
Forfeited | ( | ) | ( | ) | ( | ) | ||||||||||||||
Nonvested balance at end of period | $ | $ | $ |
Class A Common Stock | Class B Common Stock | |||||||||||||
Year Ended December 31 | Year Ended December 31 | |||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | ||||||||||
Shares issued at beginning of period | ||||||||||||||
Share issuances(a) | ||||||||||||||
Issuance (repurchased) pursuant to benefit plans | ||||||||||||||
Restricted stock forfeited and withheld for taxes | ( | ) | ( | ) | ( | ) | ||||||||
Stock options exercised | ||||||||||||||
Shares issued at end of period | ||||||||||||||
Treasury stock | ||||||||||||||
Total shares outstanding |
Year Ended December 31 | |||||||||||||
2019 | 2018 | 2017 | |||||||||||
Foreign currency translation adjustment: | |||||||||||||
Balance at beginning of period | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Other comprehensive income (loss) before reclassifications | ( | ) | |||||||||||
Income tax provision (benefit) | |||||||||||||
Other comprehensive income (loss), net of tax | ( | ) | |||||||||||
Balance at end of period | ( | ) | ( | ) | ( | ) | |||||||
Pension and postretirement benefits: | |||||||||||||
Balance at beginning of period | ( | ) | ( | ) | ( | ) | |||||||
Other comprehensive income (loss) before reclassifications | ( | ) | ( | ) | |||||||||
Reclassification to earnings | |||||||||||||
Other comprehensive income (loss) before tax | ( | ) | ( | ) | |||||||||
Income tax provision (benefit) | ( | ) | ( | ) | |||||||||
Other comprehensive income (loss), net of tax | ( | ) | ( | ) | |||||||||
Balance at end of period | ( | ) | ( | ) | ( | ) | |||||||
Cash flow hedging instruments: | |||||||||||||
Balance at beginning of period | |||||||||||||
Other comprehensive income (loss) before reclassifications | |||||||||||||
Reclassification to earnings | ( | ) | |||||||||||
Other comprehensive income (loss) before tax | — | — | |||||||||||
Balance at end of period | |||||||||||||
Accumulated other comprehensive loss at end of year | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Other comprehensive income (loss) attributable to noncontrolling interests, net of tax | $ | ( | ) | $ | ( | ) | $ |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
Net income (loss) attributable to Tenneco Inc. | $ | ( | ) | $ | $ | ||||||
Basic earnings (loss) per share — | |||||||||||
Average shares of common stock outstanding | |||||||||||
Earnings (loss) per average share of common stock | $ | ( | ) | $ | $ | ||||||
Diluted earnings (loss) per share — | |||||||||||
Average shares of common stock outstanding | |||||||||||
Effect of dilutive securities: | |||||||||||
Restricted stock and RSUs | |||||||||||
Stock options | |||||||||||
Average shares of common stock outstanding including dilutive securities | |||||||||||
Earnings (loss) per average share of common stock | $ | ( | ) | $ | $ |
• | The Clean Air segment designs, manufactures, and distributes a variety of products and systems designed to reduce pollution and optimize engine performance, acoustic tuning, and weight on a vehicle for OEMs; and |
• | The Powertrain segment focuses on original equipment powertrain products for automotive, heavy duty, and industrial applications. |
• | The Motorparts segment designs, manufactures, markets and distributes a broad portfolio of brand-name products in the global vehicle aftermarket within seven product categories including shocks and struts, steering and suspension, braking, sealing, engine, emissions, and maintenance; and |
• | The Ride Performance segment designs, manufactures, markets, and distributes a variety of ride performance solutions and systems to a global OE customer base, including noise, vibration, and harshness performance materials, advanced suspension technologies, ride control, and braking. |
Reportable Segments | |||||||||||||||||||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Total Reportable Segments | Corporate | Reclass & Elims | Total | ||||||||||||||||||||||||
For the Year Ended December 31, 2019 | |||||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||
Intersegment revenues | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
Equity in earnings of nonconsolidated affiliates, net of tax | $ | $ | $ | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||
EBITDA including noncontrolling interests | $ | $ | $ | $ | $ | $ | ( | ) | |||||||||||||||||||||||
For the Year Ended December 31, 2018 | |||||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||
Intersegment revenues | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
Equity in earnings of nonconsolidated affiliates, net of tax | $ | $ | $ | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||
EBITDA including noncontrolling interests | $ | $ | $ | $ | $ | $ | ( | ) | |||||||||||||||||||||||
For the Year Ended December 31, 2017 | |||||||||||||||||||||||||||||||
Revenues from external customers | $ | $ | $ | $ | $ | $ | $ | — | $ | ||||||||||||||||||||||
Intersegment revenues | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
Equity in earnings of nonconsolidated affiliates, net of tax | $ | $ | $ | $ | $ | $ | ( | ) | $ | — | $ | ( | ) | ||||||||||||||||||
EBITDA including noncontrolling interests | $ | $ | $ | $ | $ | $ | ( | ) |
Year Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
EBITDA including noncontrolling interests by Segments: | |||||||||||
Clean Air | $ | $ | $ | ||||||||
Powertrain | |||||||||||
Ride Performance | |||||||||||
Motorparts | |||||||||||
Total Reportable Segments | |||||||||||
Corporate | ( | ) | ( | ) | ( | ) | |||||
Depreciation and amortization | ( | ) | ( | ) | ( | ) | |||||
Earnings before interest expense, income taxes, and noncontrolling interests | |||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | |||||
Income tax (expense) benefit | ( | ) | ( | ) | ( | ) | |||||
Net income (loss) | $ | ( | ) | $ | $ |
Customer | 2019 | 2018 | 2017 | |||||
General Motors Company | % | % | % | |||||
Ford Motor Company | % | % | % |
Revenues from external customers (b) | Long-lived assets (c) | ||||||||||||||||||
Year Ended December 31 | December 31 | ||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | |||||||||||||||
United States | $ | $ | $ | $ | $ | ||||||||||||||
China | |||||||||||||||||||
Germany | |||||||||||||||||||
Poland | |||||||||||||||||||
United Kingdom | |||||||||||||||||||
Mexico | |||||||||||||||||||
India | |||||||||||||||||||
Turkey | |||||||||||||||||||
Other Foreign (a) | |||||||||||||||||||
Consolidated | $ | $ | $ | $ | $ |
(a) | Revenues from external customers and long-lived assets for individual foreign countries other than China, Germany, Poland, United Kingdom, Mexico, India, and Turkey are not individually material. |
(b) | Revenues are attributed to countries based on location of the shipper. |
(c) | Long-lived assets include all long-term assets except goodwill, intangibles and deferred tax assets. |
Reportable Segments | |||||||||||||||||||
By Customer Type | Clean Air | Powertrain | Ride Performance | Motorparts | Total | ||||||||||||||
Year Ended December 31, 2019 | |||||||||||||||||||
OE - Substrate | $ | $ | $ | $ | $ | ||||||||||||||
OE - Value add | |||||||||||||||||||
Aftermarket | |||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||
Year Ended December 31, 2018 | |||||||||||||||||||
OE - Substrate | $ | $ | $ | $ | $ | ||||||||||||||
OE - Value add | |||||||||||||||||||
Aftermarket | |||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||
Year Ended December 31, 2017 | |||||||||||||||||||
OE - Substrate | $ | $ | $ | $ | $ | ||||||||||||||
OE - Value add | |||||||||||||||||||
Aftermarket | |||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Reportable Segments | |||||||||||||||||||
By Geography | Clean Air | Powertrain | Ride Performance | Motorparts | Total | ||||||||||||||
Year Ended December 31, 2019 | |||||||||||||||||||
North America | $ | $ | $ | $ | $ | ||||||||||||||
Europe, Middle East, Africa, and South America | |||||||||||||||||||
Asia Pacific | |||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||
Year Ended December 31, 2018 | |||||||||||||||||||
North America | $ | $ | $ | $ | $ | ||||||||||||||
Europe, Middle East, Africa, and South America | |||||||||||||||||||
Asia Pacific | |||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||
Year Ended December 31, 2017 | |||||||||||||||||||
North America | $ | $ | $ | $ | $ | ||||||||||||||
Europe, Middle East, Africa, and South America | |||||||||||||||||||
Asia Pacific | |||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Year Ended December 31, 2019 | |||||||||||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Other unallocated assets | Total | ||||||||||||||||||
Prior year payable on assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Asset additions | |||||||||||||||||||||||
Less: Current year payable on assets | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||
Cash payments for property, plant, and equipment | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Year Ended December 31, 2018 | |||||||||||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Other unallocated assets | Total | ||||||||||||||||||
Prior year payable on assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Capex in accounts payable acquired | |||||||||||||||||||||||
Asset additions | |||||||||||||||||||||||
Less: Current year payable on assets | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||
Cash payments for property, plant, and equipment | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Year Ended December 31, 2017 | |||||||||||||||||||||||
Clean Air | Powertrain | Ride Performance | Motorparts | Other unallocated assets | Total | ||||||||||||||||||
Prior year payable on assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Asset additions | |||||||||||||||||||||||
Less: Current year payable on assets | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Cash payments for property, plant, and equipment | $ | $ | $ | $ | $ | $ |
Year Ended December 31, 2019 | |||||||||||
Net Sales | Purchases | Royalty and Other Income(Expense) | |||||||||
Anqing TP Goetze Piston Ring Company Limited | $ | $ | $ | ||||||||
Anqing TP Powder Metallurgy Company Limited | $ | $ | $ | ||||||||
Dongsuh Federal-Mogul Industrial Co., Ltd. | $ | $ | $ | ||||||||
Federal-Mogul Powertrain Otomotiv A.S. | $ | $ | $ | ||||||||
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti. | $ | $ | $ | ||||||||
Federal-Mogul TP Liners, Inc. | $ | $ | $ | ||||||||
Frenos Hidraulicos Auto | $ | $ | $ | ||||||||
Icahn Automotive Group LLC | $ | $ | $ | ||||||||
Montagewerk Abgastechnik Emden GmbH | $ | $ | $ | ||||||||
PSC Metals, Inc. | $ | $ | $ |
Year Ended December 31, 2018 | |||||||||||
Net Sales | Purchases | Royalty and Other Income(Expense) | |||||||||
Anqing TP Goetze Piston Ring Company Limited | $ | $ | $ | ||||||||
Anqing TP Powder Metallurgy Company Limited | $ | $ | $ | ||||||||
Dongsuh Federal-Mogul Industrial Co., Ltd. | $ | $ | $ | ||||||||
Federal-Mogul Powertrain Otomotiv A.S. | $ | $ | $ | ||||||||
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti. | $ | $ | $ | ||||||||
Federal-Mogul TP Liners, Inc. | $ | $ | $ | ||||||||
Icahn Automotive Group LLC | $ | $ | $ | ||||||||
Montagewerk Abgastechnik Emden GmbH | $ | $ | $ |
December 31, 2019 | December 31, 2018 | ||||||||||||||
Receivables | Payables and accruals | Receivables | Payables and accruals | ||||||||||||
Anqing TP Goetze Piston Ring Company Limited | $ | $ | $ | $ | |||||||||||
Anqing TP Powder Metallurgy Company Limited | $ | $ | $ | $ | |||||||||||
Dongsuh Federal-Mogul Industrial Co., Ltd. | $ | $ | $ | $ | |||||||||||
Farloc Argentina SAIC | $ | $ | $ | $ | |||||||||||
Federal-Mogul Powertrain Otomotiv A.S. | $ | $ | $ | $ | |||||||||||
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti. | $ | $ | $ | $ | |||||||||||
Federal-Mogul TP Liners, Inc. | $ | $ | $ | $ | |||||||||||
Icahn Automotive Group LLC | $ | $ | $ | $ | |||||||||||
Montagewerk Abgastechnik Emden GmbH | $ | $ | $ | $ |
Net sales and operating revenues | Cost of sales (exclusive of depreciation and amortization)(a) | Earnings (loss) before interest expense, income taxes, and noncontrolling interests | Net income (loss) attributable to Tenneco Inc. | ||||||||||||
Quarter | |||||||||||||||
2019 | |||||||||||||||
1st | $ | $ | $ | ( | ) | $ | ( | ) | |||||||
2nd | |||||||||||||||
3rd | |||||||||||||||
4th (c) | ( | ) | ( | ) | |||||||||||
Full Year | $ | $ | $ | $ | ( | ) |
Net sales and operating revenues | Cost of sales (exclusive of depreciation and amortization) | Earnings (loss) before interest expense, income taxes, and noncontrolling interests | Net income (loss) attributable to Tenneco Inc. | ||||||||||||
Quarter | |||||||||||||||
2018 | |||||||||||||||
1st | $ | $ | $ | $ | |||||||||||
2nd | |||||||||||||||
3rd | |||||||||||||||
4th | ( | ) | ( | ) | |||||||||||
Full Year | $ | $ | $ | $ |
Basic earnings (loss) per share of common stock(b) | Diluted earnings (loss) per share of common stock(b) | ||||||
Quarter | |||||||
2019 | |||||||
1st | $ | ( | ) | $ | ( | ) | |
2nd | |||||||
3rd | |||||||
4th | ( | ) | ( | ) | |||
Full Year | $ | ( | ) | $ | ( | ) |
Basic earnings (loss) per share of common stock(b) | Diluted earnings (loss) per share of common stock(b) | ||||||
Quarter | |||||||
2018 | |||||||
1st | $ | $ | |||||
2nd | |||||||
3rd | |||||||
4th | ( | ) | ( | ) | |||
Full Year | $ | $ |
Year Ended December 31, 2019 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
Revenues | |||||||||||||||||||
Net sales and operating revenues: | |||||||||||||||||||
External | $ | $ | $ | $ | $ | ||||||||||||||
Affiliated companies | ( | ) | |||||||||||||||||
( | ) | ||||||||||||||||||
Costs and expenses | |||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization) | ( | ) | |||||||||||||||||
Selling, general, and administrative | |||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||
Engineering, research, and development | |||||||||||||||||||
Restructuring charges and asset impairments | |||||||||||||||||||
Goodwill and intangible impairment charge | |||||||||||||||||||
( | ) | ||||||||||||||||||
Other income (expense) | |||||||||||||||||||
Non-service pension and postretirement benefit (costs) credits | ( | ) | ( | ) | |||||||||||||||
Equity in earnings (losses) of nonconsolidated affiliates, net of tax | |||||||||||||||||||
Other income (expense), net | |||||||||||||||||||
Earnings (loss) before interest expense, income taxes and noncontrolling interests | ( | ) | ( | ) | |||||||||||||||
Interest expense: | |||||||||||||||||||
External, net of interest capitalized | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Affiliated companies, net of interest income | ( | ) | ( | ) | |||||||||||||||
Earnings (loss) before income taxes and noncontrolling interests | ( | ) | ( | ) | ( | ) | |||||||||||||
Income tax (expense) benefit | ( | ) | ( | ) | ( | ) | |||||||||||||
Equity in net income (loss) from affiliated companies | ( | ) | ( | ) | |||||||||||||||
Net income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Less: Net income attributable to noncontrolling interests | |||||||||||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
Comprehensive income (loss) attributable to Tenneco Inc. | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Year Ended December 31, 2018 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
Revenues | |||||||||||||||||||
Net sales and operating revenues: | |||||||||||||||||||
External | $ | $ | $ | $ | $ | ||||||||||||||
Affiliated companies | ( | ) | |||||||||||||||||
( | ) | ||||||||||||||||||
Costs and expenses | |||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization) | ( | ) | ( | ) | |||||||||||||||
Selling, general, and administrative | |||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||
Engineering, research, and development | |||||||||||||||||||
Restructuring charges and asset impairments | |||||||||||||||||||
Goodwill and intangible impairment charge | |||||||||||||||||||
( | ) | ||||||||||||||||||
Other income (expense) | |||||||||||||||||||
Non-service pension and postretirement benefit (costs) credit | ( | ) | ( | ) | ( | ) | |||||||||||||
Loss on extinguishment of debt | ( | ) | ( | ) | |||||||||||||||
Equity in earnings (losses) of nonconsolidated affiliates, net of tax | |||||||||||||||||||
Other income (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Earnings (loss) before interest expense, income taxes, noncontrolling interests and equity in net income from affiliated companies | ( | ) | ( | ) | ( | ) | |||||||||||||
Interest expense: | |||||||||||||||||||
External, net of interest capitalized | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Affiliated companies, net of interest income | ( | ) | ( | ) | |||||||||||||||
Earnings (loss) before income taxes, noncontrolling interests and equity in net income from affiliated companies | ( | ) | ( | ) | ( | ) | |||||||||||||
Income tax (expense) benefit | ( | ) | ( | ) | |||||||||||||||
Equity in net income (loss) from affiliated companies | ( | ) | |||||||||||||||||
Net income (loss) | ( | ) | |||||||||||||||||
Less: Net income attributable to noncontrolling interests | |||||||||||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Comprehensive income (loss) attributable to Tenneco Inc. | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Year Ended December 31, 2017 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
Revenues | |||||||||||||||||||
Net sales and operating revenues: | |||||||||||||||||||
External | $ | $ | $ | $ | $ | ||||||||||||||
Affiliated companies | ( | ) | |||||||||||||||||
( | ) | ||||||||||||||||||
Costs and expenses | |||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization) | ( | ) | |||||||||||||||||
Selling, general, and administrative | |||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||
Engineering, research, and development | |||||||||||||||||||
Restructuring charges and asset impairments | |||||||||||||||||||
Goodwill and intangible impairment charge | |||||||||||||||||||
( | ) | ||||||||||||||||||
Other income (expense) | |||||||||||||||||||
Non-service pension and postretirement benefit (costs) credits | ( | ) | ( | ) | |||||||||||||||
Loss on extinguishment of debt | ( | ) | ( | ) | |||||||||||||||
Equity in earnings (losses) of nonconsolidated affiliates, net of tax | ( | ) | ( | ) | |||||||||||||||
Other income (expense), net | ( | ) | |||||||||||||||||
( | ) | ( | ) | ( | ) | ||||||||||||||
Earnings (loss) before interest expense, income taxes, noncontrolling interests and equity in net income from affiliated companies | ( | ) | |||||||||||||||||
Interest expense: | |||||||||||||||||||
External, net of interest capitalized | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Affiliated companies, net of interest income | ( | ) | ( | ) | |||||||||||||||
Earnings (loss) before income taxes, noncontrolling interests and equity in net income from affiliated companies | ( | ) | ( | ) | |||||||||||||||
Income tax (expense) benefit | ( | ) | ( | ) | |||||||||||||||
Equity in net income (loss) from affiliated companies | ( | ) | |||||||||||||||||
Net income (loss) | ( | ) | |||||||||||||||||
Less: Net income attributable to noncontrolling interests | |||||||||||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Comprehensive income (loss) attributable to Tenneco Inc. | $ | $ | $ | $ | ( | ) | $ |
December 31, 2019 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
ASSETS | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||
Restricted cash | |||||||||||||||||||
Receivables, net | |||||||||||||||||||
Inventories, net | |||||||||||||||||||
Prepayments and other current assets | |||||||||||||||||||
Total current assets | |||||||||||||||||||
Property, plant and equipment, net | |||||||||||||||||||
Investment in affiliated companies | ( | ) | |||||||||||||||||
Long-term receivables, net | |||||||||||||||||||
Goodwill | |||||||||||||||||||
Intangibles, net | |||||||||||||||||||
Investments in nonconsolidated affiliates | |||||||||||||||||||
Deferred income taxes | |||||||||||||||||||
Other assets | |||||||||||||||||||
Total assets | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Short-term debt, including current maturities of long-term debt | $ | $ | $ | $ | $ | ||||||||||||||
Accounts payable | |||||||||||||||||||
Accrued compensation and employee benefits | |||||||||||||||||||
Accrued income taxes | |||||||||||||||||||
Accrued expenses and other current liabilities | |||||||||||||||||||
Total current liabilities | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Intercompany due to (due from) | ( | ) | ( | ) | |||||||||||||||
Deferred income taxes | |||||||||||||||||||
Pension, postretirement benefits and other liabilities | |||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Total liabilities | |||||||||||||||||||
Redeemable noncontrolling interests | |||||||||||||||||||
Tenneco Inc. shareholders’ equity | ( | ) | |||||||||||||||||
Noncontrolling interests | |||||||||||||||||||
Total equity | ( | ) | |||||||||||||||||
Total liabilities, redeemable noncontrolling interests, and equity | $ | $ | $ | $ | ( | ) | $ |
December 31, 2018 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
ASSETS | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||
Restricted cash | |||||||||||||||||||
Receivables, net | |||||||||||||||||||
Inventories, net | |||||||||||||||||||
Prepayments and other current assets | |||||||||||||||||||
Total current assets | |||||||||||||||||||
Property, plant and equipment, net | |||||||||||||||||||
Investment in affiliated companies | ( | ) | |||||||||||||||||
Long-term receivables, net | |||||||||||||||||||
Goodwill | |||||||||||||||||||
Intangibles, net | |||||||||||||||||||
Investments in nonconsolidated affiliates | |||||||||||||||||||
Deferred income taxes | |||||||||||||||||||
Other assets | ( | ) | |||||||||||||||||
Total assets | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Short-term debt, including current maturities of long-term debt | $ | $ | $ | $ | $ | ||||||||||||||
Accounts payable | |||||||||||||||||||
Accrued compensation and employee benefits | |||||||||||||||||||
Accrued income taxes | ( | ) | |||||||||||||||||
Accrued expenses and other current liabilities | |||||||||||||||||||
Total current liabilities | ( | ) | |||||||||||||||||
Long-term debt | |||||||||||||||||||
Intercompany due to (due from) | ( | ) | ( | ) | |||||||||||||||
Deferred income taxes | |||||||||||||||||||
Pension, postretirement benefits and other liabilities | |||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Total liabilities | ( | ) | |||||||||||||||||
Redeemable noncontrolling interests | |||||||||||||||||||
Tenneco Inc. shareholders’ equity | ( | ) | |||||||||||||||||
Noncontrolling interests | |||||||||||||||||||
Total equity | ( | ) | |||||||||||||||||
Total liabilities, redeemable noncontrolling interests, and equity | $ | $ | $ | $ | ( | ) | $ |
Year Ended December 31, 2019 | ||||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | ||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||
Investing Activities | ||||||||||||||||||||
Acquisitions, net of cash acquired | ( | ) | — | ( | ) | |||||||||||||||
Proceeds from sale of assets | ||||||||||||||||||||
Proceeds from sale of investment in nonconsolidated affiliates | ||||||||||||||||||||
Net proceeds from sale of business | ||||||||||||||||||||
Cash payments for plant, property, and equipment | ( | ) | ( | ) | ( | ) | ||||||||||||||
Proceeds from deferred purchase price of factored receivables | ||||||||||||||||||||
Other | ( | ) | ||||||||||||||||||
Net cash (used in) provided by investing activities | ( | ) | ( | ) | ( | ) | ||||||||||||||
Financing Activities | ||||||||||||||||||||
Proceeds from term loans and notes | ||||||||||||||||||||
Repayments of term loans and notes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Borrowings on revolving lines of credit | ||||||||||||||||||||
Payments on revolving lines of credit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Repurchase of common shares | ( | ) | ( | ) | ||||||||||||||||
Cash dividends | ( | ) | ( | ) | ||||||||||||||||
Net decrease in bank overdrafts | ( | ) | ( | ) | ||||||||||||||||
Acquisition of additional ownership interest in consolidated affiliates | ( | ) | ( | ) | ||||||||||||||||
Distributions to noncontrolling interest partners | ( | ) | ( | ) | ||||||||||||||||
Other | ( | ) | ( | ) | ||||||||||||||||
Intercompany dividends and net (decrease) increase in intercompany obligations | ( | ) | ||||||||||||||||||
Net cash (used in) provided by financing activities | ( | ) | ||||||||||||||||||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | ||||||||||||||||||||
Increase in cash, cash equivalents and restricted cash | ( | ) | ( | ) | ( | ) | ||||||||||||||
Cash, cash equivalents and restricted cash, January 1 | ||||||||||||||||||||
Cash, cash equivalents and restricted cash, December 31 | $ | $ | $ | $ | $ |
Year Ended December 31, 2018 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
Operating Activities | |||||||||||||||||||
Net cash provided by (used in) operating activities | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||
Investing Activities | |||||||||||||||||||
Acquisitions, net of cash acquired | ( | ) | ( | ) | |||||||||||||||
Proceeds from sale of assets | |||||||||||||||||||
Cash payments for plant, property, and equipment | ( | ) | ( | ) | ( | ) | |||||||||||||
Proceeds from deferred purchase price of factored receivables | |||||||||||||||||||
Other | |||||||||||||||||||
Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Financing Activities | |||||||||||||||||||
Proceeds from term loans and notes | |||||||||||||||||||
Repayments of term loans and notes | ( | ) | ( | ) | ( | ) | |||||||||||||
Borrowings on revolving lines of credit | |||||||||||||||||||
Payments on revolving lines of credit | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Repurchase of common shares | ( | ) | ( | ) | |||||||||||||||
Cash dividends | ( | ) | ( | ) | |||||||||||||||
Debt issuance cost of long-term debt | ( | ) | ( | ) | ( | ) | |||||||||||||
Net decrease in bank overdrafts | ( | ) | ( | ) | |||||||||||||||
Distributions to noncontrolling interest partners | ( | ) | ( | ) | |||||||||||||||
Other | ( | ) | ( | ) | |||||||||||||||
Intercompany dividends and net (decrease) increase in intercompany obligations | ( | ) | ( | ) | |||||||||||||||
Net cash (used in) provided by financing activities | ( | ) | |||||||||||||||||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | ( | ) | ( | ) | |||||||||||||||
Decrease in cash, cash equivalents and restricted cash | |||||||||||||||||||
Cash, cash equivalents and restricted cash, January 1 | |||||||||||||||||||
Cash, cash equivalents and restricted cash, December 31 | $ | $ | $ | $ | $ |
Year Ended December 31, 2017 | |||||||||||||||||||
Guarantor Subsidiaries | Nonguarantor Subsidiaries | Tenneco Inc. (Parent Company) | Reclass & Elims | Consolidated | |||||||||||||||
Operating Activities | |||||||||||||||||||
Net cash provided by (used in) operating activities | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||
Investing Activities | |||||||||||||||||||
Acquisitions, net of cash acquired | |||||||||||||||||||
Proceeds from sale of assets | |||||||||||||||||||
Proceeds from sale of investment in nonconsolidated affiliates | ( | ) | ( | ) | ( | ) | |||||||||||||
Proceeds from deferred purchase price of factored receivables | |||||||||||||||||||
Other | ( | ) | ( | ) | ( | ) | |||||||||||||
Net cash used in investing activities | ( | ) | ( | ) | ( | ) | |||||||||||||
Financing Activities | |||||||||||||||||||
Proceeds from term loans and notes | |||||||||||||||||||
Repayments of term loans and notes | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Borrowings on revolving lines of credit | |||||||||||||||||||
Payments on revolving lines of credit | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Repurchase of common shares | ( | ) | ( | ) | |||||||||||||||
Cash dividends | ( | ) | ( | ) | |||||||||||||||
Debt issuance cost of long-term debt | ( | ) | ( | ) | |||||||||||||||
Purchase of common stock under the share repurchase program | ( | ) | ( | ) | |||||||||||||||
Net decrease in bank overdrafts | ( | ) | ( | ) | |||||||||||||||
Distributions to noncontrolling interest partners | ( | ) | ( | ) | |||||||||||||||
Intercompany dividends and net (decrease) increase in intercompany obligations | ( | ) | ( | ) | |||||||||||||||
Net cash used in financing activities | ( | ) | ( | ) | ( | ) | |||||||||||||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | |||||||||||||||||||
Increase in cash, cash equivalents and restricted cash | ( | ) | ( | ) | ( | ) | |||||||||||||
Cash, cash equivalents and restricted cash, January 1 | |||||||||||||||||||
Cash, cash equivalents and restricted cash, December 31 | $ | $ | $ | $ | $ |
Additions | ||||||||||||||||
Description | Balance at Beginning of Year | Charged to Costs and Expenses | Charged to Other Accounts | Deductions | Balance at End of Year | |||||||||||
(Millions) | ||||||||||||||||
Allowance for Doubtful Accounts and Notes Receivable Deducted from Assets to Which it Applies: | ||||||||||||||||
Year Ended December 31, 2019 | $ | $ | ||||||||||||||
Year Ended December 31, 2018 | $ | $ | ||||||||||||||
Year Ended December 31, 2017 | $ | $ |
Description | Balance at Beginning of Year | Provision Charged (Credited) to Expense | Allowance Changes | Other Additions (Deductions) (a) | Balance at End of Year | |||||||||||
(Millions) | ||||||||||||||||
Deferred Tax Assets- Valuation Allowance: | ||||||||||||||||
Year Ended December 31, 2019 | $ | $ | ||||||||||||||
Year Ended December 31, 2018 | $ | $ | ||||||||||||||
Year Ended December 31, 2017 | $ | ( | ) | $ |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
1) | Making changes to the organizational structure within the North America Motorparts finance organization to ensure that there are sufficient personnel to design, maintain and execute internal controls over financial reporting; |
2) | Re-evaluating control activities related to account reconciliations within the North America Motorparts business to ensure all accounts on specific ledgers are reconciled, reviewed and approved on a timely basis; and |
3) | Re-evaluating control activities related to manual journal entries within the North America Motorparts business to ensure that all journal entries are reviewed and approved by different individuals on a timely basis. |
Exhibit Number | Description | |
— | Membership Interest Purchase Agreement, dated as of April 10, 2018 by and among the Company, Federal-Mogul LLC, American Entertainment Properties Corp. and Icahn Enterprises L.P. (incorporated herein by reference to Exhibit 2.1 of the registrant’s Current Report on Form 8-K filed April 10, 2018. File No. 1-12387). | |
— | Amended and Restated Certificate of Incorporation of Tenneco Inc. (incorporated herein by reference to Exhibit 3.1 of the registrant’s Current Report on Form 8-K dated October 1 2018, File No. 1-12387). | |
— | By-laws of the registrant, as amended and restated effective October 1, 2018 (incorporated herein by reference to Exhibit 3.2 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Description of Securities | |
— | The description of Tenneco’s common stock, $0.01 par value, contained in Tenneco’s Registration Statement on Form 10 (File No. 1-12387) originally filed with the Securities and Exchange Commission (the “Commission”) on October 30, 1996, as amended by Tenneco’s post-effective amendment to the Registration Statement on Form 10 filed with the Commission on October 1, 2018, is incorporated herein by reference. | |
