10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________ 

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-12387

TENNECO INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of

incorporation or organization)

500 North Field Drive, Lake Forest, Illinois

(Address of principal executive offices)

76-0515284

(I.R.S. Employer

Identification No.)

60045

(Zip Code)

Registrant’s telephone number, including area code: (847) 482-5000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Voting Common Stock, par value $0.01 per share	TEN	New York Stock Exchange
Preferred Stock Purchase Rights		New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☑      No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☑      No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐      No  ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The number of shares of Class A Voting Common Stock, par value $0.01 per share: 60,953,834 shares outstanding as of August 4, 2020. The number of shares of Class B Non-Voting Common Stock, par value $0.01 per share: 20,308,454 shares outstanding as of August 4, 2020.

TABLE OF CONTENTS

		Page
Part I — Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	6
	Condensed Consolidated Statements of Income (Loss)	6
	Condensed Consolidated Statements of Comprehensive Income (Loss)	7
	Condensed Consolidated Balance Sheets	8
	Condensed Consolidated Statements of Cash Flows	9
	Condensed Consolidated Statements of Changes in Shareholders’ Equity	10
	Notes to Condensed Consolidated Financial Statements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	70
Item 4.	Controls and Procedures	71
Part II — Other Information
Item 1.	Legal Proceedings	72
Item 1A.	Risk Factors	72
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 3.	Defaults Upon Senior Securities	*
Item 4.	Mine Safety Disclosures	*
Item 5.	Other Information	*
Item 6.	Exhibits	75

* No response to this item is included herein for the reason that it is inapplicable or the answer to such item is negative.

2

CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning, among other things, our prospects and business strategies. These forward-looking statements are included in various sections of this report. The words “may,” “will,” “believe,” “should,” “could,” “plan,” “expect,” “anticipate,” “estimate,” and similar expressions (and variations thereof), identify these forward-looking statements. Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, these expectations may not prove to be correct. Because these forward-looking statements are also subject to risks and uncertainties, actual results may differ materially from the expectations expressed in the forward-looking statements. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include:

• general economic, business and market conditions, including the effects of the COVID-19 pandemic;

• disasters, local and global public health emergencies or other catastrophic events, such as fires, earthquakes and flooding, pandemics or epidemics (including the COVID-19 pandemic), 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;

• our ability (or inability) to successfully execute cost reduction, performance improvement and other plans, including our plans to respond to the COVID-19 pandemic and our previously announced accelerated performance improvement plan ("Accelerate"), and to realize the anticipated benefits from these plans;

• 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 and our financial flexibility to respond to the COVID-19 pandemic;

• our ability to maintain compliance with the agreements governing our indebtedness and otherwise have sufficient liquidity through the COVID-19 pandemic;

• our ability to comply with the covenants contained in our debt instruments;

• our working capital requirements;

• 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 substantial 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);

• 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 stability, tax and other laws, and potential disruptions of production and supply;

• increasing competition from lower cost, private-label products;

3

• 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 adapt to changes in technology and the availability and effectiveness of legal protection for our innovations and brands;

• 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;

• 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.

In addition, this report includes forward-looking statements regarding the Company's ongoing review of strategic alternatives and the potential separation of the Company into a powertrain technology company and an aftermarket and ride performance company. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include (in addition to the risks set forth above):

• 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 possibility that the Company may not complete a separation of the aftermarket and ride performance business from the powertrain technology business (or achieve some or all of the anticipated benefits of such a separation);

4

• the ability to retain and hire key personnel and maintain relationships with customers, suppliers or other business partners;

• the potential diversion of management's attention resulting from a separation;

• the risk the combined company and each separate company following a separation will underperform relative to our expectations;

• the ongoing transaction costs and risk we may incur greater costs following a separation of the business;

• the risk a spin-off is determined to be a taxable transaction;

• the risk the benefits of a separation may not be fully realized or may take longer to realize than expected;

• the risk a separation may not advance our business strategy; and

• the risk a transaction may have an adverse effect on existing arrangements with us, including those related to transition, manufacturing and supply services and tax matters.

The risks included here are not exhaustive. Refer to “Part II, Item 1A — Risk Factors” herein and “Part I, Item 1A — Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 for further discussion regarding our exposure to risks. Additionally, new risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor to assess the effect such risk factors might have on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Unless otherwise indicated in this report, the forward-looking statements in this report are made as of the date of this report, and, except as required by law, the Company does not undertake any obligation, and disclaims any obligation, to publicly disclose revisions or updates to any forward-looking statements.

5

PART I – FINANCIAL INFORMATION

ITEM 1.CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

TENNECO INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited)

(in millions, except share and per share amounts) 

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenues
Net sales and operating revenues	$	2,637		$	4,504		$	6,473		$	8,988
Costs and expenses
Cost of sales (exclusive of depreciation and amortization)	2,498			3,801			5,837			7,671
Selling, general, and administrative	195			292			444			610
Depreciation and amortization	159			169			330			338
Engineering, research, and development	55			78			132			170
Restructuring charges, net and asset impairments	121			49			605			65
Goodwill and intangible impairment charges	—			—			383			60
	3,028			4,389			7,731			8,914
Other income (expense)
Non-service pension and other postretirement benefit (costs) credits	1			(4		)	2			(6		)
Equity in earnings (losses) of nonconsolidated affiliates, net of tax	4			17			17			33
Other income (expense), net	11			13			19			16
	16			26			38			43
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	(375		)	141			(1,220		)	117
Interest expense	(66		)	(82		)	(141		)	(163		)
Earnings (loss) before income taxes and noncontrolling interests	(441		)	59			(1,361		)	(46		)
Income tax (expense) benefit	101			(14		)	195			(14		)
Net income (loss)	(340		)	45			(1,166		)	(60		)
Less: Net income (loss) attributable to noncontrolling interests	10			19			23			31
Net income (loss) attributable to Tenneco Inc.	$	(350	)	$	26		$	(1,189	)	$	(91	)
Earnings (loss) per share
Basic earnings (loss) per share:
Earnings (loss) per share	$	(4.30	)	$	0.32		$	(14.64	)	$	(1.13	)
Weighted average shares outstanding	81,350,773			80,920,825			81,259,667			80,897,731
Diluted earnings (loss) per share:
Earnings (loss) per share	$	(4.30	)	$	0.32		$	(14.64	)	$	(1.13	)
Weighted average shares outstanding	81,350,773			80,920,825			81,259,667			80,897,731

See accompanying notes to the condensed consolidated financial statements.

6

TENNECO INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(in millions)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net income (loss)	$	(340	)	$	45		$	(1,166	)	$	(60	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	42			(18		)	(177		)	17
Cash flow hedges	4			(3		)	2			1
Defined benefit plans	(5		)	(2		)	(1		)	(1		)
	41			(23		)	(176		)	17
Comprehensive income (loss)	(299		)	22			(1,342		)	(43		)
Less: Comprehensive income (loss) attributable to noncontrolling interests	17			18			10			36
Comprehensive income (loss) attributable to common shareholders	$	(316	)	$	4		$	(1,352	)	$	(79	)

See accompanying notes to the condensed consolidated financial statements.

7

TENNECO INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions, except shares)

	June 30, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	1,362		$	564
Restricted cash	9			2
Receivables:
Customer notes and accounts, net	2,100			2,438
Other	85			100
Inventories	1,656			1,999
Prepayments and other current assets	632			632
Total current assets	5,844			5,735
Property, plant, and equipment, net	2,939			3,627
Long-term receivables, net	10			10
Goodwill	505			775
Intangibles, net	1,239			1,422
Investments in nonconsolidated affiliates	513			518
Deferred income taxes	818			607
Other assets	527			532
Total assets	$	12,395		$	13,226
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt, including current maturities of long-term debt	$	222		$	185
Accounts payable	1,992			2,647
Accrued compensation and employee benefits	331			325
Accrued income taxes	48			72
Accrued expenses and other current liabilities	1,043			1,070
Total current liabilities	3,636			4,299
Long-term debt	6,629			5,371
Deferred income taxes	88			106
Pension and postretirement benefits	1,112			1,145
Deferred credits and other liabilities	502			490
Commitments and contingencies (Note 13)
Total liabilities	11,967			11,411
Redeemable noncontrolling interests	79			196
Tenneco Inc. shareholders’ equity:
Preferred stock — $0.01 par value; none issued	—			—
Class A voting stock — $0.01 par value; shares issued: June 30, 2020 — 75,546,691 and December 31, 2019 — 71,727,061	1			1
Class B non-voting convertible stock — $0.01 par value; shares issued: June 30, 2020 — 20,308,454 and December 31, 2019 — 23,793,669	—			—
Additional paid-in capital	4,433			4,432
Accumulated other comprehensive loss	(874		)	(711		)
Accumulated deficit	(2,556		)	(1,367		)
	1,004			2,355
Shares held as treasury stock — at cost: June 30, 2020 and December 31, 2019 — 14,592,888	(930		)	(930		)
Total Tenneco Inc. shareholders’ equity	74			1,425
Noncontrolling interests	275			194
Total equity	349			1,619
Total liabilities, redeemable noncontrolling interests and equity	$	12,395		$	13,226

See accompanying notes to the condensed consolidated financial statements.

8

TENNECO INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in millions)

	Six Months Ended June 30,
	2020			2019
Operating Activities
Net income (loss)	$	(1,166	)	$	(60	)
Adjustments to reconcile net income (loss) to cash (used) provided by operating activities:
Goodwill and intangible impairment charges	383			60
Depreciation and amortization	330			338
Deferred income taxes	(242		)	(14		)
Stock-based compensation	9			13
Restructuring charges and asset impairments, net of cash paid	540			14
Change in pension and other postretirement benefit plans	(26		)	(32		)
Equity in earnings of nonconsolidated affiliates	(17		)	(33		)
Cash dividends received from nonconsolidated affiliates	18			27
Loss (gain) on sale of assets	(1		)	(1		)
Changes in operating assets and liabilities:
Receivables	174			(401		)
Inventories	292			101
Payables and accrued expenses	(540		)	48
Accrued interest and accrued income taxes	(17		)	(66		)
Other assets and liabilities	(68		)	(94		)
Net cash (used) provided by operating activities	(331		)	(100		)
Investing Activities
Acquisitions, net of cash acquired	—			(158		)
Proceeds from sale of assets	5			5
Net proceeds from sale of business	—			22
Cash payments for property, plant, and equipment	(212		)	(379		)
Proceeds from deferred purchase price of factored receivables	91			147
Other	1			(1		)
Net cash (used) provided by investing activities	(115		)	(364		)
Financing Activities
Proceeds from term loans and notes	96			111
Repayments of term loans and notes	(133		)	(190		)
Debt issuance costs of long-term debt	(16		)	—
Borrowings on revolving lines of credit	4,821			4,525
Payments on revolving lines of credit	(3,536		)	(4,254		)
Issuance (repurchase) of common shares	(1		)	(2		)
Cash dividends	—			(20		)
Net increase (decrease) in bank overdrafts	59			(8		)
Other	(1		)	(1		)
Distributions to noncontrolling interest partners	(2		)	(20		)
Net cash (used) provided by financing activities	1,287			141
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash	(36		)	11
Increase (decrease) in cash, cash equivalents, and restricted cash	805			(312		)
Cash, cash equivalents, and restricted cash, beginning of period	566			702
Cash, cash equivalents, and restricted cash, end of period	$	1,371		$	390
Supplemental Cash Flow Information
Cash paid during the period for interest	$	123		$	145
Cash paid during the period for income taxes, net of refunds	$	75		$	100
Lease assets obtained in exchange for new operating lease liabilities	$	54		$	33
Non-cash inventory charge due to aftermarket product line exit	$	82		$	—
Non-cash Investing Activities
Period end balance of accounts payable for property, plant, and equipment	$	86		$	116
Deferred purchase price of receivables factored in the period	$	95		$	52
Reduction in assets from redeemable noncontrolling interest transaction with owner	$	53		$	—

See accompanying notes to the condensed consolidated financial statements.

9

TENNECO INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

(in millions)

	Tenneco Inc. Shareholders' equity
	$0.01 Par Value Common Stock		Treasury Stock			Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Tenneco Inc. Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance at December 31, 2019	$	1	$	(930	)	$	4,432		$	(1,367	)	$	(711	)	$	1,425		$	194		$	1,619
Net income (loss)									(839		)				(839		)	2			(837		)
Other comprehensive income (loss)—net of tax:
Foreign currency translation adjustments												(199		)	(199		)	(13		)	(212		)
Derivatives												(2		)	(2		)	—			(2		)
Defined benefit plans												4			4			—			4
Comprehensive income (loss)															(1,036		)	(11		)	(1,047		)
Stock-based compensation, net	—		—			2			—			—			2			—			2
Reclassification of redeemable noncontrolling interest to permanent equity	—		—			—			—			—			—			82			82
Redeemable noncontrolling interest transaction with owner	—		—			(7		)	—			—			(7		)	—			(7		)
Balance at March 31, 2020	1		(930		)	4,427			(2,206		)	(908		)	384			265			649
Net income (loss)									(350		)				(350		)	6			(344		)
Other comprehensive income (loss)—net of tax:
Foreign currency translation adjustments												35			35			4			39
Derivatives												4			4			—			4
Defined benefit plans												(5		)	(5		)	—			(5		)
Comprehensive income (loss)															(316		)	10			(306		)
Stock-based compensation, net	—		—			6			—			—			6			—			6
Balance as of June 30, 2020	$	1	$	(930	)	$	4,433		$	(2,556	)	$	(874	)	$	74		$	275		$	349

10

TENNECO INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

(in millions)

	Tenneco Inc. Shareholders' equity
	$0.01 Par Value Common Stock		Treasury Stock			Additional Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Tenneco Inc. Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance at December 31, 2018	$	1	$	(930	)	$	4,360	$	(1,013	)	$	(692	)	$	1,726		$	190		$	1,916
Net income (loss)								(117		)				(117		)	7			(110		)
Other comprehensive income (loss)—net of tax:
Foreign currency translation adjustments											29			29			4			33
Derivatives											4			4			—			4
Defined benefit plans											1			1			—			1
Comprehensive income (loss)														(83		)	11			(72		)
Stock-based compensation, net	—		—			5		—			—			5			—			5
Cash dividends ($0.25 per share)	—		—			—		(20		)	—			(20		)	—			(20		)
Purchase accounting measurement period adjustment	—		—			—		—			—			—			(1		)	(1		)
Distributions declared to noncontrolling interests	—		—			—		—			—			—			(1		)	(1		)
Balance at March 31, 2019	1		(930		)	4,365		(1,150		)	(658		)	1,628			199			1,827
Net income (loss)								26						26			9			35
Other comprehensive income (loss)—net of tax:
Foreign currency translation adjustments											(17		)	(17		)	—			(17		)
Derivatives											(3		)	(3		)	—			(3		)
Defined benefit plans											(2		)	(2		)	—			(2		)
Comprehensive income (loss)														4			9			13
Stock-based compensation, net	—		—			6		—			—			6			—			6
Distributions declared to noncontrolling interests	—		—			—		—			—			—			(2		)	(2		)
Balance at June 30, 2019	$	1	$	(930	)	$	4,371	$	(1,124	)	$	(680	)	$	1,638		$	206		$	1,844

See accompanying notes to the condensed consolidated financial statements.

11

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in millions, except share and per share amounts, or as otherwise noted)

1. Description of Business

Tenneco Inc. ("Tenneco" or "the Company") was formed under the laws of Delaware in 1996. Tenneco designs, manufactures, 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 clean air, powertrain, and ride performance products and systems, and serves both original equipment manufacturers ("OEM") and replacement markets worldwide.

On October 1, 2018, the Company completed the acquisition of Federal-Mogul LLC (“Federal-Mogul”) (the “Federal-Mogul Acquisition”), a global supplier of technology and innovation in vehicle and industrial products for fuel economy, emissions reductions, and safety systems. Federal-Mogul serves the world’s foremost OEM and servicers (“OES”, and together with OEM, “OE”) of automotive, light, medium and heavy-duty commercial vehicles, off road, agricultural, marine, rail, aerospace, and power generation and industrial equipment, as well as the worldwide aftermarket.

The Company has previously announced its review of a full range of strategic options to enhance shareholder value creation, including a potential separation of the Company into an Aftermarket and Ride Performance company and a new Powertrain Technology company. Current end-market conditions and the effects of the ongoing COVID-19 pandemic are affecting the Company's ability to complete a separation. In light of these ongoing conditions, the Company is pursuing additional options to optimize shareholder value creation, including a focus on operational improvements, reducing structural costs, lowering capital intensity, and reducing debt.

Beginning in the third quarter of 2020, the Motorparts segment will initiate a rationalization of its supply chain and distribution network to achieve supply chain efficiencies and improve throughput to its customers. As a result, certain assets including inventory, real estate, and personal property will no longer be utilized. As such, during the three and six months ended June 30, 2020, the Motorparts segment recognized an $82 million non-cash charge to write-down inventory to its net realizable value, a $16 million impairment charge to write-down property, plant, and equipment to its fair value, and a $9 million impairment charge to its operating lease right-of-use assets. Additionally, the Motorparts segment recognized $4 million in restructuring charges related to cash severance expected to be paid. Refer to Note 4, Restructuring Charges, Net and Asset Impairments for additional information.

2. Summary of Significant Accounting Policies

Basis of Presentation — Interim Financial Statements

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. These statements include all adjustments (consisting of normal recurring adjustments) management believes are necessary to fairly state the results of operations, comprehensive income, financial position, changes in shareholders' equity, and cash flows. The Company's management believes the disclosures are adequate to make the information presented not misleading when read in conjunction with the audited consolidated financial statements and the notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission on March 2, 2020. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. There are many uncertainties related to the COVID-19 global pandemic that could negatively affect the Company's results of operations, financial position, and cash flows. In response to the expected economic effects of COVID-19, the Company implemented and plans to continue various cost reduction initiatives, including, but not limited to reductions to salary costs and unpaid furloughs; the restructuring actions as discussed in Note 4, Restructuring Charges, Net and Asset Impairments; and the deferral of the Company’s portion of its 2020 employer paid payroll taxes and its U.S. qualified pension plan contributions under the Coronavirus Aid, Relief, and Economic Security Act.

At June 30, 2020, the Company was in compliance with all financial covenants under its credit agreement. On May 5, 2020, the Company entered into a third amendment to its credit agreement to increase the maximum leverage ratio and decrease the minimum interest coverage ratio. The amendment is discussed in more detail in Note 10, Debt and Other Financing Arrangements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Reclassifications: Certain amounts in the prior period have been aggregated or disaggregated to conform to current year presentation. These reclassifications included reclassifying amounts from restructuring charges, net and asset impairments to cost of sales (exclusive of depreciation and amortization), and selling, general, and administrative expenses. These reclassifications affected the three and six months ended June 30, 2019 and have no effect on previously reported net income within the condensed consolidated statements of income (loss), other comprehensive income (loss) within the condensed consolidated statements of comprehensive income (loss), and the cash (used) provided by operating, investing or financing activities within the condensed consolidated statements of cash flows.

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 or the passage of time.

At June 30, 2020 and December 31, 2019, the Company held redeemable noncontrolling interests of $50 million and $44 million which were not currently redeemable or probable of becoming redeemable. The redemption of these redeemable noncontrolling interests is not solely within the Company's control, therefore, they are presented in the temporary equity section of the Company's condensed 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 June 30, 2020 and December 31, 2019, the Company held redeemable noncontrolling interests of $29 million and $152 million which were currently redeemable or probable of becoming redeemable. These noncontrolling interests are also presented in the temporary equity section of the Company's condensed consolidated balance sheets and have been remeasured to redemption value. The Company immediately recognizes changes to redemption value as a component of net income (loss) attributable to noncontrolling interests in the condensed consolidated statements of income (loss). These redeemable noncontrolling interests include the following:

• During the first quarter of 2020, the Company completed the process to make a tender offer of the shares it did not own 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. As a result of completing the tender offer, the redeemable noncontrolling interest was no longer redeemable or probable of becoming redeemable and the amount of $82 million was reclassified to permanent equity during the six months ended June 30, 2020. Refer to Note 17, Related Party Transactions, for additional information related to the tender offer of this noncontrolling interest; and

• A 9.5% ownership interest in Öhlins Intressenter AB (the “KÖ Interest”) was retained by K Öhlin Holding AB (“Köhlin”), as a result of the Öhlins acquisition on January 10, 2019. Köhlin has an irrevocable right at any time after the third anniversary of the Öhlins acquisition to sell the KÖ Interest to the Company. Since it is probable the KÖ Interest will become redeemable, the Company recognized the change in carrying value and recorded an adjustment of $10 million during the six months ended June 30, 2020 to reflect its redemption value of $29 million at June 30, 2020.

For the six months ended June 30, 2019, the Company recorded a decrease to the redeemable noncontrolling interests of $8 million, as a result of adjustments made in the measurement period to the preliminary purchase price allocation from the Federal-Mogul Acquisition.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

The following is a rollforward of activities in the Company's redeemable noncontrolling interests:

	Six Months Ended June 30,
	2020			2019
Balance at beginning of period	$	196		$	138
Net income (loss) attributable to redeemable noncontrolling interests	5			15
Other comprehensive income (loss)	(4		)	1
Acquisition and other	—			16
Noncontrolling interest tender offer redemption	(46		)	—
Redemption value measurement adjustment	10			—
Purchase accounting measurement period adjustment	—			(8		)
Reclassification of noncontrolling interest to permanent equity	(82		)	—
Dividends declared	—			(17		)
Balance at end of period	$	79		$	145

Income taxes: On December 22, 2017, the Tax Cuts and Jobs Act ("TCJA") was enacted into U.S. law, which, among other provisions, included an anti-deferral provision (the Global Intangible Low-Taxed Income tax or "GILTI") effective from 2018 wherein taxes on foreign income are imposed in excess of a deemed return on tangible assets of non-U.S. corporations. The Company has elected the “tax law ordering approach” in that the Company will look to tax law ordering to determine whether its net operating loss ("NOL") carryforward deferred tax asset is expected to be realized. Based on the tax law ordering approach, NOL carryforwards are realizable if they will reduce the expected tax liability when utilized, regardless if the 50% GILTI deduction or related foreign tax credits may have been available.

Earnings (loss) per share: Basic earnings (loss) per share is calculated by dividing net earnings (loss) by the weighted average shares outstanding during the period. Diluted earnings (loss) per share reflects the weighted average effect of all potentially dilutive securities from the date of issuance. Actual weighted average shares outstanding used in calculating earnings (loss) per share were:

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
Weighted average shares of common stock outstanding	81,350,773	80,920,825	81,259,667	80,897,731
Effect of dilutive securities:
Restricted stock, PSUs, and RSUs	—	—	—	—
Stock options	—	—	—	—
Dilutive shares outstanding	81,350,773	80,920,825	81,259,667	80,897,731

For the three and six months ended June 30, 2020, the calculation of diluted earnings (loss) per share excluded 3,133,035 and 2,508,565 of share-based awards, as the effect on the calculation would have been anti-dilutive. For the three and six months ended June 30, 2019, the calculation of diluted earnings (loss) per share excluded 1,990,099 and 1,850,850 of share-based awards, as the effect on the calculation would have been anti-dilutive.

New Accounting Pronouncements

Adoption of New Accounting Standards

Income Taxes — In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2019-12: Simplifying the Accounting for Income Taxes (Topic 740), which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The ASU allows certain simplifications in the annual effective tax rate computations, which did not have a material effect on the financial statements. The Company early adopted this ASU on a prospective basis beginning January 1, 2020.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Intangibles — On January 1, 2020, the Company adopted 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, which includes amendments to align the accounting for costs incurred to implement a cloud computing arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The Company adopted this guidance on a prospective basis beginning January 1, 2020 and the effects of the adoption were not material on the 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 new standard (i) requires the removal of disclosures that are no longer considered cost beneficial; (ii) clarifies specific requirements of certain disclosures; and (iii) adds new disclosure requirements, including reasons for significant gains and losses related to changes in the benefit obligation. The amendments in this update are effective for fiscal years ending after December 15, 2020. The Company will adopt the enhanced disclosures in the consolidated financial statements for the year ending December 31, 2020.

3. Acquisitions and Divestitures

Öhlins Intressenter AB Acquisition

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 for a purchase price of $162 million (including $4 million of cash acquired). The remaining 9.5% ownership interest in Öhlins was retained by Köhlin. Köhlin has an irrevocable right at any time after the third anniversary of the Öhlins Acquisition to sell the KÖ Interest to the Company. Refer to Note 2, Summary of Significant Accounting Policies, for further information on the KÖ Interest.

Pro Forma Results

Pro forma results of operations have not been presented because the effects of the Öhlins Acquisition were not material to the Company’s condensed consolidated results of operations.

Assets Held for Sale

As the Company continues to rationalize its product portfolio and focus on core production lines, the Company has classified a non-core business in the Motorparts segment as held for sale. At June 30, 2020, expected proceeds from a sale would be approximately $16 million, which is representative of its fair value. The related assets and liabilities were classified as held for sale at June 30, 2020 and December 31, 2019. The sale is expected to occur within the next twelve months.

The related assets and liabilities for this non-core business are classified as held for sale at June 30, 2020 and December 31, 2019:

	June 30, 2020			December 31, 2019
Assets
Receivables	$	3		$	5
Inventories	7			8
Other current assets	2			1
Long-lived assets	16			18
Goodwill	3			4
Impairment on carrying value	(7		)	(8		)
Total assets held for sale	$	24		$	28
Liabilities
Accounts payable	$	2		$	4
Accrued liabilities	2			2
Total liabilities held for sale	$	4		$	6

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Additionally, during the three months ended June 30, 2020, the Company identified approximately $16 million of property, plant, and equipment, primarily land and buildings and non-core machinery and equipment, and $2 million of related liabilities across multiple segments that are expected be sold in the next twelve months. The related assets and liabilities have been classified as held for sale at June 30, 2020 and are not included in the table above. The Company recognized a non-cash impairment charge of $1 million during the three and six months ended June 30, 2020 related to these assets held for sale.

The assets and liabilities held for sale are recorded in prepayments and other current assets and accrued expenses and other current liabilities in the condensed consolidated balance sheets at June 30, 2020 and December 31, 2019.

On March 1, 2019, in accordance with a stock and asset purchase agreement, the Company sold certain assets and liabilities related to a non-core business, and received sale proceeds of $22 million, subject to customary working capital adjustments, in the six months ended June 30, 2019.