— | Shareholders Agreement, dated as of October 1, 2018 by and among the Company, American Entertainment Properties Corp., Icahn Enterprises Holdings L.P. and Icahn Enterprises L.P. (incorporated herein by reference to Exhibit 4.1 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Credit Agreement, dated as of October 1, 2018, among Tenneco Inc., Tenneco Automotive Operating Company Inc., JPMorgan Chase Bank, N.A., as Administrative Agent, and the other lenders party thereto (incorporated herein by reference to Exhibit 10.01 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Guarantee Agreement, dated as of October 1, 2018, among Tenneco Inc., the Guarantors party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.02 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Collateral Agreement, dated as of October 1, 2018, among Tenneco Inc., various subsidiaries to Tenneco, Inc. party thereto and Wilmington Trust, National Association, as Collateral Trustee (incorporated herein by reference to Exhibit 10.03 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | First Amendment, dated February 14, 2020, to the Credit Agreement, dated as of October 1, 2018, by and among Tenneco Inc., Tenneco Automotive Operating Company Inc., J.P. Morgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto (incorporated herein by reference to Exhibit 10.1 of the registrant’s Current Report on Form 8-K dated February 19, 2020, File No 1-12387). | |
— | Second Amendment, dated February 14, 2020, to the Credit Agreement, dated as of October 1, 2018, by and among Tenneco Inc., Tenneco Automotive Operating Company Inc., J.P. Morgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto (incorporated herein by reference to Exhibit 10.2 of the registrant’s Current Report on Form 8-K dated February 19, 2020, File No 1-12387). | |
— | Indenture, dated December 5, 2014, among the registrant, various subsidiaries of the registrant and U.S, Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.1 of the registrant’s Current Report on Form 8-K filed December 5, 2014, File No. 1-12387). | |
— | First Supplemental Indenture, dated December 5, 2014, among the registrant, various subsidiaries of the registrant and U.S. Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.2 of the registrant's Current Report on Form 8-K filed December 5, 2014, File No. 1-12387). | |
— | Second Supplemental Indenture, dated as of June 13, 2016, among Tenneco Inc., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K dated June 13, 2016, File No. 1-12387). |
Exhibit Number | Description | |
— | Indenture, dated as of March 30, 2017, among Federal-Mogul LLC and Federal-Mogul Financing Corporation, as Issuers, the Guarantors party thereto, Wilmington Trust, National Association, as Trustee, The Bank of New York Mellon, London Branch, as Paying Agent, and The Bank of New York Mellon SA/NV, Luxembourg Branch (formerly. The Bank of New York Mellon (Luxembourg) S.A.), as Registrar (including the form of 4.875% Senior Secured Notes due 2022 and the form of Floating Rate Senior Secured Notes due 2024) (incorporated herein by reference to Exhibit 4.01 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | First Supplemental Indenture, dated as of April 4, 2018, among Federal-Mogul LLC and Federal-Mogul Financing Corporation, as Issuers, the Guarantors party thereto, Wilmington Trust, National Association, as Trustee, and Bank of America, N.A. and Citibank, N.A. as Co-Collateral Trustees (incorporated herein by reference to Exhibit 4.02 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Second Supplemental Indenture, dated as of July 30, 2018, among Federal-Mogul LLC and Federal-Mogul Financing Corporation, as Issuers, the Guarantors party thereto, and Wilmington Trust, National Association, as Trustee (incorporated herein by reference to Exhibit 4.03 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Third Supplemental Indenture, dated as of September 18, 2018, among Federal-Mogul LLC and Federal-Mogul Financing Corporation, as Issuers, the Guarantors party thereto, and Wilmington Trust, National Association, as Trustee (incorporated herein by reference to Exhibit 4.04 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Fourth Supplemental Indenture, dated as of October 1, 2018, among Tenneco Inc. (as successor by merger to Federal-Mogul LLC) and Federal-Mogul Financing Corporation, as Issuers, the Guarantors party thereto, and Wilmington Trust, National Association, as Trustee (incorporated herein by reference to Exhibit 4.05 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Collateral Agreement, dated as of March 30, 2017, among Federal-Mogul LLC, as Company and Issuer, and certain of its subsidiaries in favor of Citibank, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.06 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement, dated as of July 30, 2018, made by Federal-Mogul Products Company LLC and Federal-Mogul Ignition LLC in favor of Bank of America, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.07 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement, dated as of September 18, 2018, made by Federal-Mogul New Products, Inc. and Federal-Mogul Products US LLC in favor of Bank of America, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.08 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement, dated as of October 1, 2018, made by Tenneco Inc., Tenneco Automotive Operating Company Inc., Tenneco International Holding Corp., Tenneco Global Holdings Inc., TMC Texas Inc., The Pullman Company and Clevite Industries Inc. in favor of Wilmington Trust, National Association, as Collateral Trustee (incorporated herein by reference to Exhibit 4.09 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Amended and Restated Collateral Trust Agreement, dated as of April 15, 2014, among Federal-Mogul Holdings Corporation, certain of its subsidiaries and Citibank, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.10 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement, dated as of July 29, 2014, made by FM Motorparts TSC, Inc. (as predecessor to F-M Motorparts TSC LLC) in favor of Citibank, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.11 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement, dated as of July 23, 2015, made by F-M TSC Real Estate Holdings LLC in favor of Citibank, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.12 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). |
Exhibit Number | Description | |
— | Assumption Agreement, dated as of July 28, 2015, made by Federal-Mogul Valve Train International LLC in favor of Citibank, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.13 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement, dated as of August 12, 2015, made by Federal-Mogul Sevierville, Inc. (as predecessor to Federal-Mogul Sevierville, LLC) in favor of Citibank, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.14 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement, dated as of July 14, 2016, made by Beck Arnley Holdings LLC and Federal-Mogul Filtration LLC in favor of Citibank, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.15 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement, dated as of March 30, 2017, made by Federal-Mogul Financing Corporation in favor of Citibank, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.16 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Collateral Trust Joinder, dated as of March 30, 2017, by Wilmington Trust, National Associate, as Trustee, and acknowledged by Citibank, N.A, as Collateral Trustee (incorporated herein by reference to Exhibit 4.17 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Collateral Trust Joinder, dated as of June 29, 2017 by The Bank of New York Mellon, London Branch, as Trustee, and acknowledged by Citibank, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.18 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement, dated as of July 30, 2018 made by Federal-Mogul Products Company LLC and Federal-Mogul Ignition LLC in favor of Bank of America, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.19 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement, dated as of September 18, 2018 made by Federal-Mogul New Products, Inc. and Federal-Mogul Products US LLC in favor of Bank of America, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.20 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement to Collateral Trust Agreement, dated as of October 1, 2018, made by Tenneco Inc., Tenneco Automotive Operating Company Inc., Tenneco International Holding Corp., Tenneco Global Holdings Inc., TMC Texas Inc., The Pullman Company and Clevite Industries Inc. in favor of Wilmington Trust, National Association, as Collateral Trustee (incorporated herein by reference to Exhibit 4.21 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Pari Passu Intercreditor Agreement, dated as of March 30, 2017, among Credit Suisse AG, Cayman Islands Branch, as Tranche C Term Administrative Agent for the applicable PP&E Credit Agreement Secured Parties, Citibank, N.A., as Collateral Trustee, and Wilmington Trust, National Association, as the Initial Other Authorized Representative (incorporated herein by reference to Exhibit 4.22 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Indenture, dated as of June 29, 2017, among Federal-Mogul LLC and Federal-Mogul Financing Corporation, as Issuers, the Guarantors party thereto, The Bank of New York Mellon, London Branch, as Trustee and Paying Agent, and The Bank of New York Mellon SA/NV, Luxembourg Branch (formerly, The Bank of New York Mellon (Luxembourg S.A.), as Registrar (incorporated herein by reference to Exhibit 4.23 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | First Supplemental Indenture, dated as of April 4, 2018, among Federal-Mogul LLC and Federal-Mogul Financing Corporation, as Issuers, the Guarantors party thereto, The Bank of New York Mellon, London Branch, as Trustee, and Bank of America, N.A. and Citibank, N.A., as Co-Collateral Trustees (incorporated herein by reference to Exhibit 4.24 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Second Supplemental Indenture, dated as of July 30, 2018, among Federal-Mogul LLC and Federal-Mogul Financing Corporation, as Issuers, the Guarantors party thereto and The Bank of New York Mellon, London Branch, as Trustee (incorporated herein by reference to Exhibit 4.25 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). |
Exhibit Number | Description | |
— | Third Supplemental Indenture, dated as of September 18, 2018, among Federal-Mogul LLC and Federal-Mogul Financing Corporation, as Issuers, the Guarantors party thereto and The Bank of New York Mellon, London Branch, as Trustee (incorporated herein by reference to Exhibit 4.26 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Fourth Supplemental Indenture, dated as of October 1, 2018, among Tenneco Inc. (as successor by merger to Federal-Mogul LLC) and Federal-Mogul Financing Corporation, as Issuers, the Guarantors party thereto, and The Bank of New York Mellon, London Branch, as Trustee (incorporated herein by reference to Exhibit 4.27 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Collateral Agreement, dated as of June 29, 2017, among Federal-Mogul LLC, as Company and Issuer, and certain of its subsidiaries in favor of Citibank, N.A., as Collateral Trustee (incorporated herein by reference to Exhibit 4.28 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement, dated as of July 30, 2018, made by Federal-Mogul Products Company LLC and Federal-Mogul Ignition LLC in favor of Bank of America, N.A. as Collateral Trustee (incorporated herein by reference to Exhibit 4.29 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement, dated as of September 18, 2018, made by Federal-Mogul New Products, Inc. and Federal-Mogul Products US LLC in favor of Bank of America, N.A. as Collateral Trustee (incorporated herein by reference to Exhibit 4.30 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Assumption Agreement, dated as of October 1, 2018, made by Tenneco Inc., Tenneco Automotive Operating Company Inc., Tenneco International Holding Corp., Tenneco Global Holdings Inc., TMC Texas Inc., The Pullman Company and Clevite Industries Inc. in favor of Wilmington Trust, National Association, as Collateral Trustee (incorporated herein by reference to Exhibit 4.31 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Joinder No. 1 to Pari Passu Intercreditor Agreement, dated as of June 29, 2017, among The Bank of New York Mellon, London Branch, as Trustee, Citibank, N.A., as Collateral Trustee, Credit Suisse, AG, Cayman Islands Branch, as Tranche C Term Administrative Agent and an Authorized Representative, and Wilmington Trust National Association, as Initial Other Authorized Representative (incorporated herein by reference to Exhibit 4.32 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Collateral Trustee Resignation and Appointment Agreement, dated as of February 23, 2018, among Bank of America, N.A., as Co-Collateral Trustee, successor Collateral Trustee and ABL Agent, Citibank. N.A., as Co-Collateral Trustee and resigning Collateral Trustee, Credit Suisse AG, Cayman Islands Branch, as PP&E First Lien Agent, Wilmington Trust, National Association, as PP&E First Lien Agent, The Bank of New Mellon, London Branch, as PP&E First Lien Agent, Federal-Mogul LLC and the other Loan Parties party thereto (incorporated herein by reference to Exhibit 4.33 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Collateral Trustee Resignation and Appointment, Joinder, Assumption and Designation Agreement, dated as of October 1, 2018, among Wilmington Trust, National Association, as Co-Collateral Trustee, successor Collateral Trustee and PP&E First Lien Agent, Bank of America, N.A., as Co-Collateral Trustee and Retiring Collateral Trustee, the Bank of New York Mellon, London Branch, as PP&E First Lien Agent, JPMorgan Chase Bank, N.A., as Authorized Agent, Tenneco Inc. and the other Loan Parties party thereto (incorporated herein by reference to Exhibit 4.34 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Third Supplemental Indenture, dated October 1, 2018, among Tenneco Inc., as issuer, the Guarantors party thereto and U.S. Bank National Association, as trustee (the “Trustee”) (incorporated herein by reference to Exhibit 4.35 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Fourth Supplemental Indenture, dated October 1, 2018, among Tenneco Inc., as issuer, the Guarantors party thereto and the Trustee (incorporated herein by reference to Exhibit 4.36 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
— | Joinder No. 2 to Pari Passu Intercreditor Agreement, dated as of October 1, 2018, among JPMorgan Chase Bank, N.A., as Additional Senior Class Debt Representative, Wilmington Trust, National Association, as Collateral Trustee, Wilmington Trust, National Association, as Initial Other Authorized Representative, The Bank of New York Mellon, London Branch, as an Authorized Representative (incorporated herein by reference to Exhibit 4.37 of the registrant’s Current Report on Form 8-K dated October 1, 2018, File No. 1-12387). | |
4.44 | — | The registrant is a party to other agreements for unregistered long-term debt securities, which do not exceed 10% of the registrant’s total assets. The registrant agrees to furnish a copy of such agreements to the Commission upon request. |
Exhibit Number | Description | |
— | Stock Ownership Plan (incorporated herein by reference to Exhibit 10.14 of the registrant’s Registration Statement on Form S-4, Reg. | |
— | Supplemental Executive Retirement Plan (incorporated herein by reference to Exhibit 10.13 of the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000, File No. 1-12387). | |
— | Form of Indemnity Agreement entered into between the registrant and Paul Stecko (incorporated herein by reference to Exhibit 10.29 of the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, File No. 1-12387). | |
— | Amendment No. 1 to the Supplemental Executive Retirement Plan (incorporated herein by reference to Exhibit 10.40 of the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, File No. 1-12387). | |
— | DRiV Incorporated Supplemental Retirement Plan, dated January 1, 2020. | |
— | Tenneco Inc. Change in Control Severance Benefit Plan for Key Executives, as Amended and Restated effective December 12, 2007 (incorporated herein by reference to Exhibit 10.61 of the registrant’s Annual Report on Form 10-K for the year ended December 31, 2008, File No. 1-12387). | |
— | Code Section 409A Amendment to Supplemental Retirement Plan (incorporated herein by reference to Exhibit 10.71 of the registrant’s Annual Report on Form 10-K for the year ended December 31, 2008, File No. 1-12387). | |
— | Tenneco Inc. 2006 Long-Term Incentive Plan (as amended and restated effective March 11, 2009) (incorporated herein by reference to Appendix A of the registrant’s proxy statement on Schedule 14A, filed with the Securities and Exchange Commission on March 31, 2009, File No. 1-12387). | |
— | First Amendment to Tenneco Inc. Change in Control Severance Benefit Plan for Key Executives, as Amended and Restated effective December 12, 2007 (incorporated herein by reference to Exhibit 10.3 of the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, File No. 1-12387). | |
— | Form of Non-Qualified Stock Option Agreement for Employees under Tenneco Inc. 2006 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.3 of the registrant's Current Report on Form 8-K dated January 18, 2012. File No. 1-12387). | |
— | Letter Agreement between Tenneco Inc. and Gregg M. Sherrill (incorporated herein by reference to Exhibit 99.2 of the registrant's Current Report on Form 8-K dated as of January 5, 2007. File No. 1-12387). | |
— | Letter Agreement between Tenneco Inc. and Gregg M. Sherrill, dated as of January 15, 2007 (incorporated herein by reference to Exhibit 99.1 of the registrant’s Current Report on Form 8-K dated as of January 15, 2007, File No. 1-12387). | |
— | Code Section 409A Amendment to Letter Agreement between the registrant and Gregg M. Sherrill (incorporated herein by reference to Exhibit 10.74 of the registrant’s Annual Report on Form 10-K for the year ended December 31, 2008, File No. 1-12387). | |
— | Amended and Restated Tenneco Inc. 2006 Long-Term Incentive Plan (effective March 18, 2013) (incorporated by reference to Appendix A of the Company's Proxy Statement on Schedule 14A, filed with the Securities Exchange Commission on April 3, 2013). | |
— | Form of Restricted Stock Unit Award Agreement under the Tenneco Inc. 2006 Long-Term Incentive Plan (awards after May 21, 2013 and before February 2017) (incorporated herein by reference to Exhibit 10.3 of the registrant’s Current Report on Form 8-K filed May 21, 2013, File No. 1-12387). | |
— | Form of Stock Option Award Agreement under the Tenneco Inc. 2006 Long-Term Incentive Plan (awards after May 21, 2013 and before February 2017) (incorporated herein by reference to Exhibit 10.4 of the registrant’s Current Report on Form 8-K filed May 21, 2013, File No. 1-12387). | |
— | Form of Long-Term Performance Unit Award Agreement under the Tenneco Inc. 2006 Long-Term Incentive Plan (grants after January 14, 2014 and before February 2017) (incorporated herein by reference to Exhibit 99.2 of the registrant’s Current Report on Form 8-K filed January 15, 2014, File No. 1-12387). | |
— | Offer Letter to Brian J. Kesseler dated January 6, 2015 (incorporated herein by reference to Exhibit 10.67 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2014, File No. 1-12387). | |
— | Second Amendment to Tenneco Inc. Change in Control Severance Benefit Plan for Key Executives (incorporated by reference to Exhibit 10.1 of registrant's Current Report on form 8-K dated April 28, 2015, File No. 1.12387). |
Exhibit Number | Description | |
— | Form of Restricted Stock Award for Brian J. Kesseler (January 2015 replacement grant) under Tenneco Inc. 2006 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.71 of the registrant's Annual Report on Form 10-K for the year ended December 31,2014, File No. 1-12387). | |
— | Tenneco Inc. Deferred Compensation Plan (as Amended and Restated Effective as of August 1, 2013) (incorporated by reference to Exhibit 10.6 of Tenneco Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, File No. 1-12387). | |
— | Amendment No. 1 to Tenneco Inc. 2006 Long-Term Incentive Plan, effective October 10, 2016 (incorporated herein by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, File No. 1-12387). | |
— | Notice to Employees of Agreement Amendments and New Options for Withholding, effective October 10, 2016 (incorporated herein by reference to Exhibit 10.5 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, File No. 1-12387). | |
— | Form of Restricted Stock Award Agreement for Employees under Tenneco Inc. 2006 Long-Term Incentive Plan (for awards commencing February 2017) (incorporated herein by reference to Exhibit 10.78 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2016, File No. 1-12387). | |
— | Form of Long-Term Performance Unit Award Agreement for Employees under Tenneco Inc. 2006 Long-Term Incentive Plan (for awards commencing February 2017) (incorporated herein by reference to Exhibit 10.79 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2016, File No. 1-12387). | |
— | Tenneco Inc. Annual Incentive Plan (incorporated herein by reference to Exhibit 10.1 of the registrant’s Current Report on Form 8-K filed February 9, 2018. File No. 1-12387). | |
— | Form of Restricted Stock Unit Award Agreement under the Tenneco Inc. 2006 Long-Term Incentive Plan (grants after 2017) (incorporated herein by reference to Exhibit 10.2 of the registrant’s Current Report on Form 8-K filed February 9, 2018. File No. 1-12387). | |
— | Form of Performance Share Unit Award Agreement under the Tenneco Inc. 2006 Long-Term Incentive Plan (grants after 2017) (incorporated herein by reference to Exhibit 10.3 of the registrant’s Current Report on Form 8-K filed February 9, 2018. File No. 1-12387). | |
— | Offer Letter to Jason M. Hollar dated April 18, 2017 (incorporated herein by reference to Exhibit 10.43 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2017, File No. 1-12387). | |
— | Offer Letter to Patrick Guo dated March 26, 2007 (incorporated herein by reference to Exhibit 10.46 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2017, File No. 1-12387). | |
— | Amendment dated February 29, 2012 to Offer Letter to Patrick Guo (incorporated herein by reference to Exhibit 10.47 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2017, File No. 1-12387). | |
— | Offer Letter to Rainer Jueckstock dated October 1, 2018. | |
— | Offer Letter to Bradley S. Norton dated October 1, 2018. | |
— | Tenneco Inc. Incentive Deferral Plan (incorporated herein by reference to Exhibit 10.48 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2017, File No. 1-12387). | |
— | Amended and Restated Tenneco Inc. Excess Benefit Plan, dated January 1, 2020. | |
— | DRiV Inc. Excess Benefit Plan, dated December 20, 2019 and effective January1, 2020. | |
— | Amended and Restated Tenneco Inc. 2006 Long-Term Incentive Plan adopted September 12, 2018 (incorporated by reference to Annex D of the registrant’s definitive Proxy Statement dated August 2, 2018, File No. 1-12387). | |
— | Addendum, dated July 20, 2018, to Offer Letter to Brian J. Kesseler dated January 6, 2015 (incorporated herein by reference to Exhibit 10.2 of the registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, File No. 1-12387). | |
— | Offer Letter to Roger Wood dated July 20, 2018 (incorporated herein by reference to Exhibit 10.3 of the registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, File No. 1-12387). | |
— | Tenneco Automotive Operating Company Inc. Severance Benefit Plan and Summary Plan Description, effective as of July 20, 2018 (incorporated herein by reference to Exhibit 10.4 of the registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, File No. 1-12387). |
Exhibit Number | Description | |
— | Form of Restricted Stock Unit Agreement under Tenneco Inc. 2006 Long-Term Incentive Plan (Retention Awards) (incorporated herein by reference to Exhibit 10.6 of the registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, File No. 1-12387). | |
— | Tenneco Inc. 2006 Long-Term Incentive Plan Special Restricted Stock Unit and Cash Incentive Award Agreement for Jason Hollar (incorporated herein by reference to Exhibit 10.44 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2018, File No. 1-12387). | |
— | Federal-Mogul LLC 2017 Long-Term Incentive Plan Motorparts Segment (for the period January 1, 2017 - December 31, 2019) (incorporated herein by reference to Exhibit 10.45 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2018, File No. 1-12387). | |
— | Federal-Mogul LLC 2017 Long Term Incentive Plan Powertrain Segment (for the period January 1, 2017 - December 31, 2019) (incorporated herein by reference to Exhibit 10.46 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2018, File No. 1-12387). | |
10.45 | — | Federal-Mogul LLC 2017 Long-Term Incentive Plan Motorparts Segment LTIP Award Agreement (for the period January 1, 2017 - December 31, 2019) effective January 1, 2017 (incorporated herein by reference to Exhibit 10.47 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2018, File No. 1-12387). |
— | Federal-Mogul LLC 2017 Long Term Incentive Plan Powertrain Segment LTIP Award Agreement (for the period January 1, 2017 - December 31, 2019) effective January 1, 2017 (incorporated herein by reference to Exhibit 10.48 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2018, File No. 1-12387). | |
— | Federal-Mogul LLC 2018 Long-Term Incentive Plan Motorparts Segment (for the period January 1, 2018 - December 31, 2020) (incorporated herein by reference to Exhibit 10.49 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2018, File No. 1-12387). | |
— | Federal-Mogul LLC 2018 Long-Term Incentive Plan Powertrain (for the period January 1, 2018 - December 31, 2020) (incorporated herein by reference to Exhibit 10.50 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2018, File No. 1-12387). | |
— | Federal-Mogul LLC 2018 Long Term Incentive Plan Motorparts Segment LTIP Award Agreement (for the period January 1, 2018 - December 31, 2020) effective January 1, 2018 (incorporated herein by reference to Exhibit 10.51 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2018, File No. 1-12387). | |
— | Federal-Mogul LLC 2018 Long Term Incentive Plan Powertrain Segment LTIP Award Agreement (for the period January 1, 2018 - December 31, 2020) effective January 1, 2018 (incorporated herein by reference to Exhibit 10.52 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2018, File No. 1-12387). | |
— | Form of Performance Share Unit Award Agreement under the Tenneco Inc. 2006 Long-Term Incentive Plan (grants after 2018) (incorporated herein by reference to Exhibit 10.53 of the registrant's Annual Report on Form 10-K for the year ended December 31, 2018, File No. 1-12387). | |
— | Form of Cash-Settled Long-Term Performance Unit Award Agreement under the Tenneco Inc. 2006 Long-Term Incentive Plan (for the period January 1, 2020 - December 31, 2022). | |
— | Form of Cash-Settled Restricted Stock Unit Award Agreement under the Tenneco Inc. 2006 Long-Term Incentive Plan (for awards commencing after February 18, 2020). | |
— | Form of Restricted Stock Unit Award Agreement under the Tenneco Inc. 2006 Long-Term Incentive Plan (for awards commencing after February 18, 2020). | |
— | Cash Retention Award Agreement, dated as of November 13, 2019, by and between Tenneco Inc. and Peng Guo. | |
— | Cash Retention Award Agreement, dated as of October 28, 2019, by and between Tenneco Inc. and Jason M. Hollar. | |
11 | — | None. |
13 | — | None. |
— | Tenneco Inc. Code of Ethical Conduct for Financial Managers (incorporated herein by reference from Exhibit 99.3 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2002, File No. 1-12387). | |
16 | — | None. |
18 | — | None. |
— | List of Subsidiaries of Tenneco Inc. | |
22 | — | None. |
Exhibit Number | Description | |
— | Consent of PricewaterhouseCoopers LLP. | |
— | Powers of Attorney. | |
— | Certification of Brian J. Kesseler under Section 302 of the Sarbanes-Oxley Act of 2002. | |
— | Certification of Jason M. Hollar under Section 302 of the Sarbanes-Oxley Act of 2002. | |
— | Certification of Brian J. Kesseler and Jason M. Hollar under Section 906 of the Sarbanes-Oxley Act of 2002. | |
33 | — | None. |
34 | — | None. |
35 | — | None. |
99 | — | None. |
100 | — | None. |
101 | — | None. |
*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. |
+ | Indicates a management contract or compensatory plan or arrangement. |
ITEM 16. | FORM 10-K SUMMARY. |
TENNECO INC. | |
By | /S/ BRIAN J. KESSELER |
Brian J. Kesseler | |
Chief Executive Officer |
Signature | Title | ||
* | Chairman and Director | ||
Gregg M. Sherrill | |||
/S/ BRIAN J. KESSELER | Chief Executive Officer and Director (principal executive officer) | ||
Brian J. Kesseler | |||
/S/ JASON M. HOLLAR | Executive Vice President and Chief Financial Officer (principal financial officer) | ||
Jason M. Hollar | |||
/s/ JOHN S. PATOUHAS | Vice President and Chief Accounting Officer (principal accounting officer) | ||
John S. Patouhas | |||
* | Director | ||
SungHwan Cho | |||
* | Director | ||
Thomas C. Freyman | |||
* | Director | ||
Denise Gray | |||
* | Director | ||
Dennis J. Letham | |||
* | Director | ||
James S. Metcalf | |||
* | Director | ||
Roger B. Porter | |||
* | Director | ||
David B. Price, Jr. | |||
* | Director | ||
Charles K. Stevens III | |||
* | Director | ||
Jane L. Warner | |||
*BY: | /S/ JASON M. HOLLAR | ||
Jason M. Hollar Attorney in fact |
• | any transfer of shares of Class B Common Stock to a broker or other nominee, provided that the transferor, immediately following such transfer, retains (i) control over the disposition of such shares and (ii) the economic consequences of ownership of such shares; |
• | any transfer of shares of Class B Common Stock to any affiliate of Icahn Enterprises L.P. (“IEP”), or any successor thereto; and |
• | any transfer of all, but not less than all, of the Class A Common Stock and Class B Common Stock then held by IEP and its affiliates, to not more than three persons designated in the shareholders agreement, dated as of October 1, 2018, by and among the Company, American Entertainment Properties Corp. (“AEP”), Icahn Enterprises Holdings L.P. (“IEH”) and IEP (the “Shareholders Agreement”), acting as a consortium, pursuant to which the transferee(s) would assume and perform all of the obligations of the transferor under the Membership Interest Purchase Agreement, dated as of April 10, 2018, by and among the Company, Federal-Mogul, AEP and IEP, the Shareholders Agreement and the other transaction agreements. |