4. Restructuring Charges, Net and Asset Impairments

The Company's restructuring activities are undertaken as necessary to execute management's strategy and streamline operations, consolidate and take advantage of available capacity and resources, and ultimately achieve net cost reductions. Restructuring activities include efforts to integrate and rationalize the Company's businesses and to relocate operations to best cost locations.

The Company's restructuring charges consist primarily of employee costs (principally severance and/or termination benefits) and facility closure and exit costs. The 2019 amounts below reflect the reclassifications to the prior period as discussed in Note 2, Summary of Significant Accounting Policies.

For the three and six months ended June 30, 2020 and 2019, restructuring charges, net and asset impairments by segment are as follows:

	Three Months Ended June 30, 2020
	Clean Air		Powertrain		Ride Performance		Motorparts			Corporate		Total
Severance and other charges, net	$	22	$	36	$	18	$	15		$	1	$	92
Asset impairments related to restructuring actions	—		3		—		25			—		28
Other non-restructuring asset impairments	—		—		—		—			1		1
Impairment of assets held for sale	—		1		—		(1		)	—		—
Total asset impairment charges	—		4		—		24			1		29
Total restructuring charges, net and asset impairments	$	22	$	40	$	18	$	39		$	2	$	121

	Three Months Ended June 30, 2019
	Clean Air		Powertrain		Ride Performance		Motorparts		Corporate		Total
Severance and other charges, net	$	14	$	17	$	10	$	6	$	—	$	47
Other non-restructuring asset impairments	1		—		—		1		—		2
Total restructuring charges, net and asset impairments	$	15	$	17	$	10	$	7	$	—	$	49

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

	Six Months Ended June 30, 2020
	Clean Air		Powertrain		Ride Performance		Motorparts			Corporate		Total
Severance and other charges, net	$	22	$	37	$	24	$	17		$	5	$	105
Asset impairments related to restructuring actions	—		3		—		25			—		28
Other non-restructuring asset impairments	—		—		455		—			17		472
Impairment of assets held for sale	—		1		—		(1		)	—		—
Total asset impairment charges	—		4		455		24			17		500
Total restructuring charges, net and asset impairments	$	22	$	41	$	479	$	41		$	22	$	605

	Six Months Ended June 30, 2019
	Clean Air		Powertrain		Ride Performance		Motorparts		Corporate		Total
Severance and other charges, net	$	19	$	18	$	15	$	10	$	1	$	63
Other non-restructuring asset impairments	1		—		—		1		—		2
Total restructuring charges, net and asset impairments	$	20	$	18	$	15	$	11	$	1	$	65

Severance and other charges, net

Severance and other charges, net for the three and six months ended June 30, 2020 include the following actions:

• In conjunction with the Company's previously announced Project Accelerate, and in response to the COVID-19 global pandemic, the Company is executing global headcount reductions, subject to negotiation with works councils in certain jurisdictions. The Company began implementing these actions during the second quarter of 2020 and expects to complete them during 2021. During the three and six months ended June 30, 2020, the Company recognized a charge of $25 million in connection with the cash severance costs expected to be paid in connections with these actions.

• In addition to the actions above, the Company initiated several other cost reduction initiatives across all segments and regions aimed at optimizing the Company's cost structure. During the three and six months ended June 30, 2020, the Company recognized cash severance charges of $32 million expected to be paid under these programs.

• During the three and six months ended June 30, 2020, the Powertrain segment incurred $20 million in restructuring and other costs, of which $16 million is related to plant relocations and closures, and $4 million is related to a cost reduction program in one of its product lines.

• During the three and six months ended June 30, 2020, the Company incurred $4 million and $10 million in restructuring and other costs related to previously announced plant relocation and closures within its Ride Performance segment.

• Beginning in the third quarter of 2020, the Motorparts segment will initiate a rationalization of its supply chain and distribution network to achieve supply chain efficiencies and improve throughput to its customers; as discussed in Note 1, Description of Business. During the three and six months ended June 30, 2020, the Motorparts segment recognized $4 million in restructuring charges related to cash severance expected to be paid in connection with these actions. In addition, the Motorparts segment also recognized charges during the three and six months ended June 30, 2020 of $3 million in connection with an infrastructure cost reduction program in one of its regions.

• The Company also incurred $4 million in cash severance costs for the elimination of certain redundant positions within its corporate component in the six months ended June 30, 2020.

On June 30, 2020, the Company approved a voluntary termination program within the Powertrain segment at one of its European bearings plants aimed at reducing headcount, as negotiated with the works council and union. The Company anticipates implementing headcount reductions during 2020 and continuing into 2021 through a voluntary early retirement program and a voluntary special termination program. Restructuring and related charges are expected to be incurred in the second half of 2020 and 2021 aggregate to approximately $31 million. The charges are expected to be comprised of approximately $10 million for postemployment benefits, including an early retirement program and $21 million of special termination benefits. In addition, the Company expects to incur additional costs of approximately $2 million for customer validation, equipment transfer, and related expenditures.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

During the three and six months ended June 30, 2019, the Company incurred $3 million and $9 million in restructuring and related costs and reduced previously recorded estimates by $2 million related to a restructuring plan designed to achieve a portion of the synergies the Company anticipated achieving in connection with the Federal-Mogul Acquisition. Pursuant to the plan, the Company reduced its headcount globally across all segments. During the three and six months ended June 30, 2019, the Ride Performance segment incurred $5 million and $8 million in restructuring and other costs related to plant relocations and closures.

Restructuring reserve rollforward

Amounts related to activities that were charged to restructuring reserves by reportable segments are as follows:

	Reportable Segments
	Clean Air			Powertrain			Ride Performance			Motorparts			Total Reportable Segments			Corporate			Total
Balance at December 31, 2019	$	23		$	30		$	23		$	16		$	92		$	9		$	101
Provisions	—			2			7			2			11			4			15
Revisions to estimates	—			(1		)	(1		)	—			(2		)	—			(2		)
Payments	(4		)	(4		)	(9		)	(4		)	(21		)	(9		)	(30		)
Foreign currency	—			—			(1		)	—			(1		)	—			(1		)
Balance at March 31, 2020	19			27			19			14			79			4			83
Provisions	24			36			18			17			95			1			96
Revisions to estimates	(2		)	—			—			(2		)	(4		)	—			(4		)
Payments	(6		)	(6		)	(17		)	(5		)	(34		)	(1		)	(35		)
Balance at June 30, 2020	$	35		$	57		$	20		$	24		$	136		$	4		$	140

	Reportable Segments
	Clean Air			Powertrain			Ride Performance			Motorparts			Total Reportable Segments			Corporate			Total
Balance at December 31, 2018	$	17		$	15		$	25		$	43		$	100		$	3		$	103
Provisions	5			1			5			4			15			1			16
Payments	(6		)	(3		)	(5		)	(14		)	(28		)	(2		)	(30		)
Balance at March 31, 2019	16			13			25			33			87			2			89
Provisions	14			17			10			8			49			—			49
Revisions to estimates	—			—			—			(2		)	(2		)	—			(2		)
Payments	(2		)	(4		)	(7		)	(7		)	(20		)	(1		)	(21		)
Balance at June 30, 2019	$	28		$	26		$	28		$	32		$	114		$	1		$	115

The following table provides a summary of the Company's restructuring liabilities and related activity for each type of exit costs:

	Six Months Ended June 30, 2020									Six Months Ended June 30, 2019
	Employee Costs			Facility Closure and Other Costs			Total			Employee Costs			Facility Closure and Other Costs			Total
Balance at beginning of period	$	97		$	4		$	101		$	98		$	5		$	103
Provisions	10			5			15			11			5			16
Revisions to estimates	(2		)	—			(2		)	—			—			—
Payments	(23		)	(7		)	(30		)	(25		)	(5		)	(30		)
Foreign currency	(1		)	—			(1		)	—			—			—
Balance at March 31	81			2			83			84			5			89
Provisions	90			6			96			44			5			49
Revisions to estimates	(4		)	—			(4		)	(2		)	—			(2		)
Payments	(31		)	(4		)	(35		)	(16		)	(5		)	(21		)
Balance at end of period	$	136		$	4		$	140		$	110		$	5		$	115

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Asset impairments

During the three and six months ended June 30, 2020, as a result of the actions in the Motorparts segment discussed above, asset impairment charges of $25 million were recognized which included $16 million related to the write-down of property, plant, and equipment to its fair value, and $9 million of impairment charge to its operating lease right-of-use assets. Refer to Note 1, Description of Business, for additional information.

During the three and six months ended June 30, 2020, the Powertrain segment incurred $3 million in asset impairment charges in connection with its plant relocation and closure actions.

Refer to Note 3, Acquisitions and Divestitures, for additional information on impairments of assets held for sale.

The Company evaluates its long-lived assets for impairment whenever events or circumstances indicate the value of these long-lived asset groups are not recoverable. During the first quarter of 2020, the Company concluded impairment triggers had occurred for certain long-lived asset groups in the Ride Performance segment as a result of the effects of the COVID-19 global pandemic on the Company's projected financial information. Accordingly, the Company tested these long-lived asset groups for recoverability by performing undiscounted cash flow analyses. Based on these analyses, the net carrying values of these asset groups exceeded their undiscounted future cash flows. As such, the Company estimated the fair values of these asset groups at March 31, 2020 and compared them to their carrying values. As the net carrying values of these long-lived asset groups exceeded their fair values, the Company recorded long-lived asset impairment charges for property, plant, and equipment of $455 million during the six months ended June 30, 2020. Refer to Note 9, Fair Value for additional information on the fair value estimates used in these analyses.

As a result of changes in the business, the Company assessed and concluded an impairment trigger had occurred for certain long-lived asset groups in its corporate component. Accordingly, the Company tested these long-lived asset groups for recoverability. The Company estimated the fair value of these asset groups and compared it to the carrying value. As the net carrying value exceeded fair value, the Company recorded long-lived asset impairment charges of $1 million and $17 million during the three and six months ended June 30, 2020. Included in the asset impairment charges for the six months ended June 30, 2020 are $11 million related to property, plant, and equipment and $6 million related to operating lease right-of-use assets.

There are many uncertainties regarding the COVID-19 global pandemic that could negatively affect the Company's results of operations, financial position, and cash flows. As a result, if there is an adverse change to the Company’s projected financial information, due to business performance or market conditions, this may be indicative the value of its long-lived assets are not recoverable, which may result in additional non-cash long-lived asset impairment charges in a future period.

5. Inventories

At June 30, 2020 and December 31, 2019, inventory consists of the following:

	June 30, 2020		December 31, 2019
Finished goods	$	728	$	1,027
Work in process	427		460
Raw materials	400		408
Materials and supplies	101		104
	$	1,656	$	1,999

6. Goodwill and Other Intangible Assets

During the three months ended June 30, 2020, the Company performed a review of potential triggering events, and concluded no events indicated it was more likely than not that the fair values of its reporting units had declined to below their carrying values. There are many uncertainties regarding the COVID-19 global pandemic that could negatively affect the Company's results of operations, financial position, and cash flows. As a result, if there is an adverse change to the Company’s projected financial information, due to business performance or market conditions, this may be indicative that the fair value of its reporting units have declined below their carrying values, which may result in non-cash goodwill or intangible asset impairment charges in a future period.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

During the first quarter of 2020, the Company concluded it was more likely than not that the fair values of certain of its reporting units and its indefinite-lived intangible assets had declined to below their carrying values as a result of the effects of the COVID-19 global pandemic on the Company's projected financial information. The Company completed a goodwill impairment analysis for four of its reporting units with goodwill in the Powertrain, Motorparts, and Ride Performance segments. The difference between the reporting units' carrying values and fair values were recognized as impairment charges. The Company recognized $267 million in non-cash impairment charges related to its goodwill during the six months ended June 30, 2020, which represented full impairments of the goodwill in one reporting unit in the Powertrain segment and one reporting unit in the Ride Performance segment, and partial impairments of goodwill in one reporting unit in the Powertrain segment and one reporting unit in the Motorparts segment.

During the first quarter of 2020, the Company also completed an analysis to determine the fair value of its trade names and trademarks for its reporting units in the Ride Performance and Motorparts segments. It was determined their carrying values exceeded their fair values and the Company recognized $51 million in non-cash impairment charges related to these indefinite-lived intangible assets during the six months ended June 30, 2020, which represented a full impairment of the trade names and trademarks in one of the reporting units in the Motorparts segment, and a partial impairment of the trade names and trademarks in one of the reporting units in the Ride Performance segment and one of the reporting units in the Motorparts segment.

As discussed in more details in Note 4, Restructuring Charges, Net and Asset Impairments, the Company concluded impairment triggers had occurred for certain long-lived asset groups within the Ride Performance segment. As a result, the Company recorded non-cash impairment charges of $65 million related to its definite-lived intangible assets during the three months ended March 31, 2020, which represented full impairments of the definite-lived intangible assets in these two reporting units.

Impairment charges for goodwill and intangible assets recognized by segment during the six months ended June 30, 2020 consist of the following:

	Six Months Ended June 30, 2020
	Powertrain		Ride Performance		Motorparts		Total
Goodwill impairment charges	$	160	$	37	$	70	$	267
Trade names and trademarks intangible asset impairment charges	—		11		40		51
Definite-lived intangible asset impairment charges	—		65		—		65
	$	160	$	113	$	110	$	383

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% based on each respective reporting units most recent goodwill impairment analysis:

	Segments
	Clean Air		Powertrain		Ride Performance		Motorparts
Number of reporting units with goodwill	3		1		1		1
Number of reporting units where fair value exceeds carrying value:
Greater than 10%	3		—		1		—
Less than 10%	—		1		—		1
Goodwill for reporting units where fair value exceeds carrying value:
Greater than 10%	$	22	$	—	$	7	$	—
Less than 10%	—		165		—		311
	$	22	$	165	$	7	$	311

20

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

At June 30, 2020 and December 31, 2019, goodwill consists of the following:

	Clean Air		Powertrain			Ride Performance			Motorparts			Total
Gross carrying amount at December 31, 2019	$	22	$	343		$	259		$	620		$	1,244
Foreign exchange	—		—			(3		)	—			(3		)
Gross carrying amount at March 31, 2020	22		343			256			620			1,241
Foreign exchange	—		—			3			—			3
Gross carrying amount at June 30, 2020	22		343			259			620			1,244
Accumulated impairment loss at December 31, 2019	—		(18		)	(212		)	(239		)	(469		)
Impairment	—		(160		)	(37		)	(70		)	(267		)
Accumulated impairment loss at March 31, 2020	—		(178		)	(249		)	(309		)	(736		)
Foreign exchange	—		—			(3		)	—			(3		)
Accumulated impairment loss at June 30, 2020	—		(178		)	(252		)	(309		)	(739		)
Net carrying value at end of period	$	22	$	165		$	7		$	311		$	505

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 $60 million of goodwill was impaired for two reporting units within its Ride Performance segment, one of which was a full impairment of the goodwill. As a result, this non-cash charge was recorded in the six months ended June 30, 2019. Goodwill allocated to other reporting units was supported by the valuation performed at that time.

At June 30, 2020 and December 31, 2019, the Company's intangible assets consist of the following:

		June 30, 2020							December 31, 2019
	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	$	988	$	(233	)	$	755	$	988	$	(123	)	$	865
Customer contract	10 years	8		(6		)	2		8		(6		)	2
Patents	10 to 17 years	1		(1		)	—		1		(1		)	—
Technology rights	10 to 30 years	133		(44		)	89		133		(37		)	96
Packaged kits know-how	10 years	54		(9		)	45		54		(7		)	47
Catalogs	10 years	47		(8		)	39		47		(6		)	41
Licensing agreements	3 to 5 years	63		(27		)	36		63		(18		)	45
Land use rights	28 to 46 years	46		(4		)	42		47		(3		)	44
		1,340		(332		)	1,008		1,341		(201		)	1,140
Indefinite-lived intangible assets:
Trade names and trademarks							231							282
Total							$	1,239						$	1,422

21

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

The amortization expense associated with definite-lived intangible assets is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Amortization expense	$	32	$	33	$	66	$	68

The expected future amortization expense for the Company's definite-lived intangible assets is as follows:

	2020		2021		2022		2023		2024		2025 and thereafter		Total
Expected amortization expense	$	66	$	127	$	124	$	121	$	113	$	457	$	1,008

7. Investment in Nonconsolidated Affiliates

The Company's ownership interest in affiliates accounted for under the equity method is as follows:

	June 30, 2020		December 31, 2019
Anqing TP Goetze Piston Ring Company Limited (China)	35.7	%	35.7	%
Anqing TP Powder Metallurgy Co., Ltd (China)	20.0	%	20.0	%
Dongsuh Federal-Mogul Industrial Co. Ltd. (Korea)	50.0	%	50.0	%
Farloc Argentina SAIC Y F (Argentina)	23.9	%	23.9	%
Federal-Mogul Powertrain Otomotiv A.S. (Turkey)	50.0	%	50.0	%
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti. (Turkey)	25.0	%	25.0	%
Federal-Mogul TP Liners, Inc. (USA)	46.0	%	46.0	%
Frenos Hidraulicos Automotrices, S.A. de C.V. (Mexico)	49.0	%	49.0	%
JURID do Brasil Sistemas Automotivos Ltda. (Brazil)	19.9	%	19.9	%
KB Autosys Co., Ltd. (Korea)	33.6	%	33.6	%
Montagewerk Abgastechnik Emden GmbH (Germany)	50.0	%	50.0	%

The Company's investments in its nonconsolidated affiliates at June 30, 2020 and December 31, 2019 is as follows:

	June 30, 2020		December 31, 2019
Investments in nonconsolidated affiliates	$	513	$	518

The carrying amount of the Company's investments in its nonconsolidated affiliates accounted for under the equity method exceeded its share of the underlying net assets by $263 million and $251 million at June 30, 2020 and December 31, 2019.

The following table represents the activity from the Company's investments in its nonconsolidated affiliates for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Equity in earnings (losses) of nonconsolidated affiliates, net of tax	$	4	$	17	$	17	$	33
Cash dividends received from nonconsolidated affiliates	$	5	$	12	$	18	$	27

During the six months ended June 30, 2019, the Company made adjustments in the measurement period to the preliminary purchase price allocation for the Federal-Mogul Acquisition which resulted in a reduction to the fair value of its investments in nonconsolidated affiliates of $15 million.

22

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

The following tables present summarized aggregated financial information of the Company's nonconsolidated affiliates for the three and six months ended June 30, 2020 and 2019. The amounts represent 100% of the interest in the nonconsolidated affiliates and not the Company's proportionate share:

	Three Months Ended June 30, 2020
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	24	$	11	$	41	$	76
Gross profit	$	6	$	5	$	6	$	17
Income from continuing operations	$	4	$	4	$	2	$	10
Net income	$	5	$	4	$	2	$	11

	Three Months Ended June 30, 2019
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	85	$	39	$	120	$	244
Gross profit	$	22	$	10	$	23	$	55
Income from continuing operations	$	17	$	9	$	11	$	37
Net income	$	21	$	9	$	11	$	41

	Six Months Ended June 30, 2020
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	120	$	41	$	146	$	307
Gross profit	$	32	$	11	$	26	$	69
Income from continuing operations	$	27	$	11	$	11	$	49
Net income	$	23	$	10	$	8	$	41

	Six Months Ended June 30, 2019
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	176	$	78	$	245	$	499
Gross profit	$	43	$	26	$	46	$	115
Income from continuing operations	$	36	$	20	$	24	$	80
Net income	$	39	$	18	$	22	$	79

Refer to Note 17, Related Party Transactions, for additional information on balances and transactions with equity method investments.

8. 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 may enter 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.

23

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Market Risks

Foreign Currency Exchange Rate 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 exchange rate 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, Thailand bhat, South African rand, Mexican peso, and Canadian dollar.

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 June 30, 2020 and December 31, 2019 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 condensed 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 condensed 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 are recognized as foreign currency gains (losses) within cost of sales in the condensed consolidated statements of income (loss). The fair value of foreign currency forward contracts is recorded in prepayments and other current assets or accrued expenses and other current liabilities in the condensed consolidated balance sheets. The fair value of these derivative instruments is not considered material to the condensed consolidated financial statements, refer to Note 9, Fair Value for additional information.

The following table summarizes by position the notional amounts for foreign currency forward contracts at June 30, 2020 (all of which mature in 2020):

	Notional Amount
Long positions	$	54
Short positions	$	(54	)

24

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Cash-Settled Share and Index Swap Transactions

The Company selectively uses swaps to reduce market risk associated with its deferred compensation liabilities, which increase as the Company's stock price increases and decrease as the Company's stock price decreases. The Company has entered into a cash-settled share swap agreement that moves in the opposite direction of these liabilities, allowing the Company to fix a portion of the liabilities at a stated amount. At June 30, 2020, the Company hedged its deferred compensation liability related to approximately 1,350,000 common share equivalents, an increase of 750,000 common share equivalents from December 31, 2019. In the first quarter of 2020, the Company entered into an S&P 500 index fund ETF swap agreement to further reduce its market risk, which will act as a natural hedge offsetting an equivalent amount of indexed investments in the Company's deferred compensation plans. The fair value of these swap agreements is recorded in prepayments and other current assets or accrued expenses and other current liabilities in the condensed consolidated balance sheets. The fair value of these derivative instruments is not considered material to the condensed consolidated financial statements, refer to Note 9, Fair Value for additional information.

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, tin, and nickel. 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 condensed 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 $16 million and $19 million at June 30, 2020 and December 31, 2019. 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, €782 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 the condensed consolidated statements of changes in shareholders' equity in the foreign currency translation component of OCL and offset against the translation adjustment 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 10, 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 June 30, 2020 and December 31, 2019:

		Carrying Value
	Balance sheet classification	June 30, 2020		December 31, 2019
Commodity price hedge contracts designated as cash flow hedges	Prepayments and other current assets	$	1	$	—
Foreign currency borrowings designated as net investment hedges	Long-term debt	$	878	$	850

The following table represents the amount of gain (loss) recognized in accumulated other comprehensive income (loss) before any reclassifications into net income (loss) for derivative and non-derivative instruments designated as hedges for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Commodity price hedge contracts designated as cash flow hedges	$	5		$	(3	)	$	2		$	1
Foreign currency borrowings designated as net investment hedges	$	(16	)	$	(12	)	$	(2	)	$	7

The Company estimates approximately $1 million included in accumulated OCI or OCL at June 30, 2020 will be reclassified into net income (loss) within the following twelve months. Refer to Note 15, Shareholders' Equity for further information.

25

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

9. Fair Value

A three-level valuation hierarchy, based upon observable and unobservable inputs, is used for fair value measurements. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions based on the best evidence available. A financial instrument’s categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy definition prioritizes the inputs used in measuring fair value into the following levels:

Level 1	—	Quoted prices in active markets for identical assets or liabilities.
Level 2	—	Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.
Level 3	—	Unobservable inputs based on the Company's own assumptions.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the assets and liabilities included in the Company's condensed consolidated balance sheets at June 30, 2020 and December 31, 2019 that are recognized at fair value on a recurring basis and indicate the fair value hierarchy utilized to determine such fair values:

		June 30, 2020				December 31, 2019
	Fair value hierarchy	Carrying Amount		Fair Value		Carrying Amount			Fair Value
Derivative asset (liability) instruments:
Swap agreements	Level 2	$	1	$	1	$	(1	)	$	(1	)
Commodity contracts	Level 2	$	1	$	1	$	—		$	—

Asset and Liability Instruments

The carrying value of cash and cash equivalents, restricted cash, short and long-term receivables, accounts payable, and short-term debt approximates fair value.

Cash-Settled Share and Index Swap Agreements

The Company's stock price is used as an observable input in determining the fair value of the cash-settled share swap agreement. The S&P 500 index ETF price is used as an observable input in determining the fair value of this swap agreement.

Commodity Contracts and Foreign Currency Contracts

The Company calculates the fair value of its commodity contracts and foreign currency contracts using commodity forward rates and currency forward rates, to calculate forward values, and then discounts the forward values. The discount rates for all derivative contracts are based on bank deposit rates. The fair value of the Company's foreign currency forward contracts was a net asset position of less than $1 million at June 30, 2020 and December 31, 2019.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

In addition to items measured at fair value on a recurring basis, assets may be measured at fair value on a nonrecurring basis. These assets include long-lived assets and intangible assets which may be written down to fair value as a result of impairment.

26

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Long-Lived Assets

The Company evaluates its long-lived assets for impairment whenever events or circumstances indicate the value of these long-lived asset groups are not recoverable. During the first quarter of 2020, the Company concluded certain impairment triggers had occurred for certain long-lived asset groups as a result of the effects of the COVID-19 global pandemic on the Company's projected financial information. After failing the undiscounted cash flow recoverability test, the Company estimated the fair values of these long-lived asset groups and compared them to their net carrying values. The fair value measurements related to these long-lived asset groups rely primarily on Company-specific inputs and the Company's assumptions about the use of the assets, as observable inputs are not available (level 3). To determine the fair value of the long-lived asset groups, the Company utilized an asset-based approach. The Company believes the assumptions and estimates used to determine the estimated fair values of the long-lived asset groups are reasonable; however, these estimates and assumptions are subject to a high degree of uncertainty. Due to the many variables inherent in estimating fair value differences in assumptions could have a material effect on the results of the analyses.

As the net carrying values of the long-lived asset groups exceeded their fair values, the Company recorded long-lived asset impairment charges consisting of $65 million of definite-lived intangible assets and $455 million of property, plant, and equipment, during the six months ended June 30, 2020. Refer to Note 4, Restructuring Charges, Net and Asset Impairments for additional information on asset impairments and refer to Note 6, Goodwill and Other Intangible Assets, for additional information on the definite-lived intangible asset impairments.

Goodwill and Indefinite-Lived Intangible Assets

The Company evaluates the carrying value of its goodwill and indefinite-lived intangible assets for impairment annually in the fourth quarter of each year, or more frequently if events or circumstances indicate these assets might be impaired. During the first quarter of 2020, the Company concluded it was more likely than not that the fair values of certain of its reporting units and its indefinite-lived intangible assets had declined to below their carrying values as a result of the effects of the COVID-19 global pandemic on the Company's projected financial information. The Company completed analyses to estimate the fair values of these reporting units and its trade names and trademarks. These fair value measurements require the Company to make significant assumptions and estimates about the (i) projected operating margins, (ii) revenue growth rate, and (iii) discount rate, which is risk-adjusted based on the aforementioned items, as observable inputs are not available (level 3). The Company believes the assumptions and estimates used to determine the estimated fair value are reasonable; however, these estimates and assumptions are subject to a high degree of uncertainty. Due to the many variables inherent in estimating fair value, differences in assumptions could have a material effect on the results of the analyses.