(a) | is the benefit that would be paid under the Retirement Plan if the provisions of the Retirement Plan were administered without regard to the limitations imposed by the Code and, only with respect to Participants who, at any time, were executive incentive level participants in Tenneco’s Value Added “TAVA” Incentive Compensation Plan (the “TAVA Plan”), if Final Average Compensation, as computed under the Retirement Plan, were determined on the basis of compensation paid during the three calendar years (of the five calendar year period ending no later than the calendar year immediately preceding his or her termination or retirement) for which such compensation is the highest, and increased by the quotient of (i) the total of the cash bonuses, as defined below, paid to the Participant in the three calendar years (during the same five calendar year period ending no later than the calendar year immediately preceding his or her termination or retirement) for which such total is the highest, divided by (ii) three or such lesser number of calendar years (included in such period) in which such bonuses were paid to the Participant; provided, that the calendar year including his or her termination or retirement shall be included if such event follows the payment of regular bonuses for that year; and provided, that bonuses and salary, respectively, deferred at the election of the Participant shall be counted only in the year that they would have been paid absent such election, and provided, further, that the foregoing language shall be applied to count bonuses which relate to a calendar year as paid in that year, for example, 2005 bonuses will be counted in 2005 notwithstanding the fact that they are actually paid in 2006; and |
(b) | is the total benefit that is payable under the Retirement Plan. |
(a) | and if the Participant is a specified employee (within the meaning of section 409A(a)(2)(B) of the Code) and if any such payment or benefit is required to be made or provided prior to the first day of the seventh month following the Participant’s separation from service or termination of employment, such payment or benefit shall be delayed until the first day of the seventh month following the Participant’s termination of employment or separation from service (or, if earlier, on death); and |
(b) | the determination as to whether the Participant has had a termination of employment (or separation from service) shall be made in accordance with the provisions of section 409A of the Code and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder. |
1. | Position: Your employment with Tenneco (and its affiliates) will commence effective as of the Closing as Tenneco’s Executive Vice President and President Powertrain and, following the successful completion of Tenneco’s previously announced intention to separate into two independent publicly traded companies (the “Spinoff”), you will continue in those positions with the future “Powertrain Technology” company (Tenneco Clean Air and Federal-Mogul Powertrain). You will report to Roger Wood, who, immediately following the Closing, will be the Co-Chief Executive Officer of Tenneco and, immediately following the Spinoff, will be the Chairman and Chief Executive Officer of the future Powertrain Technology company. Your reporting relationships will be to a position, not an individual. |
2. | Base Salary: Your initial base salary will be $950,000 per year ($79,166.67 per month) less appropriate taxes and withholding, paid in accordance with Tenneco’s normal payroll practices. Beginning in 2020 and each year thereafter, your base salary will be reviewed and, in turn, may be adjusted, subject to approval by the Compensation Committee of Tenneco’s Board of Directors (the “Compensation Committee”). |
3. | Annual Incentive Compensation: Your target bonus opportunity for the 2018 calendar year will remain at 120% of your annual base salary (or $1,140,000). The 2018 bonus will be determined and payable on the same terms and conditions as would have applied under the Federal-Mogul bonus plan as in effect prior to the Closing, including satisfaction of any applicable performance criteria. Beginning January 1, 2019, you will be eligible to participate in Tenneco’s executive annual incentive plan in a manner consistent with other Tenneco executives. The terms of the annual incentive plan are set forth in the Tenneco Inc. Annual Incentive Plan (“AIP” - copy attached). Your initial target bonus opportunity for the 2019 calendar year performance period under the AIP will be 90% of your annual base salary ($855,000 based on the offered salary) although the actual value will be determined by the Compensation Committee. The payment of an annual incentive to you under the AIP is subject to achievement of pre-defined performance goals for the company, the approval by the Compensation Committee, as well as the terms of the AIP (or successor plan). |
4. | Long-Term Incentive Compensation: Your long-term incentive compensation (“LTI”) will be subject to the following: |
a. | Your outstanding LTI granted by Federal-Mogul for the period 2016-2018 will remain in effect through December 31, 2018 in accordance with its terms. |
b. | Your outstanding LTI granted by Federal-Mogul for the periods 2017-2019 and 2018-2020 will be adjusted in accordance with the applicable plans to reflect Tenneco’s acquisition of Federal-Mogul and the Spinoff. |
c. | Beginning in 2019, you will be eligible to participate in Tenneco’s LTI plan in a manner consistent with other similarly-situated Tenneco executives. The terms of the LTI plan are set forth in the Tenneco Long-Term Incentive Plan, as amended, a copy of which is attached. Each year the Compensation Committee will determine and approve the mix of LTI awards that will be granted to you and the aggregate target value of these awards. Your first eligibility for a full LTI award will be in February 2019. The final award size, award type, performance conditions and other terms of this award will be approved by the Compensation Committee in February 2019 at the same time the terms of these awards are established for other executives at the company. Your 2019 LTI award is currently estimated to have a $1,450,000 value. |
5. | Health, Welfare and Retirement Benefits: For the remainder of calendar year 2018, you will continue to participate in the health, welfare and retirement plans in which you participate immediately prior to the Closing, subject to the terms and conditions of such plans. Effective as of January 1, 2019, you will be eligible to participate in Tenneco’s broad-based health and welfare and defined contribution retirement plans in a manner consistent with other Tenneco executives although you have indicated that you are going to waive participation in the defined contribution retirement plan. This letter will constitute an irrevocable waiver of your participation in the defined contribution plan and other qualified retirement plans of Tenneco and its affiliates in the future. Please refer to benefit plan documents for specific terms and eligibility. The company reserves the right to change these benefit programs and any of our other benefit |
6. | Vacation and holiday paid time off: You will be entitled to a total of four weeks of paid vacation per year: two weeks in accordance with the provisions of the company’s vacation policy and two additional negotiated weeks. Your vacation accrual will thereafter increase only in accordance with the vacation schedule in the policy, taking into account your service with Federal-Mogul as of the Closing. In addition, the company is typically closed during the week between Christmas and New Year’s Day holidays. You will also be eligible for paid holidays and personal floating holidays in accordance with the company’s policies. When you leave employment with Tenneco, you will receive a payment for any vacation you have accrued and not used. Vacation is prorated to your date of employment and accrued on a monthly basis; provided, however, that you will retain any accrued but unpaid vacation that you have as of the Closing. |
7. | Special Benefits. |
a. | For the period commencing on your employment commencement date and ending on December 31, 2018, you will continue to receive an automobile allowance based on an annual amount of $32,000, prorated for the remainder of the 2018 year. You will not be entitled to this benefit after calendar year 2018. |
b. | The company will make contributions to the German pension plan that covers you immediately prior to the Closing in an amount of up to €125,000 per annum. This contribution will typically be made in the first quarter of the year following the year to which such contribution relates (e.g., the contribution for 2018 typically will be made in the first quarter of 2019). |
8. | Severance Through December 31, 2018: For the remainder of calendar year 2018, you will continue to be eligible to participate in the Federal-Mogul LLC Change in Control and Severance Plan (the “F-M CIC Severance Plan”) and the Federal-Mogul LLC Severance Plan for Salaried Employees (the “F-M Severance Plan”) in accordance with their terms; provided, however, that you hereby agree to waive all of your rights under and with respect to the F-M CIC Severance Plan and the F-M Severance Plan (and any other agreements with Federal-Mogul) to terminate employment for “good reason” or “constructive discharge” or “constructive termination” (or terms of similar import) and to receive payments and benefits thereunder after the Closing on account of any such termination. Your eligibility for severance payments and benefits after December 31, 2018 are described below. |
9. | Change-In-Control (CIC) Protection: You will be eligible to participate in Tenneco’s Change-In-Control Severance Benefit Plan for Key Executives (the “CIC Plan”) effective as of January 1, 2019. Benefits under the CIC Plan are payable if you are discharged (either actually or constructively) within two years after a change-in-control that occurs after the effective date of your employment. The CIC Plan generally provides a lump-sum payment equal to two times base salary and targeted annual bonus in effect immediately prior to the change-in-control for Group II level participants. Continuing participation in certain insurance plans and outplacement services are also provided. |
10. | Severance (not related to CIC): You will be eligible to participate in the Tenneco Automotive Operating Company Inc. Severance Benefit Plan (the “Severance Plan”) effective as of January 1, 2019. Benefits are payable under the Severance Plan if you are discharged by the company other than for Cause or if you terminate due to Constructive Termination (and, in any case, other than under circumstances which would entitle you to benefits under the CIC Plan). The Severance Plan generally provides a lump-sum payment equal to one times base salary and targeted annual bonus for the year in which the termination occurs for Group I participants, subject to your execution of a general release and such other documents as the company may reasonably request. The Severance Plan also provides a medical coverage subsidy in certain cases and outplacement benefits. “Cause” and “Constructive Termination” have the meanings specified in the Severance Plan. |
11. | Stock Ownership Guidelines: Upon employment, you will be subject to Tenneco’s stock ownership guideline policy, requiring that you hold qualifying shares of Tenneco equal to three times base salary, to be attained by the first month of January following five years of employment. |
12. | Insider Trading Policy: Upon employment, you will be subject to Tenneco’s Insider Trading Policy, which, among other things, limits the timing and types of transactions you may make with respect to Tenneco securities and related derivatives. |
13. | Employment at Will: This offer does not constitute a contract of employment for any specific period of time, but will create an employment at-will relationship that may be terminated at any time by you or the company, with or without cause. |
14. | Effect on Other Arrangements: The foregoing terms and conditions of employment supersede all prior agreements between you and Federal-Mogul Corporation, Federal-Mogul LLC and/or any of their affiliates, including your Employment Agreement dated April 1, 2012, as amended (the “Employment Agreement”), relating to the subject matter of this letter. In addition, in your new position and for periods after December 31, 2018, you will not be eligible to participate in (or receive benefits under) the F-M CIC Severance Plan or the F-M Severance Plan but instead you will be eligible to participate in Tenneco severance plans as described above. By accepting this offer, you hereby agree (a) that you hereby waive your participation in, and all of your rights under and with respect to, the F-M CIC Severance Plan and the F-M Severance Plan (including any rights to payments or benefits), effective for periods after December |
1. | Position: Your employment with Tenneco (and its affiliates) will commence effective as of the Closing as Tenneco’s Executive Vice President and President Original Equipment and, following the successful completion of Tenneco’s previously announced intention to separate into two independent publicly traded companies (the “Spinoff”), you will continue in this position with the future “Aftermarket and Ride Performance” company. You will report to Brian Kesseler, who, immediately following the Closing, will be the Co-Chief Executive Officer of Tenneco and, immediately following the Spinoff, will be the Chairman and Chief Executive Officer of the future Aftermarket and Ride Performance company. |
2. | Base Salary: Your initial base salary will be $700,000 per year ($58,333.33 per month) less appropriate taxes and withholding, paid in accordance with Tenneco’s normal payroll practices. Beginning in 2020 and each year thereafter, your base salary will be reviewed and, in turn, may be adjusted, subject to approval by the Compensation Committee of Tenneco’s Board of Directors (the “Compensation Committee”). |
3. | Annual Incentive Compensation: Your target bonus opportunity for the 2018 calendar year will remain at 100% of your annual base salary (or $700,000). The 2018 bonus will be determined and payable on the same terms and conditions as would have applied under the Federal-Mogul bonus plan as in effect prior to the Closing, including satisfaction of any applicable performance criteria. Beginning January 1, 2019, you will be eligible to participate in Tenneco’s executive annual incentive plan in a manner consistent with other Tenneco executives. The terms of the annual incentive plan are set forth in the Tenneco Inc. Annual Incentive Plan (“AIP” - copy attached). Your initial target bonus opportunity for the 2019 calendar year performance period under the AIP will be 80% of your annual base salary (or $560,000 based on the offered salary) although the actual value will be determined by the Compensation Committee. The payment of an annual incentive to you under the AIP is subject to achievement of pre-defined performance goals for the company, the approval by the Compensation Committee, as well as the terms of the AIP (or successor plan). |
4. | Long-Term Incentive Compensation: Your long-term incentive compensation (“LTI”) will be subject to the following: |
a. | Your outstanding LTI granted by Federal-Mogul for the period 2016-2018 will remain in effect through December 31, 2018 in accordance with its terms. |
b. | Your outstanding LTI granted by Federal-Mogul for the periods 2017-2019 and 2018-2020 will be adjusted in accordance with the applicable plans to reflect Tenneco’s acquisition of Federal-Mogul and the Spinoff. |
c. | Beginning in 2019, you will be eligible to participate in Tenneco’s LTI plan in a manner consistent with other similarly-situated Tenneco executives. The terms of the LTI plan are set forth in the Tenneco Long-Term Incentive Plan, as amended, a copy of which is attached. Each year the Compensation Committee will determine and approve the mix of LTI awards that will be granted to you and the aggregate target value of these awards. Your first eligibility for a full LTI award will be in February 2019. The final award size, award type, performance conditions and other terms of this award will be approved by the Compensation Committee in February 2019 at the same time the terms of these awards are established for other executives at the company. Your 2019 LTI award is currently estimated to have a $1,100,000 value. |
5. | Health, Welfare and Retirement Benefits: For the remainder of calendar year 2018, you will continue to participate in the health, welfare and retirement plans in which you participate immediately prior to the Closing, subject to the terms and conditions of such plans. Effective as of January 1, 2019, you will be eligible to participate in Tenneco’s broad-based health and welfare plans and Tenneco’s 401(k) Plan in a manner consistent with other similarly-situated executives of the company. The 401(k) plan will provide a 100% company match on your first 3%, and 50% of your next 2%, of base pay contributions and we expect that it will provide a base pay company retirement contribution of between 2.5% and 4% of salary (depending on your age at the relevant time and after you have completed a year of service, taking into account your Federal-Mogul service as of the Closing), subject to 401(k) Plan and IRS maximums. Please refer to benefit plan documents for specific terms and eligibility. The company reserves the right to change these benefit programs and any of our other benefit programs. Effective as of January 1, 2019, you will also be eligible to participate in Tenneco’s Excess Benefit Plan which we expect will provide you with a benefit of between 2.5% and 4.0% of your bonus compensation and matching contributions and company retirement contributions at the rate applicable under the plan on your compensation in excess of the IRS limitation on compensation under section 401(a)(17) of the Internal Revenue Code. |
6. | Vacation and holiday paid time off: You will be entitled to a total of four weeks of paid vacation per year: two weeks in accordance with the provisions of the company’s vacation policy and two additional negotiated weeks. Your vacation accrual will thereafter increase only in accordance with the vacation schedule in the policy, taking into account your service with Federal-Mogul as of the Closing. In addition, the company is typically closed during the week between Christmas and New Year’s Day holidays. You will also be eligible for paid holidays and personal floating holidays in accordance with the company’s policies. When you leave employment with Tenneco, you will receive a payment for any vacation you have accrued and not used. Vacation is prorated to your date of employment and accrued on a monthly basis; provided, however, that you will retain any accrued but unpaid vacation that you have as of the Closing. |
7. | Automobile Allowance: You will continue to receive an automobile allowance through December 31, 2018. You will not be entitled to this benefit after calendar year 2018. |
8. | Severance Through December 31, 2018: For the remainder of calendar year 2018, you will continue to be eligible to participate in the Federal-Mogul LLC Change in Control and Severance Plan (the “F-M CIC Severance Plan”) and the Federal-Mogul LLC Severance Plan for Salaried Employees (the “F-M Severance Plan”) in accordance with their terms; provided, however, that you hereby agree to waive all of your rights under and with respect to the F-M CIC Severance Plan and the F-M Severance Plan (and any other agreements with Federal-Mogul) to terminate employment for “good reason” or “constructive discharge” or “constructive termination” (or terms of similar import) and to receive payments and benefits thereunder after the Closing on account of any such termination. Your eligibility for severance payments and benefits after December 31, 2018 are described below. |
9. | Change-In-Control (CIC) Protection: You will be eligible to participate in Tenneco’s Change-In-Control Severance Benefit Plan for Key Executives (the “CIC Plan”) effective as of January 1, 2019. Benefits under the CIC Plan are payable if you are discharged (either actually or constructively) within two years after a change-in-control that occurs after the effective date of your employment. The CIC Plan generally provides a lump-sum payment equal to two times base salary and targeted annual bonus in effect immediately prior to the change-in-control for Group II level participants. Continuing participation in certain insurance plans and outplacement services are also provided. |
10. | Severance (not related to CIC): You will be eligible to participate in the Tenneco Automotive Operating Company Inc. Severance Benefit Plan (the “Severance Plan”) effective as of January 1, 2019. Benefits are payable under the Severance Plan if you are discharged by the company other than for Cause or if you terminate due to Constructive Termination (and, in any case, other than under circumstances which would entitle you to benefits under the CIC Plan). The Severance Plan generally provides a lump-sum payment equal to one times annual base salary and targeted annual bonus for the year in which the termination occurs for Group I participants, subject to your execution of a general release and such other documents as the company may reasonably request. The Severance Plan also provides a medical coverage subsidy in certain cases and outplacement benefits. “Cause” and “Constructive Termination” have the meanings specified in the Severance Plan. |
11. | Stock Ownership Guidelines: Upon employment, you will be subject to Tenneco’s stock ownership guideline policy, requiring that you hold qualifying shares of Tenneco equal to three times base salary, to be attained by the first month of January following five years of employment. |
12. | Insider Trading Policy: Upon employment, you will be subject to Tenneco’s Insider Trading Policy, which, among other things, limits the timing and types of transactions you may make with respect to Tenneco securities and related derivatives. |
13. | Employment at Will: This offer does not constitute a contract of employment for any specific period of time, but will create an employment at-will relationship that may be terminated at any time by you or the company, with or without cause. |
14. | Effect on Other Arrangements: The foregoing terms and conditions of employment supersede all prior agreements between you and Federal-Mogul Corporation, Federal-Mogul LLC and/or any of their affiliates relating to the subject matter of this letter. In addition, in your new position and for periods after December 31, 2018, you will not be eligible to participate in (or receive benefits under) the F-M CIC Severance Plan or the F-M Severance Plan but instead you will be eligible to participate in Tenneco severance plans as described above. By accepting this offer, you hereby agree (a) that you hereby waive your participation in, and all of your rights under and with respect to, the F-M CIC Severance Plan and the F-M Severance Plan (including any rights to payments or benefits), effective for periods after December 31, 2018, (b) you hereby waive your rights under and with respect to the F-M CIC Severance Plan, the F-M Severance Plan and any other agreements with Federal-Mogul to terminate employment for “good reason” or “constructive discharge” or “constructive termination” (or terms of similar import) and to receive payments and benefits thereunder on account of any such termination (as described in Section 8), effective as of the Closing, and (c) that this letter constitutes a termination of your participation in the F-M CIC Severance Plan and the F-M Severance Plan along with any other agreements with Federal-Mogul pertaining to your compensation and/or employment (other than specifically described herein), effective as of the Closing. The foregoing waivers and termination will be effective as of the Closing except as expressly provided herein. |
(a) | Participant Contributions. Participants are not required or permitted to make any contributions under the Plan. |
(b) | Employer Bonus Contributions. Each Employer shall make contributions to the Plan for each Plan Year (“Employer Bonus Contributions”) on behalf of each of its employees who is a Participant for such Plan Year who was paid a bonus (or who would have been paid a bonus but for a deferral election related to such bonus) under the Company’s annual performance bonus (the “Bonus”) from an Employer for such Plan Year. The amount of the Employer Bonus Contribution made by an Employer for any Plan Year on behalf of any Participant shall be equal to (i) the Company Retirement Contribution percentage that applies to such Participant for such Plan Year under the 401(k) Plan (determined as of the first day of the Plan Year (or the date on which the Participant was first eligible to participate in the 401(k) Plan for such Plan Year, if later), without regard to any changes in such percentage during the Plan Year), multiplied by (ii) the Bonus. Employer Bonus Contributions shall be credited to the applicable Participants’ Accounts in accordance with subsection 5.1. |
(c) | Employer Retirement Contributions. Each Employer shall make contributions to the Plan for each Plan Year (“Employer Retirement Contributions”) on behalf of each of its employees who is a Participant in the Plan for such Plan Year and whose Company Retirement Contributions under the 401(k) Plan for such Plan Year are limited for such Plan Year by the limitations of section 401(a)(17) of the Code. The amount of Employer Retirement Contributions made by any Employer for any Plan Year on behalf of any Participant shall be equal to (i) the Company Retirement Contribution percentage that applies to such Participant for such Plan Year under the 401(k) Plan (determined as of the first day of the Plan Year (or the date on which the Participant was first eligible to participate in the 401(k) Plan for such Plan Year, if later) without regard to any changes in such percentage during the Plan Year), multiplied by (ii) the Participant’s Compensation (as defined in the 401(k) Plan, but without regard to the limitations of section 401(a)(17) of the Code) for such Plan Year in excess of the limitations of section 401(a)(17) of the Code for such Plan Year. Employer Retirement Contributions shall be credited to the applicable Participants’ Accounts in accordance with subsection 5.1. |
(d) | Employer Matching Contributions. Each Employer shall make contributions to the Plan for each Plan Year (“Employer Matching Contributions”) on behalf of each of its employees who is a Participant in the Plan for such Plan Year, who has made the maximum permitted salary deferrals to the 401(k) Plan for such Plan Year, who is employed by the Employer on the last day of the Plan Year and whose Matching Company Contributions under the 401(k) Plan for such Plan Year are limited for such Plan Year by the limitations of section 401(a)(17) of the Code. The amount of Employer Matching Contribution made by any Employer for any Plan Year on behalf of any Participant shall be equal to the difference (but not less than zero) between (i) the maximum Matching Company Contributions that could have been made on behalf of the Participant under the 401(k) Plan for that year had the limitations of section 401(a)(17) of the Code had not applied minus (ii) the maximum Matching Company Contributions that could have been made on behalf of the Participant under the 401(k) Plan for that year taking into account the limitations of section 401(a)(17) of the Code. Employer Matching Contributions shall be credited to the applicable Participants’ Accounts in accordance with subsection 5.1. |
(e) | employees who are employed by the Company or any Related Company immediately prior to the Effective Date (“Active Employees”) in connection with the Company’s Motorparts business; |
(f) | Active Employees who are employed in connection with the Company’s Ride Performance business and all participants in the Tenneco Plan who are not active employees immediately prior to the Effective Date (“Former Employees”) and who are designated by (“Tenneco”) and the Company as former Ride Performance employees; and |
(g) | Active Employees who are designated by Tenneco and the Company as DRiV Corporate Staff and DRiV Global Services employees; and |
(h) | Former Employees who are designated by Tenneco and the Company as former Clean Air employees. |
(a) | first, charge to the Account balance the amount of any distributions under the Plan with respect to that Account that have not previously been charged; |
(b) | next, credit to the Account balance the amount of Employer Deferred Contributions made on behalf of the Participant in accordance with Section 3 since the preceding Accounting Date; and |
(c) | finally, adjust the Account balance for the applicable investment return in accordance with subsection 5.2. |
(a) | Amounts credited to a Participant’s Account in accordance with subsection 5.1 shall be adjusted as of each Accounting Date to reflect the value of an investment equal to the Participant’s Account balance in one or more assumed investments that the Administrative Committee offers from time to time and communicated to Participants (the “Investment Funds”), and which the Participant directs the Administrative Committee to use for purposes of adjusting his Account. Such amount shall be determined without regard to taxes that would be payable with respect to any such Investment Fund, but will be adjusted for any investment management or similar fee that is customarily paid with respect to the Investment Fund. |
(b) | To the extent permitted by the Administrative Committee, the Participant may elect to have different portions of his Account balance for any period adjusted on the basis of different Investment Funds and any election by a Participant with respect to an Investment Fund shall be subject to such rules and regulations established from time to time by the Administrative Committee. |
(c) | Notwithstanding the election by Participants of certain investments in specified Investment Funds and the adjustment of their Accounts based on such investment elections, the Plan does not require, and no trust or other instrument that may be maintained in connection with the Plan shall require, that any assets or amounts that are set aside in trust or otherwise for the purpose of paying Plan benefits shall actually be invested in the investment alternatives selected by Participants. |
(d) | Any change in the Participant’s investment direction shall be made in accordance with rules established by the Administrative Committee, shall apply prospectively only and shall be implemented as soon as practicable after the direction is received by the Administrative Committee. |
(e) | As of the Effective Date, any amounts attributable to Transferred Benefits shall be invested in same the Investment Funds as such amounts were invested under the Tenneco Plan immediately prior to the Effective Date. |
(a) | A Participant’s “Termination Date” shall mean the date on which his employment with the Employers and Related Companies terminates for any reason. Whether a Participant has had a termination of employment shall be interpreted and administered in all respects in accordance with section 409A of the Code and applicable regulations issued thereunder. |
(b) | A Participant’s Years of Service shall be equal to the number of Years of Service credited to him under the 401(k) Plan for purposes of vesting; provided, however, that if a Participant is not a participant in the 401(k) Plan, his Years of Service shall be determined in accordance with the foregoing, as if he were a participant in the 401(k) Plan. |