During the first quarter of 2020, it was determined the carrying values of certain reporting units, and the Company's trade names and trademarks exceeded their fair values. As result, the Company recognized $267 million in non-cash impairment charges related to its goodwill and $51 million in non-cash impairment charges related to its indefinite-lived intangible assets during the six months ended June 30, 2020. Refer to Note 6, Goodwill and Other Intangible Assets, for additional information on the goodwill and indefinite-lived intangible asset impairments.

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. Refer to Note 6, Goodwill and Other Intangible Assets, for additional information on the goodwill impairment recognized in the six months ended June 30, 2019.

Financial Instruments Not Carried at Fair Value

The estimated fair value of the Company's outstanding debt is as follows:

		June 30, 2020				December 31, 2019
	Fair value hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt (including current maturities):
Term loans and senior notes	Level 2	$	5,121	$	4,641	$	5,179	$	5,113

The fair value of the Company's public senior notes and private borrowings under its senior credit facility is based on observable inputs, and its borrowings on the revolving credit facility approximate fair value. The Company also had $169 million and $192 million at June 30, 2020 and December 31, 2019 in other debt whose carrying value approximates fair value, which consists primarily of foreign debt with maturities of one year or less.

27

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

10. Debt and Other Financing Arrangements

Long-Term Debt

A summary of the Company's long-term debt obligations at June 30, 2020 and December 31, 2019 is set forth in the following table:

	June 30, 2020				December 31, 2019
	Principal		Carrying Amount (a)		Principal		Carrying Amount (a)
Credit Facilities
Revolver Borrowings
Due 2023	$	1,500	$	1,500	$	183	$	183
Term Loans
LIBOR plus 2.00% Term Loan A due 2019 through 2023(b)	1,572		1,561		1,615		1,608
LIBOR plus 3.00% Term Loan B due 2019 through 2025	1,675		1,614		1,683		1,623
Senior Unsecured Notes
$225 million of 5.375% Senior Notes due 2024	225		223		225		222
$500 million of 5.000% Senior Notes due 2026	500		494		500		494
Senior Secured Notes
€415 million 4.875% Euro Fixed Rate Notes due 2022	466		477		465		479
€300 million of Euribor plus 4.875% Euro Floating Rate Notes due 2024	337		340		336		340
€350 million of 5.000% Euro Fixed Rate Notes due 2024	393		412		392		413
Other debt, primarily foreign instruments	13		12		14		13
			6,633				5,375
Less - maturities classified as current			4				4
Total long-term debt			$	6,629			$	5,371

^(a)  Carrying amount is net of unamortized debt issuance costs and debt discounts or premiums. Total unamortized debt issuance costs were $80 million and $76 million at June 30, 2020 and December 31, 2019. Total unamortized debt (premium) discount, net was $(32) million and $(37) million at June 30, 2020 and December 31, 2019.

^(b)  The interest rate on Term Loan A at December 31, 2019 was LIBOR plus 1.75%.

Short-Term Debt

The Company's short-term debt at June 30, 2020 and December 31, 2019 consists of the following:

	June 30,		December 31,
	2020		2019
Maturities classified as current	$	4	$	4
Short-term borrowings(a)	157		179
Bank overdrafts	61		2
Total short-term debt	$	222	$	185

^(a) Includes borrowings under both committed credit facilities and uncommitted lines of credit and similar arrangements.

28

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Amortization of debt issuance costs and original issue discounts (premiums)

Interest expense associated with the amortization of the debt issuance costs and original issue discounts (premiums) recognized in the Company's condensed consolidated statements of income (loss) for the three and six months ended June 30, 2020 and 2019 is as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2020			2019		2020			2019
Amortization of debt issuance fees	$	5		$	4	$	10		$	9
Accretion of debt premium	$	(2	)	$	—	$	(6	)	$	(6	)

Included in the table above is the amortization of debt issuance costs on the revolver of $1 million in both the three months ended June 30, 2020 and 2019, and $3 million and $2 million in the six months ended June 30, 2020 and 2019. The unamortized debt issuance costs related to the revolver is included in other assets in the condensed consolidated balance sheets.

Credit Facilities

Financing Arrangements

The table below shows the Company's borrowing capacity on committed credit facilities at June 30, 2020:

	Committed Credit Facilities at June 30, 2020
	Term	Available(b)
		(in billions)
Tenneco Inc. revolving credit facility (a)	2023	$	—
Tenneco Inc. Term Loan A	2023	—
Tenneco Inc. Term Loan B	2025	—
Subsidiaries’ credit agreements	2020 - 2028	—
		$	—

^(a)  The Company is required to pay commitment fees under the revolving credit facility on the unused portion of the total commitment.

^(b)  Letters of credit reduce the available borrowings under the revolving credit facility.

The Company also had $65 million of outstanding letters of credit under uncommitted facilities at June 30, 2020.

At June 30, 2020, the Company had liquidity of $1.4 billion comprised entirely of cash. At June 30, 2020, the Company has fully utilized its $1.5 billion revolving credit facility.

Term Loans

On October 1, 2018, the Company entered into a new credit agreement with JPMorgan Chase Bank, N.A., as administrative agent and other lenders (the "New Credit Facility") in connection with the Federal-Mogul Acquisition, which has been amended by the first amendment, dated February 14, 2020 ("the "First Amendment"), by the second amendment, dated February 14, 2020 ("the Second Amendment"), and by the third amendment, dated May 5, 2020 (the "Third Amendment"). The New Credit Facility provides $4.9 billion of total debt financing, consisting of a five-year $1.5 billion revolving credit facility, a five-year $1.7 billion term loan A facility ("Term Loan A"), and a seven-year $1.7 billion term loan B facility ("Term Loan B"). The Company paid $8 million in one-time fees in connection with the First Amendment and Second Amendment, and $10 million in one-time fees in connection with the Third Amendment.

New Credit Facility — Interest Rates and Fees

The Third Amendment provides for an increase to the margin applicable to borrowings under the revolving credit facility and

the Term Loan A facility at certain leverage levels as set forth below as one of several conditions for obtaining the less restrictive financial maintenance covenants described below under New Credit Facility — Other Terms and Conditions:

Consolidated net leverage ratio	Interest rate
greater than 6.0 to 1	LIBOR plus 2.50%
less than 6.0 to 1 and greater than 4.5 to 1	LIBOR plus 2.25%

29

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Initially, and so long as the Company’s corporate family rating is Ba3 (with a stable outlook) or higher from Moody’s Investors Service, Inc. (“Moody’s”) and BB- (with a stable outlook) or higher from Standard & Poor’s Financial Services LLC (“S&P”), the interest rate on borrowings under the Term Loan B facility will be LIBOR plus 2.75%; at any time the foregoing conditions are not satisfied, the interest rate on the Term Loan B facility will be LIBOR plus 3.00%. When the Term Loan B facility is no longer outstanding and the Company and its subsidiaries have no other secured indebtedness (with certain exceptions set forth in the New Credit Facility), and upon the Company achieving and maintaining two or more corporate credit and/or corporate family ratings higher than or equal to BBB- from S&P, BBB- from Fitch Ratings Inc. (“Fitch”) and/or Baa3 from Moody’s (in each case, with a stable or positive outlook), the collateral under the New Credit Facility may be released. On June 3, 2019, Moody’s lowered our corporate family rating to B1 and the interest rate on borrowings under the term loan B was raised to LIBOR plus 3.00%.

New Credit Facility — Other Terms and Conditions — After giving effect to the Third Amendment, the Company must comply with certain less restrictive financial maintenance covenants for the revolving credit facility and the Term Loan A facility. The financial maintenance covenants are subject to several covenant reset triggers (“Covenant Reset Triggers”) that limit certain activities of the Company by implementing more restrictive affirmative and negative covenants, as more fully described below. If a Covenant Reset Trigger occurs, the financial maintenance covenants revert back to the previous financial maintenance covenants in effect immediately prior to the Third Amendment (and described above) (the “Prior Financial Covenants”). The financial maintenance covenants include (i) a requirement to have a senior secured leverage ratio (as defined in the New Credit Facility), with step-downs, as detailed in the table below; (ii) a requirement to have a consolidated net leverage ratio (as defined in the New Credit Facility), with step-downs, as follows:

(i) Senior secured net leverage ratio		(ii) Consolidated net leverage ratio
not greater than 6.75 to 1	at June 30, 2020	not greater than 4.50 to 1	at March 31, 2020
not greater than 9.50 to 1	at September 30, 2020	not greater than 5.25 to 1	at March 31, 2022
not greater than 8.75 to 1	at December 31, 2020	not greater than 4.75 to 1	at June 30, 2022
not greater than 8.25 to 1	at March 31, 2021	not greater than 4.25 to 1	at September 30, 2022
not greater than 4.50 to 1	at June 30, 2021	not greater than 3.75 to 1	thereafter
not greater than 4.25 to 1	at September 30, 2021
not greater than 4.00 to 1	at December 31, 2021

and (iii) a requirement to maintain a consolidated interest coverage ratio (as defined in the New Credit Facility) for any period of four consecutive fiscal quarters of not less than 2.00 to 1 as of June 30, 2020, 1.50 to 1 through March 31, 2021, and 2.75 to 1 thereafter.

The Company may make a one-time election to revert back to the Prior Financial Covenants and terminate the Covenant Reset Triggers upon delivery of a covenant reset certificate that attests to compliance with the Prior Financial Covenants as of the end of the relevant fiscal period (“Covenant Reset Certificate”).

The Covenant Reset Triggers include certain limitations on the ability of the Company and its restricted subsidiaries to, among other things, (a) incur additional indebtedness, (b) enter into additional sales and leasebacks, (c) create additional liens over their assets, (d) pay dividends or distributions to Tenneco’s stockholders, (e) prepay certain unsecured indebtedness of the Company or its restricted subsidiaries (as more fully described below), (f) make additional investments, (g) dispose of material intellectual property, and (h) reinvest the proceeds of certain asset sales in the business in lieu of repaying indebtedness, each as more specifically described in the Third Amendment. These limitations are in addition to other affirmative and negative covenants (with customary exceptions, materiality qualifiers and limitations) in the New Credit Agreement, including with respect to: financial reporting; payment of taxes; maintenance of existence; compliance with law and material contractual obligations; maintenance of property and insurance; inspection of property, books and records; notices of certain events; compliance with environmental laws; provision and maintenance of collateral perfection; satisfaction of the financial maintenance covenants described above; incurrence of indebtedness; permitting liens over assets; mergers, consolidations, dispositions or other fundamental transactions; dispositions and asset sales; restricted payments; investments; compliance with limitations on certain transactions with nonconsolidated affiliates; sale and leaseback transactions; changes in fiscal periods; negative pledge clauses in certain contracts; changes to lines of business; prepayments and modifications of certain subordinated indebtedness (as more fully described below); use of proceeds; transactions involving special purpose finance subsidiaries; and transactions related to effectuating a spin-off (as defined in the New Credit Agreement), each as more specifically described in the New Credit Agreement.

30

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(Unaudited)

After giving effect to the Third Amendment, so long as no default exists under its New Credit Facility, the Company would be permitted to (i) make regularly scheduled interest and principal payments as and when due in respect of the Senior Unsecured Notes, (ii) refinance the Senior Unsecured Notes with the net cash proceeds of permitted refinancing indebtedness (as defined in the New Credit Facility); (iii) make payments in respect of the Senior Unsecured Notes in an amount equal to the net cash proceeds of qualified capital stock (as defined in the New Credit Facility) issued after May 5, 2020; (iv) convert any Senior Unsecured Notes into qualified capital stock issued after May 5, 2020; and (v) make additional payments of the Senior Unsecured Notes provided that after giving effect to such additional payments the consolidated leverage ratio would be equal to or less than 2.00 to 1 after giving effect to such additional payments. The foregoing limitations regarding repayment and refinancing of the Senior Unsecured Notes and such incremental equivalent debt apply from the effectiveness of the Third Amendment until delivery of a Covenant Reset Certificate.

The covenants in the New Credit Facility generally prohibit the Company from repaying certain subordinated indebtedness. So long as no default exists, the Company would, under its New Credit Facility, be permitted to repay or refinance its subordinated indebtedness (i) with the net cash proceeds of permitted refinancing indebtedness (as defined in the New Credit Facility); (ii) in an amount equal to the net cash proceeds of qualified capital stock (as defined in the New Credit Facility) issued after October 1, 2018; (iii) in exchange for qualified capital stock issued after October 1, 2018; and (iv) with additional payments provided that such additional payments are capped based on a pro forma consolidated leverage ratio after giving effect to such additional payments.

Such additional payments on subordinated indebtedness (x) will not be permitted at any time the pro forma consolidated leverage ratio is greater than 2.00 to 1 after giving effect to such additional payments and (y) will be permitted in an unlimited amount at any time the pro forma consolidated leverage ratio is equal to or less than 2.00 to 1 after giving effect to such additional payments.

The New Credit Facility contains customary representations and warranties, including, as a condition to future revolver borrowings, that all such representations and warranties are true and correct, in all material respects, on the date of borrowing, including representations (with customary exceptions, materiality qualifiers and limitations) as to: existence; compliance with law; power, authority and enforceability; no violation of law or material contracts; material litigation; no default under the New Credit Agreement and related documents; ownership of property, including material intellectual property; payment of material taxes; compliance with margin stock regulations; labor matters; ERISA; Investment Company Act matters; subsidiaries; use of loan proceeds; environmental matters; accuracy of information; security documents; solvency; anti-corruption laws and sanctions; and that since December 31, 2017 there has been no development or event that has had a material adverse effect on the business or financial condition of the Company and its subsidiaries, each as more specifically described in the New Credit Facility.

The New Credit Facility includes customary events of default and other provisions that could require all amounts due thereunder to become immediately due and payable, either automatically or at the option of the lenders, if the Company fails to comply with the terms of the New Credit Facility or if other customary events occur. These events of default (with customary exceptions, materiality qualifiers, limitations and grace periods) include (i) failure to pay obligations under the New Credit Agreement when due; (ii) material inaccuracy of representations and warranties; (iii) failure to comply with the covenants in the New Credit Facility and related documents (as summarized above); (iv) cross-default to material indebtedness; (v) commencement of bankruptcy or insolvency proceedings; (vi) ERISA events; (vii) certain material judgments; (viii) invalidity of unenforceability of security and guarantee documents; and (ix) change of control, each as more specifically described in the New Credit Facility.

Senior Notes

The Company has outstanding 5.375% senior unsecured notes due December 15, 2024 ("2024 Senior Notes") and 5.000% senior unsecured notes due July 15, 2026 ("2026 Senior Notes" and together with the 2024 Senior Notes, the "Senior Unsecured Notes"). The Company has outstanding 5.000% euro denominated fixed rate notes which are due July 15, 2024 ("5.000% Euro Fixed Rate Notes"), 4.875% euro denominated fixed rate notes due April 15, 2022 ("4.875% Euro Fixed Rate Notes"), and floating rate notes due April 15, 2024 ("Euro Floating Rate Notes", together with the 5.000% Euro Fixed Rate Notes and the 4.875% Euro Fixed Notes, the "Senior Secured Notes").

31

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Senior Unsecured Notes and Senior Secured Notes — Other Terms and Conditions — The Senior Unsecured Notes and Senior Secured Notes contain covenants that will, among other things, limit the Company's ability to create liens and enter into sale and leaseback transactions. In addition, the Senior Secured Notes and 2024 Senior Unsecured Notes also require that, as a condition precedent to incurring certain types of indebtedness not otherwise permitted, the Company's consolidated fixed charge coverage ratio, as calculated on a pro forma basis, be greater than 2.00, as well as containing restrictions on its operations, including limitations on: (i) incurring additional indebtedness; (ii) paying dividends; (iii) distributions and stock repurchases; (iv) investments; (v) asset sales and (vi) mergers and consolidations.

Subject to limited exceptions, all of the Company's existing and future material domestic wholly owned subsidiaries fully and unconditionally guarantee its Senior Unsecured Notes and Senior Secured Notes on a joint and several basis. There are no significant restrictions on the ability of the subsidiaries that have guaranteed the Company's Senior Notes to make distributions to the Company.

At June 30, 2020, the Company was in compliance with all of its financial covenants.

Other Debt

Other debt consists primarily of subsidiary debt.

Accounts Receivable Securitization and Factoring

On-Balance Sheet Arrangements

The Company has securitization programs for some of its accounts receivable, with limited recourse provisions. Borrowings on these securitization programs, which are recorded in short-term debt, at June 30, 2020 and December 31, 2019 are as follows:

	June 30, 2020		December 31, 2019
Borrowings on securitization programs	$	3	$	4

Off-Balance Sheet Arrangements

In the Company's European and U.S. accounts receivable factoring programs, accounts receivables are transferred in their entirety to the acquiring entities and are accounted for as a sale. The fair value of assets received as proceeds in exchange for the transfer of accounts receivable under these factoring programs approximates the fair value of such receivables. Some of these programs have deferred purchase price arrangements with the banks.

The Company is the servicer of the receivables under some of these arrangements and is responsible for performing all accounts receivable administration functions. Where the Company receives a fee to service and monitor these transferred accounts receivables, such fees are sufficient to offset the costs and as such, a servicing asset or liability is not recorded as a result of such activities.

In the U.S and Canada, the Company participates in supply chain financing programs with certain of the Company's aftermarket customers through drafting programs.

The amount of accounts receivable outstanding and derecognized for these factoring and drafting arrangements was $0.9 billion and $1.0 billion at June 30, 2020 and December 31, 2019. In addition, the deferred purchase price receivable was $38 million and $33 million at June 30, 2020 and December 31, 2019.

Proceeds from the factoring of accounts receivable qualifying as sales and drafting programs was $0.7 billion and $1.3 billion for the three months ended June 30, 2020 and 2019 and was $1.9 billion and $2.5 billion for the six months ended June 30, 2020 and 2019.

32

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

The following table represents the Company's expenses associated with these arrangements for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Loss on sale of receivables(a)	$	4	$	6	$	10	$	14

^(a) Amount is included in "Interest expense" in the condensed consolidated statements of income (loss).

These programs provide the Company with access to cash at costs that are generally favorable to alternative sources of financing.

11. Pension Plans, Postretirement and Other Employee Benefits

The Company sponsors several defined benefit pension plans ("Pension Benefits") and health care and life insurance benefits ("Other Postretirement Benefits" or "OPEB") for certain employees and retirees around the world.

Components of net periodic benefit cost (credit) for the three and six months ended June 30, 2020 and 2019 are as follows:

	Three Months Ended June 30,
	Pension Benefits												Other Postretirement Benefits
	2020						2019
	U.S.			Non-U.S.			U.S.			Non-U.S.			2020			2019
Service cost	$	1		$	6		$	—		$	6		$	—		$	—
Interest cost	10			5			14			5			3			4
Expected return on plan assets	(16		)	(4		)	(17		)	(4		)	—			—
Net amortization:
Actuarial loss	1			2			1			2			—			1
Prior service cost (credit)	—			—			—			—			(2		)	(2		)
Net pension and postretirement costs (credits)	$	(4	)	$	9		$	(2	)	$	9		$	1		$	3

	Six Months Ended June 30,
	Pension Benefits												Other Postretirement Benefits
	2020						2019
	U.S.			Non-U.S.			U.S.			Non-U.S.			2020			2019
Service cost	$	1		$	12		$	1		$	12		$	—		$	—
Interest cost	20			9			27			12			5			7
Expected return on plan assets	(32		)	(8		)	(34		)	(9		)	—			—
Net amortization:
Actuarial loss	3			4			2			3			1			2
Prior service cost (credit)	—			—			—			—			(4		)	(4		)
Net pension and postretirement costs (credits)	$	(8	)	$	17		$	(4	)	$	18		$	2		$	5

12. Income Taxes

For interim tax reporting, the Company estimates its annual effective tax rate and applies it to year-to-date ordinary income. Jurisdictions where no tax benefit can be recognized due to a valuation allowance are excluded from the estimated annual effective tax rate. The effect of including these jurisdictions on the quarterly effective tax rate calculation could result in a higher or lower effective tax rate during a quarter due to the mix and timing of actual earnings versus annual projections. The tax effects of certain items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur.

For the three months ended June 30, 2020, the Company recorded income tax benefit of $101 million on loss from continuing operations before income taxes of $441 million. This compares to income tax expense of $14 million on income from continuing operations of $59 million in the three months ended June 30, 2019.

For the six months ended June 30, 2020, the Company recorded income tax benefit of $195 million on loss from continuing operations before income taxes of $1.4 billion. This compares to income tax expense of $14 million on loss from continuing operations before income taxes of $46 million in the same period of 2019.

Income tax benefit for the three months ended June 30, 2020 differs from the U.S. statutory rate due primarily to pre-tax income taxed at rates higher than the U.S. statutory tax rate and pre-tax losses with no tax benefit.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Income tax benefit for the six months ended June 30, 2020 differs from the U.S. statutory rate due primarily to $111 million of tax benefit recognized related to asset impairment charges of $883 million, pre-tax income taxed at rates higher than the U.S. statutory tax rate, and pre-tax losses with no tax benefit.

Income tax expense for the three and six months ended June 30, 2019 differs from the U.S. statutory rate due primarily to pre-tax income taxed at rates higher than the U.S. statutory rate and pre-tax losses with no tax benefit.

The Company evaluates its deferred tax assets quarterly to determine if valuation allowances are required or should be adjusted. This assessment considers, among other matters, the nature, frequency and amount of recent losses, the duration of statutory carryforward periods, and tax planning strategies. In making such judgments, significant weight is given to evidence that can be objectively verified. There are many uncertainties regarding the COVID-19 global pandemic that could negatively affect the Company's results of operations, financial position, and cash flows. As a result, if there is an adverse change to the Company’s business performance or the market conditions in which it operates, it is reasonably possible there may be sufficient negative evidence for a valuation allowance to be recorded in the next twelve months. This may result in a one-time charge to income tax expense of up to $595 million, primarily related to the U.S., China, France, Poland, and Spain.

The Company believes it is reasonably possible up to $51 million in unrecognized tax benefits related to the expiration of foreign statute of limitations and the conclusion of income tax examinations may be recognized within the next twelve months.

After considering the effect of COVID-19 on the 2020 forecast, the Company is not projecting sufficient income to utilize its 2011 and 2012 foreign tax credit carryforwards of $29 million and $21 million. The Company has certain U.S. reserves that provide positive evidence these foreign tax credits would be utilized in the event of an assessment by the U.S. tax authorities; therefore, it has netted the foreign tax credit carryforward deferred tax assets with its uncertain tax position liability on the condensed consolidated balance sheets. Should the 2011 and 2012 foreign tax credit carryforwards expire without utilization, the foreign tax credit carryforward deferred tax assets would be written off with a charge to income tax expense. 

13. Commitments and Contingencies

Environmental Matters

The Company is subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which it operates. The Company has been notified by the U.S. Environmental Protection Agency, other national environmental agencies, and various provincial and state agencies it may be a potentially responsible party (“PRP”) under such laws for the cost of remediating hazardous substances pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") and other national and state or provincial environmental laws. PRP designation typically requires the funding of site investigations and subsequent remedial activities. Many of the sites that are likely to be the costliest to remediate are often current or former commercial waste disposal facilities to which numerous companies sent wastes. Despite the potential joint and several liability which might be imposed on the Company under CERCLA and some of the other laws pertaining to these sites, its share of the total waste sent to these sites generally has been small. The Company believes its exposure for liability at these sites is not material.

On a global basis, the Company has also identified certain other present and former properties at which it may be responsible for cleaning up or addressing environmental contamination, in some cases as a result of contractual commitments and/or federal or state environmental laws. The Company is seeking to resolve its responsibilities for those sites for which a claim has been received.

The Company expenses or capitalizes, as appropriate, expenditures for ongoing compliance with environmental regulations. At June 30, 2020, the Company has an obligation to remediate or contribute towards the remediation of certain sites, including the sites discussed above at which it may be a PRP.

The Company's estimated share of environmental remediation costs for all these sites is recognized in the condensed consolidated balance sheets on a discounted basis and the amounts at June 30, 2020 and December 31, 2019 are as follows:

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

	June 30, 2020		December 31, 2019
Accrued expenses and other current liabilities	$	9	$	8
Deferred credits and other liabilities	26		28
	$	35	$	36

For those locations where the liability was discounted, the weighted average discount rate used was 0.45% and 1.30% at June 30, 2020 and December 31, 2019.

The Company's expected payments for environmental remediation costs for non-indemnified locations are estimated to be approximately:

	2020		2021		2022		2023		2024		2025 and thereafter
Expected payments	$	5	$	4	$	2	$	2	$	2	$	15

Based on information known to the Company from site investigations and the professional judgment of consultants, the Company has established reserves it believes are adequate for these costs. Although the Company believes these estimates of remediation costs are reasonable and are based on the latest available information, the costs are estimates, difficult to quantify based on the complexity of the issues, and are subject to revision as more information becomes available about the extent of remediation required. At some sites, the Company expects other parties will contribute to the remediation costs. In addition, certain environmental statutes provide the Company's liability could be joint and several, meaning the Company could be required to pay amounts in excess of its share of remediation costs. The financial strength of the other PRPs at these sites has been considered, where appropriate, in the determination of the estimated liability. The Company does not believe any potential costs associated with its current status as a PRP, or as a liable party at the other locations referenced herein, will be material to its annual consolidated financial position, results of operations, or liquidity.

Antitrust Investigations and Litigation

On March 25, 2014, representatives of the European Commission (EC) were at Tenneco GmbH's Edenkoben, Germany administrative facility to gather information in connection with an ongoing global antitrust investigation concerning multiple automotive suppliers. On the same date, the Company also received a related subpoena from the U.S. Department of Justice (“DOJ”).

On November 5, 2014, the DOJ granted conditional leniency to the Company, its subsidiaries, and its 50% affiliates as of such date ("2014 Tenneco Entities") pursuant to an agreement the Company entered into under the Antitrust Division's Corporate Leniency Policy. This agreement provides important benefits to the 2014 Tenneco Entities in exchange for the Company's self-reporting of matters to the DOJ and its continuing full cooperation with the DOJ's resulting investigation. For example, the DOJ will not bring any criminal antitrust prosecution against the 2014 Tenneco Entities, nor seek any criminal fines or penalties, in connection with the matters the Company reported to the DOJ. Additionally, there are limits on the liability of the 2014 Tenneco Entities related to any follow-on civil antitrust litigation in the United States. The limits include single rather than treble damages, as well as relief from joint and several antitrust liability with other relevant civil antitrust action defendants. These limits are subject to the Company satisfying the DOJ and any court presiding over such follow-on civil litigation.

On April 27, 2017, the Company received notification from the EC that it has administratively closed its global antitrust inquiry regarding the production, assembly, and supply of complete exhaust systems. No charges against the Company or any other competitor were initiated at any time and the EC inquiry is now closed.

Certain other competition agencies are also investigating possible violations of antitrust laws relating to products supplied by the Company and its subsidiaries, including Federal-Mogul. The Company has cooperated and continues to cooperate fully with all of these antitrust investigations and take other actions to minimize its potential exposure.

The Company and certain of its competitors are also currently defendants in civil putative class action litigation and are subject to similar claims filed by other plaintiffs, in the United States and Canada. More related lawsuits may be filed, including in other jurisdictions. Plaintiffs in these cases generally allege that defendants have engaged in anticompetitive conduct, in violation of federal and state laws, relating to the sale of automotive exhaust systems or components thereof. Plaintiffs seek to recover, on behalf of themselves and various purported classes of purchasers, injunctive relief, damages and attorneys’ fees.

35

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

However, as explained above, because the DOJ granted conditional leniency to the 2014 Tenneco Entities, the Company's civil liability in U.S. follow-on actions with respect to these entities is limited to single damages and the Company will not be jointly and severally liable with the other defendants, provided that the Company has satisfied its obligations under the DOJ leniency agreement and approval is granted by the presiding court. Typically, exposure for follow-on actions in Canada is less than the exposure for U.S. follow-on actions.

Following the EC's decision to administratively close its antitrust inquiry into exhaust systems in 2017, receipt by the 2014 Tenneco Entities of conditional leniency from the DOJ and discussions during the third quarter of 2017 following the appointment of a special settlement master in the civil putative class action cases pending against the Company and/or certain of its competitors in the United States, the Company continues to vigorously defend itself and/or take actions to minimize its potential exposure to matters pertaining to the global antitrust investigation, including engaging in settlement discussions when it is in the best interests of the Company and its stockholders. For example, in October 2017, the Company settled an administrative action brought by Brazil's competition authority for an amount that was not material. In December 2018, the Company settled a separate administrative action brought by Brazil’s competition authority against a Federal-Mogul subsidiary, also for an amount that was not material.

Additionally, in February 2018, the Company settled civil putative class action litigation in the United States brought by classes of direct purchasers, end-payors and auto dealers. No other classes of plaintiffs have brought claims against the Company in the United States. Based upon those earlier developments, including settlement discussions, the Company established a reserve of $132 million in its second quarter 2017 financial results for settlement costs that were probable, reasonably estimable, and expected to be necessary to resolve its antitrust matters globally, which primarily involves the resolution of civil suits and related claims. Of the $132 million reserve that was established, $109 million has been paid through June 30, 2020, which included $30 million paid in the six months ended June 30, 2020 from amounts that were included in the reserve. In connection with the resolution of certain claims, $9 million was released from the reserve in the third quarter of 2019. At June 30, 2020, the reserve was $14 million, of which $2 million was recorded in accrued expenses and other current liabilities and $12 million was recorded in deferred credits and other liabilities in the Company's condensed consolidated balance sheets. While the Company, including its Federal-Mogul subsidiaries, continues to cooperate with certain competition agencies investigating possible violations of antitrust laws relating to products supplied by the Company, and the Company may be subject to other civil lawsuits and/or related claims, no amount of this reserve is attributable to matters with the DOJ or the EC, and no such amount is expected based on current information.

The Company's reserve for its antitrust matters is based upon all currently available information and an assessment of the probability of events for those matters where the Company can make a reasonable estimate of the costs to resolve such outstanding matters. The Company's estimate involves significant judgment, given the number, variety and potential outcomes of actual and potential claims, the uncertainty of future rulings and approvals by a court or other authority, the behavior or incentives of adverse parties or regulatory authorities, and other factors outside of its control. As a result, the Company's reserve may change from time to time, and actual costs may vary. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on current information, the Company does not expect any such change in the reserve will have a material adverse effect on the Company's annual consolidated financial position, results of operations or liquidity.

Other Legal Proceedings, Claims and Investigations

For many years the Company has been and continues to be subject to lawsuits initiated by claimants alleging health problems as a result of exposure to asbestos. The Company's current docket of active and inactive cases is less than 500 cases in the United States and less than 50 in Europe.

With respect to the claims filed in the United States, the substantial majority of the claims are related to alleged exposure to asbestos in the Company's line of Walker® exhaust automotive products although a significant number of those claims appear also to involve occupational exposures sustained in industries other than automotive. A small number of claims have been asserted against one of the Company's subsidiaries by railroad workers alleging exposure to asbestos products in railroad cars. The Company believes, based on scientific and other evidence, it is unlikely that U.S. claimants were exposed to asbestos by the Company's former products and that, in any event, they would not be at increased risk of asbestos-related disease based on their work with these products. Further, many of these cases involve numerous defendants. Additionally, in many cases the plaintiffs either do not specify any, or specify the jurisdictional minimum, dollar amount for damages.

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TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

With respect to the claims filed in Europe, the substantial majority relate to occupational exposure claims brought by current and former employees of Federal-Mogul facilities in France and amounts paid out were not material. A small number of occupational exposure claims have also been asserted against Federal-Mogul entities in Italy and Spain.

As major asbestos manufacturers and/or users continue to go out of business or file for bankruptcy, the Company may experience an increased number of these claims. The Company vigorously defends itself against these claims as part of its ordinary course of business. In future periods, the Company could be subject to cash costs or charges to earnings if any of these matters are resolved unfavorably to the Company. To date, with respect to claims that have proceeded sufficiently through the judicial process, the Company has regularly achieved favorable resolutions. Accordingly, the Company presently believes that these asbestos-related claims will not have a material adverse effect on the Company's annual consolidated financial position, results of operations or liquidity.

The Company is also from time to time involved in other legal proceedings, claims or investigations. Some of these matters involve allegations of damages against the Company relating to environmental liabilities (including toxic tort, property damage and remediation), intellectual property matters (including patent, trademark and copyright infringement, and licensing disputes), personal injury claims (including injuries due to product failure, design or warning issues, and other product liability related matters), taxes, unclaimed property, employment matters, advertising matters, and commercial or contractual disputes, sometimes related to acquisitions or divestitures. Additionally, some of these matters involve allegations relating to legal compliance.

While the Company vigorously defends itself against all of these legal proceedings, claims and investigations and take other actions to minimize its potential exposure, in future periods, the Company could be subject to cash costs or charges to earnings if any of these matters are resolved on unfavorable terms. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on current information, including the Company's assessment of the merits of the particular claim, the Company does not expect the legal proceedings, claims or investigations currently pending against it will have any material adverse effect on its annual consolidated financial position, results of operations or liquidity.

Asset Retirement Obligations

The Company’s primary asset retirement obligations ("ARO") activities relate to the removal of hazardous building materials at its facilities. The Company records an ARO at fair value upon initial recognition when the amount is probable and can be reasonably estimated. ARO fair values are determined based on the Company’s determination of what a third party would charge to perform the remediation activities, generally using a present value technique.

The Company's ARO liabilities at June 30, 2020 and December 31, 2019 are as follows:

	June 30, 2020		December 31, 2019
Accrued expenses and other current liabilities	$	3	$	3
Deferred credits and other liabilities	12		13
	$	15	$	16

Warranty Matters

The Company provides warranties on some of its products. The warranty terms vary but range from one year up to limited lifetime warranties on some of its premium aftermarket products. Provisions for estimated expenses related to product warranty are made at the time products are sold or when specific warranty issues are identified with the Company's products. These estimates are established using historical information about the nature, frequency, and average cost of warranty claims. The Company believes the warranty reserve is appropriate; however, actual claims incurred could differ from the original estimates, requiring adjustments to the reserve. The reserve is included in both current and long-term liabilities on the condensed consolidated balance sheets.

37

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

The following represents the changes in the Company's warranty accrual for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Balance at beginning of period	$	51		$	48		$	54		$	45
Accruals related to product warranties	1			16			4			21
Reductions for payments made	(1		)	(11		)	(7		)	(13		)
Foreign currency	(1		)	—			(1		)	—
Balance at end of period	$	50		$	53		$	50		$	53

38

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

14. Share-Based Compensation

Share-based compensation expense is included in selling, general, and administrative expenses in the condensed consolidated statements of income (loss). Total share-based compensation expense (benefit) for the three and six months ended June 30, 2020 and 2019 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Cash-settled share-based compensation expense (benefit)	$	1	$	1	$	1	$	—
Share-settled share-based compensation expense (benefit)	7		6		9		13
	$	8	$	7	$	10	$	13

Cash-Settled Awards

The Company has granted restricted stock units ("RSUs") to certain key employees that are payable in cash. These awards are classified as liabilities, valued based on the fair value of the award at the grant date, and 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 June 30, 2020, approximately $5 million of total unrecognized compensation costs is expected to be recognized on the cash-settled RSU's over a weighted average period of approximately 3 years.

Share-Settled Awards

The Company has granted restricted stock, RSUs, and performance share units ("PSUs") to its directors and certain key employees that are payable in common stock. These awards are settled in shares upon vesting and recognized in equity based on their fair value.

The following table reflects the status of all nonvested restricted shares, share-settled RSUs, and PSUs for the six months ended June 30, 2020:

	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	35,630		$	63.27	1,125,346		$	37.91	806,233		$	34.12
Granted	169,781		9.15		1,511,307		7.83		6,654		12.26
Vested	(200,223	)	40.69		(289,074	)	41.39		—		—
Forfeited	(1,781	)	58.01		(339,120	)	34.93		(264,471	)	28.91
Nonvested balance at end of period	3,407		$	59.87	2,008,459		$	27.60	548,416		$	36.15

At June 30, 2020, approximately $27 million of total unrecognized compensation costs is expected to be recognized on the share-settled awards over a weighted average period of approximately 2 years.

15. Shareholders' Equity

Common Stock Outstanding

The Company has authorized 175,000,000 shares ($0.01 par value) of Class A Common Stock at June 30, 2020 and December 31, 2019. The Company has authorized 25,000,000 shares ($0.01 par value) of Class B Common Stock at June 30, 2020 and December 31, 2019.

39

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Total common stock outstanding and changes in common stock issued are as follows:

	Six Months Ended June 30,
	Class A Common Stock				Class B Common Stock
	2020		2019		2020		2019
Shares issued at beginning of period	71,727,061		71,675,379		23,793,669		23,793,669
Issuance (repurchased) pursuant to benefit plans	458,855		123,216		—		—
Restricted stock forfeited and withheld for taxes	(124,440	)	(60,081	)	—		—
Stock options exercised	—		8,438		—		—
Class B common stock converted to Class A common stock	3,485,215		—		(3,485,215	)	—
Shares issued at end of period	75,546,691		71,746,952		20,308,454		23,793,669
Treasury stock	14,592,888		14,592,888		—		—
Total shares outstanding	60,953,803		57,154,064		20,308,454		23,793,669

Class B Common Stock Conversion

Effective April 1, 2020, Icahn Enterprises L.P. ("IEP") exercised its right to convert 3,485,215 shares of the Company’s Class B Common Stock into 3,485,215 shares of the Company’s Class A Common Stock. As a result, IEP holds 9,136,392 shares, or approximately 14.99%, of the Company’s outstanding Class A Common Stock and 20,308,454 shares of the Company’s outstanding Class B Common Stock.

Preferred Stock

The Company had 50,000,000 shares of preferred stock ($0.01 par value) authorized at both June 30, 2020 and December 31, 2019. No shares of preferred stock were issued or outstanding at those dates.

Shareholder Rights Plan

On April 15, 2020, the Company's Board of Directors approved a Section 382 Rights Plan, which will expire on the earliest to occur of (i) the close of business on the day following the certification of the voting results of the Company’s 2021 annual meeting of stockholders, if at such stockholder meeting or any other meeting of stockholders of the Company duly held prior to such meeting, a proposal to ratify the Section 382 Rights Plan has not been passed by the requisite vote of the Company’s stockholders; (ii) the date on which the Board of Directors determines in its sole discretion that (x) the Section 382 Rights Plan is no longer necessary for the preservation of material valuable tax attributes or (y) the tax attributes have been fully utilized and may no longer be carried forward; and (iii) the close of business on October 2, 2021.

Pursuant to the Section 382 Rights Plan, our Board of Directors declared a dividend of (i) one preferred share purchase right (a “Class A Right”), payable on April 27, 2020, for each share of Class A Voting Common Stock and (ii) one preferred share purchase right (a “Class B Right” and, together with the Class A Rights, the “Rights”), payable on April 27, 2020, for each share of Class B Non-Voting Common Stock, in each case, outstanding on April 27, 2020 to the stockholders of record on that date. Each Right, which is exercisable only in the event that any person or group acquires 4.9% or more of the Company’s outstanding shares of Class A Voting Common Stock (with certain limited exceptions), would entitle any holder other than the person or group whose ownership position has exceeded the ownership limit to purchase common stock having a value equal to twice the exercise price of the Right, or, at the election of the Board of Directors, to exchange each Right for one share of Class A Common Stock per Class A Right or one share of Class B Non-Voting Common Stock per Class B Right.

40

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Accumulated Other Comprehensive Income (Loss)

The following represents the Company's changes in accumulated other comprehensive income (loss) by component, net of tax for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Foreign currency translation adjustments and other:
Balance at beginning of period	$	(568	)	$	(366	)	$	(369	)	$	(395	)
Other comprehensive income (loss) before reclassifications	34			(16		)	(165		)	11
Reclassification from other comprehensive income (loss)	—			—			—			—
Other comprehensive income (loss)	34			(16		)	(165		)	11
Income tax benefit (provision)	1			(1		)	1			1
Balance at end of period	(533		)	(383		)	(533		)	(383		)
Pensions and other postretirement benefits:
Balance at beginning of period	(338		)	(296		)	(342		)	(297		)
Other comprehensive income (loss) before reclassifications	—			—			—			—
Reclassification from other comprehensive income (loss)	1			2			4			3
Other comprehensive income (loss)	1			2			4			3
Income tax benefit (provision)	(6		)	(4		)	(5		)	(4		)
Balance at end of period	(343		)	(298		)	(343		)	(298		)
Cash flow hedge instruments:
Balance at beginning of period	(2		)	4			—			—
Other comprehensive income (loss) before reclassifications	5			(3		)	2			1
Reclassification from other comprehensive income (loss)	—			—			—			—
Other comprehensive income (loss)	5			(3		)	2			1
Income tax benefit (provision)	(1		)	—			—			—
Balance at end of period	2			1			2			1
Accumulated other comprehensive loss at end of period	$	(874	)	$	(680	)	$	(874	)	$	(680	)
Other comprehensive income (loss) attributable to noncontrolling interests	$	7		$	(1	)	$	(13	)	$	5

16. Segment Information

Tenneco consists of four operating segments: Powertrain, Clean Air, Ride Performance, and Motorparts. Costs related to other business activities, primarily corporate headquarter functions, are disclosed separately from the four operating segments as "Corporate."

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 U.S. 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 U.S. 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 the three and six months ended June 30, 2020 and 2019 are as follows:

	Reportable Segments
	Clean Air		Powertrain		Ride Performance		Motorparts		Total		Reclass & Elims			Total
For the Three Months Ended June 30, 2020
Revenues from external customers	$	1,140	$	602	$	336	$	559	$	2,637	$	—		$	2,637
Intersegment revenues	$	3	$	21	$	21	$	6	$	51	$	(51	)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	—	$	2	$	1	$	1	$	4	$	—		$	4
For the Three Months Ended June 30, 2019
Revenues from external customers	$	1,827	$	1,133	$	709	$	835	$	4,504	$	—		$	4,504
Intersegment revenues	$	—	$	40	$	38	$	11	$	89	$	(89	)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	—	$	14	$	1	$	2	$	17	$	—		$	17
For the Six Months Ended June 30, 2020
Revenues from external customers	$	2,685	$	1,599	$	924	$	1,265	$	6,473	$	—		$	6,473
Intersegment revenues	$	9	$	59	$	50	$	15	$	133	$	(133	)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	—	$	13	$	1	$	3	$	17	$	—		$	17
For the Six Months Ended June 30, 2019
Revenues from external customers	$	3,606	$	2,308	$	1,442	$	1,632	$	8,988	$	—		$	8,988
Intersegment revenues	$	—	$	86	$	84	$	22	$	192	$	(192	)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	—	$	27	$	2	$	4	$	33	$	—		$	33

41

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Segment EBITDA including noncontrolling interests and the reconciliation to earnings (loss) before interest expense, income taxes, and noncontrolling interests are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
EBITDA including noncontrolling interests by segment:
Clean Air	$	17		$	152		$	116		$	283
Powertrain	(62		)	100			(132		)	213
Ride Performance	(70		)	26			(647		)	(19		)
Motorparts	(52		)	110			(92		)	155
Total reportable segments	(167		)	388			(755		)	632
Corporate	(49		)	(78		)	(135		)	(177		)
Depreciation and amortization	(159		)	(169		)	(330		)	(338		)
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	(375		)	141			(1,220		)	117
Interest expense	(66		)	(82		)	(141		)	(163		)
Income tax (expense) benefit	101			(14		)	195			(14		)
Net income (loss)	$	(340	)	$	45		$	(1,166	)	$	(60	)

Disaggregated Revenue

Original Equipment

Value-Added Sales

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.

42

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Revenue from contracts with customers is disaggregated by customer type and geography, as it depicts the nature and amount of the Company’s revenue that is aligned with the Company's key growth strategies. Certain amounts in the prior period for the Ride Performance segment have been reclassified from OE - Value add to Aftermarket to conform with the current year presentation. This reclassification affected the three and six months ended June 30, 2019 and has no effect on the previously reported totals. In the following tables, revenue is disaggregated accordingly:

	Reportable Segments
By Customer Type	Clean Air		Powertrain		Ride Performance		Motorparts		Total
Three Months Ended June 30, 2020
OE - Substrate	$	623	$	—	$	—	$	—	$	623
OE - Value add	517		602		326		—		1,445
Aftermarket	—		—		10		559		569
Total	$	1,140	$	602	$	336	$	559	$	2,637
Three Months Ended June 30, 2019
OE - Substrate	$	777	$	—	$	—	$	—	$	777
OE - Value add	1,050		1,133		695		—		2,878
Aftermarket	—		—		14		835		849
Total	$	1,827	$	1,133	$	709	$	835	$	4,504
Six Months Ended June 30, 2020
OE - Substrate	$	1,323	$	—	$	—	$	—	$	1,323
OE - Value add	1,362		1,599		899		—		3,860
Aftermarket	—		—		25		1,265		1,290
Total	$	2,685	$	1,599	$	924	$	1,265	$	6,473
Six Months Ended June 30, 2019
OE - Substrate	$	1,483	$	—	$	—	$	—	$	1,483
OE - Value add	2,123		2,308		1,414		—		5,845
Aftermarket	—		—		28		1,632		1,660
Total	$	3,606	$	2,308	$	1,442	$	1,632	$	8,988

	Reportable Segments
By Geography	Clean Air		Powertrain		Ride Performance		Motorparts		Total
Three Months Ended June 30, 2020
North America	$	335	$	168	$	81	$	389	$	973
Europe, Middle East and Africa	248		263		161		135		807
Rest of world	557		171		94		35		857
Total	$	1,140	$	602	$	336	$	559	$	2,637
Three Months Ended June 30, 2019
North America	$	800	$	398	$	228	$	536	$	1,962
Europe, Middle East and Africa	609		540		349		241		1,739
Rest of world	418		195		132		58		803
Total	$	1,827	$	1,133	$	709	$	835	$	4,504
Six Months Ended June 30, 2020
North America	$	1,039	$	512	$	279	$	865	$	2,695
Europe, Middle East and Africa	813		755		458		332		2,358
Rest of world	833		332		187		68		1,420
Total	$	2,685	$	1,599	$	924	$	1,265	$	6,473
Six Months Ended June 30, 2019
North America	$	1,593	$	803	$	460	$	1,043	$	3,899
Europe, Middle East and Africa	1,250		1,115		727		478		3,570
Rest of world	763		390		255		111		1,519
Total	$	3,606	$	2,308	$	1,442	$	1,632	$	8,988

17. Related Party Transactions

The following table summarizes the net sales, purchases, and royalty and other income to and from related parties for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,
	2020						2019
	Net Sales		Purchases		Royalty and Other		Net Sales		Purchases		Royalty and Other
Anqing TP Goetze Piston Ring Company Limited	$	1	$	16	$	1	$	—	$	15	$	1
Anqing TP Powder Metallurgy Company Limited	$	2	$	1	$	—	$	1	$	2	$	—
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	—	$	1	$	—	$	2	$	5	$	—
Federal-Mogul Powertrain Otomotiv A.S.	$	5	$	17	$	2	$	16	$	53	$	1
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti.	$	—	$	1	$	—	$	—	$	2	$	—
Federal-Mogul TP Liners, Inc.	$	3	$	4	$	—	$	4	$	—	$	1
Frenos Hidraulicos Autos	$	—	$	—	$	—	$	1	$	—	$	—
Icahn Automotive Group LLC	$	32	$	—	$	1	$	47	$	—	$	1
Montagewerk Abgastechnik Emden GmbH	$	1	$	—	$	—	$	—	$	—	$	—
PSC Metals, Inc.	$	1	$	—	$	—	$	—	$	—	$	—

43

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

	Six Months Ended June 30,
	2020						2019
	Net Sales		Purchases		Royalty and Other		Net Sales		Purchases		Royalty and Other
Anqing TP Goetze Piston Ring Company Limited	$	5	$	26	$	1	$	—	$	29	$	—
Anqing TP Powder Metallurgy Company Limited	$	3	$	2	$	—	$	1	$	3	$	—
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	1	$	3	$	—	$	3	$	7	$	—
Federal-Mogul Powertrain Otomotiv A.S.	$	17	$	76	$	6	$	44	$	112	$	2
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti.	$	—	$	2	$	—	$	—	$	5	$	—
Federal-Mogul TP Liners, Inc.	$	7	$	16	$	—	$	8	$	—	$	1
Frenos Hidraulicos Autos	$	—	$	—	$	—	$	1	$	—	$	—
Icahn Automotive Group LLC	$	65	$	—	$	2	$	90	$	—	$	2
Montagewerk Abgastechnik Emden GmbH	$	4	$	—	$	—	$	2	$	—	$	—
PSC Metals, Inc.	$	1	$	—	$	—	$	1	$	—	$	—

The following table is a summary of amounts due to and from the Company's related parties at June 30, 2020 and December 31, 2019:

	June 30, 2020				December 31, 2019
	Receivables		Payables and Accruals		Receivables		Payables and Accruals
Anqing TP Goetze Piston Ring Company Limited	$	2	$	22	$	1	$	26
Anqing TP Powder Metallurgy Company Limited	$	1	$	1	$	—	$	1
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	—	$	1	$	—	$	2
Farloc Argentina SAIC	$	—	$	—	$	1	$	—
Federal-Mogul Powertrain Otomotiv A.S.	$	8	$	24	$	8	$	31
Federal-Mogul TP Liners, Inc.	$	1	$	4	$	2	$	7
Icahn Automotive Group LLC	$	45	$	8	$	52	$	10
Montagewerk Abgastechnik Emden GmbH	$	3	$	—	$	1	$	—

Refer to Note 7, Investment in Nonconsolidated Affiliates, for further information for companies within the tables above that represent equity method investments.

Amounts presented as Icahn Automotive Group LLC represent the Company's activities with Auto Plus and Pep Boys.

As part of the Federal-Mogul Acquisition, the Company acquired a redeemable noncontrolling interest related to a subsidiary in India. In accordance with local regulations, the Company initiated a process to make a tender offer of the shares it did 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. During the first quarter of 2020, the tender offer for the shares was completed. Since the transaction was funded and executed by IEP, the completion of the tender offer resulted in an adjustment to additional paid-in capital during the six months ended June 30, 2020. Immediately following the completion of the tender offer, the shares of this noncontrolling interest not owned by the Company were no longer redeemable, or probable of becoming redeemable; therefore, the noncontrolling interest was reclassified from temporary equity to permanent equity during the six months ended June 30, 2020. Refer to Note 2, Summary of Significant Accounting Policies, for further information on this noncontrolling interest.

44

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References herein to "Tenneco", the "Company", "we", "us", and "our" refer to Tenneco Inc. and its consolidated subsidiaries. Unless otherwise stated, all comparisons of June 30, 2020 financial results are to June 30, 2019 financial results.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the condensed consolidated financial statements and related notes included in Item 1 of this quarterly report on Form 10-Q and the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission ("SEC") on March 2, 2020 (the "2019 Form 10-K").

EXECUTIVE OVERVIEW

Our Business

We are one of the world's leading manufacturers of clean air, powertrain, and ride performance products and systems for light vehicle, commercial truck, off-highway, industrial, and aftermarket customers. Both original equipment ("OE") vehicle designers and manufacturers and the repair and replacement markets, or aftermarket, are served globally through leading brands, including Monroe^®, Champion^®, Öhlins^®, MOOG^®, Walker^®, Fel-Pro^®, Wagner^®, Ferodo^®, Rancho^®, Thrush^®, National^®, and Sealed Power^®, among others.

Tenneco consists of four operating segments, Clean Air, Powertrain, Ride Performance, and Motorparts:

• 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 OE customers;

• The Powertrain segment focuses on original equipment powertrain products for automotive, heavy duty, and industrial applications;

• 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; and

• 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.

The COVID-19 global pandemic has negatively affected the global economy, disrupted global supply chains, and created extreme volatility and disruptions to capital and credit markets in the global financial markets. We have responded quickly to protect our team members’ health and safety while taking aggressive actions to mitigate the financial effect of the pandemic on us. In response to the pandemic, we expanded on structural cost reductions, and implemented a range of temporary cost reductions including plant closures, deferment of discretionary spending, and the reduction of capital expenditures. In addition, on April 15, 2020, our Board of Directors adopted a shareholder rights plan designed to protect the availability of our tax assets in the current volatile market environment and, on May 5, 2020, we entered into a third amendment to our credit agreement to increase the maximum leverage ratio and decrease the minimum interest coverage ratio. There are many uncertainties related to COVID-19 that could negatively affect our results of operations, financial position, and cash flows. After considering the effect of COVID-19 on our 2020 forecast, we believe we will comply with our financial covenants, as required by our amended credit agreement and we believe our liquidity position continues to be adequate based on our current estimates and forecasts.