(a) | and if the Participant is a specified employee (within the meaning of section 409A(a)(2)(B) of the Code) and if any such payment or benefit is required to be made or provided prior to the first day of the seventh month following the Participant’s separation from service or termination of employment, such payment or benefit shall be delayed until the first day of the seventh month following the Participant’s termination of employment or separation from service (or, if earlier, on death); and |
(b) | the determination as to whether the Participant has had a termination of employment (or separation from service) shall be made in accordance with the provisions of section 409A of the Code and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder. |
(a) | Cumulative Division Cash Target Award-Non Enterprise Participant. For purposes hereof, the Participant’s “Cumulative Division Cash Target Award” is equal to 50% of his or her total Target Award. The maximum value of the Cumulative Division Cash Target Award (expressed as a percentage, the “Cumulative Division Cash Vesting Percentage”) that may become vested hereunder (subject to the terms and conditions of the Plan and this Award Agreement) is based on Cumulative Division Cash (calculated as described in Appendix A) achieved for the Performance Period against the Cumulative Division Cash Performance Target established by the Committee for the Performance Period, based on the following chart: |
Cumulative Division Cash Performance Target | Cumulative Division Cash Vesting Percentage |
* | 200% (maximum) |
* | 100% (target) |
* | 50% (threshold) |
* | 0% |
(b) | Cumulative Division EBITDA Target Award-Non-Enterprise Participant. For purposes hereof, the Participant’s “Cumulative Division EBITDA Target Award” is equal to 50% of his or her total |
Cumulative Division EBITDA Performance Target | Cumulative Division EBITDA Vesting Percentage |
* | 200% (maximum) |
* | 100% (target) |
* | 50% (threshold) |
* | 0% |
(c) | Special Rules for Enterprise Participants. Notwithstanding the foregoing, for purposes hereof: |
(i) | In the case of an Enterprise Participant (as defined Paragraph 3(f)), the Enterprise Participant’s “Cumulative Division Cash Target Award” is equal to 50% of his or her total Target Award and the maximum value of the Cumulative Division Cash Target Award (expressed as a percentage, the “Cumulative Division Cash Vesting Percentage”) that may become vested hereunder (subject to the terms and conditions of the Plan and this Award Agreement) is based 25% on the Performance Targets achieved for the Performance Period against the Cumulative Division Cash Performance Target established by the Committee for the Performance Period based on the chart applicable under Paragraph 2(a) and 25% on the following chart: |
Cumulative Division Cash Performance Target | Cumulative Division Cash Vesting Percentage |
* | 200% (maximum) |
* | 100% (target) |
* | 50% (threshold) |
* | 0% |
(ii) | an Enterprise Participant’s “Cumulative Division EBITDA Target Award” is equal to 50% of his or her total Target Award and the maximum value of the Cumulative Division EBITDA Target Award (expressed as a percentage, the “Cumulative Division EBITDA Vesting Percentage”) that may become vested hereunder (subject to the terms and conditions of the Plan and this Award Agreement) is based 25% on the Cumulative Division EBITDA achieved for the Performance Period against the Cumulative Division EBITDA Performance Target established by the Committee for the Performance Period based on the chart applicable under Paragraph 2(b) and 25% on the following chart: |
Cumulative Division EBITDA Performance Target | Cumulative Division EBITDA Vesting Percentage |
* | 200% (maximum) |
* | 100% (target) |
* | 50% (threshold) |
* | 0% |
(d) | Interpolation. Linear interpolation shall be used to determine the Cumulative Division Cash Vesting Percentage and Cumulative Division EBITDA Vesting Percentage, as applicable, under Paragraphs 2(a), (b) and (c) in the event Cumulative Division Cash or Cumulative Division EBITDA, as applicable, does not fall directly on one of the targets, as applicable, listed in the above charts. |
(e) | Determination of Performance and Amount of Vested Award. As soon as practicable after the end of the Performance Period, the Committee shall determine whether and the extent to which the Performance Targets have been satisfied for the Performance Period and the value of the Participant’s Target Award that becomes the Vested Award based on such performance, subject to the terms and conditions of Paragraph 3 and the other terms and conditions of this Award Agreement. |
(f) | Adjustment of Performance Targets in Certain Circumstances. Without limiting the generality of the Committee’s authority to adjust any aspect of this Award in accordance with the terms hereof or the provisions of the Plan, in the event that the determination as to whether and the extent to which the Performance Targets are met occurs other than as of the last date of the Performance Period in accordance with Paragraph 3(e), the Performance Targets shall be pro-rated for the portion of the Performance Period elapsed as of the date the determination is to be made as described in Appendix A. In the event of a Business Transaction (defined below), the Performance Targets shall be adjusted to remove the future portion of the applicable Performance Target that is attributable to the business divested in connection with the Business Transaction. For purposes of the Award Agreement, a “Business Transaction” means a corporate transaction, other than a New Tenneco Transaction or a DRiV Transaction (each as defined in Paragraph 3), and any other transaction involving the Company that constitutes a spin-off, sale of assets, sale of a subsidiary, combination, split-up, or other similar material transaction as determined by the Committee. |
(a) | Unvested Award. Except as otherwise specifically provided herein, the Participant shall have no right with respect to any payments or other amounts in respect of this Award until the Award is actually paid and settled on the Settlement Date (as defined below) and if the Participant’s Termination Date occurs before the Settlement Date, this Award shall immediately expire and shall be forfeited and the Participant shall have no further rights with respect thereto. In addition, this Award is subject to forfeiture if the Participant fails to accept the Award within the first twelve (12) months following the Grant Date in accordance with procedures established by the Company. |
(b) | Payment and Settlement Generally. Except as otherwise provided in this Paragraph 3, payment and settlement of the Vested Award shall be made following the end of the Performance Period as of a date determined by the Committee and no later than two and one-half months after the end of the Performance Period (such date, the “Settlement Date”). Payment and settlement of the Vested Award shall be made in the form of cash. Upon the payment and settlement of the Award, the Award shall be cancelled. |
(c) | Termination for Death, Total Disability or Retirement. Notwithstanding the provisions of Paragraphs 3(a) and (b), if the Participant’s Termination Date occurs on or before the applicable Settlement Date (as determined under Paragraph 3(b)): |
(i) | as a result of the Participant’s death or Total Disability (as defined below), the value of the Target Award that shall become the Vested Award shall equal the product of (A) 100% of the value of the Target Award subject to this Award, multiplied by (B) the Termination Multiplier (as defined below), which Vested Award shall be paid and settled within sixty |
(ii) | as a result of Retirement (as defined below) the value of the Target Award that shall become the Vested Award shall equal to the product of (A) the value of the Target Award subject to this Award that would have become a Vested Award pursuant to Paragraph 2 based on performance for the Performance Period had the Participant’s Termination Date not occurred prior to the end of the Performance Period, multiplied by (B) the Termination Multiplier, which Vested Award shall be paid and settled on the Settlement Date (as determined under Paragraph 3(b)). |
(d) | Special Vesting Rules for Special Projects. In the event that the Participant is assigned to a special project with a limited scope (as approved by the Committee or in accordance with guidelines established by the Committee) and if the Participant’s Termination Date occurs prior to the Settlement Date (as determined under Paragraph 3(b)) as a result of termination by the Company or a Subsidiary for reasons other than for Cause (as defined below), then the amount of the Target Award that shall become the Vested Award is 100% of the Target Award subject to this Award, which Vested Award shall be paid and settled within sixty (60) days after the Participant’s Termination Date (and such date shall be the “Settlement Date” for purposes of this Award Agreement). |
(e) | Change in Control and Other Business Transactions. Except as expressly provided herein, the provisions of this Paragraph 3(e) shall supersede the provisions of Article 6 of the Plan. To the extent applicable, the following provisions shall apply to the Participant based on whether the Participant is a DRiV Participant or a New Tenneco Participant (each as defined below) as of the date of the applicable transaction. |
(i) | In the event of a Change in Control other than a New Tenneco Transaction or a DRiV Transaction (each as defined below), the provisions of Article 6 of the Plan shall apply. |
(ii) | The following shall apply if a New Tenneco Transaction occurs during the Performance Period: |
(A) | In the case of New Tenneco Participants, the Committee shall determine whether and the extent to which the Performance Targets have been satisfied (and the amount of the Vested Award based on performance) under the provisions of Paragraph 2 as if the date of the New Tenneco Transaction was the last day of the Performance Period; provided, however, that in the case of any New Tenneco Participant who is an Enterprise Participant, any portion of the Award that is to be calculated with respect to Performance Targets based on the performance of the DRiV Division shall be calculated as of the last day of the calendar year preceding the year in which the New Tenneco Transaction occurs in accordance with the provisions of Paragraph 2 based on the Performance Targets applicable to the DRiV Division as if the last day of such calendar year was the last day of the Performance Period. The portion of the Target Award that shall become the Vested |
(B) | In the case of DRiV Participants, the Award shall continue in accordance with its terms (including payment and settlement); provided, however, that in the case of any DRiV Participant who is an Enterprise Participant, any portion of the Award that is to be calculated with respect to Performance Targets based on the performance of the New Tenneco Division shall be calculated as of the last day of the calendar year preceding the year in which the New Tenneco Transaction occurs in accordance with the provisions of Paragraph 2 based on the Performance Targets applicable to the New Tenneco Division as if the last day of such calendar year was the last day of the Performance Period and any remaining portion of the Performance Period shall be calculated based solely on the Performance Targets applicable to the DRiV Division. |
(iii) | The following shall apply if a DRiV Transaction (other than a DRiV Transaction that is a spin-off) occurs during the Performance Period: |
(A) | In the case of DRiV Participants, the Committee shall determine whether and the extent to which the Performance Targets have been satisfied (and the amount of the Vested Award based on performance) under the provisions of Paragraph 2 as if the date of the DRiV Transaction was the last day of the Performance Period provided, however, that in the case of any DRiV Participant who is an Enterprise Participant, any portion of the Award that is to be calculated with respect to Performance Targets based on the performance of the New Tenneco Division shall be calculated as of the last day of the calendar year preceding the year in which the DRiV Transaction occurs in accordance with the provisions of Paragraph 2 based on the Performance Targets applicable to the New Tenneco Division as if the last day of such calendar year was the last day of the Performance Period. The portion of the Target Award that shall become the Vested Award pursuant to this subclause (A) is the greater of the value of the Vested Award determined in accordance with Paragraph 2 (as modified by this subclause (A) and, in the case of Enterprise Participants, determined separately with respect to the portion determined based on DRiV performance and New Tenneco performance) or 100% of the Target Award subject to this Award and, in the case of Enterprise Participants, determined separately with respect to the portion determined based on DRiV performance and New Tenneco performance. Payment and settlement of the Vested Award shall be made to each DRiV Participant within sixty (60) days following the DRiV Transaction and, upon payment and settlement, the Award shall be cancelled. |
(B) | In the case of New Tenneco Participants, the Award shall continue in accordance with its terms (including payment and settlement); provided, however, that in the case of any New Tenneco Participant who is an Enterprise Participant, any portion of the Award that is to be calculated with respect to Performance Targets based on the performance of the DRiV Division shall be calculated as of the last day of the calendar year preceding the year in which the DRiV Transaction occurs in |
(iv) | The following shall apply if a DRiV Transaction that is a spin-off occurs during the Performance Period: |
(A) | In the case of New Tenneco Participants and DRiV Participants other than Enterprise Participants, the Award shall continue in accordance with its terms (including payment and settlement). |
(B) | In the case of Enterprise Participants, for the portion of the Performance Period ending with the last day of the calendar year preceding the date of the spin-off, any portion of the Award that is to be calculated with respect to Performance Targets based on the DRiV Division (in the case of a New Tenneco Participant) or the New Tenneco Division (in the case of a DRiV Participant) shall be calculated as of the last day of the calendar year preceding the year in which the spin-off occurs in accordance with Paragraph 2 as if the last day of such calendar year was the last day of the Performance Period and any remaining portion of the Performance Period shall be calculated based solely on the Performance Targets applicable to the DRiV Division (in the case of a DRiV Participant) or the New Tenneco Division (in the case of a New Tenneco Participant). |
(f) | Certain Definitions. For purposes of this Award Agreement, the following terms shall have the meaning specified: |
(i) | “Cause” means, with respect to the Participant, (A) fraud, embezzlement, or theft in connection with his or her employment (B) gross negligence in the performance of his or her duties, (C) his or her conviction, guilty plea, or plea of nolo contendere with respect to a felony, (D) the willful and continued failure to substantially perform his or her duties for the Company or any of its Subsidiaries (except where the failure results from incapacity due to disability), (E) the failure to meet the obligations required by his or her position, as determined in the reasonable discretion of the Committee, or (F) the willful or negligent engagement in conduct which is, or could reasonably be expected to be, materially injurious to any of the Company or any of its Subsidiaries, monetarily or otherwise. For purposes of the foregoing, no act, or failure to act, on the part of the Participant shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that his or her act, or failure to act, was in the best interest of the Company and its Subsidiaries. |
(ii) | “DRiV Division” means the Company’s business consisting primarily of the Company’s Global Motorparts business group and Global Ride Performance business group and applicable reporting lines thereunder as determined from time to time by the Company. |
(iii) | “DRiV Participant” means a Participant (including an Enterprise Participant) who is employed primarily in the Company’s DRiV Division as of the Grant Date, subject to changes in such division allocation permitted under this Award Agreement. |
(iv) | “DRiV Transaction” means (A) a sale of the Company’s DRiV Division; provided, however, that a sale of the DRiV Division shall not constitute a DRiV Transaction unless the sale constitutes a sale of all or substantially all of the DRiV Division or (B) a spin-off of the Company’s DRiV Division. A DRiV Transaction shall not constitute a Change in |
(v) | “Enterprise Participant” means a DRiV Participant or a New Tenneco Participant who is designated by the Committee as an Enterprise Participant as of the Grant Date. |
(vi) | “New Tenneco Division” means the Company’s business consisting primarily of the Company’s Global Clean Air business group and Global Powertrain business group and applicable reporting lines thereunder as determined from time to time by the Company. |
(vii) | “New Tenneco Participant” means a Participant (including an Enterprise Participant) who is employed primarily in the Company’s New Tenneco Division as of the Grant Date, subject to changes in such division allocation permitted under this Award Agreement. |
(viii) | “New Tenneco Transaction” means a sale of the Company’s New Tenneco Division; provided, however, that a sale of the New Tenneco Division shall not constitute a New Tenneco Transaction unless the sale constitutes a sale of all or substantially all of the New Tenneco Division. A New Tenneco Transaction shall not constitute a Change in Control for purposes of this Award Agreement even if it otherwise constitutes a Change in Control for purposes of the of the Plan. |
(ix) | “Retirement” means the Participant’s termination of employment with the Company and its Subsidiaries after the date on which the Participant attains (A) age 65 or (B) age 55 and has completed at least 10 years of service with the Company and its Subsidiaries and is not for any other reason, including voluntary resignation, termination by the Company or a Subsidiary for cause, which shall include the failure of the Participant to meet the obligations required by his or her position (as determined in the reasonable discretion of the company), or termination by the Participant for good reason or constructive discharge. |
(x) | “Termination Multiplier” means a fraction, the numerator of which is the number of full months of the Participant’s employment during the Performance Period prior to his or her Termination Date and the denominator of which is thirty six (36). |
(xi) | “Total Disability” means an event that results in the Participant being (A) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (B) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company or its Subsidiaries. |
(g) | Effect of Contrary Terms in Employment Agreement. In the event that the Company (or any of its Subsidiaries) is a party to a written employment agreement with the Participant, and if the employment agreement is inconsistent with the provisions of this Paragraph 3, the terms of the employment agreement will take precedence over the foregoing provisions, as applicable. |
(h) | Section 409A. It is the intent that none of the payments provided pursuant to this Paragraph 3 or otherwise under this Award Agreement be subject to Section 409A of the Code. In the event that any of the payments are subject to Section 409A of the Code and the payment is to be made other than on the Settlement Date (as determined under Paragraph 3(b)), such payment shall be made at a time other than the Settlement Date determined under Paragraph 3(b) only if permitted under |
(a) | and if the Participant is a specified employee (within the meaning of section 409A(a)(2)(B) of the Code) and if any such payment or benefit is required to be made or provided prior to the first day of the seventh month following the Participant’s separation from service or termination of employment, such payment or benefit shall be delayed until the first day of the seventh month following the Participant’s termination of employment or separation from service; and |
(b) | the determination as to whether the Participant has had a termination of employment (or separation from service) shall be made in accordance with the provisions of section 409A of the Code and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder. |
(a) | If a dividend with respect to shares of Common Stock is payable in cash, then, as of the applicable dividend payment date, the Participant’s Dividend Cash Account shall be credited with an amount (a “Dividend Cash Amount”) equal to (i) the cash dividend payable with respect to a share of Common Stock, multiplied by (ii) the number of Restricted Stock Units outstanding on the applicable dividend record date. |
(b) | If a dividend with respect to shares of Common Stock is payable in shares of Common Stock, then, as of the applicable dividend payment date, the Participant’s Dividend Cash Account shall be credited with a Dividend Cash Amount in an amount equal to (i) the number of shares of Common Stock distributed in the dividend with respect to a share of Common Stock, divided by (ii) the Fair Market Value of a share of Common Stock on the dividend payment date, multiplied by (iii) the number of Restricted Stock Units outstanding on the applicable dividend record date. |
(a) | if the Participant’s Termination Date occurs by reason of Total Disability (as defined in Paragraph 3) or death, any unvested Restricted Stock Units that are outstanding on the Termination Date (and any associated Dividend Cash Amounts) shall immediately vest on the Termination Date and the Termination Date shall be the “Vesting Date” for purposes of this Award Agreement; |
(b) | if the Participant’s Termination Date occurs by reason of Retirement (as defined in Paragraph 3) [after the first anniversary of the Grant Date], any unvested Restricted Stock Units that are outstanding on the Termination Date (and associated Dividend Cash Amounts) shall immediately vest on the Termination Date and the Termination Date shall be the “Vesting Date” for purposes of this Award Agreement;1 |
(c) | in the event that the Participant is assigned to a special project with a limited scope (as approved by the Committee and communicated to the Participant) and if the Participant’s Termination Date occurs as a result of termination by the Company for reasons other than for Cause (as defined in Paragraph 3), then any unvested portion of the Award that is outstanding on the Termination Date shall immediately vest on the Termination Date and the Termination Date shall be the “Vesting Date” for purposes of this Award Agreement; |
(d) | in the event of a Change in Control other than a New Tenneco Transaction or a DRiV Transaction (each as defined in Paragraph 3), the terms of Article 6 of the Plan shall control; |
(e) | The following shall apply if a New Tenneco Transaction occurs: |
(i) | If the Participant is a New Tenneco Participant, any unvested Restricted Stock Units that are outstanding on the date of the New Tenneco Transaction (and any associated Dividend Cash Amounts) shall immediately vest on the date of the New Tenneco Transaction and the date of the New Tenneco Transaction shall be the “Vesting Date” for purposes of this Award Agreement, and |
(ii) | If the Participant is a DRiV Participant, any outstanding unvested Restricted Stock Units (and associated Dividend Cash Amounts) shall be paid and settled as of the Settlement Date (determined in accordance with Paragraph 4) provided that the DRiV Participant’s Termination Date does not occur prior to the Settlement Date; provided, however, that if the DRiV Participant’s Termination Date occurs prior to the Settlement Date as a result of death, Total Disability or a termination by the Company or a Subsidiary for reasons other than Cause, any unvested Restricted Stock Units that are outstanding on the Termination Date (and associated Dividend Cash Amounts) shall immediately vest on the Termination Date and the Termination Date shall be the “Vesting Date” for purposes of this Award Agreement; |
(f) | The following shall apply if a DRiV Transaction that is a sale of DRiV occurs: |
(i) | If the Participant is a DRiV Participant, any unvested Restricted Stock Units that are outstanding on the date of the DRiV Transaction (and any associated Dividend Cash Amounts) shall immediately vest on the date of the DRiV Transaction and the date of the DRiV Transaction shall be the “Vesting Date” for purposes of this Award Agreement, and |
(ii) | If the Participant is a New Tenneco Participant, any outstanding unvested Restricted Stock Units (and associated Dividend Cash Amounts) shall be paid and settled as of the Settlement Date (determined in accordance with Paragraph 4) provided that the New Tenneco Participant’s Termination Date does not occur prior to the Settlement Date; provided, however, that if the New Tenneco’s Termination Date occurs prior to the Settlement Date as a result of death, Total Disability or a termination by the Company or a Subsidiary for reasons other than Cause, any unvested Restricted Stock Units that are outstanding on the Termination Date (and associated Dividend Cash Amounts) shall immediately vest on the Termination Date and the Termination Date shall be the “Vesting Date” for purposes of this Award Agreement; and |
(g) | If a DRiV Transaction occurs that is a spin-off of DRiV, the provisions of this Agreement shall continue to apply without regard to the DRiV Transaction. |
(a) | “Cause” means, with respect to the Participant, (i) fraud, embezzlement, or theft in connection with his or her employment, (ii) gross negligence in the performance of his or her duties, (iii) his or her conviction, guilty plea, or plea of nolo contendere with respect to a felony, (iv) the willful and continued failure to substantially perform his or her duties for the Company or any of its Subsidiaries (except where the failure results from |
(b) | “DRiV Participant” means a Participant who is employed primarily in the Company’s DRiV Division as of the relevant date of determination for purposes of Paragraph 2(e) or (f). The Participant’s Division Allocation as of the Grant Date is reflected above. Nothing herein shall prohibit or restrict the Company or the Committee from changing the Participant’s Division Allocation prior to the relevant date of determination for purposes of Paragraph 2(e) or (f). For the avoidance of doubt, the Participant’s Division Allocation for purposes of this Agreement applies solely for purposes of this Agreement. |
(c) | “DRiV Transaction” means (i) a sale or (ii) spin-off, in each case of the Company’s DRiV Division (consisting primarily of the Company’s Global Motorparts business group and Global Ride Performance business group and applicable reporting lines thereunder as determined from time to time by the Company); provided, however, that a sale of the DRiV Division shall not constitute a DRiV Transaction unless the sale constitutes a sale of all or substantially all of the DRiV Division. A DRiV Transaction shall not constitute a Change in Control for purposes of this Award Agreement even if it otherwise constitutes a Change in Control for purposes of the Plan. |
(d) | “New Tenneco Participant” means a Participant who is employed primarily in the Company’s New Tenneco Division as of the relevant date of determination for purposes of Paragraph 2(e) or (f). The Participant’s Division Allocation as of the Grant Date is reflected above. Nothing herein shall prohibit or restrict the Company or the Committee from changing the Participant’s Division Allocation prior to the relevant date of determination for purposes of Paragraph 2(e) or (f). For the avoidance of doubt, the Participant’s Division Allocation for purposes of this Agreement applies solely for purposes of this Agreement. |
(e) | “New Tenneco Transaction” means a sale of the Company’s New Tenneco Division (consisting primarily of the Company’s Global Clean Air business group and Global Powertrain business group and applicable reporting lines thereunder as determined from time to time by the Company); provided, however, that a sale of the New Tenneco Division shall not constitute a New Tenneco Transaction unless the sale constitutes a sale of all or substantially all of the New Tenneco Division. A New Tenneco Transaction shall not constitute a Change in Control for purposes of this Award Agreement even if it otherwise constitutes a Change in Control for purposes of the of the Plan. |
(f) | “Retirement” means the Participant’s termination of employment with the Company and its Subsidiaries after the date on which the Participant attains (A) age 65 or (B) age 55 and has completed at least 10 years of service with the Company and its Subsidiaries and is not for any other reason, including voluntary resignation, termination by the Company or a Subsidiary for cause, which shall include the failure of the Participant to meet the obligations required by his or her position (as determined in the reasonable discretion of the Company), or termination by the Participant for good reason or constructive discharge. |
(g) | “Total Disability” means an event that results in the Participant being (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company or its Subsidiaries. |
(a) | and if the Participant is a specified employee (within the meaning of section 409A(a)(2)(B) of the Code) and if any such payment or benefit is required to be made or provided prior to the first day of the seventh month following the Participant’s separation from service or termination of employment, such payment or benefit shall be delayed until the first day of the seventh month following the Participant’s termination of employment or separation from service; and |
(b) | the determination as to whether the Participant has had a termination of employment (or separation from service) shall be made in accordance with the provisions of section 409A of the Code and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder. |
Electronic Signature | Senior Vice President and Chief Human Resources Officer |
(a) | If a dividend with respect to shares of Common Stock is payable in cash, then, as of the applicable dividend payment date, the Participant’s Dividend Cash Account shall be credited with an amount (a “Dividend Cash Amount”) equal to (i) the cash dividend payable with respect to a share of Common Stock, multiplied by (ii) the number of Restricted Stock Units outstanding on the applicable dividend record date. |