Other factors that we expect will continue to be critical to our success include winning new business awards, managing our overall global manufacturing footprint to ensure proper placement and workforce levels in line with business needs, maintaining competitive wages and benefits, maximizing efficiencies in manufacturing processes, and reducing overall costs. In addition, our ability to adapt to key industry trends, such as a shift in consumer preferences to other vehicles in response to higher fuel costs and other economic and social factors, increasing technologically sophisticated content, changing aftermarket distribution channels, increasing environmental standards, and extended product life of automotive parts, also play a critical role in our success. Other factors that are critical to our success include adjusting to economic challenges such as increases in the cost of raw materials and our ability to successfully reduce the effect of any such cost increases through material substitutions, cost reduction initiatives, and other methods.

45

Beginning in the third quarter of 2020, the Motorparts segment will initiate a rationalization of its supply chain and distribution network to achieve supply chain efficiencies and improve throughput to its customers. As a result, certain assets including inventory, real estate, and personal property will no longer be utilized. As such, during the three and six months ended June 30, 2020, the Motorparts segment recognized an $82 million non-cash charge to write-down inventory to its net realizable value, a $16 million impairment charge to write-down property, plant, and equipment to its fair value, and a $9 million impairment charge to its operating lease right-of-use assets. Additionally, the Motorparts segment recognized $4 million in restructuring charges related to cash severance expected to be paid.

Separation Transaction

We have previously announced our review of a full range of strategic options to enhance shareholder value creation, including a potential separation of the Company into an Aftermarket and Ride Performance company and a new Powertrain Technology company. Current end-market conditions and the effects of the ongoing COVID-19 pandemic are affecting our ability to complete a separation. In light of these ongoing conditions, we are pursuing additional options to optimize shareholder value creation, including a focus on operational improvements, reducing structural costs, lowering capital intensity, and reducing debt.

Financial Results for the Six Months Ended June 30, 2020

Consolidated revenues were $6,473 million, a decrease of $2,515 million, or 28%, for the six months ended June 30, 2020. The primary driver of the decrease is lower sales volume and mix of $2,229 million, largely attributable to the effects of COVID-19. The remaining decrease is attributable to a decrease in revenues of $60 million, or less than 1%, related to the net effects of acquisitions and divestitures, the unfavorable effects of foreign currency exchange of $205 million, and the net unfavorable effects of other of $21 million.

Cost of sales were $5,837 million, a decrease of $1,834 million, or 24%, for the six months ended June 30, 2020. The primary driver of the decrease is from lower sales volume of $1,618 million, largely attributable to the effects of COVID-19. The remaining decrease is attributable to a decrease in cost of sales of $55 million, or less than 1%, related to the net effects of acquisitions and divestitures, the favorable effects of materials sourcing of $22 million, the favorable effects of foreign currency exchange of $181 million, and the net favorable effects of other costs of $40 million. This was partially offset by a non-cash charge of $82 million related to the write-down of inventory in the Motorparts segment in connection with its initiative to rationalize its supply chain and distribution network.

Net loss increased by $1,106 million to a net loss of $1,166 million for the six months ended June 30, 2020 as compared to a net loss of $60 million for the six months ended June 30, 2019. The increase was primarily driven by:

• an increase in restructuring charges, net and asset impairments of $540 million primarily related to the impairment of long-lived asset groups triggered by the effects of the COVID-19 global pandemic on the Company's projected financial information, global headcount and cost reduction initiatives, and other actions to optimize our distribution footprint and warehousing locations; and

• an increase in goodwill and intangible impairment charges of $323 million, which was comprised of an increase in goodwill impairment charges of $207 million, $65 million of definite-lived intangible asset impairments, and $51 million of indefinite-lived intangible asset impairments.

These unfavorable effects were partially offset by:

• a decrease in selling, general, and administrative costs of $166 million, primarily due to $41 million in lower acquisition and expected separation costs, and the favorable effects of cost reduction initiatives implemented in response to the effects of COVID-19, including unpaid furloughs, net pay decreases, temporary support programs, and other compensation related expenses;

• a decrease in engineering, research, and development of $38 million primarily due to the effects of COVID-19 and cost reduction initiatives; and

• an increase in income tax benefit of $209 million primarily resulting from the impairment charges recognized in the six months ended June 30, 2020.

Recent Trends and Market Conditions

There is inherent uncertainty in the continuation of the trends discussed below. In addition, there may be other factors or trends that can have an effect on our business. Our business and operating results are affected by the relative strength of:

General economic conditions

Our OE business is directly related to automotive vehicle production by our customers. Automotive production levels depend on a number of factors, including global and regional economic conditions. Demand for aftermarket products is driven by three primary factors: the number of vehicles in operation; the average age of vehicles; and vehicle usage trends (primarily distance traveled).

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In late 2019, a novel strain of coronavirus, COVID-19, was first detected in Wuhan, China. In March 2020, the World Health Organization declared COVID-19 a global pandemic, and governmental authorities around the world have implemented measures to reduce the spread of COVID-19. COVID-19 has resulted in suspension or reduction of operations, supply chain disruptions, restrictions on domestic and international travel, and a decrease in consumer traffic. These measures have adversely affected workforces, customers, economies, and financial markets, and, along with decreased consumer spending, reductions in revenue, and delays in payments from customers and partners, have led to an economic downturn in many of our markets.

The decline in value-add revenue for the three and six months ended June 30, 2020 was $1,713 million and $2,355 million which is largely attributable to the effects of the COVID-19 global pandemic. We expect the effects of the COVID-19 outbreak will likely continue during the second half of our fiscal year and, accordingly, we cannot predict the extent to which COVID-19 will ultimately affect our business, results of operations or financial condition. As customer demand increases, we expect to face periods where payments will become due to suppliers for our existing and additional inventories to support renewed production before we have generated new receivables from customers from that renewed production. It is our intent to maintain a consistent balance between our payables and receivables during this time.

Cost reductions and other responses to COVID-19

The Company has implemented a range of actions aimed at temporarily reducing costs and preserving liquidity in response to the effects and anticipated effects to our business resulting from COVID-19 as described under “Liquidity and Capital Resources - Liquidity and Financing Arrangements”. The Company will continue to evaluate further ways to manage costs in line with reduced revenue.

Global light vehicle production levels (According to IHS Markit, July, 2020)

For the three months ended June 30, 2020, global light vehicle production was down across most major markets in which we operate and down 45% overall compared to same period in the prior year. Production levels in North America declined 69%, production in South America was down 82%, Europe production decreased 62%, and India declined 86%, while China light vehicle production improved 9%.

Global light vehicle production decreased by 33% overall for the first half of 2020 compared to the same period in the prior year. There were significant declines globally, notably, a 40% decline in both North America and Europe, a 51% decline in both South America and India, and a decline in China of 20%.

Global commercial truck production levels (According to IHS Markit, August, 2020)

For the three months ended June 30, 2020, global commercial truck production was down across most major markets in which we operate and down 32% overall compared to the same period in the prior year. Production decreased 73% in North America, production in Brazil was down 71%, Europe production was down 55%, and India declined 90%, while China was up 18%.

Global commercial truck production decreased by 29% overall for the first half of 2020 compared to the same period in the prior year. There were significant declines globally, notably, a 48% decline in North America, a 35% decline in Brazil, a 39% decline in Europe, a 1% decline in China, and a decline in India of 74%.

Part replacement trends

The strength of our aftermarket business is influenced by several key drivers. These include the vehicle population (or "VIO", vehicles in operation), average vehicle age, fuel prices, and vehicle distance traveled. The VIO is estimated to have expanded in most major markets, including the U.S., China, and Germany over recent years. Average vehicle ages also increased, despite growth in new vehicle sales, in most regions. Vehicle distance traveled varies by region and is sensitive to several factors, including fuel prices, and transportation alternatives.

Geopolitical risk

We conduct business globally, which subjects us to numerous risks and uncertainties including, without limitation, “Brexit” implications, joint ventures in unstable regions, and substantial new tariffs. For example, we have operations in the U.K. which may be materially affected by the U.K.'s referendum to leave the European Union, which has created uncertainty in both the U.K. and Europe. We also have an interest in a Turkish joint venture, which may be affected by recent turmoil in that region. In addition, we do business in Mexico and China where there could be potential changes in trade agreements (e.g., the North American Free Trade Agreement) and new or changed tariffs in the U.S. (such as those relating to China).

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Foreign currencies

Given the global nature of our operations, we are subject to fluctuations in foreign exchange rates and there has been significant volatility in foreign currency rates.

Business Strategy

Many of the key components of our business strategy are described below. As we continue to monitor and respond to the COVID-19 global pandemic, we expect that certain of these business strategies will be secondary to our attention to the pandemic and our response and mitigation measures worldwide.

Continue to optimize operational performance by aggressively pursuing cost competitiveness in all business segments and continuing to drive cash flow generation and meet capital allocation objectives

As we continue to expand our distribution and service capabilities globally, we seek to continue optimizing our performance through enhanced efficiencies in order to meet the world-class delivery performance our customers increasingly require. We have made and will continue to make investments in our global distribution network to maximize our manufacturing footprint and manage complexities of our supply chain. By achieving efficiency gains and cost competitiveness, we strive to generate strong cash flow and meet our capital allocation objectives, including deleveraging our balance sheet.

From a design perspective, we will bring a lean mindset to our portfolio to ensure standardization, remove redundancies, reduce transit costs, leverage economies of scale, and optimize manufacturing productivity. We will also continually look for ways to innovate and leverage cross- and up-sell opportunities to the market through a customer-centric product development process. From a manufacturing perspective, we will maintain a continuous improvement philosophy by streamlining plant operations and our network, and executing projects to improve efficiency.

Serving our customers also requires that we compete effectively at the unit cost level, in particular with OE customers. We are making concerted and systematic efforts to continuously improve our position on the cost curve for each of our component part categories. In doing so, we will continue to be a preferred supplier to our customers.

We will be mindful of the changing market conditions that might necessitate adjustments to our resources and manufacturing capacity around the world. We will also remain committed to protecting the environment as well as the health and safety of our employees.

Pursue focused transactional opportunities, consistent with our capital allocation priorities, product line enhancements, technological advancements, geographic positioning, penetration of emerging markets and market share growth

Throughout our history, we have successfully identified and capitalized on acquisitions, alliances, and divestitures to achieve strategic growth and alignment. Through these transactions, we have (1) expanded our product portfolio with complementary technologies; (2) realized incremental business from existing customers; (3) gained access to new customers; (4) achieved leadership positions in geographic regions outside North America; and (5) re-focused on areas that will contribute to our profitable growth.

We intend to continue to explore strategic alliances, joint ventures, acquisitions, divestitures, and other transactions that complement, expand, enhance or realign our existing products, technology, systems development efforts, customer base and/or global presence. We are committed to developing a broader ecosystem-based approach that allows us to work with new and existing customers, suppliers, and entrants to provide timely and leading-edge solutions across the mobility market. We will align with companies that have proven products, proprietary technology, advanced research capabilities, broad geographic reach, and/or strong market positions to further strengthen our product leadership, technology position, global reach, and customer relationships.

Adapt cost structure to economic realities

We aggressively respond to difficult economic environments, aligning our operations to any resulting reductions in production levels and replacement demand and executing comprehensive restructuring and cost-reduction initiatives. Suppliers must continually identify and implement product innovation and cost reduction activities to fund customer annual price concession expectations in order to retain current business as well as to be competitively positioned for future new business opportunities.

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Original Equipment Specific Strategies

The converging forces of connectivity, autonomy, electrification, and shared mobility are spawning a new age of automotive autonomy and a unique opportunity to position our business for significant growth and profitability. We strive to strengthen our global position by designing, manufacturing, delivering, and marketing technologically innovative products and solutions for OE manufacturers. The key components of our OE strategy are described below:

Capitalize on our breadth of technology, differentiated products, and global reach to support and strengthen relationships with existing and emerging OE customers across the world

We conduct business with nearly all of the major automotive OE customers around the world. Within the highly competitive automotive parts industry, we seek to extend the significant advantages that come from our world-class global manufacturing, engineering and distribution footprint and global sourcing capabilities. This footprint enables the design, production and delivery of premium parts emphasizing quality, safety and reliability virtually anywhere in the world and also supports the continual innovation of new products, technologies, and solutions for new and existing OE customers.

Maintain technological leadership to drive further growth from secular market trends

In order to maintain our strong market positions, we are focused on meeting changing performance requirements and keeping up with emerging OE trends such as connectivity, autonomy, shared mobility, and electrification. In pursuit of delivering the ideal ride characteristics for any application, our ride performance division will leverage its innovative technology, NVH performance materials, differentiated products, and advanced system capabilities to provide innovative solutions. Aligning product lines and technical capabilities creates an ideal foundation to meet changing performance requirements for comfort and safety and again ultimately reinventing the ride of the future. The addition of Öhlins to the portfolio will accelerate the development of advanced technology suspension solutions, while also fast-tracking time to market. That acquisition is yet another example of our strategy to leverage key technologies that will better position us to take advantage of secular trends. It also enhances our portfolio in broader mobility markets through the addition of Öhlins’ range of premium OE and aftermarket automotive and motorsports performance products. In addition, our suite of mobility solutions under development represents an opportunity to drive greater partnership with OE manufacturers and broader mobility ecosystem players, creating and capturing value, and growth with higher value content per vehicle.

OE manufacturers are responding to changing end customer trends and preferences alongside their own challenging cost structures by reducing design and production complexities and investing in advanced technologies that enable vehicle electrification and autonomy. We anticipate that OE suppliers with high technology capabilities in vehicle system integration will be able to enable a more seamless transition to next-generation electric vehicles and become preferred suppliers to OE manufacturers. Though many vehicle and customer requirements will evolve, we believe one of the remaining characteristics that will continue to provide differentiated experience and value in the future of mobility is the ride experience. By leveraging our deep component level expertise as well as working with partners across the broader mobility ecosystem, our intent is to lead in the next generation development of motion management products, systems and solutions to engineer the ideal ride for any customer.

Penetrate adjacent market segments

We seek to penetrate a variety of adjacent sales opportunities and achieve growth in higher-margin businesses by applying our design, engineering and manufacturing capabilities. For example, we aggressively leverage our technology and engineering leadership in powertrain, clean air, ride performance and aftermarket into adjacent sales opportunities for heavy-duty trucks, buses, agricultural equipment, construction machinery, and other vehicles in other regions around the world.

We design and launch clean air products for commercial vehicle customers such as Caterpillar, for whom we are their global diesel clean air system integrator, John Deere, Navistar, Deutz, Daimler Trucks, Scania, Weichai Power, FAW Group, and Kubota. We also engineer and build modular NOx-reduction systems for large engines that meet standards of the International Maritime Organization, among others.

Aftermarket Specific Strategies

Our aftermarket business strategy incorporates a go-to-market model that we believe differentiates us from our competitors and creates structural support for sustained revenue growth. The model is designed to drive revenue growth by capitalizing on three of the company’s key competitive strengths: a leading portfolio of products and brands; extensive global manufacturing, distribution and service capabilities; and market intelligence gathered from the company’s distributors, installers and consumers.

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We expect this distinctive go-to-market model will result in a sustainable competitive advantage, particularly as the industry trends previously mentioned disrupt the traditional aftermarket landscape and business practices. We expect the demand for replacement parts to increase as a result of the increase in the average age of VIO and the increase in the average miles driven per year. The characteristics of aftermarket sales and distribution are defined regionally, which require regionally focused strategies to address the key success factors of our customers. The key components of our aftermarket strategy are described below:

Leverage the strength of our global aftermarket leading brands positions, product portfolio and range, marketing and selling expertise, and distribution and logistics capabilities

Our aftermarket business includes multiple leading brands with strong product offerings. Our portfolio includes the industry’s most well-respected and enduring brands.

We will leverage our go-to-market model to build upon our brand strengths and grow our global aftermarket business by consistently delivering differentiated benefits, by growing our brand equity among our target end-customers, and by leveraging our broad product coverage and extensive distribution network. We are in an outstanding position to capitalize on aftermarket trends and expand in mature markets (e.g., North America, Europe, and Australia) as well as high-growth regions (i.e. China, South America, India, and Southeast and Northeast Asia). Important focus areas are enhancing our presence in high-growth markets; leveraging our portfolio and strong presence in suspension to expand our business globally; and diversifying outside of chassis with our sealing, engine and underhood products, as well as other components.

Continue to strengthen our aftermarket capabilities and product offerings in mature markets, including North America and Europe

The scale of our aftermarket business allows for strong distribution channels that significantly enhance our go-to-market capabilities across mature markets in North America and Europe. We continually rationalize our already strong distribution networks with the goal of improved customer service at a lower cost. This is achieved by continually harnessing and leveraging market intelligence and sharing information with our channel partners to drive best practices in go-to-market, manufacturing and distribution processes.

The North America and Europe go-to-market capabilities will be defined by positioning our distribution and installer partners for success. We believe this will require maintaining an extensive catalog of products to provide the ability to address customer requirements quickly and easily. Managing a large and complex catalog of products requires an understanding of the composition of the car parc within the regions including wear patterns, typical replacement rates based on weather, road quality, and average miles driven annually. These compositions differ significantly by region, which will affect the range and frequency of replacement part requirements. The understanding of these regional dynamics will help us provide the right parts when they are needed and achieve the industry’s best “Order to Delivery” times. We will continue to innovate product solutions that will be cost competitive and reliable, reduce install time, reduce the number of unique parts that installers need to inventory on-site, reduce the number of unique installer tools and equipment required, and improve installer safety.

In addition to having a comprehensive product offering, we also strive to maintain very close relationships with our customers and help position them for success. We have launched a series of “Tech First” initiatives to provide online, on demand, and onsite technical training and support to vehicle repair technicians who use and install our products in North America, Europe, and China and plan to expand into South America. This initiative included Garage Gurus™, a network of technical support centers that provide some of the most comprehensive training programs in the industry to educate our partners and customers with emerging vehicle technologies and vehicle repair operational skills. We believe it is key to our strategy to provide aftermarket parts that are simple to install and to make sure our customers have the resources to know how to install these parts properly. In having the right products and resources for our customers, we believe we will continue to be a preferred aftermarket supplier and continue to drive growth in the Americas and emerging economic areas.

Increase aftermarket position in high-growth regions, notably in Asia Pacific

The Asia Pacific region, particularly the high-growth markets of China and India, presents a significant opportunity for us to expand our business. We have made investments in distribution and in our sales force in both China and the rest of Asia to help drive growth in this increasingly important region. We must take into account the different operational requirements in Asia Pacific in order to drive aftermarket growth in this region.

The Asia Pacific light vehicle and commercial vehicle aftermarket industry is fragmented with a large number of small distributors and installers that require different strategies and solutions than more mature consolidated markets. Distribution in smaller volumes will require us to have a hub and spoke warehousing approach to compete on the basis of optimal “Order to Delivery” timeliness while maintaining a broad range of products.

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Additionally, buying online is the preferred purchase method for many smaller distribution and installer partners. The sophistication of the existing online marketplaces in Asia Pacific will require us to develop adaptive and flexible omnichannel tools in order to compete effectively. We believe that developing a competitive online platform for our Asia Pacific customers will be the foundation for us to build a digital platform that will improve our competitiveness globally.

Critical Accounting Estimates

Refer to our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the SEC on March 2, 2020.

Non-GAAP Measures

We use EBITDA including noncontrolling interests as the key performance measure of segment profitability and use the measure in our 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. 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. EBITDA including noncontrolling interests, as determined and measured by us, should not be compared to similarly titled measures reported by other companies.

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RESULTS OF OPERATIONS

For the Three and Six Months Ended June 30, 2020 compared to the Three and Six Months Ended June 30, 2019

Consolidated Results of Operations

The following table presents our condensed consolidated results of operations. The amounts for the three and six months ended June 30, 2019 below reflect the reclassifications to the prior period as discussed in Part I, Item I.

	Three Months Ended June 30,						Increase / (Decrease)					Six Months Ended June 30,						Increase / (Decrease)
	2020			2019			$ Change			% Change (1)		2020			2019			$ Change			% Change (1)
	(millions, except percent, share, and per share amounts)
Revenues
Net sales and operating revenues	$	2,637		$	4,504		$	(1,867	)	(41	)%	$	6,473		$	8,988		$	(2,515	)	(28	)%
Costs and expenses
Cost of sales (exclusive of depreciation and amortization)	2,498			3,801			(1,303		)	(34	)%	5,837			7,671			(1,834		)	(24	)%
Selling, general, and administrative	195			292			(97		)	(33	)%	444			610			(166		)	(27	)%
Depreciation and amortization	159			169			(10		)	(6	)%	330			338			(8		)	(2	)%
Engineering, research, and development	55			78			(23		)	(29	)%	132			170			(38		)	(22	)%
Restructuring charges, net and asset impairments	121			49			72			147	%	605			65			540			n/m
Goodwill and intangible impairment charges	—			—			—			—	%	383			60			323			n/m
	3,028			4,389			(1,361		)	(31	)%	7,731			8,914			(1,183		)	(13	)%
Other income (expense)
Non-service pension and other postretirement benefit (costs) credits	1			(4		)	5			n/m		2			(6		)	8			n/m
Equity in earnings (losses) of nonconsolidated affiliates, net of tax	4			17			(13		)	(76	)%	17			33			(16		)	(48	)%
Other income (expense), net	11			13			(2		)	(15	)%	19			16			3			19	%
	16			26			(10		)	(38	)%	38			43			(5		)	(12	)%
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	(375		)	141			(516		)	n/m		(1,220		)	117			(1,337		)	n/m
Interest expense	(66		)	(82		)	(16		)	(20	)%	(141		)	(163		)	(22		)	(13	)%
Earnings (loss) before income taxes and noncontrolling interests	(441		)	59			(500		)	n/m		(1,361		)	(46		)	(1,315		)	n/m
Income tax (expense) benefit	101			(14		)	115			n/m		195			(14		)	209			n/m
Net income (loss)	(340		)	45			(385		)	n/m		(1,166		)	(60		)	(1,106		)	n/m
Less: Net income (loss) attributable to noncontrolling interests	10			19			(9		)	(47	)%	23			31			(8		)	(26	)%
Net income (loss) attributable to Tenneco Inc.	$	(350	)	$	26		$	(376	)	n/m		$	(1,189	)	$	(91	)	$	(1,098	)	n/m
Earnings (loss) per share
Basic earnings (loss) per share:
Earnings (loss) per share	$	(4.30	)	$	0.32							$	(14.64	)	$	(1.13	)
Weighted average shares outstanding	81,350,773			80,920,825								81,259,667			80,897,731
Diluted earnings (loss) per share:
Earnings (loss) per share	$	(4.30	)	$	0.32							$	(14.64	)	$	(1.13	)
Weighted average shares outstanding	81,350,773			80,920,825								81,259,667			80,897,731

(1) Percentages above denoted as "n/m" are not meaningful to present in the table.

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Revenues

Three-months ended: Revenues decreased by $1,867 million, or 41%, as compared to the three months ended June 30, 2019. The primarily driver of the decrease is lower sales volume and mix of $1,730 million, largely attributable to the effects of COVID-19. The remaining decrease is attributable to a decrease in revenues of $15 million, or less than 1%, related to the net effects of acquisitions and divestitures, the unfavorable effects of foreign currency exchange of $108 million, and the net unfavorable effects of other of $14 million.

The table below reflects our consolidated revenues for the three months ended June 30, 2020 and 2019 (amounts in millions):

Three months ended June 30, 2019	$	4,504
Acquisitions and divestitures, net	(15		)
Drivers in the change of organic revenues:
Volume and mix	(1,730		)
Currency exchange rates	(108		)
Others	(14		)
Three months ended June 30, 2020	$	2,637

Six-months ended: Revenues decreased by $2,515 million, or 28%, as compared to the six months ended June 30, 2019. The primary driver of the decrease is lower sales volume and mix of $2,229 million, largely attributable to the effects of COVID-19. The remaining decrease is attributable to a decrease in revenues of $60 million, or less than 1%, related to the net effects of acquisitions and divestitures, the unfavorable effects of foreign currency exchange of $205 million, and the net unfavorable effects of other of $21 million.

The table below reflects our consolidated revenues for the six months ended June 30, 2020 and 2019 (amounts in millions):

Six months ended June 30, 2019	$	8,988
Acquisitions and divestitures, net	(60		)
Drivers in the change of organic revenues:
Volume and mix	(2,229		)
Currency exchange rates	(205		)
Others	(21		)
Six months ended June 30, 2020	$	6,473

Cost of sales

Three-months ended: Cost of sales decreased by $1,303 million, or 34%, as compared to the three months ended June 30, 2019. The primary driver of the decrease is lower costs resulting from lower sales volume of $1,233 million, largely attributable to the effects of COVID-19. The remaining decrease is attributable to a decrease in cost of sales of $12 million, or less than 1%, related to the net effects of acquisitions and divestitures, the favorable effects of foreign currency exchange of $92 million, and the net favorable effects of other costs of $50 million. This was partially offset by the unfavorable effects of materials sourcing of $2 million and a non-cash charge of $82 million related to the write-down of inventory in the Motorparts segment in connection with its initiative to rationalize its supply chain and distribution network.

The table below reflects our consolidated cost of sales for the three months ended June 30, 2020 and 2019 (amounts in millions):

Three months ended June 30, 2019	$	3,801
Acquisitions and divestitures, net	(12		)
Drivers in the change of organic cost of sales:
Volume and mix	(1,233		)
Material	2
Currency exchange rates	(92		)
Inventory write-down	82
Others	(50		)
Three months ended June 30, 2020	$	2,498

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Six-months ended: Cost of sales decreased by $1,834 million, or 24%, as compared to the six months ended June 30, 2019. The primary driver of the decrease is from lower sales volume of $1,618 million, largely attributable to the effects of COVID-19. The remaining decrease is attributable to a decrease in cost of sales of $55 million, or less than 1%, related to the net effects of acquisitions and divestitures, the favorable effects of materials sourcing of $22 million, the favorable effects of foreign currency exchange of $181 million, and the net favorable effects of other costs of $40 million. This was partially offset by a non-cash charge of $82 million related to the write-down of inventory in the Motorparts segment in connection with its initiative to rationalize its supply chain and distribution network.

The table below reflects our consolidated cost of sales for the six months ended June 30, 2020 and 2019 (amounts in millions):

Six months ended June 30, 2019	$	7,671
Acquisitions and divestitures, net	(55		)
Drivers in the change of organic cost of sales:
Volume and mix	(1,618		)
Material	(22		)
Currency exchange rates	(181		)
Inventory write-down	82
Others	(40		)
Six months ended June 30, 2020	$	5,837

Selling, general, and administrative (SG&A)

Three-months ended: SG&A decreased by $97 million to $195 million compared to $292 million for the three months ended June 30, 2019. The decrease was primarily due to $18 million in lower acquisition and expected separation costs, and the favorable effects of cost reduction initiatives implemented in response to the effects of COVID-19, including unpaid furloughs, net pay decreases, temporary support programs, and other compensation related expenses during the three months ended June 30, 2020.

Six-months ended: SG&A decreased by $166 million to $444 million compared to $610 million for the six months ended June 30, 2019. The decrease was primarily due to $41 million in lower acquisition and expected separation costs, and the favorable effects of cost reduction initiatives implemented in response to the effects of COVID-19, including unpaid furloughs, net pay decreases, temporary support programs, and other compensation related expenses during the six months ended June 30, 2020.

Depreciation and amortization

Three-months ended: Depreciation and amortization decreased by $10 million to $159 million as compared to $169 million for the three months ended June 30, 2019, primarily attributable to the impairments on property, plant, and equipment recognized in the first quarter of 2020.

Six-months ended: Depreciation and amortization decreased by $8 million to $330 million as compared to $338 million for the six months ended June 30, 2019, primarily attributable to the impairments on property, plant, and equipment recognized in the first quarter of 2020.

Engineering, research, and development

Three-months ended: Engineering, research, and development decreased by $23 million to $55 million as compared to $78 million for the three months ended June 30, 2019. The decrease was due primarily to the effects of COVID-19 and the favorable effects of cost reduction initiatives.

Six-months ended: Engineering, research, and development decreased by $38 million to $132 million as compared to $170 million for the six months ended June 30, 2019. The decrease was due primarily to the effects of COVID-19 and the favorable effects of cost reduction initiatives.

Restructuring charges, net and asset impairments

Three-months ended: Restructuring charges, net and asset impairments increased by $72 million to $121 million as compared to $49 million for the three months ended June 30, 2019. The increase is primarily attributable to an increase of $45 million for cash severance costs expected to be paid as part of global headcount and cost reduction actions across all segments and regions; asset impairments charges in the Motorparts segment of $25 million related to its initiative to rationalize its supply chain and distribution network; and asset impairment charges of $3 million in the Powertrain segment in connection with certain plant relocations and closures during the three months ended June 30, 2020. In addition, there was a decrease of $1 million in other asset impairments for the three months ended June 30, 2020 as compared to the three months ended June 30, 2019.

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Six-months ended: Restructuring charges, net and asset impairments increased by $540 million to $605 million as compared to $65 million for the six months ended June 30, 2019. The increase is primarily attributable to property, plant, and equipment asset impairments in the Ride Performance segment of $455 million; an increase of $42 million for cash severance costs expected to be paid as part of global headcount and cost reduction actions across all segments and regions; asset impairment charges in the Motorparts segment of $25 million related to its initiative to rationalize its supply chain and distribution network; asset impairment charges of $3 million in the Powertrain segment in connection with certain plant relocations and closures; and an asset impairment charge of $17 million for operating lease right-of-use assets in the corporate component during the six months ended June 30, 2020. In addition, there was a decrease of $2 million in other asset impairments for the six months ended June 30, 2020 as compared to the six months ended June 30, 2019.

Goodwill and intangible impairment charges

Three-months ended: There was no goodwill and intangible impairment charge recorded in either the three months ended June 30, 2020 and 2019.

Six-months ended: Goodwill and intangible impairment charges increased by $323 million to $383 million as compared to $60 million for the six months ended June 30, 2019. The increase is primarily attributable to $267 million of goodwill impairment charges, $65 million of definite-lived intangible asset impairments, and $51 million of indefinite-lived intangible asset impairments during the six months ended June 30, 2020, which was the result of the effects of COVID-19. This compared to a $60 million goodwill impairment charge for the six months ended June 30, 2019, which was the result of a reorganization of reporting units within the Motorparts and Ride Performance segments.

Non-service pension and postretirement benefit (costs) credits

Three-months ended: Non-service pension and postretirement benefit (costs) credits increased by $5 million to a net credit of $1 million as compared to a net cost of $4 million for the three months ended June 30, 2019. The change was primarily attributable to a decrease in the discount rate and lower amortization, which was partially offset by a decrease in the long-term rate of return.

Six-months ended: Non-service pension and postretirement benefit (costs) credits increased by $8 million to a net credit of $2 million as compared to a net cost of $6 million for the six months ended June 30, 2019. The change was primarily attributable to a decrease in the discount rate, which was partially offset by a decrease in the long-term rate of return.

Equity in earnings (losses) of nonconsolidated affiliates, net of tax

Three-months ended: Equity in earnings (losses) of nonconsolidated affiliates, net of tax decreased by $13 million as compared to the three months ended June 30, 2019. The decrease is primarily attributable to the effects of the COVID-19 global pandemic on the equity in earnings (losses) of our nonconsolidated affiliates located in Turkey, Korea, and the U.S.

Six-months ended: Equity in earnings (losses) of nonconsolidated affiliates, net of tax decreased by $16 million as compared to the six months ended June 30, 2019. The decrease is primarily attributable to the effects of the COVID-19 global pandemic on the equity in earnings (losses) of our nonconsolidated affiliates located in Turkey, Korea, and the U.S.

Other income (expense), net

Three-months ended: Other income (expense), net decreased by $2 million as compared to the three months ended June 30, 2019. This is primarily attributable to a decrease in income from an EPA mandate to which we were the beneficiary during the three months ended June 30, 2020 as compared to the three months ended June 30, 2019.

Six-months ended: Other income (expense), net increased by $3 million as compared to the six months ended June 30, 2019. This is primarily attributable to an increase in income from an EPA mandate to which we were the beneficiary during the six months ended June 30, 2020 as compared to the six months ended June 30, 2019.

Interest expense

Three-months ended: Interest expense decreased by $16 million as compared to the three months ended June 30, 2019. The decrease was primarily attributable to lower interest rates on our variable rate debt, slightly offset by interest expense on higher borrowings on the revolver. Interest expense includes financing charges on sales of accounts receivable, which decreased by $2 million as compared to the three months ended June 30, 2019.

Six-months ended: Interest expense decreased by $22 million as compared to the six months ended June 30, 2019. The decrease was primarily attributable to lower interest rates on our variable rate debt, slightly offset by interest expense on higher borrowings on the revolver. Interest expense includes financing charges on sales of accounts receivable, which decreased by $4 million as compared to the six months ended June 30, 2019.

55

Income tax (expense) benefit

Three-months ended: Income tax benefit increased by $115 million to an income tax benefit of $101 million as compared to an income tax expense of $14 million in the three months ended June 30, 2019. Income tax (expense) benefit for the three months ended June 30, 2020 differs from the U.S. statutory tax rate due primarily to pre-tax income taxed at rates higher than the U.S. statutory tax rate and pre-tax losses with no tax benefit.

Six-months ended: Income tax benefit increased by $209 million to an income tax benefit of $195 million as compared to an income tax expense of $14 million in the six months ended June 30, 2019. Income tax (expense) benefit for the six months ended June 30, 2020 differs from the U.S. statutory tax rate due primarily to $111 million of tax benefit recognized related to asset impairment charges, pre-tax income taxed at rates higher than the U.S. statutory tax rate, and pre-tax losses with no tax benefit.

Net income (loss)

Three-months ended: Net loss increased by $385 million to a net loss of $340 million as compared to a net income of $45 million for the three months ended June 30, 2019 as a result of the aforementioned items.

Six-months ended: Net loss increased by $1,106 million to a net loss of $1,166 million as compared to a net loss of $60 million for the six months ended June 30, 2019 as a result of the aforementioned items.

Earnings (loss) before interest expense, income taxes, noncontrolling interests, and depreciation and amortization (“EBITDA including noncontrolling interests”)

The following table presents the reconciliation from EBITDA including noncontrolling interests to net income (loss) for the three and six months ended June 30, 2020 and 2019 (amounts in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
EBITDA including noncontrolling interests:
Clean Air	$	17		$	152		$	116		$	283
Powertrain	(62		)	100			(132		)	213
Ride Performance	(70		)	26			(647		)	(19		)
Motorparts	(52		)	110			(92		)	155
Corporate	(49		)	(78		)	(135		)	(177		)
Depreciation	(159		)	(169		)	(330		)	(338		)
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	(375		)	141			(1,220		)	117
Interest expense	(66		)	(82		)	(141		)	(163		)
Income tax (expense) benefit	101			(14		)	195			(14		)
Net income (loss)	$	(340	)	$	45		$	(1,166	)	$	(60	)

See "Segment Results of Operations" for further information on EBITDA including noncontrolling interests.

56

Segment Results of Operations

Overview of Net Sales and Operating Revenues

Our Clean Air segment has substrate sales. Substrates are porous ceramic filters coated with a catalyst - typically, precious metals such as platinum, palladium and rhodium. We do not manufacture substrates, as they are supplied to us by Tier 2 suppliers generally as directed by our OE customers. We generally earn a small margin on these components of the system. These substrate components have been increasing as a percentage of our revenue as the need for more sophisticated emission control solutions increases to meet more stringent environmental regulations, and as we capture more diesel aftertreatment business. While these substrates dilute our gross margin percentage, they are a necessary component of an emission control system.

Our value-add content in an emission control system includes designing the system to meet environmental regulations through integration of the substrates into the system, maximizing use of thermal energy to heat up the catalyst quickly, efficiently managing airflow to reduce back pressure as the exhaust stream moves past the catalyst, managing the expansion and contraction of the emission control system components due to temperature extremes experienced by an emission control system, using advanced acoustic engineering tools to design the desired exhaust sound, minimizing the opportunity for the fragile components of the substrate to be damaged when we integrate it into the emission control system and reducing unwanted noise, vibration and harshness transmitted through the emission control system.

We disclose substrate sales amounts because we believe investors utilize this information to understand the effect of this portion of our revenues on our overall business and because it removes the effect of potentially volatile precious metals pricing from our revenues. While our OE customers generally assume the risk of precious metals pricing volatility, it affects our reported revenues.

The table below reflects our segment revenues for the three months ended June 30, 2020 and 2019 (amounts in millions):

	Segments
	Clean Air					Powertrain					Ride Performance					Motorparts					Total Revenues
For the Three Months Ended June 30,	2020			2019		2020			2019		2020			2019		2020			2019		2020			2019
Revenues	$	1,140		$	1,827	$	602		$	1,133	$	336		$	709	$	559		$	835	$	2,637		$	4,504
Value-add revenues	517			1,050		602			1,133		336			709		559			835		2,014			3,727
Currency effect on value-add revenue	(16		)	—		(35		)	—		(15		)	—		(27		)	—		(93		)	—
Value-add revenue excluding currency	$	533		$	1,050	$	637		$	1,133	$	351		$	709	$	586		$	835	$	2,107		$	3,727
Substrate sales	$	623		$	777	$	—		$	—	$	—		$	—	$	—		$	—	$	623		$	777

The table below reflects our segment revenues for the six months ended June 30, 2020 and 2019 (amounts in millions):

	Segments
	Clean Air					Powertrain					Ride Performance					Motorparts					Total Revenues
For the Six Months Ended June 30,	2020			2019		2020			2019		2020			2019		2020			2019		2020			2019
Revenues	$	2,685		$	3,606	$	1,599		$	2,308	$	924		$	1,442	$	1,265		$	1,632	$	6,473		$	8,988
Value-add revenues	1,362			2,123		1,599			2,308		924			1,442		1,265			1,632		5,150			7,505
Currency effect on value-add revenue	(35		)	—		(61		)	—		(32		)	—		(46		)	—		(174		)	(28		)
Value-add revenue excluding currency	$	1,397		$	2,123	$	1,660		$	2,308	$	956		$	1,442	$	1,311		$	1,632	$	5,324		$	7,533
Substrate sales	$	1,323		$	1,483	$	—		$	—	$	—		$	—	$	—		$	—	$	1,323		$	1,483

Segment Revenue

Clean Air

Three-months ended: Clean Air revenue decreased $687 million, or 38%, as compared to the three months ended June 30, 2019. While higher sales volumes in Asia Pacific resulted in revenue growth, this improvement was more than offset by lower sales volumes primarily in North America, South America and Europe for light vehicle and off-highway and other revenues contributing a net $646 million to the decrease. In addition, foreign currency exchange had a $31 million unfavorable effect on Clean Air revenue while other unfavorable effects decreased revenue by $10 million.

57

Six-months ended: Clean air revenue decreased $921 million, or 26%, as compared to the six months ended June 30, 2019. While higher sales volumes in Asia Pacific resulted in revenue growth, this improvement was more than offset by lower sales volumes primarily in North America, South America and Europe for light vehicle and off-highway and other revenues contributing a net $834 million to the decrease. In addition, foreign currency exchange had a $66 million unfavorable effect on Clean Air revenue while other unfavorable effects decreased revenue by $21 million.

Powertrain

Three-months ended: Powertrain revenue decreased $531 million, or 47%, as compared to the three months ended June 30, 2019. Lower light vehicle, commercial truck, industrial, off-highway and other vehicle revenue contributed $489 million to the decrease, foreign currency exchange had a $35 million unfavorable effect on Powertrain revenue, while other unfavorable effects decreased revenue by $7 million.

Six-months ended: Powertrain revenue decreased $709 million, or 31%, as compared to the six months ended June 30, 2019. Lower light vehicle, commercial truck, industrial, off-highway and other vehicle revenue contributed $634 million to the decrease, foreign currency exchange had a $61 million unfavorable effect on Powertrain revenue, while other unfavorable effects decreased revenue by $14 million.

Ride Performance

Three-months ended: Ride Performance revenue decreased $373 million, or 53%, as compared to the three months ended June 30, 2019. Lower light vehicle, commercial truck and off-highway and other vehicle revenues contributed $354 million to the decrease, as well as a decrease in revenues from divestitures of $2 million, foreign currency exchange had a $15 million unfavorable effect on Ride Performance revenue, while other unfavorable effects decreased revenue by $2 million.

Six-months ended: Ride performance revenue decreased $518 million, or 36%, as compared to the six months ended June 30, 2019. Lower light vehicle, commercial truck and off-highway and other vehicle revenues contributed $460 million to the decrease, as well as a decrease in revenues from divestitures of $21 million, foreign currency exchange had a $32 million unfavorable effect on Ride Performance revenue, while other unfavorable effects decreased revenue by $5 million.

Motorparts

Three-months ended: Motorparts revenue decreased $276 million, or 33%, as compared to the three months ended June 30, 2019. Lower volume contributed $241 million to the decrease, as well as a decrease in revenues from divestitures of $13 million, and foreign currency exchange had a $27 million unfavorable effect on Motorparts revenues. The unfavorable effects were partially offset by other net favorable effects of $5 million.

Six-months ended: Motorparts revenue decreased $367 million, or 22%, as compared to the six months ended June 30, 2019. Lower volume contributed $301 million to the decrease, as well as a decrease in revenues from divestitures of $39 million, and foreign currency exchange had a $46 million unfavorable effect on Motorparts revenues. The unfavorable effects were partially offset by other net favorable effects of $19 million.

EBITDA including noncontrolling interests

The following table presents the EBITDA including noncontrolling interests by segment for the three and six months ended June 30, 2020 and 2019 (amounts in millions):

	Three Months Ended June 30,					Six Months Ended June 30,						Three Months Ended June 30			Six Months Ended June 30
	2020			2019		2020			2019			2020 vs 2019 Change			2020 vs 2019 Change
EBITDA including noncontrolling interests by segment:
Clean Air	$	17		$	152	$	116		$	283		$	(135	)	$	(167	)
Powertrain	$	(62	)	$	100	$	(132	)	$	213		$	(162	)	$	(345	)
Ride Performance	$	(70	)	$	26	$	(647	)	$	(19	)	$	(96	)	$	(628	)
Motorparts	$	(52	)	$	110	$	(92	)	$	155		$	(162	)	$	(247	)

Clean Air

Three-months ended: Clean Air EBITDA including noncontrolling interests decreased $135 million as compared to the three months ended June 30, 2019. The decrease is primarily attributable to lower sales volume and unfavorable mix, partially offset by lower selling, general, and administrative costs during the three months ended June 30, 2020 as compared to the three months ended June 30, 2019.

58

Six-months ended: Clean Air EBITDA including noncontrolling interests decreased $167 million as compared to the six months ended June 30, 2019. The decrease is primarily attributable to lower sales volume and unfavorable mix, partially offset by favorable operating performance and lower selling, general, and administrative costs during the six months ended June 30, 2020 as compared to the six months ended June 30, 2019.

Powertrain

Three-months ended: Powertrain EBITDA including noncontrolling interests decreased $162 million as compared to the three months ended June 30, 2019. The decrease is primarily attributable to lower sales volume and unfavorable mix, and an increase in cash severance charges expected to be paid of $19 million that was recognized during the three months ended June 30, 2020 as compared to the three months ended June 30, 2019. These unfavorable factors were partially offset by favorable operating performance and lower selling, general, and administrative costs.

Six-months ended: Powertrain EBITDA including noncontrolling interests decreased $345 million as compared to the six months ended June 30, 2019. The decrease is primarily attributable to lower sales volume and unfavorable mix, an increase in cash severance charges expected to be paid of $19 million, and a goodwill impairment charge in the amount of $160 million recognized during the six months ended June 30, 2020 as compared to the six months ended June 30, 2019. These unfavorable factors were partially offset by favorable operating performance and lower selling, general, and administrative costs.

Ride Performance

Three-months ended: Ride Performance EBITDA including noncontrolling interests decreased $96 million as compared to the three months ended June 30, 2019. The decrease is primarily attributable to lower sales volume, partially offset by lower selling, general, and administrative costs.

Six-months ended: Ride Performance EBITDA including noncontrolling interests decreased $628 million as compared to the six months ended June 30, 2019. The decrease is primarily attributable to asset impairment charges of $455 million and goodwill and intangible impairment charges of $113 million recognized during the six months ended June 30, 2020 as compared to a goodwill impairment charge of $60 million recognized during the six months ended June 30, 2019. Also contributing to the decrease is lower sales volume and unfavorable mix, partially offset by lower selling, general, and administrative costs.

Motorparts

Three-months ended: Motorparts EBITDA including noncontrolling interests decreased $162 million as compared to the three months ended June 30, 2019. The decrease is primarily attributable to lower sales volumes, a non-cash charge to cost of sales of $82 million related to the write-down of inventory recognized in connection with its initiative to rationalize its supply chain and distribution network, and the recognition of restructuring related asset impairment charges of $25 million during the three months ended June 30, 2020 as compared to the three months ended June 30, 2019. These unfavorable factors were partially offset by favorable operating performance and lower selling, general, and administrative costs.

Six-months ended: Motorparts EBITDA including noncontrolling interests decreased $247 million as compared to the six months ended June 30, 2019. The decrease is primarily attributable to lower sales volumes, goodwill and intangible impairment charges of $110 million, a non-cash charge to cost of sales of $82 million related to the write-down of inventory recognized in connection with its initiative to rationalize its supply chain and distribution network, and the recognition of restructuring related asset impairment charges of $25 million during the six months ended June 30, 2020 as compared to the six months ended June 30, 2019. These unfavorable factors were partially offset by favorable operating performance and lower selling, general, and administrative costs.

59

The EBITDA including noncontrolling interests results shown in the preceding table include the following items, certain of which may have an effect on the comparability of EBITDA including noncontrolling interests results between periods (amounts in millions):

	Reportable Segments
	Clean Air			Powertrain		Ride Performance		Motorparts			Total		Corporate		Total
Three Months Ended June 30, 2020
Restructuring charges, net	$	22		$	36	$	18	$	15		$	91	$	1	$	92
Restructuring related costs	(1		)	1		11		2			13		—		13
Inventory write-down(1)	—			—		—		82			82		—		82
Asset impairments restructuring related	—			3		—		25			28		—		28
Other non-restructuring asset impairments	—			1		—		(1		)	—		1		1
Acquisition and expected separation costs (2)	—			—		—		—			—		8		8
Total adjustments	$	21		$	41	$	29	$	123		$	214	$	10	$	224

(1) Non-cash charge to write-down inventory in the Motorparts segment in connection with its initiative to rationalize its supply chain and distribution network.

(2) Costs related to acquisitions and costs related to expected separation.

	Reportable Segments
	Clean Air		Powertrain		Ride Performance		Motorparts		Total		Corporate		Total
Three Months Ended June 30, 2019
Costs to achieve synergies (1)	$	—	$	1	$	—	$	—	$	1	$	2	$	3
Restructuring and related expenses	14		17		22		6		59		—		59
Other non-restructuring asset impairments	1		—		—		1		2		—		2
Cost reduction initiatives(2)	—		—		—		—		—		2		2
Acquisition and expected separation costs (3)			—		—		1		1		26		27
Process harmonization (4)	1		—		—		—		1		—		1
Purchase accounting adjustments (5)	—		—		2		1		3		—		3
Warranty charge (6)	—		—		—		7		7		—		7
Total adjustments	$	16	$	18	$	24	$	16	$	74	$	30	$	104

(1) Cost to achieve synergies related to the Acquisitions.

(2) Costs related to cost reduction initiatives.

(3) Costs related to acquisitions and costs related to expected separation.

(4) Charge due to process harmonization.

(5) This primarily relates to non-cash charge to cost of goods sold for the amortization of the inventory fair value step-up recorded as part of the Acquisitions.

(6) Charge related to warranty. Although we regularly incur warranty costs, this specific charge is of an unusual nature in the period incurred.

	Reportable Segments
	Clean Air		Powertrain		Ride Performance		Motorparts			Total		Corporate		Total
Six Months Ended June 30, 2020
Restructuring charges, net	$	22	$	37	$	24	$	17		$	100	$	5	$	105
Restructuring related costs	—		—		30		3			33		1		34
Inventory write-down(1)	—		—		—		82			82		—		82
Asset impairments restructuring related	—		3		—		25			28		—		28
Other non-restructuring asset impairments	—		1		455		(1		)	455		17		472
Acquisition and expected separation costs (2)	4		—		—		—			4		29		33
Goodwill and intangibles impairment charge	—		160		113		110			383		—		383
Total adjustments	$	26	$	201	$	622	$	236		$	1,085	$	52	$	1,137

(1) Non-cash charge to write-down inventory in the Motorparts segment in connection with its initiative to rationalize its supply chain and distribution network.

(2) Costs related to acquisitions and costs related to expected separation.

60

	Reportable Segments
	Clean Air		Powertrain		Ride Performance		Motorparts		Total		Corporate		Total
Six Months Ended June 30, 2019
Costs to achieve synergies (1)	$	—	$	1	$	—	$	—	$	1	$	2	$	3
Restructuring and related expenses	19		18		35		10		82		1		83
Other non-restructuring asset impairments	1		—		—		1		2		—		2
Cost reduction initiatives (2)	—		—		—		—		—		10		10
Acquisition and expected separation costs (3)	—		—		—		1		1		66		67
Process harmonization (4)	5		—		—		5		10		—		10
Purchase accounting charges (5)	—		2		5		37		44		—		44
Goodwill impairment charge (6)	—		—		60		—		60		—		60
Warranty charge (7)	—		—		—		7		7		—		7
Total adjustments	$	25	$	21	$	100	$	61	$	207	$	79	$	286

(1) Cost to achieve synergies related to the Acquisitions.

(2) Costs related to cost reduction initiatives.

(3) Costs related to acquisitions and costs related to expected separation.

(4) Charge due to process harmonization.

(5) This primarily relates to non-cash charge to cost of goods sold for the amortization of the inventory fair value step-up recorded as part of the Acquisitions.

(6) Post segment reorganization impairment of goodwill.

(7) Charge related to warranty. Although we regularly incur warranty costs, this specific charge is of an unusual nature in the period incurred.

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Liquidity and Capital Resources

Liquidity and Financing Arrangements

The COVID-19 global pandemic has negatively affected the global economy, disrupted global supply chains, and created extreme volatility and disruptions to capital and credit markets in the global financial markets. We believe our liquidity position continues to be adequate. However, with the recent economic downturn related to COVID-19, we expect to see lower revenue and lower earnings, putting pressure on our liquidity position. As customer demand increases, we expect to face periods where payments will become due to our suppliers for our existing and additional inventories needed to support renewed production before we have generated new receivables from customers from that renewed production. It is our intent to maintain a consistent balance between our payables and receivables during this time.

We have implemented a range of actions aimed at temporarily reducing costs and preserving liquidity in response to the effects and anticipated effects to our business resulting from COVID-19. These measures include:

• Temporarily suspending or reducing operations;

• As discussed in more detail in Note 10, Debt and Other Financing Arrangements and below, we entered into an amendment to our senior credit facility to increase the maximum leverage ratio and decrease the minimum interest coverage ratio;

• At June 30, 2020, we had liquidity of $1.4 billion comprised entirely of cash and we have fully utilized our $1.5 billion revolving credit facility;

• For the second quarter of 2020, overall salary costs were reduced at least 25% through a combination of unpaid furloughs, net pay decreases, and available temporary support programs in all regions Tenneco does business. Additionally, the executive leadership team (the CEO and direct staff) had reduced their salaries by 50%-100%;

• For the third quarter, overall salary costs will be reduced 10-20% through a combination of unpaid furloughs, net pay decreases, and temporary support programs in all regions we do business, subject to potential restorations or further reductions based on business conditions;

• We reduced our headcount globally, and plan further reductions subject to negotiation with works councils in certain jurisdictions, beginning in the second quarter of 2020 and expect these actions to be completed during 2020. We recorded a charge of $92 million for the second quarter of 2020 in connection with cash severance costs expected to be paid;

• Capital expenditures in 2020 are expected to approximate $380 million. This is a reduction from previous guidance of 2020 expenditures between $610 to $650 million and 2019 expenditures of more than $700 million;

• Utilizing applicable and appropriate provisions under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) including deferral of our portion of the 2020 FICA payroll taxes which will be repaid in 2021 and 2022, payroll tax credits, and deferral of our U.S. qualified pension plan contributions;

• The Tenneco Board of Directors annual retainer fees were reduced by 25% effective for the third quarter of 2020 and will be reduced for the remainder of year; and

• In the second quarter of 2020, we deferred payments and extended payment terms with certain suppliers and other business partners to address the working capital issues described above, including delayed collections from customers of $150 million to $200 million, and accordingly deferred or delayed cash outlays as necessary and practical. These deferred payments approximated $235 million at the end of the second quarter of 2020.