(b) | If a dividend with respect to shares of Common Stock is payable in shares of Common Stock, then, as of the applicable dividend payment date, the Participant’s Dividend Cash Account shall be credited with a Dividend Cash Amount in an amount equal to (i) the number of shares of Common Stock distributed in the dividend with respect to a share of Common Stock, divided by (ii) the Fair Market Value of a share of Common Stock on the dividend payment date, multiplied by (iii) the number of Restricted Stock Units outstanding on the applicable dividend record date. |
(a) | if the Participant’s Termination Date occurs by reason of Total Disability (as defined in Paragraph 3) or death, any unvested Restricted Stock Units that are outstanding on the Termination Date (and any associated Dividend Cash Amounts) shall immediately vest on the Termination Date and the Termination Date shall be the “Vesting Date” for purposes of this Award Agreement; |
(b) | if the Participant’s Termination Date occurs by reason of Retirement (as defined in Paragraph 3) [after the first anniversary of the Grant Date], any unvested Restricted Stock Units that are outstanding on the Termination Date (and associated Dividend Cash Amounts) shall immediately vest on the Termination Date and the Termination Date shall be the “Vesting Date” for purposes of this Award Agreement;1 |
(c) | in the event that the Participant is assigned to a special project with a limited scope (as approved by the Committee and communicated to the Participant) and if the Participant’s Termination Date occurs as a result of termination by the Company for reasons other than for Cause (as defined in Paragraph 3), then any unvested portion of the Award that is outstanding on the Termination Date shall immediately vest on the |
(d) | in the event of a Change in Control other than a New Tenneco Transaction or a DRiV Transaction (each as defined in Paragraph 3), the terms of Article 6 of the Plan shall control; |
(e) | The following shall apply if a New Tenneco Transaction occurs: |
(i) | If the Participant is a New Tenneco Participant, any unvested Restricted Stock Units that are outstanding on the date of the New Tenneco Transaction (and any associated Dividend Cash Amounts) shall immediately vest on the date of the New Tenneco Transaction and the date of the New Tenneco Transaction shall be the “Vesting Date” for purposes of this Award Agreement, and |
(ii) | If the Participant is a DRiV Participant, any outstanding unvested Restricted Stock Units (and associated Dividend Cash Amounts) shall be paid and settled as of the Settlement Date (determined in accordance with Paragraph 4) provided that the DRiV Participant’s Termination Date does not occur prior to the Settlement Date; provided, however, that if the DRiV Participant’s Termination Date occurs prior to the Settlement Date as a result of death, Total Disability or a termination by the Company or a Subsidiary for reasons other than Cause, any unvested Restricted Stock Units that are outstanding on the Termination Date (and associated Dividend Cash Amounts) shall immediately vest on the Termination Date and the Termination Date shall be the “Vesting Date” for purposes of this Award Agreement; |
(f) | The following shall apply if a DRiV Transaction that is a sale of DRiV occurs: |
(i) | If the Participant is a DRiV Participant, any unvested Restricted Stock Units that are outstanding on the date of the DRiV Transaction (and any associated Dividend Cash Amounts) shall immediately vest on the date of the DRiV Transaction and the date of the DRiV Transaction shall be the “Vesting Date” for purposes of this Award Agreement, and |
(ii) | If the Participant is a New Tenneco Participant, any outstanding unvested Restricted Stock Units (and associated Dividend Cash Amounts) shall be paid and settled as of the Settlement Date (determined in accordance with Paragraph 4) provided that the New Tenneco Participant’s Termination Date does not occur prior to the Settlement Date; provided, however, that if the New Tenneco’s Termination Date occurs prior to the Settlement Date as a result of death, Total Disability or a termination by the Company or a Subsidiary for reasons other than Cause, any unvested Restricted Stock Units that are outstanding on the Termination Date (and associated Dividend Cash Amounts) shall immediately vest on the Termination Date and the Termination Date shall be the “Vesting Date” for purposes of this Award Agreement; and |
(g) | If a DRiV Transaction occurs that is a spin-off of DRiV, the provisions of this Agreement shall continue to apply without regard to the DRiV Transaction. |
(a) | “Cause” means, with respect to the Participant, (i) fraud, embezzlement, or theft in connection with his or her employment, (ii) gross negligence in the performance of his or her duties, (iii) his or her conviction, guilty plea, or plea of nolo contendere with respect to a felony, (iv) the willful and continued failure to substantially perform his or her duties for the Company or any of its Subsidiaries (except where the failure results from incapacity due to disability), (v) the failure to meet the obligations required by his or her position, as determined in the reasonable discretion of the Committee, or (vi) the willful or negligent engagement in conduct which is, or could reasonably be expected to be, materially injurious to any of the Company or any |
(b) | “DRiV Participant” means a Participant who is employed primarily in the Company’s DRiV Division as of the relevant date of determination for purposes of Paragraph 2(e) or (f). The Participant’s Division Allocation as of the Grant Date is reflected above. Nothing herein shall prohibit or restrict the Company or the Committee from changing the Participant’s Division Allocation prior to the relevant date of determination for purposes of Paragraph 2(e) or (f). For the avoidance of doubt, the Participant’s Division Allocation for purposes of this Agreement applies solely for purposes of this Agreement. |
(c) | “DRiV Transaction” means (i) a sale or (ii) spin-off, in each case of the Company’s DRiV Division (consisting primarily of the Company’s Global Motorparts business group and Global Ride Performance business group and applicable reporting lines thereunder as determined from time to time by the Company); provided, however, that a sale of the DRiV Division shall not constitute a DRiV Transaction unless the sale constitutes a sale of all or substantially all of the DRiV Division. A DRiV Transaction shall not constitute a Change in Control for purposes of this Award Agreement even if it otherwise constitutes a Change in Control for purposes of the Plan. |
(d) | “New Tenneco Participant” means a Participant who is employed primarily in the Company’s New Tenneco Division as of the relevant date of determination for purposes of Paragraph 2(e) or (f). The Participant’s Division Allocation as of the Grant Date is reflected above. Nothing herein shall prohibit or restrict the Company or the Committee from changing the Participant’s Division Allocation prior to the relevant date of determination for purposes of Paragraph 2(e) or (f). For the avoidance of doubt, the Participant’s Division Allocation for purposes of this Agreement applies solely for purposes of this Agreement. |
(e) | “New Tenneco Transaction” means a sale of the Company’s New Tenneco Division (consisting primarily of the Company’s Global Clean Air business group and Global Powertrain business group and applicable reporting lines thereunder as determined from time to time by the Company); provided, however, that a sale of the New Tenneco Division shall not constitute a New Tenneco Transaction unless the sale constitutes a sale of all or substantially all of the New Tenneco Division. A New Tenneco Transaction shall not constitute a Change in Control for purposes of this Award Agreement even if it otherwise constitutes a Change in Control for purposes of the of the Plan. |
(f) | “Retirement” means the Participant’s termination of employment with the Company and its Subsidiaries after the date on which the Participant attains (A) age 65 or (B) age 55 and has completed at least 10 years of service with the Company and its Subsidiaries and is not for any other reason, including voluntary resignation, termination by the Company or a Subsidiary for cause, which shall include the failure of the Participant to meet the obligations required by his or her position (as determined in the reasonable discretion of the Company), or termination by the Participant for good reason or constructive discharge. |
(g) | “Total Disability” means an event that results in the Participant being (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company or its Subsidiaries. |
(a) | and if the Participant is a specified employee (within the meaning of section 409A(a)(2)(B) of the Code) and if any such payment or benefit is required to be made or provided prior to the first day of the seventh month following the Participant’s separation from service or termination of employment, such payment or benefit shall be delayed until the first day of the seventh month following the Participant’s termination of employment or separation from service; and |
(b) | the determination as to whether the Participant has had a termination of employment (or separation from service) shall be made in accordance with the provisions of section 409A of the Code and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder. |
Electronic Signature | Senior Vice President and Chief Human Resources Officer |
1. | Definitions. In addition to defined terms included elsewhere in this Agreement, the following capitalized terms when used herein shall have the meaning specified: |
(a) | “Cause” shall mean the Executive’s: (i) willful failure to perform substantially his or her duties (other than any such failure resulting from incapacity due to Disability); (ii) commission of, or indictment for, a felony or any crime involving fraud or embezzlement or dishonesty or conviction of, or plea of guilty or nolo contendere to a crime or misdemeanor (other than a traffic violation) punishable by imprisonment under federal, state or local law; (ii) engagement in an act of fraud or other act of willful dishonesty or misconduct, towards the Company Group or any member thereof, or detrimental to Company Group or any member thereof, or in the performance of the Executive’s duties; (iv) negligence in the performance of employment duties that has a materially detrimental effect on the Company Group or any member thereof; (v) violation of a federal or state securities law or regulation; (vi) the use of a controlled substance without a prescription or the use of alcohol which, while performing services on behalf of the Company Group or any member thereof, in each case, significantly impairs the Executive’s ability to carry out his or her duties and responsibilities; (vii) material violation of the policies and procedures of the Company Group or any member of thereof applicable to the Executive; (viii) embezzlement and/or misappropriation of property of the Company Group or any member thereof; or (ix) conduct involving any immoral acts which is reasonably likely to impair the reputation of the Company Group or any member thereof. |
(b) | “Code” shall mean the Internal Revenue Code of 1986, as amended. |
(c) | “Disability” shall mean the permanent and total disability of the Executive as determined for purposes of the Company Group long-term disability plan in which the Executive participates (or in which the Executive is eligible to participate) at the time the determination is to be made. |
(d) | “Good Reason” shall mean any of the following that occur without the Executive’s written consent upon or following a Transaction: (i) a material diminishment in the Executive’s status, position, duties or responsibilities with the Company Group from those in effect immediately prior to the Transaction (or failure to attain a previously announced enhanced role for such executive following the Separation, if applicable); (ii) a material reduction in the Executive’s then current annual cash compensation from the Company Group (or a successor, if applicable) below the sum of (A) the Executive’s annual base salary or annual base compensation from the Company Group in effect immediately prior to the Transaction and (B) the Executive’s targeted annual long-term incentive award for the calendar year completed immediately prior to the Transaction; provided, however, that a material reduction |
(e) | “Payment Date” shall means, with respect to the Retention Bonus or any portion thereof, the date that is sixty (60) days after the applicable Vesting Date relating to the Retention Bonus (or such portion) and in no event later than two and one-half (2-1/2) months following the end of the year in which the applicable Vesting Date occurs. |
(f) | “Qualifying Termination” occurs if the Executive’s Termination Date occurs coincident with or following a Transaction as a result of (i) termination by the Company Group without Cause or (ii) termination by the Executive for Good Reason. |
(g) | “Termination Date” shall mean the date on which the Executive’s employment with the Company Group terminates for any reason; provided, however, that in connection with a Transaction, the Executive’s Termination Date shall be considered to have terminated only if his or her employment with the Company Group and any successors (and affiliates of successors) terminates upon or following the Transaction. Subject to the foregoing, the determination as to whether the Executive has had a termination of employment (or separation from service) shall be made in accordance with the provisions of section 409A of the Code and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder. |
(h) | “Transaction” shall mean the consummation of the separation of the Company Group’s businesses into two separate companies consisting of an Aftermarket and Ride Performance company and a Clean Air and Powertrain company (whether effected through a merger, exchange, sale of stock or assets or other transaction). |
(a) | In the event that a Transaction occurs on or prior to December 31, 2020, one third (1/3) of the Retention Bonus will vest on the closing of the Transaction, one third (1/3) of the Retention Bonus will vest on December 31, 2020 and 1/3 will vest on December 31, 2021 (each such date a “Vesting Date”), provided that the Executive’s Termination Date has not occurred as of the applicable Vesting Date. |
(b) | In the event that a Transaction does not occur on or prior to December 31, 2020, fifty percent (50%) of the Retention Bonus will vest on December 31, 2020 and fifty percent (50%) of the Retention Bonus will vest on December 31, 2021 (each such date a “Vesting Date”), provided that the Executive’s Termination Date has not occurred as of the applicable Vesting Date. |
(c) | Notwithstanding the provisions of paragraphs (a) and (b), in the event that the Executive’s Termination Date occurs as a result of death, Disability, or as a result of termination by the Company Group without Cause, any portion of the Retention Bonus that is not yet vested as of the Termination Date shall become vested on the Executive’s Termination Date and the Termination Date shall be the “Vesting Date” with respect to such portions of the Retention Bonus that become vested on the Termination Date. |
(d) | Notwithstanding the provisions of paragraphs (a) and (b), in the event that a Transaction occurs prior to a Vesting Date and if the Executive’s Termination Date occurs coincident with or after the Transaction and prior to a Vesting Date as a result of a Qualifying Termination, any portion of the Retention Bonus that is not yet vested as of the Termination Date shall become vested on the Executive’s Termination Date and the Termination Date |
4. | Payment of Retention Bonus. Subject to the terms and conditions of this Agreement, the Retention Bonus (or portion thereof) that becomes vested in accordance with Section 3 hereof shall be paid, in cash, upon the Payment Date. |
1. | Definitions. In addition to defined terms included elsewhere in this Agreement, the following capitalized terms when used herein shall have the meaning specified: |
(a) | “Cause” shall mean the Executive’s: (i) willful failure to perform substantially his or her duties (other than any such failure resulting from incapacity due to Disability); (ii) commission of, or indictment for, a felony or any crime involving fraud or embezzlement or dishonesty or conviction of, or plea of guilty or nolo contendere to a crime or misdemeanor (other than a traffic violation) punishable by imprisonment under federal, state or local law; (ii) engagement in an act of fraud or other act of willful dishonesty or misconduct, towards the Company Group or any member thereof, or detrimental to Company Group or any member thereof, or in the performance of the Executive’s duties; (iv) negligence in the performance of employment duties that has a materially detrimental effect on the Company Group or any member thereof; (v) violation of a federal or state securities law or regulation; (vi) the use of a controlled substance without a prescription or the use of alcohol which, while performing services on behalf of the Company Group or any member thereof, in each case, significantly impairs the Executive’s ability to carry out his or her duties and responsibilities; (vii) material violation of the policies and procedures of the Company Group or any member of thereof applicable to the Executive; (viii) embezzlement and/or misappropriation of property of the Company Group or any member thereof; or (ix) conduct involving any immoral acts which is reasonably likely to impair the reputation of the Company Group or any member thereof. |
(b) | “Code” shall mean the Internal Revenue Code of 1986, as amended. |
(c) | “Disability” shall mean the permanent and total disability of the Executive as determined for purposes of the Company Group long-term disability plan in which the Executive participates (or in which the Executive is eligible to participate) at the time the determination is to be made. |
(d) | “Good Reason” shall mean any of the following that occur without the Executive’s written consent upon or following a Transaction: (i) a material diminishment in the Executive’s status, position, duties or responsibilities with the Company Group from those in effect immediately prior to the Transaction (or failure to attain a previously announced enhanced role for such executive following the Separation, if applicable); (ii) a material reduction in the Executive’s then current annual cash compensation from the Company Group (or a successor, if applicable) below the sum of (A) the Executive’s annual base salary or annual base compensation from the Company Group in effect immediately prior to the Transaction and (B) the Executive’s targeted annual long-term incentive award for the calendar year completed immediately prior to the Transaction; provided, however, that a material reduction |
(e) | “Payment Date” shall means, with respect to the Retention Bonus or any portion thereof, the date that is sixty (60) days after the applicable Vesting Date relating to the Retention Bonus (or such portion) and in no event later than two and one-half (2-1/2) months following the end of the year in which the applicable Vesting Date occurs. |
(f) | “Qualifying Termination” occurs if the Executive’s Termination Date occurs coincident with or following a Transaction as a result of (i) termination by the Company Group without Cause or (ii) termination by the Executive for Good Reason. |
(g) | “Termination Date” shall mean the date on which the Executive’s employment with the Company Group terminates for any reason; provided, however, that in connection with a Transaction, the Executive’s Termination Date shall be considered to have terminated only if his or her employment with the Company Group and any successors (and affiliates of successors) terminates upon or following the Transaction. Subject to the foregoing, the determination as to whether the Executive has had a termination of employment (or separation from service) shall be made in accordance with the provisions of section 409A of the Code and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder. |
(h) | “Transaction” shall mean the consummation of the separation of the Company Group’s businesses into two separate companies consisting of an Aftermarket and Ride Performance company and a Clean Air and Powertrain company (whether effected through a merger, exchange, sale of stock or assets or other transaction). |
(a) | In the event that a Transaction occurs on or prior to December 31, 2020, one third (1/3) of the Retention Bonus will vest on the closing of the Transaction, one third (1/3) of the Retention Bonus will vest on December 31, 2020 and 1/3 will vest on December 31, 2021 (each such date a “Vesting Date”), provided that the Executive’s Termination Date has not occurred as of the applicable Vesting Date. |
(b) | In the event that a Transaction does not occur on or prior to December 31, 2020, fifty percent (50%) of the Retention Bonus will vest on December 31, 2020 and fifty percent (50%) of the Retention Bonus will vest on December 31, 2021 (each such date a “Vesting Date”), provided that the Executive’s Termination Date has not occurred as of the applicable Vesting Date. |
(c) | Notwithstanding the provisions of paragraphs (a) and (b), in the event that the Executive’s Termination Date occurs as a result of death, Disability, or as a result of termination by the Company Group without Cause, any portion of the Retention Bonus that is not yet vested as of the Termination Date shall become vested on the Executive’s Termination Date and the Termination Date shall be the “Vesting Date” with respect to such portions of the Retention Bonus that become vested on the Termination Date. |
(d) | Notwithstanding the provisions of paragraphs (a) and (b), in the event that a Transaction occurs prior to a Vesting Date and if the Executive’s Termination Date occurs coincident with or after the Transaction and prior to a Vesting Date as a result of a Qualifying Termination, any portion of the Retention Bonus that is not yet vested as of the Termination Date shall become vested on the Executive’s Termination Date and the Termination Date |
4. | Payment of Retention Bonus. Subject to the terms and conditions of this Agreement, the Retention Bonus (or portion thereof) that becomes vested in accordance with Section 3 hereof shall be paid, in cash, upon the Payment Date. |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
A.E. Group Machines Limited | Indirect | United Kingdom | ||
AE International Limited | Indirect | United Kingdom | ||
Anand I-Power Limited | Indirect | India | ||
Anqing TP Goetze Liner Co., Ltd. | Indirect | China | ||
Anqing TP Goetze Piston Ring Co., Ltd. | Indirect | China | ||
Anqing TP Powder Metallurgy Co. Ltd. | Indirect | China | ||
Armstrong Properties (Pty.) Ltd. | Indirect | South Africa | ||
Ateliers Juliette Adam SAS | Indirect | France | ||
Autopartes Walker, S. de R.L. de C.V. | Indirect | Mexico | ||
Beck Arnley Holdings LLC | Indirect | United States | ||
Carter Automotive Company LLC | Indirect | United States | ||
CATAI s.r.l. | Indirect | Italy | ||
CED’S Inc. | Indirect | Illinois | ||
Clevite Industries Inc. | Indirect | Delaware | ||
Componentes Venezolanos de Direccion, S.A. | Indirect | Venezuela | ||
Cooperatief Federal-Mogul Dutch Investments B.A. | Direct | Netherlands | ||
Coventry Assurance Ltd. | Direct | Bermuda | ||
Dongsuh Federal-Mogul Co., Ltd. | Indirect | South Korea | ||
DRiV Automotive Inc. | Indirect | United States | ||
DRiV Incorporated | Direct | United States | ||
DRiV IP LLC | Direct | United States | ||
Farloc Argentina S.A.I.C. y F. | Indirect | Argentina | ||
FDML Holdings Limited | Indirect | United Kingdom | ||
Federal Mogul (Thailand) Ltd. | Indirect | Thailand | ||
Federal Mogul Aftermarket Egypt Ltd. | Indirect | Egypt |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
Federal Mogul Argentina S.A. | Indirect | Argentina | ||
Federal Mogul Dis Ticaret Anonim Sirketi | Indirect | Turkey | ||
Federal Mogul Hungary Kft. | Indirect | Hungary | ||
Federal Mogul Powertrain Otomotiv Anonim Sirketi | Indirect | Turkey | ||
Federal Mogul SAS | Indirect | France | ||
Federal Mogul Services Sarl | Indirect | France | ||
Federal Mogul Systems Protection SAS | Indirect | France | ||
Federal-Mogul (Anqing) Powder Metallurgy Co., Ltd. | Indirect | China | ||
Federal-Mogul (Changshu) Automotive Parts Co., Ltd. | Indirect | China | ||
Federal-Mogul (China) Co., Ltd. | Indirect | China | ||
Federal-Mogul (Chongqing) Friction Materials Co., Ltd. | Indirect | China | ||
Federal-Mogul (Dalian) Co., Ltd. | Indirect | China | ||
Federal-Mogul (Langfang) Automotive Components Co., Ltd. | Indirect | China | ||
Federal-Mogul (Proprietary) Limited | Indirect | South Africa | ||
Federal-Mogul (Shanghai) Automotive Parts Co., Ltd. | Indirect | China | ||
Federal-Mogul (T&N) Hong Kong Limited | Indirect | Hong Kong | ||
Federal-Mogul (Tianjin) Surface Treatment Co., Ltd. | Indirect | China | ||
Federal-Mogul (Vietnam) Ltd. | Indirect | Vietnam | ||
Federal-Mogul Aftermarket Espana, S.A. | Indirect | Spain | ||
Federal-Mogul Aftermarket France SAS | Indirect | France | ||
Federal-Mogul Aftermarket GmbH | Indirect | Germany | ||
Federal-Mogul Aftermarket Southern Africa (Pty) Limited | Indirect | South Africa | ||
Federal-Mogul Aftermarket UK Limited | Indirect | United Kingdom | ||
Federal-Mogul Anand Bearings India Limited | Direct | India | ||
Federal-Mogul Anand Sealings India Limited | Indirect | India | ||
Federal-Mogul Asia Investments Holding Korea, Ltd. | Indirect | South Korea |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
Federal-Mogul Asia Investments Limited | Indirect | United Kingdom | ||
Federal-Mogul Automotive GmbH & Co. KG | Indirect | Germany | ||
Federal-Mogul Automotive Pty Ltd | Indirect | Australia | ||
Federal-Mogul Automotive Verwaltungs GmbH | Direct | Germany | ||
Federal-Mogul Betriebsgrundstucke Burscheid GmbH | Indirect | Germany | ||
Federal-Mogul Bimet Spolka Akcyjna | Indirect | Poland | ||
Federal-Mogul Bradford Limited | Indirect | United Kingdom | ||
Federal-Mogul Bremsbelag GmbH | Indirect | Germany | ||
Federal-Mogul Burscheid Beteiligungs GmbH | Indirect | Germany | ||
Federal-Mogul Burscheid GmbH | Indirect | Germany | ||
Federal-Mogul Canada Limited | Direct | Canada | ||
Federal-Mogul Chassis LLC | Indirect | United States | ||
Federal-Mogul Componentes de Motores Ltda. | Indirect | Brazil | ||
Federal-Mogul Controlled Power Limited | Indirect | United Kingdom | ||
Federal-Mogul Coventry Limited | Indirect | United Kingdom | ||
Federal-Mogul de Costa Rica, S.A. | Direct | Costa Rica | ||
Federal-Mogul de Guatemala, Sociedad Anonima | Direct | Guatemala | ||
Federal-Mogul de Matamoros, S. de R.L. de C.V. | Indirect | Mexico | ||
Federal-Mogul de Mexico, S. de R.L. de C.V. | Indirect | Mexico | ||
Federal-Mogul de Venezuela, C.A. | Indirect | Venezuela | ||
Federal-Mogul Deva (Qingdao) Automotive Parts Co., Ltd. | Indirect | China | ||
Federal-Mogul Deva GmbH | Indirect | Germany | ||
Federal-Mogul Dimitrovgrad LLC | Indirect | Russia | ||
Federal-Mogul Distribucion de Mexico, S. de R.L. de C.V. | Indirect | Mexico | ||
Federal-Mogul Dong Feng (Shiyan) Engine Components Co., Ltd. | Indirect | China | ||
Federal-Mogul EMEA Distribution Services | Indirect | Belgium | ||
Federal-Mogul Employee Trust Administration Limited | Indirect | United Kingdom |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
Federal-Mogul Engineering Limited | Indirect | United Kingdom | ||
Federal-Mogul FIL-P43, S. de R.L. de C.V. | Indirect | Mexico | ||
Federal-Mogul FIL-S43, S. de R.L. de C.V. | Indirect | Mexico | ||
Federal-Mogul Filtration LLC | Indirect | United States | ||
Federal-Mogul Finance 1, LLC | Indirect | United States | ||
Federal-Mogul Finance 2, LLC | Indirect | United States | ||
Federal-Mogul Financial Services Poland Sp.z.o.o. | Indirect | Poland | ||
Federal-Mogul Financial Services S.A.S. | Indirect | France | ||
Federal-Mogul Financing Corporation | Direct | United States | ||
Federal-Mogul Friction Products a.s. | Indirect | Czech Republic | ||
Federal-Mogul Friction Products Barcelona, S.L. | Indirect | Spain | ||
Federal-Mogul Friction Products Co., Ltd. | Indirect | China | ||
Federal-Mogul Friction Products GmbH | Indirect | Germany | ||
Federal-Mogul Friction Products International GmbH | Indirect | Germany | ||
Federal-Mogul Friction Products Limited | Indirect | United Kingdom | ||
Federal-Mogul Friction Products Ploiesti SRL | Indirect | Romania | ||
Federal-Mogul Friction Products, S.A. | Indirect | Spain | ||
Federal-Mogul Friction Spain, S.L. | Indirect | Spain | ||
Federal-Mogul Friedberg GmbH | Indirect | Germany | ||
Federal-Mogul Garennes SAS | Indirect | France | ||
Federal-Mogul Germany Investments Holding GmbH | Indirect | Germany | ||
Federal-Mogul Global Aftermarket EMEA | Indirect | Belgium | ||
Federal-Mogul Global Growth Limited | Indirect | United Kingdom | ||
Federal-Mogul GmbH | Indirect | Switzerland | ||
Federal-Mogul Goetze (India) Limited | Indirect | India | ||
Federal-Mogul Gorzyce Sp. z o.o. | Indirect | Poland |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
Federal-Mogul Holding Deutschland GmbH | Indirect | Germany | ||
Federal-Mogul Holding Sweden AB | Direct | Sweden | ||
Federal-Mogul Holdings, Ltd. | Indirect | Mauritius | ||
Federal-Mogul Iberica, S.L. | Indirect | Spain | ||
Federal-Mogul Ignition GmbH | Indirect | Germany | ||
Federal-Mogul Ignition LLC | Indirect | United States | ||
Federal-Mogul Ignition Products India Limited | Indirect | India | ||
Federal-Mogul Ignition Products SAS | Indirect | France | ||
Federal-Mogul Industria de Autopecas Ltda. | Indirect | Brazil | ||
Federal-Mogul Investment Ltd. | Indirect | British Virgin Islands | ||
Federal-Mogul Investments B.V. | Indirect | Netherlands | ||
Federal-Mogul Italy S.r.l. | Indirect | Italy | ||
Federal-Mogul Izmit Piston ve Pim Uretim Tesisleri A.S. | Indirect | Turkey | ||
Federal-Mogul Japan K.K. | Indirect | Japan | ||
Federal-Mogul Juarez S. de R.L. de C.V. | Indirect | Mexico | ||
Federal-Mogul Lighting, S. de R.L. de C.V. | Indirect | Mexico | ||
Federal-Mogul Limited | Indirect | United Kingdom | ||
Federal-Mogul Luxembourg S.a.r.l. | Indirect | Luxembourg | ||
Federal-Mogul Motorparts (India) Limited | Indirect | India | ||
Federal-Mogul Motorparts (Netherlands) B.V. | Direct | Netherlands | ||
Federal-Mogul Motorparts (Pinghu) Trading Limited | Indirect | China | ||
Federal-Mogul Motorparts (Qingdao) Co., Ltd. | Indirect | China | ||
Federal-Mogul Motorparts (Singapore) Pte. Ltd. | Indirect | Singapore | ||
Federal-Mogul Motorparts (Thailand) Limited | Direct | Thailand | ||
Federal-Mogul Motorparts (Zhejiang) Co., Ltd. | Indirect | China | ||
Federal-Mogul Motorparts Colombia S.A.S. | Indirect | Columbia | ||
Federal-Mogul Motorparts Holding B.V. | Indirect | Netherlands |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
Federal-Mogul Motorparts Holding GmbH | Direct | Germany | ||
Federal-Mogul Motorparts LLC | Direct | United States | ||
Federal-Mogul Motorparts Management (Shanghai) Co., Ltd. | Indirect | China | ||
Federal-Mogul Motorparts Minority Holding B.V. | Indirect | Netherlands | ||
Federal-Mogul Motorparts Philippines, Inc. | Indirect | Philippines | ||
Federal-Mogul Motorparts Ploiesti SRL | Indirect | Romania | ||
Federal-Mogul Motorparts Poland Sp.z.o.o. | Indirect | Poland | ||