On May 5, 2020, we entered into a third amendment to our credit agreement to increase the maximum leverage ratio and decrease the minimum interest coverage ratio. At June 30, 2020, we are in compliance with all financial covenants under the credit agreement. There are many uncertainties related to COVID-19 that could negatively affect our results of operations, financial position, and cash flows. After considering the effect of COVID-19 on our 2020 forecast, we believe we will comply with these financial covenants, as required by our amended credit agreement. The amendment is discussed in more detail below.

We believe cash flows from operations, combined with our cash on hand, will be sufficient to meet our future capital requirements, including debt amortization, capital expenditures, pension contributions, and other operational requirements, for the following year based on our current estimates and forecasts. We believe we will maintain compliance with the new financial ratios set forth in the amended credit agreement. However, our ability to meet the financial covenants depends upon a number of operational and economic factors, including the effects of COVID-19, many of which are beyond our control. In the event we are unable to meet these financial covenants, we would consider several options to meet our cash flow needs. Such actions include additional restructuring initiatives and other cost reductions, sales of assets, reductions to working capital and capital spending, issuance of equity, and other alternatives to enhance our financial and operating position. We also continue to actively monitor credit market conditions to identify opportunities from both a shareholder and company perspective.

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Credit Facilities

The table below shows our borrowing capacity on committed credit facilities at June 30, 2020 (amounts in billions):

	Committed Credit Facilities at June 30, 2020
	Term	Available(b)
Tenneco Inc. revolving credit facility (a)	2023	$	—
Tenneco Inc. Term Loan A	2023	—
Tenneco Inc. Term Loan B	2025	—
Subsidiaries’ credit agreements	2020 - 2028	—
		$	—

^(a)  We are required to pay commitment fees under the revolving credit facility on the unused portion of the total commitment.

^(b)  Letters of credit reduce the available borrowings under the revolving credit facility.

We also have $65 million of outstanding letters of credit under our uncommitted facilities at June 30, 2020.

At June 30, 2020, we had liquidity of $1.4 billion comprised entirely of cash. At June 30, 2020, we have fully utilized our $1.5 billion revolving credit facility.

Term Loans

We entered into a new credit agreement with JPMorgan Chase Bank, N.A., as administrative agent and other lenders (the "New Credit Facility") in connection with the Federal-Mogul Acquisition, which has been amended by the first amendment, dated February 14, 2020 (the “First Amendment”), by the second amendment, dated February 14, 2020 (the “Second Amendment”), and by the third amendment, dated May 5, 2020 (the "Third Amendment"). The New Credit Facility consists of $4.9 billion of total debt financing, consisting of a five-year $1.5 billion revolving credit facility, a five-year $1.7 billion term loan A facility ("Term Loan A") and a seven-year $1.7 billion term loan B facility ("Term Loan B"). We paid $8 million in one-time fees in connection with the First Amendment and Second Amendment, and $10 million in one-time fees in connection with the Third Amendment.

New Credit Facility — Interest Rates and Fees

The Third Amendment provides for an increase to the margin applicable to borrowings under the revolving credit facility and the Term Loan A facility at certain leverage levels as set forth below as one of several conditions for obtaining less restrictive financial maintenance covenants described below under New Credit Facility — Other Terms and Conditions:

Consolidated net leverage ratio	Interest rate
greater than 6.0 to 1	LIBOR plus 2.50%
less than 6.0 to 1 and greater than 4.5 to 1	LIBOR plus 2.25%

Initially, and so long as our corporate family rating is Ba3 (with a stable outlook) or higher from Moody’s Investors Service, Inc. (“Moody’s”) and BB- (with a stable outlook) or higher from Standard & Poor’s Financial Services LLC (“S&P”), the interest rate on borrowings under the Term Loan B facility will be LIBOR plus 2.75%; at any time the foregoing conditions are not satisfied, the interest rate on the Term Loan B facility will be LIBOR plus 3.00%. When the Term Loan B facility is no longer outstanding and we, and our subsidiaries, have no other secured indebtedness (with certain exceptions set forth in the New Credit Facility), and upon us achieving and maintaining two or more corporate credit and/or corporate family ratings higher than or equal to BBB- from S&P, BBB- from Fitch Ratings Inc. (“Fitch”) and/or Baa3 from Moody’s (in each case, with a stable or positive outlook), the collateral under the New Credit Facility may be released. On June 3, 2019, Moody’s lowered our corporate family rating to B1 and the interest rate on borrowings under the term loan B was raised to LIBOR plus 3.00%.

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New Credit Facility — Other Terms and Conditions — After giving effect to the Third Amendment, we must comply with certain less restrictive financial maintenance covenants for the revolving credit facility and the Term Loan A facility. The financial maintenance covenants are subject to several covenant reset triggers (“Covenant Reset Triggers”) that limit certain activities of ours by implementing more restrictive affirmative and negative covenants. If a Covenant Reset Trigger occurs, the financial maintenance covenants revert back to the financial maintenance covenants in effect immediately prior to the Third Amendment (and described above) (the “Prior Financial Covenants”). The financial maintenance covenants include (i) a requirement to have a senior secured leverage ratio (as defined in the New Credit Facility), with step-downs, as detailed in the table below; (ii) a requirement to have a consolidated net leverage ratio (as defined in the New Credit Facility), with step-downs, as follows:

(i) Senior secured net leverage ratio		(ii) Consolidated net leverage ratio
not greater than 6.75 to 1	at June 30, 2020	not greater than 4.50 to 1	at March 31, 2020
not greater than 9.50 to 1	at September 30, 2020	not greater than 5.25 to 1	at March 31, 2022
not greater than 8.75 to 1	at December 31, 2020	not greater than 4.75 to 1	at June 30, 2022
not greater than 8.25 to 1	at March 31, 2021	not greater than 4.25 to 1	at September 30, 2022
not greater than 4.50 to 1	at June 30, 2021	not greater than 3.75 to 1	thereafter
not greater than 4.25 to 1	at September 30, 2021
not greater than 4.00 to 1	at December 31, 2021

and (iii) a requirement to maintain a consolidated interest coverage ratio (as defined in the New Credit Facility) for any period of four consecutive fiscal quarters of not less than 2.00 to 1 as of June 30, 2020, 1.50 to 1 through March 31, 2021, and 2.75 to 1 thereafter.

We may make a one-time election to revert back to the Prior Financial Covenants and terminate the Covenant Reset Triggers upon delivery of a covenant reset certificate that attests to compliance with the Prior Financial Covenants as of the end of the relevant fiscal period (“Covenant Reset Certificate”). Refer to Note 10, Debt and Other Financing Arrangements included in Part I, Item I for additional details.

After giving effect to the Third Amendment, so long as no default exists under its New Credit Facility, we would be permitted to (i) make regularly scheduled interest and principal payments as and when due in respect of the Senior Unsecured Notes, (ii) refinance the Senior Unsecured Notes with the net cash proceeds of permitted refinancing indebtedness (as defined in the New Credit Facility); (iii) make payments in respect of the Senior Unsecured Notes in an amount equal to the net cash proceeds of qualified capital stock (as defined in the New Credit Facility) issued after May 5, 2020; (iv) convert any Senior Unsecured Notes into qualified capital stock issued after May 5, 2020; and (v) make additional payments of the Senior Unsecured Notes provided that after giving effect to such additional payments the consolidated leverage ratio would be equal to or less than 2.00 to 1 after giving effect to such additional payments. The foregoing limitations regarding repayment and refinancing of the Senior Unsecured Notes and such incremental equivalent debt apply from the effectiveness of the Third Amendment until delivery of a Covenant Reset Certificate.

The covenants in the New Credit Facility generally prohibit us from repaying certain subordinated indebtedness. So long as no default exists, we would, under our New Credit Facility, be permitted to repay or refinance our subordinated indebtedness (i) with the net cash proceeds of permitted refinancing indebtedness (as defined in the New Credit Facility); (ii) in an amount equal to the net cash proceeds of qualified capital stock (as defined in the New Credit Facility) issued after October 1, 2018; (iii) in exchange for qualified capital stock issued after October 1, 2018; and (iv) with additional payments provided that such additional payments are capped based on a pro forma consolidated leverage ratio after giving effect to such additional payments.

Such additional payments on subordinated indebtedness (x) will not be permitted at any time the pro forma consolidated leverage ratio is greater than 2.00 to 1 after giving effect to such additional payments and (y) will be permitted in an unlimited amount at any time the pro forma consolidated leverage ratio is equal to or less than 2.00 to 1 after giving effect to such additional payments.

The New Credit Facility includes customary events of default and other provisions that could require all amounts due thereunder to become immediately due and payable, either automatically or at the option of the lenders, if we fail to comply with the terms of the New Credit Facility or if other customary events occur.

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The financial ratios required under the New Credit Facility and the actual ratios we calculated as of June 30, 2020 for the second quarter of 2020, are as follows: leverage ratio of 4.57 actual versus 6.75 (maximum) required; and interest coverage ratio of 4.23 actual versus 2.00 (minimum) required.

Senior Notes

We have outstanding 5.375% senior unsecured notes due December 15, 2024 ("2024 Senior Notes") and 5.000% senior unsecured notes due July 15, 2026 ("2026 Senior Notes" and together with the 2024 Senior Notes, the "Senior Unsecured Notes"). We have outstanding 5.000% euro denominated fixed rate notes which are due July 15, 2024 ("5.000% Euro Fixed Rate Notes"), 4.875% euro denominated fixed rate notes due April 15, 2022 ("4.875% Euro Fixed Rate Notes"), and floating rate notes due April 15, 2024 ("Euro Floating Rate Notes", together with the 5.000% Euro Fixed Rate Notes and the 4.875% Euro Fixed Notes, the "Senior Secured Notes").

Senior Unsecured Notes and Senior Secured Notes — Other Terms and Conditions — The Senior Unsecured Notes and Senior Secured Notes contain covenants that will, among other things, limit our ability to create liens and enter into sale and leaseback transactions. In addition, the Senior Secured Notes and 2024 Senior Unsecured Notes also require that, as a condition precedent to incurring certain types of indebtedness not otherwise permitted, our consolidated fixed charge coverage ratio, as calculated on a pro forma basis, be greater than 2.00, as well as containing restrictions on our operations, including limitations on: (i) incurring additional indebtedness; (ii) paying dividends; (iii) distributions and stock repurchases; (iv) investments; (v) asset sales and (vi) mergers and consolidations.

Subject to limited exceptions, all of our existing and future material domestic wholly owned subsidiaries fully and unconditionally guarantee our Senior Unsecured Notes and Senior Secured Notes on a joint and several basis. There are no significant restrictions on the ability of the subsidiaries that have guaranteed our Senior Notes to make distributions to us.

Accounts Receivable Securitization and Factoring

On-Balance Sheet Arrangements

We have securitization programs for some of our accounts receivable, with limited recourse provisions. Borrowings on these securitization programs, which are recorded in short-term debt, at June 30, 2020 and December 31, 2019 are as follows (amounts in millions):

	June 30, 2020		December 31, 2019
Borrowings on securitization programs	$	3	$	4

Off-Balance Sheet Arrangements

We have an accounts receivable factoring program in the U.S. with a commercial bank. Under this program we sell receivables from certain of our U.S. OE customers at a rate that is favorable versus our senior credit facility. This arrangement is uncommitted and provides for cancellation by the commercial bank with no less than 30 days prior written notice. In addition, we have two other receivable factoring programs in the U.S. with commercial banks under which we sell receivables from certain of our aftermarket customers to whom we have extended payment terms. Both arrangements are uncommitted and may be terminated with 10 days prior notice for one program and 30 days prior notice for the other program.

We also have subsidiaries in several countries in Europe that are parties to accounts receivable factoring facilities. The commitments for these arrangements are generally for one year, but some may be canceled with notice 90 days prior to renewal. In some instances, the arrangement provides for cancellation by the applicable financial institution at any time upon notification.

Certain of these programs have deferred purchase price arrangements with the banks. These programs provide us with access to cash at costs that are generally favorable to alternative sources of financing.

In the U.S and Canada, we participate in supply chain financing programs with certain of our aftermarket customers to whom we have extended payment terms whereby the accounts receivable are satisfied through the early receipt of negotiable financial instruments that are payable at a later date when payments from our customers are due. We sell these financial instruments before their maturity date to various financial institutions at a discount.

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The accounts receivables under the programs described above are transferred in their entirety to the acquiring entities and are accounted for as a sale. The fair value of assets received as proceeds in exchange for the transfer of accounts receivable under these factoring programs approximates the fair value of such receivables. We are the servicer of the receivables under some of these arrangements and are responsible for performing all accounts receivable administration functions. Where we receive a fee to service and monitor these transferred accounts receivables, such fees are sufficient to offset the costs and as such, a servicing asset or liability is not recorded as a result of such activities.

The amount of accounts receivable outstanding and derecognized for these factoring and drafting arrangements was $0.9 billion and $1.0 billion at June 30, 2020 and December 31, 2019. In addition, the deferred purchase price receivable was $38 million and $33 million at June 30, 2020 and December 31, 2019.

Proceeds from the factoring of accounts receivable qualifying as sales and drafting programs was $0.7 billion and $1.3 billion for the three months ended June 30, 2020 and 2019 and was $1.9 billion and $2.5 billion for the six months ended June 30, 2020 and 2019.

Financing charges associated with the factoring of receivables are as follows (amounts in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Loss on sale of receivables(a)	$	4	$	6	$	10	$	14

^(a) Amount is included in "Interest expense" in the condensed consolidated statements of income (loss).

Supply Chain Financing

Certain of our suppliers participate in supply chain financing programs under which they securitize their accounts receivables from us. Financial institutions participate in the supply chain financing program on an uncommitted basis and can cease purchasing receivables or drafts from our suppliers at any time. We are in the process of winding down these programs and expect to end them by the end of 2020.

Cash Flows

Operating Activities

Operating activities for the six months ended June 30, 2020 and 2019 were as follows (amounts in millions):

	Six Months Ended June 30,
	2020			2019
Operational cash flow before changes in operating assets and liabilities	$	(172	)	$	312
Changes in operating assets and liabilities:
Receivables	174			(401		)
Inventories	292			101
Payables and accrued expenses	(540		)	48
Accrued interest and accrued income taxes	(17		)	(66		)
Other assets and liabilities	(68		)	(94		)
Total change in operating assets and liabilities	(159		)	(412		)
Net cash (used) provided by operating activities	$	(331	)	$	(100	)

Net cash used by operations for the six months ended June 30, 2020 was $331 million, an increase of $231 million compared to the six months ended June 30, 2019. The activity was the result of:

• an increase in net cash used by operating activities before operating assets and liabilities of $484 million; and

• a net decrease of $253 million in net cash used by operating activities due to favorable changes in working capital items, benefited by the deferral of approximately $235 million in accounts payable at June 30, 2020.

Furthermore, as a result of lower demand, the Company benefited by selling existing inventory without replenishing inventory levels. Net cash used by operating activities was negatively affected by a reduction in proceeds generated from factoring receivables due to the decline in sales.

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Investing Activities

Investing activities for the six months ended June 30, 2020 and 2019 were as follows (amounts in millions):

	Six Months Ended June 30,
	2020			2019
Proceeds from sale of assets	$	5		$	5
Net proceeds from sale of business	—			22
Cash payments for property, plant, and equipment	(212		)	(379		)
Acquisitions, net of cash acquired	—			(158		)
Proceeds from deferred purchase price of factored receivables	91			147
Other	1			(1		)
Net cash (used) provided by investing activities	$	(115	)	$	(364	)

Net cash used by investing activities for the six months ended June 30, 2020 decreased primarily due to a decrease in cash payments for property, plant, and equipment of $167 million and no cash payments for acquisitions, offset by a decrease in net proceeds from sale of a business of $22 million and proceeds from deferred purchase price of factored receivables of $56 million.

Cash payments for property, plant, and equipment were $212 million and $379 million for the six months ended June 30, 2020 and 2019.

Financing Activities

Financing activities for the six months ended June 30, 2020 and 2019 were as follows (amounts in millions):

	Six Months Ended June 30,
	2020			2019
Proceeds from term loans and notes	$	96		$	111
Repayments of term loans and notes	(133		)	(190		)
Debt issuance costs of long-term debt	(16		)	—
Borrowings on revolving lines of credit	4,821			4,525
Payments on revolving lines of credit	(3,536		)	(4,254		)
Issuance (repurchase) of common shares	(1		)	(2		)
Cash dividends	—			(20		)
Net increase (decrease) in bank overdrafts	59			(8		)
Other	(1		)	(1		)
Distributions to noncontrolling interest partners	(2		)	(20		)
Net cash (used) provided by financing activities	$	1,287		$	141

Net cash provided by financing activities was $1,287 million for the six months ended June 30, 2020. This included net repayments on term loans of $37 million and net borrowings on revolving lines of credit of $1,285 million.

Net cash provided by financing activities was $141 million for the six months ended June 30, 2019. This included net repayments on term loans of $79 million and net borrowings on revolving lines of credit of $271 million.

Dividends on Common Stock

We did not pay dividends during the six months ended June 30, 2020. This was a decrease of $20 million as compared to the six months ended June 30, 2019, due to the suspension of the dividend program in the second quarter 2019.

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Supplemental Guarantor Financial Information

Basis of Presentation

Substantially all of the Company's existing and future material domestic 100% owned subsidiaries (which are referred to as the "Guarantor Subsidiaries") fully and unconditionally guarantee its senior notes on a joint and several basis. However, a subsidiary’s guarantee may be released in certain customary circumstances such as a sale of the subsidiary or all or substantially all of its assets in accordance with the indenture applicable to the notes. The Guarantor Subsidiaries are combined in the presentation below.

Summarized Financial Information

The following tables present summarized financial information for the Parent and the Guarantors on a combined basis after the elimination of (a) intercompany transactions and balances among the Parent and the Guarantors and (b) the equity in earnings from and investments in any subsidiary that is a Nonguarantor:

Income Statements

	Six Months Ended June 30,			Year Ended December 31,
	2020			2019
Net sales and operating revenues	$	2,654		$	6,390
Operating expenses	$	3,461		$	6,885
Net income (loss)	$	(762	)	$	(498	)
Net income (loss) attributable to Tenneco Inc.	$	(762	)	$	(498	)

Balance Sheets

	June 30, 2020			December 31, 2019
ASSETS
Current assets	$	1,896		$	1,947
Non-current assets	$	2,666		$	3,089
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities	$	1,143		$	1,347
Non-current liabilities	$	7,354		$	6,102
Intercompany due to (due from)	$	(368	)	$	107

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Environmental Matters, Legal Proceedings and Product Warranties

Note 13, Commitments and Contingencies in our condensed consolidated financial statements located in Part I, Item 1 of this Form 10-Q is incorporated herein by reference.

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ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain global market risks, including foreign currency exchange rate risk, commodity price risk, interest rate risk associated with our debt, and equity price risk associated with our share-based compensation awards.

Foreign Currency Exchange Rate Risk

We manufacture and sell our products in North America, South America, Asia, Europe, and Africa. As a result, our 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 we manufacture and sell our products. We generally try to use natural hedges within our foreign currency activities, including the matching of revenues and costs, to minimize foreign currency exchange rate risk. Where natural hedges are not in place, we consider managing certain aspects of our 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, Thailand bhat, South African rand, Mexican peso, and Canadian dollar.

Foreign Currency Forward Contracts

We enter into foreign currency forward purchase and sale contracts to mitigate our exposure to changes in exchange rates on certain intercompany and third-party trade receivables and payables. In managing our foreign currency exposures, we identify and aggregate existing offsetting positions and then hedge residual exposures through third-party derivative contracts. The gains or losses on these contracts are recognized as foreign currency gains (losses) within cost of sales in the condensed consolidated statements of income (loss). The fair value of foreign currency forward contracts is recorded in prepayments and other current assets or accrued expenses and other current liabilities in the condensed consolidated balance sheets. The fair value of these derivative instruments is not considered material to the condensed consolidated financial statements.

The following table summarizes by position the notional amounts for foreign currency forward contracts at June 30, 2020 (all of which mature in 2020):

	Notional Amount
Long positions	$	54
Short positions	$	(54	)

Interest Rate Risk

Our financial instruments that are sensitive to market risk for changes in interest rates are primarily our debt securities. We use our revolving credit facility to finance our short-term and long-term capital requirements. We pay a current market rate of interest on these borrowings. Our long-term capital requirements have been financed with long-term debt with original maturity dates ranging from five to ten years. At June 30, 2020, we had $1.6 billion par value of fixed rate debt and $3.6 billion par value of floating rate debt. In addition, borrowings on our revolving credit facility of $1.5 billion are subject to variable rates. Of the fixed rate debt, $466 million is fixed through 2022, $618 million is fixed through 2024, and $500 million is fixed through 2026. For more detailed explanations on our debt structure and senior credit facility, refer to “Liquidity and Capital Resources” earlier in this Management’s Discussion and Analysis and Note 10, Debt and Other Financing Arrangements in our condensed consolidated financial statements located in Part I, Item 1 of this Form 10-Q.

We estimate the fair value of our long-term debt at June 30, 2020 was approximately 91% percent of its book value. A one percentage point increase or decrease in interest rates related to our variable interest rate debt would increase or decrease the annual interest expense we recognize in the condensed consolidated statements of income (loss) and the cash we pay for interest expense by approximately $50 million.

Equity Prices

We selectively use swaps to reduce market risk associated with our deferred compensation liabilities, which increase as our stock price increases and decrease as our stock price decreases. We have entered into a cash-settled share swap agreement that moves in the opposite direction of these liabilities, allowing us to fix a portion of the liabilities at a stated amount. At June 30, 2020, we hedged our deferred compensation liability related to approximately 1,350,000 common share equivalents. We also have an S&P 500 index fund ETF swap agreement to further reduce our market risk, which will act as a natural hedge offsetting an equivalent amount of indexed investments in our deferred compensation plans. The fair value of these swap agreements is recorded in prepayments and other current assets or accrued expenses and other current liabilities in the condensed consolidated balance sheets. The fair value of these derivative instruments is not considered material to the condensed consolidated financial statements.

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ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officers and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended ("Exchange Act"), as the end of the quarter covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, due to the material weakness in our internal control over financial reporting previously identified and described more fully under Item 9A in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, the Company’s disclosure controls and procedures were not effective as of June 30, 2020 to ensure information required to be disclosed by our Company in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosures.

Internal Controls Surrounding the North America Motorparts business

A material weakness (as defined in Rule 12b-2 under the Exchange Act) is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement in our annual or interim financial statements will not be prevented or detected on a timely basis.

As previously identified and described more fully under Item 9A in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, the Company identified a deficiency within its North America Motorparts business that constitutes a material weakness, as it did not maintain a sufficient complement of resources in the North America Motorparts business to ensure that appropriate controls were designed, maintained and executed, including controls over account reconciliations and manual journal entries, related to the integration of a previously acquired entity within the North America Motorparts business. The material weakness continued to exist as of the end of the period covered by this Quarterly Report.

The material weakness did not result in any material misstatements of the Company’s financial statements or disclosures but did result in out-of-period adjustments during the quarter ended December 31, 2019. Additionally, this material weakness could result in the misstatement of relevant account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Remediation Plan for Material Weakness in Internal Control over Financial Reporting

The Company continues to take action on the remediation plan more fully described under Item 9A in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. While the Company is moving forward with these remediation activities, additional work needs to be done in this area. Accordingly, we concluded that this material weakness had not yet been remediated as of June 30, 2020.

We will continue to monitor the effectiveness of these and other processes, procedures and controls and make any further changes management determines appropriate.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

Note 13, Commitments and Contingencies, in our condensed consolidated financial statements located in Part I, Item 1 of this Form 10-Q is incorporated herein by reference.

ITEM 1A.RISK FACTORS

We are exposed to certain risks and uncertainties that could have a material adverse effect on our business, financial condition and operating results. Except as set forth below, there have been no material changes to the Risk Factors described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. The risks described herein or in our Annual Report on Form 10-K are not the only risks facing us. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor to assess the effect such risk factors might have on our business, financial condition and operating results, or the extent to which any such risk factor or combination of risk factors may affect our business, financial condition and operating results.

The novel coronavirus (COVID-19) global pandemic has had and is expected to continue to have an adverse effect on our business and results of operations.

In late 2019, a novel strain of coronavirus, COVID-19, was first detected in Wuhan, China. In March 2020, the World Health Organization declared COVID-19 a global pandemic, and governmental authorities around the world have implemented measures to reduce the spread of COVID-19. These measures have adversely affected workforces, customers, consumer sentiment, economies, and financial markets, and, along with decreased consumer spending, reductions in revenue, and delays in payments from customers and partners, have led to an economic downturn in many of our markets. As a result of COVID-19, and in response to government mandates or recommendations, as well as decisions made to protect the health and safety of employees, consumers and communities, we and our customers have experienced significant closures and instances of reduced operations. Additionally, we have closed many of our corporate office and other facilities and have implemented a work from home policy for many corporate employees which may negatively impact productivity and cause other disruptions to our business.

The uncertainties created by the COVID-19 global pandemic, including the severity and duration of the outbreak and additional actions that may be taken by governmental authorities make it is difficult to forecast the effects of the virus on the Company’s future results, including our ability to execute our near-term and long-term business strategies and initiatives in the expected time frame. Additionally, it is possible that we may experience supply chain disruptions as well as labor shortages as a result of COVID-19, further disrupting operations and impacting revenues negatively.

To the extent the COVID-19 global pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this ‘‘Risk Factors’’ section or to the “Risk Factors” described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, such as those relating to our high level of indebtedness, our need to generate sufficient cash flows to service our indebtedness, our ability to comply with the covenants contained in the agreements that govern our indebtedness and to have access to sufficient liquidity through the COVID-19 pandemic, decreased revenue from loss of customer market share, and working capital requirements.

We may not be able to fully utilize our net operating loss and other tax carryforwards.

Under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be limited. A corporation generally experiences an “ownership change” if the percentage of its shares of stock owned by its “5-percent shareholders,” as such term is defined in Section 382 of the Code, increases by more than 50 percentage points over a rolling three-year period. We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control. If an ownership change occurs and our ability to use our tax attributes is materially limited, it would harm our future operating results by effectively increasing our future tax obligations.