Federal-Mogul Motorparts Pty Ltd | Indirect | Australia | ||
Federal-Mogul Motorparts Services SRL | Indirect | Romania | ||
Federal-Mogul MP US LLC | Indirect | United States | ||
Federal-Mogul Naberezhnye Chelny | Indirect | Russia | ||
Federal-Mogul Nürnberg GmbH | Indirect | Germany | ||
Federal-Mogul of South Africa (Proprietary) Limited | Indirect | South Africa | ||
Federal-Mogul Operations France S.A.S. | Indirect | France | ||
Federal-Mogul Piston Rings, LLC | Indirect | United States | ||
Federal-Mogul Plasticos Puntanos, S.A. | Indirect | Argentina | ||
Federal-Mogul Powertrain (Netherlands) B.V. | Direct | Netherlands | ||
Federal-Mogul Powertrain Eastern Europe B.V. | Indirect | Netherlands | ||
Federal-Mogul Powertrain IP LLC | Indirect | United States | ||
Federal-Mogul Powertrain Italy S.R.L | Indirect | Italy | ||
Federal-Mogul Powertrain LLC | Direct | United States | ||
Federal-Mogul Powertrain Mexico Distribucion S. de R.L. de C.V. | Indirect | Mexico | ||
Federal-Mogul Powertrain Russia GmbH | Indirect | Germany | ||
Federal-Mogul Powertrain Solutions India Private Limited | Indirect | India | ||
Federal-Mogul Powertrain Systems S A (Proprietary) Limited | Indirect | South Africa | ||
Federal-Mogul Powertrain Vostok OOO | Indirect | Russia | ||
Federal-Mogul Products US LLC | Indirect | United States |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
Federal-Mogul Pty Ltd | Indirect | Australia | ||
Federal-Mogul R&L Friedberg Casting GmbH & Co. KG | Indirect | Germany | ||
Federal-Mogul Risk Advisory Services LLC | Indirect | United States | ||
Federal-Mogul S. de R.L. de C.V. | Indirect | Mexico | ||
Federal-Mogul S.A. | Indirect | Belgium | ||
Federal-Mogul Sealing System (Nanchang) Co., Ltd. | Indirect | China | ||
Federal-Mogul Sealing Systems GmbH | Indirect | Germany | ||
Federal-Mogul Sejong Co., Ltd | Indirect | Korea | ||
Federal-Mogul Sejong Tech Ltd | Indirect | South Korea | ||
Federal-Mogul Serina Co., Ltd. | Indirect | Thailand | ||
Federal-Mogul Sevierville, LLC | Indirect | United States | ||
Federal-Mogul Shanghai Bearing Co., Ltd. | Indirect | China | ||
Federal-Mogul Shanghai Compound Material Co., Ltd. | Indirect | China | ||
Federal-Mogul Singapore Investments Pte. Ltd. | Indirect | Singapore | ||
Federal-Mogul Sistemas Automotivos Ltda. | Indirect | Brazil | ||
Federal-Mogul Sistemas de Limpadores de Para-Brisas Ltda | Indirect | Brazil | ||
Federal-Mogul Sorocaba-Holding Ltda | Indirect | Brazil | ||
Federal-Mogul SP Mexico, S. de R.L. de C.V. | Indirect | Mexico | ||
Federal-Mogul Systems Protection Hungary Kft. | Indirect | Hungary | ||
Federal-Mogul Systems Protection Morocco SARL AU | Indirect | Morocco | ||
Federal-Mogul Technology Limited | Indirect | United Kingdom | ||
Federal-Mogul TP Europe GmbH & Co KG | Indirect | Germany | ||
Federal-Mogul TP Liner Europe Otomotiv Ltd. Şti | Indirect | Turkey | ||
Federal-Mogul TP Liners, Inc. | Indirect | United States | ||
Federal-Mogul TP Piston Rings GmbH | Indirect | Germany |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
Federal-Mogul TPR (India) Limited | Indirect | India | ||
Federal-Mogul Transaction LLC | Indirect | United States | ||
Federal-Mogul UK Investments Limited | Indirect | United Kingdom | ||
Federal-Mogul UK Powertrain Limited | Indirect | United Kingdom | ||
Federal-Mogul Valve Train International LLC | Indirect | United States | ||
Federal-Mogul Valve Train S. de R.L. de C.V. | Indirect | Mexico | ||
Federal-Mogul Valvetrain GmbH | Indirect | Germany | ||
Federal-Mogul Valvetrain La Source SAS | Indirect | France | ||
Federal-Mogul Valvetrain Limited | Direct | United Kingdom | ||
Federal-Mogul Valvetrain s.r.o. | Indirect | Czech Republic | ||
Federal-Mogul Valvetrain Schirmeck SAS | Indirect | France | ||
Federal-Mogul VCS Holding B.V. | Indirect | Netherlands | ||
Federal-Mogul VCS, LLC | Indirect | Russia | ||
Federal-Mogul Vermogensverwaltungs GmbH | Indirect | Germany | ||
Federal-Mogul Verwaltungs-und Beteiligungs-GmbH | Indirect | Germany | ||
Federal-Mogul Wiesbaden GmbH | Indirect | Germany | ||
Federal-Mogul World Trade (Asia) Limited | Indirect | Hong Kong | ||
Federal-Mogul World Wide LLC | Indirect | United States | ||
Federal-Mogul Yura (Qingdao) Ignition Co., Ltd. | Indirect | China | ||
Federal-Mogul Zhengsheng (Changsha) Piston Ring Co., Ltd. | Indirect | China | ||
Felt Products MFG. CO. LLC | Indirect | United States | ||
Ferodo America, LLC | Indirect | United States | ||
Ferodo Limited | Indirect | United Kingdom | ||
F-M Holding Daros AB | Indirect | Sweden | ||
F-M Holding Goteborg AB | Indirect | Sweden | ||
F-M Holding Mexico, S.A. de C.V. | Direct | Mexico |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
FM International, LLC | Indirect | United States | ||
F-M Motorparts Limited | Indirect | United Kingdom | ||
F-M Motorparts TSC LLC | Indirect | United States | ||
FM Participacoes e Investimentos LTDA | Indirect | Brazil | ||
FM PBW Bearings Private Limited | Indirect | India | ||
F-M Trademarks Limited | Indirect | United Kingdom | ||
F-M TSC Real Estate Holdings LLC | Indirect | United States | ||
Fonciere de Liberation | Indirect | France | ||
Forjas y Maquinas, S. de R.L. de C.V. | Indirect | Mexico | ||
Frenos Hidraulicos Automotrices, S.A. de C.V. | Indirect | Mexico | ||
Fric-Rot S.A.I.C. | Indirect | Argentina | ||
Gasket Holdings, LLC | Indirect | United States | ||
Gillet Exhaust Manufacturing Limited | Indirect | United Kingdom | ||
Gillet Pressings Cardiff Limited | Indirect | United Kingdom | ||
Goetze Wohnungsbau GmbH | Indirect | Germany | ||
ISA Installations Steuerungs und Automatislerungs GmbH | Indirect | Germany | ||
J.W. Hartley (Motor Trade) Limited | Indirect | United Kingdom | ||
Jurid do Brasil Sistemas Automotivos Ltda. | Indirect | Brazil | ||
KB Autosys Co., Ltd. | Indirect | Korea | ||
KB Autosys India Private Ltd. | Indirect | India | ||
KB Autosys (Zhangjiagang) Co., Ltd. | Indirect | China | ||
Kinetic Pty. Ltd. | Indirect | Australia | ||
Kontich | Direct | Belgium | ||
Leeds Piston Ring & Engineering Co. Limited | Indirect | United Kingdom | ||
Maco Inversiones S.A. | Indirect | Argentina | ||
McCord Payen de Mexico S. de R.L. de C.V. | Indirect | Mexico |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
McPherson Strut Company LLC | Indirect | Delaware | ||
Monroe Amortisor Imalat Ve Ticaret Anonim Sirketi | Indirect | Turkey | ||
Monroe Australia Pty. Limited | Indirect | Australia | ||
Monroe Czechia s.r.o. | Indirect | Czech Republic | ||
Monroe Holding, S. de R.L. de C.V. | Indirect | Mexico | ||
Monroe Manufacturing (Proprietary) Ltd. | Indirect | South Africa | ||
Monroe Mexico, S. de R.L. de C.V. | Indirect | Mexico | ||
Monroe Packaging BVBA | Indirect | Belgium | ||
Monroe Ride Performance Sweden AB | Indirect | Sweden | ||
Monroe Springs (Australia) Pty. Ltd. | Indirect | Australia | ||
Montagewerk Abgastechnik Emden GmbH | Indirect | Germany | ||
Motocare India Private Limited | Indirect | India | ||
Muzzy-Lyon Auto Parts LLC | Indirect | United States | ||
Parts Zone (Thailand) Co., Ltd. | Indirect | Thailand | ||
Payen International Limited | Indirect | United Kingdom | ||
Piston Rings (UK) Limited | Indirect | United Kingdom | ||
Precision Modular Assembly Corp. | Indirect | Delaware | ||
Productos de Frenos Automotrices de Calidad S.A. de C.V. | Indirect | Mexico | ||
Proveedora Walker S. de R.L. de C.V. | Indirect | Mexico | ||
Pullman Standard Inc. | Indirect | Delaware | ||
Qingdao Tenneco FAWSN Automobile Parts Co., Ltd. | Indirect | China | ||
Raimsa, S. de R.L. de C.V. | Indirect | Mexico | ||
Ride Performance Canada Inc. | Indirect | Canada | ||
Ride Performance Japan Ltd. | Indirect | Japan | ||
Ride Performance Korea Limited | Indirect | Korea |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
Ride Performance Mexico Holding LLC | Indirect | United States | ||
Sapav Marketing Ltd | Indirect | Cyprus | ||
Saxid | Indirect | France | ||
SAXID Limited | Indirect | United Kingdom | ||
Saxid s.r.l. | Indirect | Italy | ||
Servicio de Componentes Automotrices, S. de R.L. de C.V. | Indirect | Mexico | ||
Servicios Administrativos Industriales, S. de R.L. de C.V. | Indirect | Mexico | ||
Shanghai Tenneco Exhaust System Co., Ltd. | Indirect | China | ||
Sibirica Energy Limited | Indirect | Cyprus | ||
Sintration Limited | Indirect | United Kingdom | ||
Speyside Real Estate, LLC | Indirect | United States | ||
Subensambles Internacionales, S. de R.L. de C.V. | Indirect | Mexico | ||
T&N de Mexico S. de R.L. de C.V. | Indirect | Mexico | ||
T&N Industries, LLC | Indirect | United States | ||
TA (Australia) Group Pty. Ltd. | Indirect | Australia | ||
Taiwan Federal-Mogul Motorparts Co., Limited | Indirect | Taiwan | ||
TecCom GmbH | Indirect | Germany | ||
Tenneco (Beijing) Exhaust System Co., Ltd. | Indirect | China | ||
Tenneco (Beijing) Ride Control System Co., Ltd. | Indirect | China | ||
Tenneco (Changzhou) Ride Performance Co., Ltd. | Indirect | China | ||
Tenneco (China) Co., Ltd. | Indirect | China | ||
Tenneco (Dalian) Exhaust System Co. Ltd. | Indirect | China | ||
Tenneco (Guangzhou) Co., Ltd. | Indirect | China | ||
Tenneco (Jingzhou) Ride Performance Co., Ltd. | Indirect | China | ||
Tenneco (Mauritius) Limited | Indirect | Mauritius |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
Tenneco (MSCan) Operations Inc. | Indirect | Canada (BC) | ||
Tenneco (MUSA) | Indirect | California | ||
Tenneco (Suzhou) Co., Ltd. | Indirect | China | ||
Tenneco (Suzhou) Emission System Co., Ltd. | Indirect | China | ||
Tenneco (Suzhou) Ride Control Co., Ltd. | Indirect | China | ||
Tenneco (Tianjin) Ride Performance Co. Ltd. | Indirect | China | ||
Tenneco (TM Asia) Ltd. | Indirect | Taiwan | ||
Tenneco (TM Belgium) BVBA | Indirect | Belgium | ||
Tenneco Asheville Inc. | Indirect | Delaware | ||
Tenneco Asia Inc. | Indirect | Delaware | ||
Tenneco Automotie Nederland B.V. | Indirect | Netherlands | ||
Tenneco Automotive (Thailand) Limited | Indirect | Thailand | ||
Tenneco Automotive Brasil Ltda. | Indirect | Brazil | ||
Tenneco Automotive Deutschland GmbH | Indirect | Germany | ||
Tenneco Automotive Eastern Europe Sp. z.o.o. | Indirect | Poland | ||
Tenneco Automotive Europe BVBA | Indirect | Belgium | ||
Tenneco Automotive Europe Coordination Center BVBA | Indirect | Belgium | ||
Tenneco Automotive Foreign Sales Corporation Limited | Indirect | Jamaica | ||
Tenneco Automotive France S.A.S. | Indirect | France | ||
Tenneco Automotive Holdings South Africa Pty. Limited | Indirect | South Africa | ||
Tenneco Automotive Iberica S.A. | Indirect | Spain | ||
Tenneco Automotive Inc. Nevada | Direct | Nevada | ||
Tenneco Automotive India Private Limited | Indirect | India | ||
Tenneco Automotive Italia S.r.l. | Indirect | Italy | ||
Tenneco Automotive Operating Company Inc. | Direct | Delaware | ||
Tenneco Automotive Polska Sp. z.o.o. | Indirect | Poland |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
Tenneco Automotive Port Elizabeth (Proprietary) Limited | Indirect | South Africa | ||
Tenneco Automotive Portugal – Componentes Para Automovel, Unipessoal, LDA. | Indirect | Portugal | ||
Tenneco Automotive RSA Company | Indirect | Delaware | ||
Tenneco Automotive Second RSA Company | Indirect | Delaware | ||
Tenneco Automotive Services Societe Par Actions Simplifiee | Indirect | France | ||
Tenneco Automotive Servicios Mexico, S. de R.L. de C.V. | Indirect | Mexico | ||
Tenneco Automotive Trading Company | Indirect | Delaware | ||
Tenneco Automotive UK Limited | Indirect | United Kingdom | ||
Tenneco Automotive Volga LLC | Indirect | Russia | ||
Tenneco Automotive Walker Inc. | Indirect | Delaware | ||
Tenneco Brake, Inc. | Indirect | Delaware | ||
Tenneco CA Czech Republic s.r.o. | Indirect | Czech Republic | ||
Tenneco CA Mexico, S. de R.L. de C.V. | Indirect | Mexico | ||
Tenneco CA Netherlands BV | Indirect | Netherlands | ||
Tenneco Canada Inc. | Indirect | Canada | ||
Tenneco Clean Air Argentina S.A.I.C. | Indirect | Argentina | ||
Tenneco Clean Air India Private Limited | Indirect | India | ||
Tenneco Clean Air Spain, S.L.U. | Indirect | Spain | ||
Tenneco Clean Air US Inc. | Indirect | United States | ||
Tenneco Deutschland Holdinggesellschaft mbH | Indirect | Germany | ||
Tenneco Eastern European Holdings S.a.r.l. | Indirect | Luxembourg | ||
Tenneco Eberspaecher (Beijing) Exhaust System Co., Ltd. | Indirect | China | ||
Tenneco Emission Control (Pty) Ltd | Indirect | South Africa | ||
Tenneco Etain Societe Par Actions Simplifiee | Indirect | France | ||
Tenneco Europe Limited | Indirect | Delaware |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
Tenneco FAWSN (Changchun) Automobile Parts Co., Ltd. | Indirect | China | ||
Tenneco FAWSN (Foshan) Automobile Parts Co., Ltd. | Indirect | China | ||
Tenneco FAWSN (Tianjin) Automobile Parts Co., Ltd. | Indirect | China | ||
Tenneco Fusheng (Chengdu) Automobile Parts Co., Ltd. | Indirect | China | ||
Tenneco Global Holdings Inc. | Indirect | Delaware | ||
Tenneco GmbH | Indirect | Germany | ||
Tenneco Holdings Danmark ApS | Indirect | Denmark | ||
Tenneco Hong Kong Holdings Limited | Indirect | Hong Kong | ||
Tenneco Hungary Korlatolt Felelossegu Tarsasag | Indirect | Hungary | ||
Tenneco Indústria de Autopeças Ltda. | Indirect | Brazil | ||
Tenneco Innovacion S.L. | Indirect | Spain | ||
Tenneco International Holding Corp. | Indirect | Delaware | ||
Tenneco International Luxembourg S.a.r.l. | Indirect | Luxembourg | ||
Tenneco International Manufacturing S.a.r.l. | Indirect | Luxembourg | ||
Tenneco Japan Ltd. | Indirect | Japan | ||
Tenneco Korea Limited | Indirect | Korea | ||
Tenneco Lingchuan (Chongqing) Exhaust System Co., Ltd. | Indirect | China | ||
Tenneco Management (Europe) Limited | Indirect | United Kingdom | ||
Tenneco Mauritius China Holdings Ltd. | Indirect | Mauritius | ||
Tenneco Mauritius Holdings Limited | Indirect | Mauritius | ||
Tenneco Mexico, S. de R.L. de C.V. | Indirect | Mexico | ||
Tenneco Ride Control South Africa (Pty) Ltd. | Indirect | South Africa | ||
Tenneco Ride Performance US 4 LLC | Indirect | United States | ||
Tenneco Ride Performance US 5 LLC | Indirect | United States | ||
Tenneco RP Germany GmbH | Indirect | Germany |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
Tenneco Silesia spolka z ograniczona odpowiedzialnoscia | Indirect | Poland | ||
Tenneco SpinCo Incorporated | Direct | United States | ||
Tenneco Sverige AB | Indirect | Sweden | ||
Tenneco Walker (Tianjin) Exhaust System Co., Ltd. | Indirect | China | ||
Tenneco Zwickau GmbH | Indirect | Germany | ||
Tenneco-Eberspaecher (Dalian) Exhaust System Co., Ltd. | Indirect | China | ||
Tenneco-Walker (U.K.) Limited | Indirect | United Kingdom | ||
The Pullman Company | Indirect | Delaware | ||
The Tenneco Automotive (UK) Pension Scheme Trustee Limited | Indirect | United Kingdom | ||
Thompson and Stammers (Dunmow) Number 6 Limited | Indirect | United Kingdom | ||
Thompson and Stammers (Dunmow) Number 7 Limited | Indirect | United Kingdom | ||
TM S.r.l. in liquidation | Indirect | Italy | ||
TMC Texas Inc. | Indirect | Delaware | ||
TPR Federal-Mogul Tennessee, Inc. | Indirect | United States | ||
United Piston Ring, Inc. | Indirect | United States | ||
VTD Vakuumtechnik Dresden GmbH | Indirect | Germany | ||
Walker Australia Pty. Limited | Indirect | Australia | ||
Walker Danmark ApS | Indirect | Denmark | ||
Walker Electronic Silencing, Inc. | Indirect | Delaware | ||
Walker Europe, Inc. | Indirect | Delaware | ||
Walker Exhaust (Thailand) Company Limited | Indirect | Thailand | ||
Walker Gillet (Europe) GmbH | Indirect | Germany | ||
Walker Limited | Indirect | United Kingdom | ||
Walker Manufacturing Company | Indirect | Delaware | ||
Walker UK Ltd | Indirect | United Kingdom | ||
Wellworthy Limited | Indirect | United Kingdom |
Company Name | Ownership Type (a) | Primary Jurisdiction | ||
Wimetal Societe Par Actions Simplifiee | Indirect | France | ||
Wuhan Tenneco Exhaust System Co., Ltd. | Indirect | China | ||
Yura Federal Mogul Sejong Ignition Limited Liability Company | Indirect | South Korea |
(a) | Ownership type indicates whether each subsidiary or affiliate is directly owned by Tenneco Inc., indirectly owned by a subsidiary of Tenneco Inc. (in each case, such subsidiary or affiliate may be partially or wholly owned), or a combination thereof. |
/s/ Brian J. Kesseler |
Name: Brian J. Kesseler |
/s/ Jason M. Hollar |
Name: Jason M. Hollar |
/s/ John S. Patouhas |
Name: John S. Patouhas |
/s/ Gregg M. Sherrill |
Name: Gregg M. Sherrill |
/s/ SungHwan Cho |
Name: SungHwan Cho |
/s/ Thomas C. Freyman |
Name: Thomas C. Freyman |
/s/ Denise Gray |
Name: Denise Gray |
/s/ Dennis J. Letham |
Name: Dennis J. Letham |
/s/ Roger B. Porter |
Name: Roger B. Porter |
/s/ James S. Metcalf |
Name: James S. Metcalf |
/s/ David B. Price, Jr. |
Name: David B. Price, Jr. |
/s/ Jane L. Warner |
Name: Jane L. Warner |
1. | I have reviewed this annual report on Form 10-K of Tenneco Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of the registrant’s internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ | BRIAN J. KESSELER |
Brian J. Kesseler | |
Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Tenneco Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of the registrant’s internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ | JASON M. HOLLAR |
Jason M. Hollar | |
Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ BRIAN J. KESSELER |
Brian J. Kesseler |
Chief Executive Officer |
/s/ JASON M. HOLLAR |
Jason M. Hollar |
Executive Vice President and Chief Financial Officer |
Summary of Accounting Policies - Basis of Presentation (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
|
Motorparts | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Prior period reclassification | $ 15 | $ 7 | |
Ride Performance | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Prior period reclassification | $ 5 |
Income Taxes - Reconciliation of our Uncertain Tax Positions (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Uncertain tax positions - | |||
Balance January 1 | $ 224 | $ 112 | $ 111 |
Gross increases in tax positions due to acquisition | 0 | 110 | 0 |
Gross increases in tax positions in current period | 12 | 8 | 6 |
Gross increases in tax positions in prior period | 4 | 7 | 2 |
Gross decreases in tax positions in prior period | (5) | (1) | (2) |
Gross decreases - settlements | (12) | (2) | 0 |
Gross decreases - statute of limitations expired | (8) | (10) | (5) |
Balance December 31 | $ 215 | $ 224 | $ 112 |
Related Party Transactions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The following table is a summary of net sales, purchases, and royalty and other income (expense), net to the Company's related parties for the year ended December 31, 2019 and 2018:
The following table is a summary of amounts due to and from the Company's related parties as of December 31, 2019 and 2018:
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Shareholders' Equity (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock by Class | Total common stock outstanding and changes in common stock issued are as follows:
|
Commitments and Contingencies - Capital and Lease Commitments (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Estimate of authorized expenditures required to complete facilities and projects | $ 106 |
Environmental remediation accrual, undiscounted basis | $ 40 |
Acquisitions and Divestitures - Other Matters (Details) - USD ($) $ / shares in Units, $ in Millions |
Jun. 29, 2019 |
Oct. 19, 2018 |
Dec. 31, 2019 |
Oct. 01, 2018 |
Jun. 30, 2017 |
---|---|---|---|---|---|
Loss Contingencies [Line Items] | |||||
Estimated liability | $ 44 | $ 132 | |||
Awarded to other party (in dollars per share) | $ 12.01 | ||||
Awarded to other party | $ 61 | ||||
Federal-Mogul | |||||
Loss Contingencies [Line Items] | |||||
Capital contribution | $ 56 | ||||
Estimated liability | $ 55 | ||||
Accrued interest | $ 6 |
Derivatives and Hedging Activities |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging Activities | Derivatives and Hedging Activities The Company is exposed to market risk, such as fluctuations in foreign currency exchange rates, commodity prices, equity compensation liabilities, and changes in interest rates, which may result in cash flow risks. For exposures not offset within its operations, the Company enters into various derivative transactions pursuant to its risk management policies, which prohibit holding or issuing derivative financial instruments for speculative purposes. Designation of derivative instruments is performed on a transaction basis to support hedge accounting. The changes in fair value of these hedging instruments are offset in part or in whole by corresponding changes in the fair value or cash flows of the underlying exposures being hedged. The Company assesses the initial and ongoing effectiveness of its hedging relationships in accordance with its documented policy. Foreign Currency Risk The Company manufactures and sells its products in North America, South America, Asia, Europe, and Africa. As a result, the Company’s financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets in which the Company manufactures and sells its products. The Company generally tries to use natural hedges within its foreign currency activities, including the matching of revenues and costs, to minimize foreign currency risk. Where natural hedges are not in place, the Company considers managing certain aspects of its foreign currency activities and larger transactions through the use of foreign currency options or forward contracts. Principal currencies hedged have historically included the U.S. dollar, euro, British pound, Polish zloty, Singapore dollar, and Mexican peso. Concentrations of Credit Risk Financial instruments including cash equivalents and derivative contracts expose the Company to counterparty credit risk for non-performance. The Company’s counterparties for cash equivalents and derivative contracts are banks and financial institutions that meet the Company’s requirement of high credit standing. The Company’s counterparties for derivative contracts are substantial investment and commercial banks with significant experience using such derivatives. The Company manages its credit risk through policies requiring minimum credit standing and limiting credit exposure to any one counterparty and through monitoring counterparty credit risks. The Company’s concentration of credit risk related to derivative contracts at December 31, 2019 and 2018 is not material. Other The Company presents its derivative positions and any related material collateral under master netting agreements on a net basis. For derivatives designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness. Unrealized gains and losses associated with ineffective hedges, determined using the hypothetical derivative method, are recognized in cost of sales in the consolidated statements of income (loss). Derivative gains and losses included in accumulated other comprehensive income (loss) for effective hedges are reclassified into operations upon recognition of the hedged transaction. Derivative gains and losses associated with undesignated hedges are recognized in "Cost of sales" in the consolidated statements of income (loss). Derivative Instruments Foreign currency forward contracts — The Company enters into foreign currency forward purchase and sale contracts to mitigate its exposure to changes in exchange rates on certain intercompany and third-party trade receivables and payables. In managing its foreign currency exposures, the Company identifies and aggregates existing offsetting positions and then hedges residual exposures through third-party derivative contracts. The gains or losses on these contracts is recorded in cost of sales in the consolidated statements of income (loss). The fair value of foreign currency forward contracts are recorded in prepayments and other current assets or accrued expenses and other current liabilities in the consolidated balance sheets. The fair value of the Company's foreign currency forward contracts was a net asset position of less than $1 million at December 31, 2019 and 2018. The following table summarizes by major currency the notional amounts for foreign currency forward purchase and sale contracts as of December 31, 2019 (all of which mature in 2020):
Cash-settled Share Swap Transactions — In the second quarter of 2019, the Company entered into an amended and restated equity swap agreement. The Company selectively uses cash-settled share swaps to reduce market risk associated with its deferred compensation liabilities. These equity deferred compensation liabilities increase as the Company's stock price increases and decrease as the Company's stock price decreases. In contrast, the value of the swap agreement moves in the opposite direction of these liabilities, allowing the Company to fix a portion of the liabilities at a stated amount. As of December 31, 2019, the Company hedged its deferred compensation liability related to approximately 600,000 common share equivalents, an increase from 250,000 common share equivalents as of December 31, 2018. The fair value of the equity swap agreement is recorded in prepayments and other current assets or accrued expenses and other current liabilities in the consolidated balance sheets. The fair value of the Company's equity swap agreement was a net liability position of $1 million and a net asset position of $4 million at December 31, 2019 and 2018. Hedging Instruments Cash Flow Hedges—Commodity Price Risk — The Company’s production processes are dependent upon the supply of certain raw materials that are exposed to price fluctuations on the open market. The primary purpose of the Company’s commodity price forward contract activity is to manage the volatility associated with forecasted purchases for up to eighteen months in the future. The Company monitors its commodity price risk exposures regularly to maximize the overall effectiveness of its commodity forward contracts. Principal raw materials hedged include copper and tin. In certain instances, within this program, foreign currency forwards may be used in order to match critical terms for commodity exposure. The Company has designated these contracts as cash flow hedging instruments. The Company records unrecognized gains and losses in other comprehensive income (loss) (“OCI or OCL”) and makes regular reclassifying adjustments into cost of sales within the consolidated statements of income (loss) when the underlying hedged transaction is recognized in earnings. The Company had commodity derivatives outstanding with an equivalent notional amount of $19 million and $27 million at December 31, 2019 and 2018. Substantially all of the commodity price hedge contracts mature within one year. Net Investment Hedge – Foreign Currency Borrowings — The Company has foreign currency denominated debt, €758 million of which was designated as a net investment hedge in certain foreign subsidiaries and affiliates of the Company. Changes to its carrying value are included in shareholders' equity in the foreign currency translation component of OCL and offset against the translation adjustments on the underlying net assets of those foreign subsidiaries and affiliates, which are also recorded in OCL. The Company’s debt instruments are discussed further in Note 11, Debt and Other Financing Arrangements . The following table is a summary of the carrying value of derivative and non-derivative instruments designated as hedges at December 31, 2019 and 2018:
The following table represents the effects before reclassification into net income of derivative and non-derivative instruments designated as hedges in accumulated other comprehensive income (loss) at December 31, 2019 and 2018:
The Company estimates less than $1 million of net derivative losses included in AOCI as of December 31, 2019 will be reclassified into earnings within the following 12 months. See Note 19, Changes in Accumulated Other Comprehensive Income (Loss) by Component for further information.
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories At December 31, 2019 and 2018, inventory by major classification was as follows:
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Segment and Geographic Area Information - Additional Information (Details) - Segment |
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Mar. 31, 2019 |
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Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Number of operating segments | 2 | 3 | 2 |
Corporate | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Number of operating segments | 4 |
Related Party Transactions Related Party Transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions The parties presented in the tables below, other than Montagewerk Abgastechnik Emden GmbH, became related parties of the Company as a result of the Federal-Mogul Acquisition discussed in Note 3, Acquisitions and Divestitures, with net sales, purchases, and royalty and other income presented being reflective of activity post acquisition date. Amounts presented as Icahn Automotive Group LLC represent the Company's activity with Auto Plus and Pep Boys. See Note 8, Investment in Nonconsolidated Affiliates, for further information on companies within the tables below that represent equity method investments. As part of the Federal-Mogul Acquisition, the Company acquired a redeemable noncontrolling interests related to a subsidiary in India. In accordance with local regulations, the Company initiated the process to make a tender offer of the shares it does not own due to the change in control triggered by the Federal-Mogul Acquisition. The Company entered into separate agreements with IEP subsequent to the Purchase Agreement whereby IEP agreed to fund and execute the tender offer for the shares on behalf of the Company. As a result of finalizing the redemption value, the Company recorded a $53 million loss to income available to common shareholders concurrently with marking the related redeemable noncontrolling interest to its redemption value in the year ended December 31, 2019. The loss to common shareholders was fully absorbed by IEP and resulted in an adjustment to additional paid-in capital. See Note 2, Summary of Significant Accounting Policies, for further information on this redeemable noncontrolling interest. The following table is a summary of net sales, purchases, and royalty and other income (expense), net to the Company's related parties for the year ended December 31, 2019 and 2018:
The following table is a summary of amounts due to and from the Company's related parties as of December 31, 2019 and 2018:
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2019 |
Dec. 31, 2018 |
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Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Treasury stock (in shares) | 14,592,888 | 14,592,888 |
Class A | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 71,727,061 | 71,675,379 |
Treasury stock (in shares) | 14,592,888 | 14,592,888 |
Class B | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 23,793,669 | 23,793,669 |
Treasury stock (in shares) | 0 | 0 |
Summary of Accounting Policies (Policies) |
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Dec. 31, 2019 | |||||||||
Accounting Policies [Abstract] | |||||||||
Basis of Presentation | Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).
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Reclassifications | Reclassifications: Certain amounts in the prior years have been aggregated or disaggregated to conform to current year presentation. These reclassifications included reclassifying amounts related to restructuring and asset impairments from cost of sales (exclusive of depreciation and amortization); selling, general, and administrative expenses; engineering, research, and development; and other income (expense) into a separate financial statement line item within the statements of income (loss). In addition, loss on sale of receivables was reclassified from other income (expense) to interest expense. These reclassifications affected the three and twelve months ended December 31, 2018 and 2017 and have no effect on previously reported net income, other comprehensive income (loss), and the cash provided (used) by operating, investing or financing activities within the consolidated statements of cash flows. In addition, the Company recorded immaterial charges of $7 million in its Motorparts segment in the three months ended June 30, 2019 and $5 million in its Ride Performance segment in the three months ended September 30, 2019, both related to prior periods. |
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Principles of Consolidation | Principles of Consolidation: The Company consolidates into its financial statements the accounts of the Company, all wholly owned subsidiaries, and any partially owned subsidiary it has the ability to control. Control generally equates to ownership percentage, whereby investments more than 50% owned are consolidated, investments in affiliates of 50% or less but greater than 20% are accounted for using the equity method, and investments in affiliates of 20% or less are accounted for using the cost method. See Note 8, Investment in Nonconsolidated Affiliates. |
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Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates. | ||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents: The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents. The carrying value of cash and cash equivalents approximate fair value. |
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Restricted Cash | Restricted Cash: The Company is required to provide cash collateral in connection with certain contractual arrangements and statutory requirements. | ||||||||
Notes and Accounts Receivable | Notes and Accounts Receivable: Notes and accounts receivable are stated at net realizable value, which approximates fair value. Receivables are reduced by an allowance for amounts that may become uncollectible in the future. The allowance is an estimate based on expected losses, current economic and market conditions, and a review of the current status of each customer's trade accounts or notes receivable. A receivable is past due if payments have not been received within the agreed-upon invoice terms. Account balances are charged-off against the allowance when management determines the receivable will not be recovered. |
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Inventories | Inventories: Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) or average cost methods. Work in process includes purchased parts such as substrates coated with precious metals. Cost of inventory includes direct materials, labor, and applicable manufacturing overhead costs. The value of inventories is reduced for excess and obsolescence based on management's review of on-hand inventories compared to historical and estimated future sales and usage.
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Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests: The Company has noncontrolling interests with redemption features. These redemption features could require the Company to make an offer to purchase the noncontrolling interests in the event of a change in control of Tenneco Inc. or certain of its subsidiaries. At December 31, 2019, the Company holds redeemable noncontrolling interests of $44 million which are not currently redeemable, or probable of becoming redeemable. The redemption of these noncontrolling interests is not solely within the Company's control, therefore, they are presented in the temporary equity section of the Company's consolidated balance sheets. The Company does not believe it is probable the redemption features related to these noncontrolling interest securities will be triggered, as a change in control event is generally not probable until it occurs. As such, these noncontrolling interests have not been remeasured to redemption value. In addition, at December 31, 2019, the Company holds redeemable noncontrolling interests of $152 million which are currently redeemable, or probable of becoming redeemable. These noncontrolling interests are also presented in the temporary equity section of the Company's consolidated balance sheets and have been remeasured to redemption value. The Company immediately recognizes changes to redemption value as a component of noncontrolling interest income (loss) in the consolidated statements of income (loss). These redeemable noncontrolling interests include the following:
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Long-Lived Assets | Long-Lived Assets: Long-lived assets, such as property, plant, and equipment and definite-lived intangible assets are recorded at cost or fair value established at acquisition. Definite-lived intangible assets include customer relationships and platforms, patented and unpatented technology, and licensing agreements. Long-lived asset groups are evaluated for impairment when impairment indicators exist. If the carrying value of a long-lived asset group is impaired, an impairment charge is recorded for the amount by which the carrying value of the long-lived asset group exceeds its fair value. Depreciation and amortization are computed principally on a straight-line basis over the estimated useful lives of the assets for financial reporting purposes. Expenditures for maintenance and repairs are expensed as incurred. |
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Goodwill, net | Goodwill, net: Goodwill is determined as the excess of fair value over amounts attributable to specific tangible and intangible assets. Goodwill is evaluated for impairment during the fourth quarter of each year, or more frequently, if impairment indicators exist. An impairment indicator exists when a reporting unit's carrying value exceeds its fair value. When performing the goodwill impairment testing, a reporting units' fair value is based on valuation techniques using the best available information. The assessment of fair value utilizes a combination of the income approach and market approach. The impairment charge is the excess of the goodwill carrying value over the implied fair value of goodwill using a one-step quantitative approach. |
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Trademarks and brand names | Trade Names and Trademarks: Trade names and trademarks are stated at fair value established at acquisition or cost. These indefinite-lived intangible assets are evaluated for impairment during the fourth quarter of each year, or more frequently, if impairment indicators exist. An impairment exists when a trade name and trademarks' carrying value exceeds its fair value. The fair values of these assets are based upon the prospective stream of hypothetical after-tax royalty cost savings discounted at rates that reflect the rates of return appropriate for these intangible assets. The impairment charge is the excess of the assets carrying value over its fair value. |
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Pre-production Design and Development and Tooling Assets | Pre-production Design and Development and Tooling Assets: The Company expenses pre-production design and development costs as incurred unless there is a contractual guarantee for reimbursement from the original equipment (“OE”) customer. Costs for molds, dies, and other tools used to make products sold on long-term supply arrangements for which the Company has title to the assets are capitalized in property, plant, and equipment and amortized to cost of sales over the shorter of the term of the arrangement or over the estimated useful lives of the assets. Costs for molds, dies, and other tools used to make products sold on long-term supply arrangements for which the Company has a contractual guarantee for reimbursement or has the non-cancelable right to use the assets during the term of the supply arrangement from the customer are capitalized in prepayments and other current assets.
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Internal Use Software Assets | Internal Use Software Assets: Certain costs related to the purchase and development of software used in the business operations are capitalized. Costs attributable to these software systems are amortized over their estimated useful lives based on various factors such as the effects of obsolescence, technology, and other economic factors. Additions to capitalized software development costs, including payroll and payroll-related costs for those employees directly associated with developing and obtaining the internal use software, are classified as investing activities in the consolidated statements of cash flows. |
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Income Taxes | Income Taxes: Deferred tax assets and liabilities are recognized on the basis of the future tax consequences attributable to temporary differences that exist between the financial statement carrying value of assets and liabilities and the respective tax values, and net operating losses (“NOL”) and tax credit carryforwards on a taxing jurisdiction basis. Deferred tax assets and liabilities are measured using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. The effect on deferred tax assets and liabilities of a change in tax rates is recorded in the results of operations in the period that includes the enactment date under the law. Deferred income tax assets are evaluated quarterly to determine if valuation allowances are required or should be adjusted. Valuation allowances are established in certain jurisdictions based on a more likely than not standard. The ability to realize deferred tax assets depends on the Company's ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each tax jurisdiction. The Company considers the various possible sources of taxable income when assessing the realization of its deferred tax assets. The valuation allowances recorded against deferred tax assets generated by taxable losses in certain jurisdictions will affect the provision for income taxes until the valuation allowances are released. The Company's provision for income taxes will include no tax benefit for losses incurred and no tax expense with respect to income generated in these jurisdictions until the respective valuation allowance is eliminated. The Company records uncertain tax positions on the basis of a two-step process whereby it is determined whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position, and for those tax positions that meet the more likely than not criteria, the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority is recognized. The Company elected to account for Global Intangible Low-Taxed Income (“GILTI”) as a current-period expense when incurred. |
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Pension and other postretirement benefit plan obligations | Pension and Other Postretirement Benefit Plan Obligations: Pensions and other postretirement employee benefit costs and related liabilities and assets are dependent upon assumptions used in calculating such amounts. These assumptions include discount rates, long term rate of return on plan assets, health care cost trends, compensation, and other factors. Actual results that differ from the assumptions used are accumulated and amortized over future periods, and accordingly, generally affect recognized expense in future periods. The cost of benefits provided by defined benefit pension and other postretirement plans is recorded in the period employees provide service. Future pension expense for certain significant funded benefit plans is calculated using an expected return on plan asset methodology. Investments with registered investment companies, common and preferred stocks, and certain government debt securities are valued at the closing price reported on the active market on which the securities are traded. Corporate debt securities are valued by third-party pricing sources using the multi-dimensional relational model using instruments with similar characteristics. Hedge funds and the collective trusts are valued at net asset value (“NAV”) per share which are provided by the respective investment sponsors or investment advisers.
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Revenue Recognition | Revenue Recognition: The Company accounts for a contract with a customer when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. Revenue is recognized for sales to OE and aftermarket customers when transfer of control of the related good or service has occurred. Revenue from most OE and aftermarket goods and services is transferred to customers at a point in time. The customer is invoiced once transfer of control has occurred and the Company has a right to payment. Typical payment terms vary based on the customer and the type of goods and services in the contract. The period of time between invoicing and when payment is due is not significant. Amounts billed and due from customers are classified as accounts receivable in the consolidated balance sheets. Standard payment terms are less than one year and the Company applies the practical expedient to not assess whether a contract has a significant financing component if the payment terms are less than one year. Performance Obligations: The majority of the Company's customer contracts with OE and aftermarket customers are long-term supply arrangements. The performance obligations are established by the enforceable contract, which is generally considered to be the purchase order but, in some cases could be the delivery release schedule. The purchase order, or related delivery release schedule, is of a duration of less than one year. As such, the Company does not disclose information about remaining performance obligations that have original expected durations of one year or less, for which work has not yet been performed. Rebates: The Company accrues for rebates pursuant to specific arrangements primarily with aftermarket customers. Rebates generally provide for payments to customers based upon the achievement of specified purchase volumes and are recorded as a reduction of sales as earned by such customers. Product Returns: Certain aftermarket contracts with customers include terms and conditions that result in a customer right of return that is accounted for on a gross basis. For these contracts the Company has recorded a refund liability within other accrued liabilities and a return asset within other current assets in the consolidated balance sheets. Shipping and Handling Costs: Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales in the consolidated statements of income (loss). Sales and Sales Related Taxes: The Company collects and remits taxes assessed by various governmental authorities that are both imposed on and concurrent with revenue-producing transactions with its customers. These taxes may include, but are not limited to, sales, use, value-added, and some excise taxes. The collection and remittance of these taxes is reported on a net basis. Contract Balances: Contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date on contracts with customers. The contract assets are transferred to accounts receivable when the rights become unconditional. Contract liabilities primarily relate to contracts where advance payments or deposits have been received, but performance obligations have not yet been met, and therefore, revenue has not been recognized. There have been no impairment losses recognized related to any accounts receivable or contract assets arising from the Company’s contracts with customers.
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Engineering, Research and Development | Engineering, Research, and Development: The Company records engineering, research, and development costs (“R&D”) net of customer reimbursements as they are considered a recovery of cost. | ||||||||
Advertising and Promotion Expenses | Advertising and Promotion Expenses: The Company expenses advertising and promotional expenses as incurred | ||||||||
Foreign currency translation | Foreign Currency Translation: Exchange adjustments related to foreign currency transactions and remeasurement adjustments for foreign subsidiaries whose functional currency is the U.S. dollar are reflected in the consolidated statements of income (loss). Translation adjustments of foreign subsidiaries for which local currency is the functional currency are reflected in the consolidated balance sheets as a component of accumulated other comprehensive income (loss). Transaction gains and losses arising from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency are recognized in earnings as incurred, except for those intercompany balances for which settlement is not planned or anticipated in the foreseeable future. | ||||||||
Asset Retirement Obligations | Asset Retirement Obligations: The Company records asset retirement obligations ("ARO") when liabilities are probable and amounts can be reasonably estimated. The Company's primary ARO activities relate to the removal of hazardous building materials at its facilities.
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Derivative Financial Instruments | Derivative Financial Instruments: For derivative instruments to qualify as hedging instruments, they must be designated as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. Gains and losses related to a hedge are either recognized in income immediately to offset the gain or loss on the hedged item or are deferred and reported as a component of accumulated other comprehensive income (loss) and subsequently recognized in earnings when the hedged item affects earnings. The change in fair value of the ineffective portion of a derivative financial instrument, determined using the hypothetical derivative method, is recognized in earnings immediately. The gain or loss related to derivative financial instruments not designated as hedges are recognized immediately in earnings. Cash flows related to hedging activities are included in the operating section of the consolidated statements of cash flows. |
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New Accounting Pronouncements | New Accounting Pronouncements Adoption of New Accounting Standards Comprehensive Income — In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). The amendments in this update allow a reclassification from accumulated other comprehensive income (loss) to accumulated deficit for stranded tax effects resulting from the Tax Cuts and Jobs Act ("TCJA"). The Company has elected not to adopt the optional reclassification. Leases: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update supersedes the lease requirements in Topic 840, Leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flow arising from a lease. The Company adopted this update on January 1, 2019 using the modified retrospective method without the recasting of comparative periods’ financial information, as permitted by the transition guidance. See Note 16, Leases. Revenue Recognition: The Company adopted ASU 2014-09, as incorporated into Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers ("ASC 606"), on January 1, 2018, which required it to recognize revenue when a customer obtains control rather than when substantially all risks and rewards of a good or service have been transferred. ASU 2014-09 was adopted by applying the modified retrospective method under which the cumulative effect is recognized in equity at the date of initial application. ASC 606 has been applied to all contracts at the date of initial application. The cumulative effect of the adoption was recognized as a decrease to accumulated deficit of $1 million. Income Taxes: In October 2016, the FASB issued ASU 2016-16, Income Taxes—Intra Entity Transfers of Assets Other Than Inventory (Topic 740). The new standard changes the accounting for income taxes when a company transfers certain tangible and intangible assets, such as equipment or intellectual property, between entities in different tax jurisdictions. The new standard does not change the current accounting for the income taxes related to transfers of inventory. The Company adopted this ASU on January 1, 2018 using the modified retrospective method. The cumulative effect of the adoption was recognized as an increase to accumulated deficit of $1 million. Accounting Standards Issued But Not Yet Adopted Intangibles: In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendments in this update are effective for interim and annual periods for the Company beginning on January 1, 2020. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is currently evaluating the potential effect of this new guidance on its consolidated financial statements. Retirement Benefits: In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20). The amendments in this update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. The amendments in this update are effective for fiscal years ending after December 15, 2020 with early adoption permitted. The Company evaluated the potential effect of this new guidance on its consolidated financial statements and concluded that it will not early adopt this standard. Fair Value Measurements: In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820). The new guidance modifies disclosure requirements related to fair value measurement. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Implementation on a prospective or retrospective basis varies by specific disclosure requirement. The standard also allows for early adoption of any removed or modified disclosures upon issuance of this ASU while delaying adoption of the additional disclosures until their effective date. The Company is currently evaluating the potential effect of this new guidance on its consolidated financial statements. Income Taxes: In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for the Company in the first quarter of 2021 on a prospective basis, and early adoption is permitted. The Company is currently evaluating the potential effect of this new guidance on its consolidated financial statements. |
Description of Business |
12 Months Ended |
---|---|
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Tenneco Inc. (“Tenneco” or “the Company”) was formed under the laws of Delaware in 1996. Tenneco designs, manufactures, markets, and sells products and services for light vehicle, commercial truck, off-highway, industrial, and aftermarket customers. The Company is one of the world’s leading manufacturers of innovative clean air, powertrain, and ride performance products and systems, and serves both original equipment manufacturers (“OEM”) and replacement markets worldwide. On January 10, 2019, the Company completed the acquisition of a 90.5% ownership interest in Öhlins Intressenter AB (“Öhlins”, the “Öhlins Acquisition”), a Swedish technology company that develops premium suspension systems and components for the automotive and motorsport industries. |
Shareholders' Equity - Common Stock Outstanding (Details) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Treasury stock (in shares) | 14,592,888 | 14,592,888 | |
Class A | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Shares issued, beginning balance (in shares) | 71,675,379 | 66,033,509 | 65,891,930 |
Share issuances (in shares) | 0 | 5,651,177 | 0 |
Issuance (repurchased) pursuant to benefit plans (in shares) | 113,916 | 19,919 | 34,760 |
Restricted stock forfeited and withheld for taxes (in shares) | (70,672) | (51,049) | (126,682) |
Exercised (in shares) | 8,438 | 21,823 | 233,501 |
Shares issued, ending balance (in shares) | 71,727,061 | 71,675,379 | 66,033,509 |
Treasury stock (in shares) | 14,592,888 | 14,592,888 | 14,592,888 |
Total shares outstanding (in shares) | 57,134,173 | 57,082,491 | 51,440,621 |
Class B | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Shares issued, beginning balance (in shares) | 23,793,669 | 0 | |
Share issuances (in shares) | 0 | 23,793,669 | |
Issuance (repurchased) pursuant to benefit plans (in shares) | 0 | 0 | |
Restricted stock forfeited and withheld for taxes (in shares) | 0 | 0 | |
Exercised (in shares) | 0 | 0 | |
Shares issued, ending balance (in shares) | 23,793,669 | 23,793,669 | 0 |
Treasury stock (in shares) | 0 | 0 | |
Total shares outstanding (in shares) | 23,793,669 | 23,793,669 |
Inventories (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | At December 31, 2019 and 2018, inventory by major classification was as follows:
|
Share-Based Compensation - Narrative (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Oct. 01, 2018 |
Sep. 12, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Authorized common stock (in shares) | 135,000,000 | 250,000,000 | |||
Award performance period | 1 year | ||||
Restriction period for restricted common stock | 3 years | ||||
Total Intrinsic value of options exercised | $ 1,000,000 | $ 1,000,000 | $ 6,000,000 | ||
Total fair value of shares vested | $ 0 | 0 | 2,000,000 | ||
Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.00% | ||||
Tranche Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.00% | ||||
Tranche Three | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.00% | ||||
PSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restriction period for restricted common stock | 3 years | ||||
Unrecognized compensation expense | $ 40,000,000 | ||||
Unrecognized compensation expense period | 2 years | ||||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total fair value of restricted shares vested | $ 8,000,000 | 11,000,000 | 14,000,000 | ||
LTPU and RSU | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restriction period for restricted common stock | 3 years | ||||
LTPU and RSU | Performance Targets, Vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 50.00% | ||||
LTPU and RSU | Market Targets, Vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 50.00% | ||||
Cash Settled Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 3,000,000 | (1,000,000) | 4,000,000 | ||
Share-Settled RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | 19,000,000 | 11,000,000 | 11,000,000 | ||
Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense | 0 | ||||
Cash received from stock option exercises | 1,000,000 | 1,000,000 | 8,000,000 | ||
Tax benefit from exercise of stock options | $ 1,000,000 | $ 1,000,000 | $ 2,000,000 | ||
2006 Long-Term Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Authorized common stock (in shares) | 3,000,000.0 | ||||
Shares of common stock remain authorized for delivery (in shares) | 1,964,372 | ||||
2006 Long-Term Incentive Plan | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock remain authorized for delivery (in shares) | 14,800,000 |
Segment and Geographic Area Information - Geographic Information Table (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Schedule Of Geographical Information [Line Items] | |||||||||||
Revenues from external customers | $ 4,143 | $ 4,319 | $ 4,504 | $ 4,484 | $ 4,278 | $ 2,371 | $ 2,533 | $ 2,581 | $ 17,450 | $ 11,763 | $ 9,274 |
Long-lived assets | 4,687 | 4,268 | 4,687 | 4,268 | |||||||
United States | |||||||||||
Schedule Of Geographical Information [Line Items] | |||||||||||
Revenues from external customers | 6,203 | 4,488 | 3,632 | ||||||||
Long-lived assets | 1,363 | 1,234 | 1,363 | 1,234 | |||||||
China | |||||||||||
Schedule Of Geographical Information [Line Items] | |||||||||||
Revenues from external customers | 2,377 | 1,553 | 1,283 | ||||||||
Long-lived assets | 768 | 687 | 768 | 687 | |||||||
Germany | |||||||||||
Schedule Of Geographical Information [Line Items] | |||||||||||
Revenues from external customers | 2,227 | 1,212 | 798 | ||||||||
Long-lived assets | 539 | 543 | 539 | 543 | |||||||
Poland | |||||||||||
Schedule Of Geographical Information [Line Items] | |||||||||||
Revenues from external customers | 925 | 731 | 488 | ||||||||
Long-lived assets | 331 | 319 | 331 | 319 | |||||||
United Kingdom | |||||||||||
Schedule Of Geographical Information [Line Items] | |||||||||||
Revenues from external customers | 568 | 499 | 482 | ||||||||
Long-lived assets | 130 | 116 | 130 | 116 | |||||||
Mexico | |||||||||||
Schedule Of Geographical Information [Line Items] | |||||||||||
Revenues from external customers | 959 | 543 | 416 | ||||||||
Long-lived assets | 277 | 239 | 277 | 239 | |||||||
India | |||||||||||
Schedule Of Geographical Information [Line Items] | |||||||||||
Revenues from external customers | 475 | 316 | 216 | ||||||||
Long-lived assets | 182 | 167 | 182 | 167 | |||||||
Turkey | |||||||||||
Schedule Of Geographical Information [Line Items] | |||||||||||
Revenues from external customers | 5 | 7 | 9 | ||||||||
Long-lived assets | 250 | 276 | 250 | 276 | |||||||
Other Foreign | |||||||||||
Schedule Of Geographical Information [Line Items] | |||||||||||
Revenues from external customers | 3,711 | 2,414 | $ 1,950 | ||||||||
Long-lived assets | $ 847 | $ 687 | $ 847 | $ 687 |
Segment and Geographic Area Information |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Geographic Area Information | Segment and Geographic Area Information As previously announced, the Company intends to separate its businesses to form two new, independent, publicly traded companies, New Tenneco and DRiV. The New Tenneco business consists of two existing operating segments, Clean Air and Powertrain:
The Company began to manage and report its DRiV businesses through two new operating segments, in the first quarter of 2019, as compared to the three operating segments it had previously reported. The DRiV operating segments are Motorparts and Ride Performance. The new Motorparts operating segment consists of the previously reported Aftermarket operating segment as well as the aftermarket portion of the previously reported Motorparts operating segment. The Ride Performance operating segment consists of the previously reported Ride Performance operating segment as well as the OE Braking business that was included in the previously reported Motorparts operating segment:
Costs related to other business activities, primarily corporate headquarter functions, are disclosed separately from the four operating segments as "Corporate." Prior period operating segment results have been conformed to reflect the Company's current operating segments. Management uses EBITDA including noncontrolling interests as the key performance measure of segment profitability and uses the measure in its financial and operational decision-making processes, for internal reporting, and for planning and forecasting purposes to effectively allocate resources. EBITDA including noncontrolling interests is defined as earnings before interest expense, income taxes, noncontrolling interests, and depreciation and amortization. Segment assets are not presented as it is not a measure reviewed by the Chief Operating Decision Maker in allocating resources and assessing performance. EBITDA including noncontrolling interests should not be considered a substitute for results prepared in accordance with US GAAP and should not be considered an alternative to net income, which is the most directly comparable financial measure to EBITDA including noncontrolling interests that is in accordance with US GAAP. EBITDA including noncontrolling interests, as determined and measured by the Company, should not be compared to similarly titled measures reported by other companies. Segment results for 2019, 2018, and 2017 are as follows:
Segment EBITDA including noncontrolling interests and the reconciliation to earnings before interest expense, income taxes, and noncontrolling interests are as follow:
The following customers accounted for 10% or more of the Company's net sales in the last three years. The net sales to both customers were across all segments.
Disaggregation of revenue Original Equipment Value added: OE revenue is generated from providing original equipment manufacturers and servicers with products for automotive, heavy duty, and industrial applications. Supply relationships typically extend over the life of the related vehicle, subject to interim design and technical specification revisions, and do not require the customer to purchase a minimum quantity. Substrate/Passthrough sales: Generally, in connection with the sale of exhaust systems to certain OE manufacturers, the Company purchases catalytic converters and diesel particulate filters or components thereof including precious metals (“substrates”) on behalf of its customers which are used in the assembled system. These substrates are included in inventory and are “passed through” to the customer at cost, plus a small margin. Since the Company takes title to the substrate inventory and has responsibility for both the delivery and quality of the finished product including the substrates, the revenues and related expenses are recorded at gross amounts. Aftermarket Aftermarket revenue is generated from providing products for the global vehicle aftermarket to a wide range of warehouse distributors, retail parts stores, and mass merchants that distribute these products to customers ranging from professional service providers to “do-it-yourself” consumers. Revenue from contracts with customers is disaggregated by product lines, as it depicts the nature and amount of the Company’s revenue that is aligned with the Company's key growth strategies. In the following table, revenue is disaggregated accordingly:
The following table shows the asset expenditure information by reportable segments:
The Other unallocated assets are comprised of software additions not included in segment information.
|
Related Party Transactions (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Related Party Transaction [Line Items] | |||
Net Sales | $ 0 | $ 0 | $ 0 |
Anqing TP Goetze Piston Ring Company Limited | |||
Related Party Transaction [Line Items] | |||
Net Sales | 7 | 0 | |
Purchase from related party | 59 | 16 | |
Royalty and Other Income(Expense) | 3 | 0 | |
Receivables | 1 | 1 | |
Payables and accruals | 26 | 22 | |
Anqing TP Powder Metallurgy Company Limited | |||
Related Party Transaction [Line Items] | |||
Net Sales | 1 | 1 | |
Purchase from related party | 3 | 1 | |
Royalty and Other Income(Expense) | 1 | 0 | |
Receivables | 0 | 1 | |
Payables and accruals | 1 | 1 | |
Dongsuh Federal-Mogul Industrial Co., Ltd. | |||
Related Party Transaction [Line Items] | |||
Net Sales | 4 | 1 | |
Purchase from related party | 11 | 2 | |
Royalty and Other Income(Expense) | 0 | 0 | |
Receivables | 0 | 1 | |
Payables and accruals | 2 | 2 | |
Federal-Mogul Powertrain Otomotiv A.S. | |||
Related Party Transaction [Line Items] | |||
Net Sales | 69 | 11 | |
Purchase from related party | 257 | 53 | |
Royalty and Other Income(Expense) | 4 | 4 | |
Receivables | 8 | 9 | |
Payables and accruals | 31 | 16 | |
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti. | |||
Related Party Transaction [Line Items] | |||
Net Sales | 0 | 0 | |
Purchase from related party | 7 | 13 | |
Royalty and Other Income(Expense) | 0 | 0 | |
Receivables | 0 | 0 | |
Payables and accruals | 0 | 1 | |
Federal-Mogul TP Liners, Inc. | |||
Related Party Transaction [Line Items] | |||
Net Sales | 16 | 2 | |
Purchase from related party | 54 | 14 | |
Royalty and Other Income(Expense) | 2 | 4 | |
Receivables | 2 | 2 | |
Payables and accruals | 7 | 7 | |
Frenos Hidraulicos Auto | |||
Related Party Transaction [Line Items] | |||
Net Sales | 0 | ||
Purchase from related party | 1 | ||
Royalty and Other Income(Expense) | 0 | ||
Icahn Automotive Group LLC | |||
Related Party Transaction [Line Items] | |||
Net Sales | 180 | 52 | |
Purchase from related party | 0 | 0 | |
Royalty and Other Income(Expense) | 5 | 1 | |
Receivables | 52 | 60 | |
Payables and accruals | 10 | 12 | |
Montagewerk Abgastechnik Emden GmbH | |||
Related Party Transaction [Line Items] | |||
Net Sales | 7 | 1 | |
Purchase from related party | 0 | 0 | |
Royalty and Other Income(Expense) | 0 | 0 | |
Receivables | 1 | 0 | |
Payables and accruals | 0 | 0 | |
PSC Metals, Inc. | |||
Related Party Transaction [Line Items] | |||
Net Sales | 0 | ||
Purchase from related party | 0 | ||
Royalty and Other Income(Expense) | 2 | ||
Farloc Argentina SAIC | |||
Related Party Transaction [Line Items] | |||
Receivables | 1 | 0 | |
Payables and accruals | $ 0 | $ 0 |
Share-Based Compensation |
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Text Block [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation The Company's current long-term incentive compensation plan, which was originally adopted in 2006 and amended in 2009, 2013, and 2018, is known as the Tenneco Inc. 2006 Long-Term Incentive Plan ("2006 LTIP"). The types of awards that may be granted under the 2006 LTIP are stock-options (both incentive and non-qualified stock options), stock appreciation rights ("SARs"), Full Value Awards (including bonus stock, stock units, restricted stock, restricted stock units ("RSUs"), deferred stock units, performance stock, and performance stock units ("PSUs")), and cash incentive awards (including long-term performance units ("LTPUs") and cash settled RSUs). On September 12, 2018, the stockholders of the Company approved an amendment to the 2006 LTIP to increase the shares of common stock available thereunder to 3.0 million. Share-settled awards are settled through the issuance of new shares of Class A Common Stock. As of December 31, 2019, up to 14.8 million shares of the Company's Class A Common Stock are authorized to be issued under its 2006 LTIP, of which approximately 1,964,372 shares remain authorized for granting under the plan. In 2018, the Company prospectively changed its vesting policy regarding retirement eligibility and now require a retirement eligible employee (or an employee who becomes retirement eligible) to provide at least one year of service from the grant date in order for the award to vest. If an employee becomes retirement eligible after the first year of vesting but before completion of the three-year term, the Company amortizes the expense for the share-based awards over a period starting at the grant date to the date an employee becomes retirement eligible. Prior to 2018, for employees eligible to retire at grant date, the Company immediately expensed the granted awards. Director restricted stock awards generally vest on the date of grant. Stock options, RSUs (both cash-settled and share-settled) and restricted stock are time-based service awards and generally vest according to a three-year graded vesting schedule. One-third of the award will vest on the first anniversary of the grant date, one-third of the award will vest on the second anniversary, and one-third of the award will vest on the third anniversary. LTPU and PSU awards generally have a three-year performance period and cliff vest at the end of the period based upon achievement of performance and market targets established at the time of grant. Generally, 50% of the award is based on performance targets and 50% is based on market targets. The market target for both LTPUs and PSUs is Company total shareholder return (TSR) percentile ranking among peer companies with TSR defined as change in stock price plus dividends paid divided by beginning stock price. The LTPUs have two performance targets, Cumulative EBITDA and Cumulative free cash flow, which are defined in the award. The 2018 PSUs have one performance target, Cumulative economic value added, which is defined in the award. Director restricted stock, restricted stock and RSUs (cash-settled and share-settled) will participate in any dividends during the vesting period, which are subject to the same vesting terms of the award. The dividends are generally paid in cash on the settlement date of the award. The fair value of restricted stock and RSUs (cash-settled and share-settled) are determined using the average of the high and low trading price of the Company's common stock on the date of measurement. The fair value of LTPU’s and PSUs are determined using the probability weighted factors for performance conditions combined with Monte Carlo simulation model for market conditions. The Monte Carlo model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award and calculated the fair value of the award. The starting stock price is based on the trailing 20-day closing stock price as of the beginning of the performance period and the closing stock price on the valuation date, as well as the respective stock prices for component companies. The risk-free rate is based on yields observed on the U.S. Treasury constant maturity notes with a term equal to the remaining term of the award being measured. Expected volatilities utilized in the model are based on historical volatility of the Company and the companies in the S&P 500 index using daily stock price returns prior to the valuation date, commensurate with the remaining performance period at the measurement date. The cross correlation among stock price returns of the Company and each of the component companies in the S&P 500 with the S&P 500 Index are calculated based on daily returns over the trailing period commensurate with the remainder of the performance period at the valuation date. For restricted stock, share-settled RSUs and PSUs that have not yet vested, the Company estimates forfeitures by taking the average of the past actual forfeiture rate for these grants. Cash-Settled Awards The Company has granted RSUs and LTPUs to certain key employees that are payable in cash. These awards are classified as liabilities and are valued based on the fair value of the award at the grant date and are remeasured at each reporting date until settlement with compensation expense being recognized in proportion to the completed requisite period up until date of settlement. At December 31, 2019, the LTPUs outstanding included a three-year grant for 2017-2019 payable in the first quarter of 2020. Total share-based compensation expense (net of taxes) for the cash-settled awards was expense of $3 million, a benefit of $1 million, and expense of $4 million for the years ended December 31, 2019, 2018, and 2017. Share-based compensation expense is included in selling, general and administrative expenses in the consolidated statements of income (loss). As of December 31, 2019, no unrecognized costs on the cash-settled awards remain. Share-Settled Awards The Company has granted restricted stock and stock options to its directors and certain key employees. In addition, beginning in 2018, the Company has granted RSUs and PSUs that are payable in common stock to certain key employees. These awards are settled in shares upon vesting with compensation expense being recognized based on the grant date fair value recognized ratably over the requisite service period if it is probable the performance target related to the PSUs will be achieved and subsequently adjusted if the probability assessment changes. Total share-based compensation expense (net of taxes) for the share-settled awards was $19 million, $11 million, and $11 million for the years ended December 31, 2019, 2018, and 2017. Share-based compensation expense is included in selling, general and administrative expenses in the consolidated statements of income (loss). Stock Options The Company's nonqualified stock options generally have seven-year terms. There have been no stock options granted since 2014 and all options are currently vested. There was no unrecognized compensation cost related to the Company's stock option awards as of December 31, 2019. The following table reflects the status and activity for all options to purchase common stock for the period indicated:
Cash received from stock option exercises was less than $1 million, $1 million, and $8 million for the years ended December 31, 2019, 2018, and 2017. Stock options exercised generated a tax shortfall of less than $1 million, a tax shortfall of less than $1 million, and an excess tax benefit of $2 million for the years ended December 31, 2019, 2018, and 2017. As of December 31, 2019, all outstanding options are exercisable. The total intrinsic value of options exercised during the years ended December 31, 2019, 2018, and 2017 was less than $1 million, less than $1 million, and $6 million. No options vested in 2019 or 2018. The total fair value of shares vested from options that were granted prior to 2015 was $2 million for the year ended December 31, 2017. Restricted Stock, Share-Settled RSUs and PSUs The following table reflects the status for all nonvested restricted stock, share-settled RSUs, and PSUs for the period indicated:
At December 31, 2019, the PSUs outstanding represent a three-year grant for 2018-2020 payable in the first quarter of 2021 and a three-year grant for 2019-2021 payable in the first quarter of 2022. The total fair value of restricted stock vested was $8 million, $11 million, and $14 million for the years ended December 31, 2019, 2018, and 2017. At December 31, 2019, approximately $40 million of total unrecognized compensation costs is expected to be recognized on the share-settled awards over a weighted-average period of approximately two years.
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Pension Plans, Postretirement and Other Employee Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans, Postretirement and Other Employee Benefits | Pension Plans, Postretirement and Other Employee Benefits Defined Contribution Plans The Company sponsors defined contribution plans that provide Company matching contributions for eligible U.S. salaried and hourly employees. Contributions are also made to certain non-U.S. defined contribution plans. The Company recorded expense for these defined contribution plans of approximately $76 million, $43 million, and $29 million for the years ended December 31, 2019, 2018 and 2017. Defined Benefit Plans The Company sponsors defined benefit pension plans and health care and life insurance benefits for certain employees and retirees around the world. There are also unfunded nonqualified pension plans primarily covering U.S. executives, which are frozen with respect to future benefit accruals. The funding policy for defined benefit pension plans is to contribute the minimum required by applicable laws and regulations or to directly pay benefit payments where appropriate. At December 31, 2019, all legal funding requirements had been met. The Company expects to contribute $49 million to its U.S. pension plans, $43 million to its non-U.S. pension plans, and $25 million to its other postretirement plans in 2020. Other Benefits The Company also provides benefits to former or inactive employees paid after employment but before retirement. The liabilities for these postemployment benefits were $73 million and $75 million at December 31, 2019 and 2018. Significant Events In December 2019, the Company approved an amendment for one of its U.S. postretirement benefit plans that eliminated health care and life insurance benefits in retirement for active salaried and nonunion hourly employees if benefits are not commenced by the earlier of (i) one-year from the date of separation, or (ii) July 1, 2021. In addition, the Company approved an amendment for another of its U.S. postretirement benefit plans to eliminate health care benefits for certain retirees. These actions reduced the Company's obligations by $17 million with a corresponding increase of $13 million to AOCI (net of taxes of $4 million) at December 31, 2019 and a non-cash curtailment gain of $7 million for the year ended December 31, 2019. The $17 million is being amortized on a straight-line basis as a reduction to net periodic postretirement benefit cost over participants' average remaining service periods or remaining life expectancy. During 2019, the Company also offered a voluntary lump sum window for one of its U.S. defined benefit pension plans to terminated vested participants that met certain eligibility criteria. These benefits were paid in December 2019 out of the pension plan assets and resulted in a non-cash settlement charge of $5 million for the year ended December 31, 2019. In December 2018, the Company approved an amendment for one of its U.S. postretirement health care benefit plans. Beginning June 1, 2019, eligible retirees that opt to receive benefits will receive a fixed subsidiary payment to purchase health care benefits on a marketplace exchange in lieu of the original plan’s medical benefits. The amendments to the plan resulted in a plan remeasurement and recognition of a negative plan amendment, which reduced the Company's obligation by $66 million with a corresponding increase of $50 million in AOCI (net of taxes of $16 million) as of December 31, 2018. The $66 million is being amortized on a straight-line basis as a reduction to net periodic postretirement benefit cost over participants' average remaining service periods or remaining life expectancy. As a result of the Federal-Mogul Acquisition, the Company assumed $848 million in underfunded defined benefit pension and other postretirement benefit obligations. In February 2016, the Company launched a voluntary program to buy out active employees and retirees who had earned benefits in the U.S. pension plans. As of December 31, 2016, this program had been substantially completed with cash payments to those who elected to take the buyout made from pension plan assets in the fourth quarter of 2016. In connection with this program the Company contributed $18 million into the pension trust and recognized a non-cash charge of $72 million. The program was completed in the first quarter of 2017, at which time the Company contributed another $10 million and recognize a non-cash charge of $6 million during the year ended December 31, 2017. The measurement date for all defined benefit plans is December 31. The following provides a reconciliation of the plans’ benefit obligations, plan assets, and funded status as of December 31, 2019 and 2018:
Amounts recognized on the consolidated balance sheets consist of the following at December 31, 2019 and 2018:
(a) Included in "Pension and postretirement benefits" within in the consolidated balance sheets is postemployment benefits of $73 million and $75 million at December 31, 2019 and 2018 which are not included in the tables above. Amounts recognized in accumulated other comprehensive loss for pension and postretirement benefits, inclusive of tax effects, consist of the following components at December 31, 2019 and 2018:
Information for defined benefit plans with projected benefit obligations in excess of plan assets:
Information for pension plans with accumulated benefit obligations in excess of plan assets:
The accumulated benefit obligation for all pension plans is $2,315 million and $2,225 million at December 31, 2019 and 2018. Net periodic pension and postretirement benefits costs for the years 2019, 2018 and 2017, consist of the following components:
The following assumptions were used in the accounting for the pension and other postretirement benefits plans for the years of 2019, 2018, and 2017:
Estimated amounts to be amortized from accumulated other comprehensive loss into net periodic benefit cost in the year ending December 31, 2020 based on December 31, 2019 plan measurements:
Estimated future benefit payments are as follows:
Health Care Trend The weighted-average assumed health care cost trend rate used in determining next year's postretirement health care benefits are as follows:
The assumed health care cost trend rate has a significant effect on the amounts reported for other postretirement benefits plans. The following table illustrates the sensitivity to a change in the assumed health care cost trend rate:
Long-term Rate of Return The Company's expected return on assets is established annually through analysis of anticipated future long-term investment performance for the plan based upon the asset allocation strategy and is primarily a long-term prospective rate. An analysis was performed in December 2019 resulting in changes to the expected long-term rate of return on assets. The weighted-average long-term rate of return on assets for the U.S. pension plans was 6.3% at both December 31, 2019 and 2018. The expected long-term rate of return on plan assets used in determining pension expense for non-U.S. plans is determined in a similar manner to the U.S. plans and decreased from 4.0% at December 31, 2018 to 3.5% at December 31, 2019. Plan Assets Certain pension plans sponsored by the Company invest in a diversified portfolio consisting of an array of asset classes that attempts to maximize returns while minimizing volatility. These asset classes include developed market equities, emerging market equities, private equity, global high quality and high yield fixed income, real estate, and absolute return strategies. U.S. Plans: The U.S. investment strategy mitigates risk by incorporating diversification across appropriate asset classes to meet the plans' objectives. It is intended to reduce risk, provide long-term financial stability for the plan, and maintain funded levels that meet long-term plan obligations while preserving sufficient liquidity for near-term benefit payments. Risk assumed is considered appropriate for the return anticipated and consistent with the diversification of plan assets. Approximately 51% of the U.S. plan assets were invested in actively managed investment funds. The Company’s investment strategy includes a target asset allocation of 55% equity investments, 20% fixed income investments, 5% debt securities, and 20% in other investment types including hedge funds. Non-U.S. Plans: The Company's non-U.S. plans are individually managed to different target levels depending on the investing environment in each country and the funded status of each plan, with a reduction in the allocation of assets to equity and fixed income securities at higher funded ratios. The insurance contracts guarantee a minimum rate of return. The Company has no input into the investment strategy of the assets underlying the contracts, but they are typically heavily invested in active bond markets and are highly regulated by local law. Pension plan assets were invested in the following classes of securities:
The assets of some of the Company's 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. The following table presents the Company’s defined benefit plan assets measured at fair value by asset class:
The Company's level 1 assets were valued using market prices based on daily net asset value ("NAV") or prices available daily through a public stock exchange. Its level 2 assets were valued primarily using market prices, sometimes net of estimated realization expenses, and based on broker/dealer markets or in commingled funds where NAV is not available daily or publicly. For insurance contracts, the estimated surrender value of the policy was used to estimate fair market value. The table below summarizes the changes in the fair value of the Level 3 assets:
The following table contains information about significant concentrations of risk, including all individual assets that make up more than 5% of the total assets and any direct investments in Tenneco stock:
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Supplemental Guarantor Condensed Consolidating Financial Statements - Statement of Comprehensive Income Loss (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
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Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Net sales and operating revenues: | |||||||||||
External | $ 17,450 | $ 11,763 | $ 9,274 | ||||||||
Affiliated companies | 0 | 0 | 0 | ||||||||
Net sales and operating revenues | $ 4,143 | $ 4,319 | $ 4,504 | $ 4,484 | $ 4,278 | $ 2,371 | $ 2,533 | $ 2,581 | 17,450 | 11,763 | 9,274 |
Costs and expenses | |||||||||||
Cost of sales (exclusive of depreciation and amortization) | 3,581 | 3,660 | 3,801 | 3,870 | 3,673 | 2,002 | 2,134 | 2,193 | 14,912 | 10,002 | 7,771 |
Selling, general, and administrative | 1,138 | 752 | 632 | ||||||||
Depreciation and amortization | 673 | 345 | 226 | ||||||||
Engineering, research, and development | 324 | 200 | 158 | ||||||||
Restructuring charges and asset impairments | 126 | 117 | 47 | ||||||||
Goodwill and intangible impairment charge | 241 | 3 | 11 | ||||||||
Costs and expenses | 17,414 | 11,419 | 8,845 | ||||||||
Other income (expense) | |||||||||||
Non-service pension and postretirement benefit (costs) credits | (11) | (20) | (16) | ||||||||
Loss on extinguishment of debt | 0 | (10) | (1) | ||||||||
Equity in earnings (losses) of nonconsolidated affiliates, net of tax | 43 | 18 | (1) | ||||||||
Other income (expense), net | 53 | (10) | 2 | ||||||||
Total other expense (income) | 85 | (22) | (16) | ||||||||
Earnings (loss) before interest expense, income taxes, and noncontrolling interests | (144) | 148 | 141 | (24) | (23) | 112 | 111 | 122 | 121 | 322 | 413 |
Interest expense: | |||||||||||
External, net of interest capitalized | (322) | (148) | (77) | ||||||||
Affiliated companies, net of interest income | 0 | 0 | 0 | ||||||||
Earnings (loss) before income taxes, noncontrolling interests and equity in net income from affiliated companies | (201) | 174 | 336 | ||||||||
Income tax (expense) benefit | (19) | (63) | (71) | ||||||||
Equity in net income (loss) from affiliated companies | 0 | 0 | 0 | ||||||||
Net income (loss) | (220) | 111 | 265 | ||||||||
Less: Net income attributable to noncontrolling interests | 114 | 56 | 67 | ||||||||
Net income (loss) attributable to Tenneco Inc. | $ (313) | $ 70 | $ 26 | $ (117) | $ (109) | $ 57 | $ 47 | $ 60 | (334) | 55 | 198 |
Comprehensive income (loss) attributable to Tenneco Inc. | (353) | (99) | 319 | ||||||||
Reclass & Elims | |||||||||||
Net sales and operating revenues: | |||||||||||
External | 0 | 0 | 0 | ||||||||
Affiliated companies | (1,984) | (1,331) | (1,180) | ||||||||
Net sales and operating revenues | (1,984) | (1,331) | (1,180) | ||||||||
Costs and expenses | |||||||||||
Cost of sales (exclusive of depreciation and amortization) | (1,984) | (1,331) | (1,180) | ||||||||
Selling, general, and administrative | 0 | 0 | 0 | ||||||||
Depreciation and amortization | 0 | 0 | 0 | ||||||||
Engineering, research, and development | 0 | 0 | 0 | ||||||||
Restructuring charges and asset impairments | 0 | 0 | 0 | ||||||||
Goodwill and intangible impairment charge | 0 | 0 | 0 | ||||||||
Costs and expenses | (1,984) | (1,331) | (1,180) | ||||||||
Other income (expense) | |||||||||||
Non-service pension and postretirement benefit (costs) credits | 0 | 0 | 0 | ||||||||
Loss on extinguishment of debt | 0 | 0 | |||||||||
Equity in earnings (losses) of nonconsolidated affiliates, net of tax | 0 | 0 | 0 | ||||||||
Other income (expense), net | 0 | (18) | (53) | ||||||||
Total other expense (income) | 0 | (18) | (53) | ||||||||
Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 0 | (18) | (53) | ||||||||
Interest expense: | |||||||||||
External, net of interest capitalized | 0 | 0 | 0 | ||||||||
Affiliated companies, net of interest income | 0 | 0 | 0 | ||||||||
Earnings (loss) before income taxes, noncontrolling interests and equity in net income from affiliated companies | 0 | (18) | (53) | ||||||||
Income tax (expense) benefit | 0 | 0 | 0 | ||||||||
Equity in net income (loss) from affiliated companies | (169) | (319) | (414) | ||||||||
Net income (loss) | (169) | (337) | (467) | ||||||||
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Net income (loss) attributable to Tenneco Inc. | (169) | (337) | (467) | ||||||||
Comprehensive income (loss) attributable to Tenneco Inc. | (104) | (251) | (467) | ||||||||
Guarantor Subsidiaries | |||||||||||
Net sales and operating revenues: | |||||||||||
External | 6,390 | 4,678 | 3,889 | ||||||||
Affiliated companies | 909 | 606 | 540 | ||||||||
Net sales and operating revenues | 7,299 | 5,284 | 4,429 | ||||||||
Costs and expenses | |||||||||||
Cost of sales (exclusive of depreciation and amortization) | 6,290 | 4,551 | 3,773 | ||||||||
Selling, general, and administrative | 669 | 430 | 391 | ||||||||
Depreciation and amortization | 325 | 153 | 91 | ||||||||
Engineering, research, and development | 136 | 94 | 77 | ||||||||
Restructuring charges and asset impairments | 62 | 20 | 4 | ||||||||
Goodwill and intangible impairment charge | 172 | 3 | 0 | ||||||||
Costs and expenses | 7,654 | 5,251 | 4,336 | ||||||||
Other income (expense) | |||||||||||
Non-service pension and postretirement benefit (costs) credits | 2 | (13) | (18) | ||||||||
Loss on extinguishment of debt | 0 | (1) | |||||||||
Equity in earnings (losses) of nonconsolidated affiliates, net of tax | 3 | 0 | 0 | ||||||||
Other income (expense), net | 34 | (29) | 7 | ||||||||
Total other expense (income) | 39 | (42) | (12) | ||||||||
Earnings (loss) before interest expense, income taxes, and noncontrolling interests | (316) | (9) | 81 | ||||||||
Interest expense: | |||||||||||
External, net of interest capitalized | (37) | (33) | (20) | ||||||||
Affiliated companies, net of interest income | 25 | 14 | 15 | ||||||||
Earnings (loss) before income taxes, noncontrolling interests and equity in net income from affiliated companies | (328) | (28) | 76 | ||||||||
Income tax (expense) benefit | 117 | 30 | 10 | ||||||||
Equity in net income (loss) from affiliated companies | 196 | 135 | 149 | ||||||||
Net income (loss) | (15) | 137 | 235 | ||||||||
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Net income (loss) attributable to Tenneco Inc. | (15) | 137 | 235 | ||||||||
Comprehensive income (loss) attributable to Tenneco Inc. | 27 | 159 | 282 | ||||||||
Nonguarantor Subsidiaries | |||||||||||
Net sales and operating revenues: | |||||||||||
External | 11,060 | 7,085 | 5,385 | ||||||||
Affiliated companies | 1,075 | 725 | 640 | ||||||||
Net sales and operating revenues | 12,135 | 7,810 | 6,025 | ||||||||
Costs and expenses | |||||||||||
Cost of sales (exclusive of depreciation and amortization) | 10,606 | 6,795 | 5,178 | ||||||||
Selling, general, and administrative | 463 | 289 | 241 | ||||||||
Depreciation and amortization | 346 | 192 | 135 | ||||||||
Engineering, research, and development | 188 | 106 | 81 | ||||||||
Restructuring charges and asset impairments | 64 | 97 | 43 | ||||||||
Goodwill and intangible impairment charge | 69 | 0 | 11 | ||||||||
Costs and expenses | 11,736 | 7,479 | 5,689 | ||||||||
Other income (expense) | |||||||||||
Non-service pension and postretirement benefit (costs) credits | (13) | (9) | 2 | ||||||||
Loss on extinguishment of debt | 0 | 0 | |||||||||
Equity in earnings (losses) of nonconsolidated affiliates, net of tax | 40 | 18 | (1) | ||||||||
Other income (expense), net | 19 | 38 | 48 | ||||||||
Total other expense (income) | 46 | 47 | 49 | ||||||||
Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 445 | 378 | 385 | ||||||||
Interest expense: | |||||||||||
External, net of interest capitalized | (29) | (21) | (8) | ||||||||
Affiliated companies, net of interest income | (7) | (7) | (6) | ||||||||
Earnings (loss) before income taxes, noncontrolling interests and equity in net income from affiliated companies | 409 | 350 | 371 | ||||||||
Income tax (expense) benefit | (131) | (93) | (81) | ||||||||
Equity in net income (loss) from affiliated companies | 0 | 0 | 0 | ||||||||
Net income (loss) | 278 | 257 | 290 | ||||||||
Less: Net income attributable to noncontrolling interests | 114 | 56 | 67 | ||||||||
Net income (loss) attributable to Tenneco Inc. | 164 | 201 | 223 | ||||||||
Comprehensive income (loss) attributable to Tenneco Inc. | 77 | 24 | 173 | ||||||||
Tenneco Inc. (Parent Company) | |||||||||||
Net sales and operating revenues: | |||||||||||
External | 0 | 0 | 0 | ||||||||
Affiliated companies | 0 | 0 | 0 | ||||||||
Net sales and operating revenues | 0 | 0 | 0 | ||||||||
Costs and expenses | |||||||||||
Cost of sales (exclusive of depreciation and amortization) | 0 | (13) | 0 | ||||||||
Selling, general, and administrative | 6 | 33 | 0 | ||||||||
Depreciation and amortization | 2 | 0 | 0 | ||||||||
Engineering, research, and development | 0 | 0 | 0 | ||||||||
Restructuring charges and asset impairments | 0 | 0 | 0 | ||||||||
Goodwill and intangible impairment charge | 0 | 0 | 0 | ||||||||
Costs and expenses | 8 | 20 | 0 | ||||||||
Other income (expense) | |||||||||||
Non-service pension and postretirement benefit (costs) credits | 0 | 2 | 0 | ||||||||
Loss on extinguishment of debt | (10) | 0 | |||||||||
Equity in earnings (losses) of nonconsolidated affiliates, net of tax | 0 | 0 | 0 | ||||||||
Other income (expense), net | 0 | (1) | 0 | ||||||||
Total other expense (income) | 0 | (9) | 0 | ||||||||
Earnings (loss) before interest expense, income taxes, and noncontrolling interests | (8) | (29) | 0 | ||||||||
Interest expense: | |||||||||||
External, net of interest capitalized | (256) | (94) | (49) | ||||||||
Affiliated companies, net of interest income | (18) | (7) | (9) | ||||||||
Earnings (loss) before income taxes, noncontrolling interests and equity in net income from affiliated companies | (282) | (130) | (58) | ||||||||
Income tax (expense) benefit | (5) | 0 | 0 | ||||||||
Equity in net income (loss) from affiliated companies | (27) | 184 | 265 | ||||||||
Net income (loss) | (314) | 54 | 207 | ||||||||
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | ||||||||
Net income (loss) attributable to Tenneco Inc. | (314) | 54 | 207 | ||||||||
Comprehensive income (loss) attributable to Tenneco Inc. | $ (353) | $ (31) | $ 331 |
Leases - Maturity Schedules (Details) $ in Millions |
Dec. 31, 2019
USD ($)
|
---|---|
Operating leases | |
2020 | $ 109 |
2021 | 84 |
2022 | 61 |
2023 | 44 |
2024 | 27 |
Thereafter | 40 |
Total future undiscounted lease payments | 365 |
Less imputed interest | (35) |
Total reported lease liability | 330 |
Finance leases | |
2020 | 2 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total future undiscounted lease payments | 2 |
Less imputed interest | 0 |
Total reported lease liability | $ 2 |
Goodwill and Other Intangible Assets—Net (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table shows a summary of the number of reporting units with goodwill in each segment and whether or not the reporting unit's fair value exceeds its carrying value by more or less than 10%:
At December 31, 2019 and 2018, goodwill consisted of the following:
|
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Schedule of Indefinite-Lived Intangible Assets | At December 31, 2019 and 2018, intangible assets consisted of the following:
|
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Schedule of Finite-Lived Intangible Assets | At December 31, 2019 and 2018, intangible assets consisted of the following:
|
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Finite-lived Intangible Assets Amortization Expense | The expected future amortization expense for the Company's definite-lived intangible assets is as follows:
|
Fair Value of Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, by Balance Sheet Grouping | Estimated fair values of the Company's outstanding debt were:
The following table presents assets and liabilities included in the Company's consolidated balance sheets as of December 31, 2019 and 2018 that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine such fair value:
|
Leases (Narrative) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2019 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 1 month |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 10 years |
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