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In April 2020, our Board of Directors approved a Section 382 Rights Agreement (the “Section 382 Rights Plan”), which may cause substantial dilution to a person or group that attempts to acquire 4.9% or more of the Company’s Class A Voting Common Stock on terms not approved by our Board of Directors. The purpose of the Rights Plan is to protect value by preserving the Company’s ability to use certain of its tax attributes to offset potential future income taxes. Although the Section 382 Rights Plan is intended to reduce the likelihood of an “ownership change” that could adversely affect utilization of our tax assets, there is no assurance that the Section 382 Rights Plan will prevent all transfers that could result in such an “ownership change.” The Section 382 Rights Plan could make it more difficult for a third party to acquire, or could discourage a third party from acquiring, a large block of our Class A Voting Common Stock. A third party that acquires in excess of 4.9% or more of our Class A Voting Common Stock could suffer substantial dilution of its ownership interest under the terms of the Section 382 Rights Plan. This may adversely affect the marketability of our Class A Voting Common Stock by discouraging existing or potential investors from acquiring our stock or additional shares of our stock.

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ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) None.

(b) Not applicable.

(c) Purchase of equity securities by the issuer and affiliated purchasers. The following table provides information relating to our purchase of shares of our common stock in the second quarter of 2020. These purchases reflect shares withheld upon vesting of restricted stock for tax withholding obligations. We generally intend to continue to satisfy tax withholding obligations in connection with the vesting of outstanding restricted stock through the withholding of shares.

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 (Millions)
April 2020	999	$	7.43	—	$	—
May 2020	3,043	4.56		—	—
June 2020	754	7.60		—	—
Total	4,796	$	5.64	—	$	—

(1) Shares withheld upon vesting of share settled restricted stock units in the second quarter of 2020.

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ITEM 6.EXHIBITS

INDEX TO EXHIBITS

QUARTERLY REPORT ON FORM 10-Q

FOR QUARTER ENDED JUNE 30, 2020

Exhibit Number		Description
3.1	—	Certificate of Designations of Series A Preferred Stock of Tenneco Inc. (incorporated herein by reference to Exhibit 3.1 of the registrant’s Current Report on Form 8-K dated April 16, 2020, File No 1-12387).
4.1	—	Section 382 Rights Agreement, dated as of April 15, 2020, between Tenneco Inc. and Equiniti Trust Company, as rights agent (incorporated herein by reference to Exhibit 4.1 of the registrant’s Current Report on Form 8-K dated April 16, 2020, File No 1-12387).
+10.5	—	Tenneco Inc. 2006 Long-Term Incentive Plan, as amended and restated effective March 10, 2020 (incorporated by reference to Appendix A of Tenneco’s Definitive Proxy Statement filed on April 1, 2020).
*31.1	—	Certification of Brian J. Kesseler under Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2	—	Certification of Kenneth R. Trammell under Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1	—	Certification of Brian J. Kesseler and Kenneth R. Trammell under Section 906 of the Sarbanes-Oxley Act of 2002.
*101.INS	—	Inline XBRL Instance Document. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
*101.SCH	—	Inline XBRL Taxonomy Extension Schema Document.
*101.CAL	—	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
*101.DEF	—	Inline XBRL Taxonomy Extension Definition Linkbase Document.
*101.LAB	—	Inline XBRL Taxonomy Extension Label Linkbase Document.
*101.PRE	—	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	—	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith.
+	Indicates a management contract or compensatory plan or arrangement

75

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, Tenneco Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

TENNECO INC.
By:	/s/ KENNETH R. TRAMMELL
	Kenneth R. Trammell
	Interim Executive Vice President and Chief Financial Officer (on behalf of the Registrant)

                        

TENNECO INC.
By:	/s/ JOHN S. PATOUHAS
	John S. Patouhas
	Vice President and Chief Accounting Officer (principal accounting officer)

Dated: August 6, 2020

76

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Brian J. Kesseler, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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 officers 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 officers 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

Dated: August 6, 2020

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Kenneth R. Trammell, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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 officers 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 officers 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/ KENNETH R. TRAMMELL

Kenneth R. Trammell

Interim Executive Vice President and Chief Financial Officer

Dated: August 6, 2020

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Quarterly Report on Form 10-Q of Tenneco Inc. (the “Company”) for the period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Brian J. Kesseler Chief Executive Officer of the Company and Kenneth R. Trammell, as Interim Chief Financial Officer of the Company, hereby certify that:

(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/ KENNETH R. TRAMMELL

Kenneth R. Trammell

Interim Chief Financial Officer

Dated: August 6, 2020

This certification shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934. In addition, this certification shall not be deemed to be incorporated by reference into any filing under the Securities Exchange Act of 1933 or the Securities Exchange Act of 1934.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2020	Aug. 04, 2020
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	1-12387
Entity Registrant Name	TENNECO INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	76-0515284
Entity Address, Address Line One	500 North Field Drive
Entity Address, City or Town	Lake Forest
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60045
City Area Code	847
Local Phone Number	482-5000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001024725
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false
Class A
Document Information [Line Items]
Title of 12(b) Security	Class A Voting Common Stock, par value $0.01 per share
Trading Symbol	TEN
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		60,953,834
Class B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		20,308,454
Preferred Stock Purchase Rights
Document Information [Line Items]
Title of 12(b) Security	Preferred Stock Purchase Rights
Trading Symbol	true
Security Exchange Name	NYSE

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues
Net sales and operating revenues	$ 2,637	$ 4,504	$ 6,473	$ 8,988
Costs and expenses
Cost of sales (exclusive of depreciation and amortization)	2,498	3,801	5,837	7,671
Selling, general, and administrative	195	292	444	610
Depreciation and amortization	159	169	330	338
Engineering, research, and development	55	78	132	170
Restructuring charges, net and asset impairments	121	49	605	65
Goodwill and intangible impairment charges	0	0	383	60
Costs and expenses	3,028	4,389	7,731	8,914
Other income (expense)
Non-service pension and other postretirement benefit (costs) credits	1	(4)	2	(6)
Equity in earnings (losses) of nonconsolidated affiliates, net of tax	4	17	17	33
Other income (expense), net	11	13	19	16
Total other expense (income)	16	26	38	43
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	(375)	141	(1,220)	117
Interest expense	(66)	(82)	(141)	(163)
Earnings (loss) before income taxes and noncontrolling interests	(441)	59	(1,361)	(46)
Income tax (expense) benefit	101	(14)	195	(14)
Net income (loss)	(340)	45	(1,166)	(60)
Less: Net income (loss) attributable to noncontrolling interests	10	19	23	31
Net income (loss) attributable to Tenneco Inc.	$ (350)	$ 26	$ (1,189)	$ (91)
Basic earnings (loss) per share:
Earnings (loss) per share (in dollars per share)	$ (4.30)	$ 0.32	$ (14.64)	$ (1.13)
Weighted average shares outstanding (in shares)	81,350,773	80,920,825	81,259,667	80,897,731
Diluted earnings (loss) per share:
Earnings (loss) per share (in dollars per share)	$ (4.30)	$ 0.32	$ (14.64)	$ (1.13)
Weighted average shares outstanding (in shares)	81,350,773	80,920,825	81,259,667	80,897,731

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (340)	$ 45	$ (1,166)	$ (60)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	42	(18)	(177)	17
Cash flow hedges	4	(3)	2	1
Defined benefit plans	(5)	(2)	(1)	(1)
Other comprehensive income (loss), net of tax	41	(23)	(176)	17
Comprehensive income (loss)	(299)	22	(1,342)	(43)
Less: Comprehensive income (loss) attributable to noncontrolling interests	17	18	10	36
Comprehensive income (loss) attributable to common shareholders	$ (316)	$ 4	$ (1,352)	$ (79)

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 1,362	$ 564
Restricted cash	9	2
Receivables:
Customer notes and accounts, net	2,100	2,438
Other	85	100
Inventories	1,656	1,999
Prepayments and other current assets	632	632
Total current assets	5,844	5,735
Property, plant, and equipment, net	2,939	3,627
Long-term receivables, net	10	10
Goodwill	505	775
Intangibles, net	1,239	1,422
Investments in nonconsolidated affiliates	513	518
Deferred income taxes	818	607
Other assets	527	532
Total assets	12,395	13,226
Current liabilities:
Short-term debt, including current maturities of long-term debt	222	185
Accounts payable	1,992	2,647
Accrued compensation and employee benefits	331	325
Accrued income taxes	48	72
Accrued expenses and other current liabilities	1,043	1,070
Total current liabilities	3,636	4,299
Long-term debt	6,629	5,371
Deferred income taxes	88	106
Pension and postretirement benefits	1,112	1,145
Deferred credits and other liabilities	502	490
Commitments and contingencies (Note 13)
Total liabilities	11,967	11,411
Redeemable noncontrolling interests	79	196
Tenneco Inc. shareholders’ equity:
Preferred stock — $0.01 par value; none issued	0	0
Additional paid-in capital	4,433	4,432
Accumulated other comprehensive loss	(874)	(711)
Accumulated deficit	(2,556)	(1,367)
Total shareholders equity before treasury stock	1,004	2,355
Shares held as treasury stock — at cost: June 30, 2020 and December 31, 2019 — 14,592,888	(930)	(930)
Total Tenneco Inc. shareholders’ equity	74	1,425
Noncontrolling interests	275	194
Total equity	349	1,619
Total liabilities, redeemable noncontrolling interests and equity	12,395	13,226
Class A
Tenneco Inc. shareholders’ equity:
Common stock	1	1
Class B
Tenneco Inc. shareholders’ equity:
Common stock	$ 0	$ 0

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares issued (in shares)	0	0
Treasury shares (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)	75,546,691	71,727,061
Treasury shares (in shares)	14,592,888
Class B
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares issued (in shares)	20,308,454	23,793,669
Treasury shares (in shares)	0

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating Activities
Net income (loss)	$ (1,166)	$ (60)
Adjustments to reconcile net income (loss) to cash (used) provided by operating activities:
Goodwill and intangible impairment charges	383	60
Depreciation and amortization	330	338
Deferred income taxes	(242)	(14)
Stock-based compensation	9	13
Restructuring charges and asset impairments, net of cash paid	540	14
Change in pension and other postretirement benefit plans	(26)	(32)
Equity in earnings of nonconsolidated affiliates	(17)	(33)
Cash dividends received from nonconsolidated affiliates	18	27
Loss (gain) on sale of assets	(1)	(1)
Changes in operating assets and liabilities:
Receivables	174	(401)
Inventories	292	101
Payables and accrued expenses	(540)	48
Accrued interest and accrued income taxes	(17)	(66)
Other assets and liabilities	(68)	(94)
Net cash (used) provided by operating activities	(331)	(100)
Investing Activities
Acquisitions, net of cash acquired	0	(158)
Proceeds from sale of assets	5	5
Net proceeds from sale of business	0	22
Cash payments for property, plant, and equipment	(212)	(379)
Proceeds from deferred purchase price of factored receivables	91	147
Other	1	(1)
Net cash (used) provided by investing activities	(115)	(364)
Financing Activities
Proceeds from term loans and notes	96	111
Repayments of term loans and notes	(133)	(190)
Debt issuance costs of long-term debt	(16)	0
Borrowings on revolving lines of credit	4,821	4,525
Payments on revolving lines of credit	(3,536)	(4,254)
Issuance (repurchase) of common shares	(1)	(2)
Cash dividends	0	(20)
Net increase (decrease) in bank overdrafts	59	(8)
Other	(1)	(1)
Distributions to noncontrolling interest partners	(2)	(20)
Net cash (used) provided by financing activities	1,287	141
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash	(36)	11
Increase (decrease) in cash, cash equivalents, and restricted cash	805	(312)
Cash, cash equivalents, and restricted cash, beginning of period	566	702
Cash, cash equivalents, and restricted cash, end of period	1,371	390
Supplemental Cash Flow Information
Cash paid during the period for interest	123	145
Cash paid during the period for income taxes, net of refunds	75	100
Lease assets obtained in exchange for new operating lease liabilities	54	33
Non-cash inventory charge due to aftermarket product line exit	82	0
Non-cash Investing Activities
Period end balance of accounts payable for property, plant, and equipment	86	116
Deferred purchase price of receivables factored in the period	95	52
Reduction in assets from redeemable noncontrolling interest transaction with owner	$ 53	$ 0

XML

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited) - USD ($) shares in Millions, $ in Millions	Total	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Total Tenneco Inc. Shareholders' Equity	Noncontrolling Interests	Total Equity
Beginning balance (in shares) at Dec. 31, 2018		1
Balance at beginning of period at Dec. 31, 2018			$ (930)	$ 4,360	$ (1,013)	$ (692)	$ 1,726	$ 190	$ 1,916
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)					(117)		(117)	7	(110)
Foreign currency translation adjustments						29	29	4	33
Derivatives						4	4		4
Defined benefit plans						1	1		1
Comprehensive income (loss)							(83)	11	(72)
Stock-based compensation, net				5			5		5
Cash dividends declared					(20)		(20)		(20)
Purchase accounting measurement period adjustment								(1)	(1)
Distributions declared to noncontrolling interests								(1)	(1)
Ending balance (in shares) at Mar. 31, 2019		1
Balance at end of period at Mar. 31, 2019			(930)	4,365	(1,150)	(658)	1,628	199	1,827
Beginning balance (in shares) at Dec. 31, 2018		1
Balance at beginning of period at Dec. 31, 2018			(930)	4,360	(1,013)	(692)	1,726	190	1,916
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ (91)
Foreign currency translation adjustments	17
Derivatives	1
Defined benefit plans	(1)
Comprehensive income (loss)	(43)
Purchase accounting measurement period adjustment	(8)
Distributions declared to noncontrolling interests	0
Ending balance (in shares) at Jun. 30, 2019		1
Balance at end of period at Jun. 30, 2019			(930)	4,371	(1,124)	(680)	1,638	206	1,844
Beginning balance (in shares) at Mar. 31, 2019		1
Balance at beginning of period at Mar. 31, 2019			(930)	4,365	(1,150)	(658)	1,628	199	1,827
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	26				26		26	9	35
Foreign currency translation adjustments	(18)					(17)	(17)		(17)
Derivatives	(3)					(3)	(3)		(3)
Defined benefit plans	(2)					(2)	(2)		(2)
Comprehensive income (loss)	22						4	9	13
Stock-based compensation, net				6			6		6
Distributions declared to noncontrolling interests								(2)	(2)
Ending balance (in shares) at Jun. 30, 2019		1
Balance at end of period at Jun. 30, 2019			(930)	4,371	(1,124)	(680)	1,638	206	1,844
Beginning balance (in shares) at Dec. 31, 2019		1
Balance at beginning of period at Dec. 31, 2019	1,619		(930)	4,432	(1,367)	(711)	1,425	194	1,619
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)					(839)		(839)	2	(837)
Foreign currency translation adjustments						(199)	(199)	(13)	(212)
Derivatives						(2)	(2)		(2)
Defined benefit plans						4	4		4
Comprehensive income (loss)							(1,036)	(11)	(1,047)
Stock-based compensation, net				2			2		2
Reclassification of redeemable noncontrolling interest to permanent equity								82	82
Redeemable noncontrolling interest transaction with owner				(7)			(7)		(7)
Ending balance (in shares) at Mar. 31, 2020		1
Balance at end of period at Mar. 31, 2020			(930)	4,427	(2,206)	(908)	384	265	649
Beginning balance (in shares) at Dec. 31, 2019		1
Balance at beginning of period at Dec. 31, 2019	1,619		(930)	4,432	(1,367)	(711)	1,425	194	1,619
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(1,189)
Foreign currency translation adjustments	(177)
Derivatives	2
Defined benefit plans	(1)
Comprehensive income (loss)	(1,342)
Purchase accounting measurement period adjustment	0
Distributions declared to noncontrolling interests	(82)
Ending balance (in shares) at Jun. 30, 2020		1
Balance at end of period at Jun. 30, 2020	349		(930)	4,433	(2,556)	(874)	74	275	349
Beginning balance (in shares) at Mar. 31, 2020		1
Balance at beginning of period at Mar. 31, 2020			(930)	4,427	(2,206)	(908)	384	265	649
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(350)				(350)		(350)	6	(344)
Foreign currency translation adjustments	42					35	35	4	39
Derivatives	4					4	4		4
Defined benefit plans	(5)					(5)	(5)		(5)
Comprehensive income (loss)	(299)						(316)	10	(306)
Stock-based compensation, net				6			6		6
Ending balance (in shares) at Jun. 30, 2020		1
Balance at end of period at Jun. 30, 2020	$ 349		$ (930)	$ 4,433	$ (2,556)	$ (874)	$ 74	$ 275	$ 349

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Jun. 30, 2020	Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]
Cash dividends (in dollars per share)	$ 0.25	$ 0.25

XML

Description of Business

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

1. Description of Business

Tenneco Inc. ("Tenneco" or "the Company") was formed under the laws of Delaware in 1996. Tenneco designs, manufactures, 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 clean air, powertrain, and ride performance products and systems, and serves both original equipment manufacturers ("OEM") and replacement markets worldwide.

On October 1, 2018, the Company completed the acquisition of Federal-Mogul LLC (“Federal-Mogul”) (the “Federal-Mogul Acquisition”), a global supplier of technology and innovation in vehicle and industrial products for fuel economy, emissions reductions, and safety systems. Federal-Mogul serves the world’s foremost OEM and servicers (“OES”, and together with OEM, “OE”) of automotive, light, medium and heavy-duty commercial vehicles, off road, agricultural, marine, rail, aerospace, and power generation and industrial equipment, as well as the worldwide aftermarket.

The Company has previously announced its review of a full range of strategic options to enhance shareholder value creation, including a potential separation of the Company into an Aftermarket and Ride Performance company and a new Powertrain Technology company. Current end-market conditions and the effects of the ongoing COVID-19 pandemic are affecting the Company's ability to complete a separation. In light of these ongoing conditions, the Company is pursuing additional options to optimize shareholder value creation, including a focus on operational improvements, reducing structural costs, lowering capital intensity, and reducing debt.

Beginning in the third quarter of 2020, the Motorparts segment will initiate a rationalization of its supply chain and distribution network to achieve supply chain efficiencies and improve throughput to its customers. As a result, certain assets including inventory, real estate, and personal property will no longer be utilized. As such, during the three and six months ended June 30, 2020, the Motorparts segment recognized an $82 million non-cash charge to write-down inventory to its net realizable value, a $16 million impairment charge to write-down property, plant, and equipment to its fair value, and a $9 million impairment charge to its operating lease right-of-use assets. Additionally, the Motorparts segment recognized $4 million in restructuring charges related to cash severance expected to be paid. Refer to Note 4, Restructuring Charges, Net and Asset Impairments for additional information.

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Summary of Significant Accounting Policies (Notes)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation — Interim Financial Statements

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. These statements include all adjustments (consisting of normal recurring adjustments) management believes are necessary to fairly state the results of operations, comprehensive income, financial position, changes in shareholders' equity, and cash flows. The Company's management believes the disclosures are adequate to make the information presented not misleading when read in conjunction with the audited consolidated financial statements and the notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission on March 2, 2020. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. There are many uncertainties related to the COVID-19 global pandemic that could negatively affect the Company's results of operations, financial position, and cash flows. In response to the expected economic effects of COVID-19, the Company implemented and plans to continue various cost reduction initiatives, including, but not limited to reductions to salary costs and unpaid furloughs; the restructuring actions as discussed in Note 4, Restructuring Charges, Net and Asset Impairments; and the deferral of the Company’s portion of its 2020 employer paid payroll taxes and its U.S. qualified pension plan contributions under the Coronavirus Aid, Relief, and Economic Security Act.

At June 30, 2020, the Company was in compliance with all financial covenants under its credit agreement. On May 5, 2020, the Company entered into a third amendment to its credit agreement to increase the maximum leverage ratio and decrease the minimum interest coverage ratio. The amendment is discussed in more detail in Note 10, Debt and Other Financing Arrangements.

Reclassifications: Certain amounts in the prior period have been aggregated or disaggregated to conform to current year presentation. These reclassifications included reclassifying amounts from restructuring charges, net and asset impairments to cost of sales (exclusive of depreciation and amortization), and selling, general, and administrative expenses. These reclassifications affected the three and six months ended June 30, 2019 and have no effect on previously reported net income within the condensed consolidated statements of income (loss), other comprehensive income (loss) within the condensed consolidated statements of comprehensive income (loss), and the cash (used) provided by operating, investing or financing activities within the condensed consolidated statements of cash flows.

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 or the passage of time.

At June 30, 2020 and December 31, 2019, the Company held redeemable noncontrolling interests of $50 million and $44 million which were not currently redeemable or probable of becoming redeemable. The redemption of these redeemable noncontrolling interests is not solely within the Company's control, therefore, they are presented in the temporary equity section of the Company's condensed 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 June 30, 2020 and December 31, 2019, the Company held redeemable noncontrolling interests of $29 million and $152 million which were currently redeemable or probable of becoming redeemable. These noncontrolling interests are also presented in the temporary equity section of the Company's condensed consolidated balance sheets and have been remeasured to redemption value. The Company immediately recognizes changes to redemption value as a component of net income (loss) attributable to noncontrolling interests in the condensed consolidated statements of income (loss). These redeemable noncontrolling interests include the following:

• During the first quarter of 2020, the Company completed the process to make a tender offer of the shares it did not own 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. As a result of completing the tender offer, the redeemable noncontrolling interest was no longer redeemable or probable of becoming redeemable and the amount of $82 million was reclassified to permanent equity during the six months ended June 30, 2020. Refer to Note 17, Related Party Transactions, for additional information related to the tender offer of this noncontrolling interest; and

• A 9.5% ownership interest in Öhlins Intressenter AB (the “KÖ Interest”) was retained by K Öhlin Holding AB (“Köhlin”), as a result of the Öhlins acquisition on January 10, 2019. Köhlin has an irrevocable right at any time after the third anniversary of the Öhlins acquisition to sell the KÖ Interest to the Company. Since it is probable the KÖ Interest will become redeemable, the Company recognized the change in carrying value and recorded an adjustment of $10 million during the six months ended June 30, 2020 to reflect its redemption value of $29 million at June 30, 2020.

For the six months ended June 30, 2019, the Company recorded a decrease to the redeemable noncontrolling interests of $8 million, as a result of adjustments made in the measurement period to the preliminary purchase price allocation from the Federal-Mogul Acquisition.

The following is a rollforward of activities in the Company's redeemable noncontrolling interests:

	Six Months Ended June 30,
	2020			2019
Balance at beginning of period	$	196		$	138
Net income (loss) attributable to redeemable noncontrolling interests	5			15
Other comprehensive income (loss)	(4		)	1
Acquisition and other	—			16
Noncontrolling interest tender offer redemption	(46		)	—
Redemption value measurement adjustment	10			—
Purchase accounting measurement period adjustment	—			(8		)
Reclassification of noncontrolling interest to permanent equity	(82		)	—
Dividends declared	—			(17		)
Balance at end of period	$	79		$	145

Income taxes: On December 22, 2017, the Tax Cuts and Jobs Act ("TCJA") was enacted into U.S. law, which, among other provisions, included an anti-deferral provision (the Global Intangible Low-Taxed Income tax or "GILTI") effective from 2018 wherein taxes on foreign income are imposed in excess of a deemed return on tangible assets of non-U.S. corporations. The Company has elected the “tax law ordering approach” in that the Company will look to tax law ordering to determine whether its net operating loss ("NOL") carryforward deferred tax asset is expected to be realized. Based on the tax law ordering approach, NOL carryforwards are realizable if they will reduce the expected tax liability when utilized, regardless if the 50% GILTI deduction or related foreign tax credits may have been available.

Earnings (loss) per share: Basic earnings (loss) per share is calculated by dividing net earnings (loss) by the weighted average shares outstanding during the period. Diluted earnings (loss) per share reflects the weighted average effect of all potentially dilutive securities from the date of issuance. Actual weighted average shares outstanding used in calculating earnings (loss) per share were:

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
Weighted average shares of common stock outstanding	81,350,773	80,920,825	81,259,667	80,897,731
Effect of dilutive securities:
Restricted stock, PSUs, and RSUs	—	—	—	—
Stock options	—	—	—	—
Dilutive shares outstanding	81,350,773	80,920,825	81,259,667	80,897,731

For the three and six months ended June 30, 2020, the calculation of diluted earnings (loss) per share excluded 3,133,035 and 2,508,565 of share-based awards, as the effect on the calculation would have been anti-dilutive. For the three and six months ended June 30, 2019, the calculation of diluted earnings (loss) per share excluded 1,990,099 and 1,850,850 of share-based awards, as the effect on the calculation would have been anti-dilutive.

New Accounting Pronouncements

Adoption of New Accounting Standards

Income Taxes — In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2019-12: Simplifying the Accounting for Income Taxes (Topic 740), which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The ASU allows certain simplifications in the annual effective tax rate computations, which did not have a material effect on the financial statements. The Company early adopted this ASU on a prospective basis beginning January 1, 2020.

Intangibles — On January 1, 2020, the Company adopted 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, which includes amendments to align the accounting for costs incurred to implement a cloud computing arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The Company adopted this guidance on a prospective basis beginning January 1, 2020 and the effects of the adoption were not material on the 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 new standard (i) requires the removal of disclosures that are no longer considered cost beneficial; (ii) clarifies specific requirements of certain disclosures; and (iii) adds new disclosure requirements, including reasons for significant gains and losses related to changes in the benefit obligation. The amendments in this update are effective for fiscal years ending after December 15, 2020. The Company will adopt the enhanced disclosures in the consolidated financial statements for the year ending December 31, 2020.

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Acquisitions and Divestitures

6 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

Acquisitions and Divestitures

3. Acquisitions and Divestitures

Öhlins Intressenter AB Acquisition

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 for a purchase price of $162 million (including $4 million of cash acquired). The remaining 9.5% ownership interest in Öhlins was retained by Köhlin. Köhlin has an irrevocable right at any time after the third anniversary of the Öhlins Acquisition to sell the KÖ Interest to the Company. Refer to Note 2, Summary of Significant Accounting Policies, for further information on the KÖ Interest.

Pro Forma Results

Pro forma results of operations have not been presented because the effects of the Öhlins Acquisition were not material to the Company’s condensed consolidated results of operations.

Assets Held for Sale

As the Company continues to rationalize its product portfolio and focus on core production lines, the Company has classified a non-core business in the Motorparts segment as held for sale. At June 30, 2020, expected proceeds from a sale would be approximately $16 million, which is representative of its fair value. The related assets and liabilities were classified as held for sale at June 30, 2020 and December 31, 2019. The sale is expected to occur within the next twelve months.

The related assets and liabilities for this non-core business are classified as held for sale at June 30, 2020 and December 31, 2019:

	June 30, 2020			December 31, 2019
Assets
Receivables	$	3		$	5
Inventories	7			8
Other current assets	2			1
Long-lived assets	16			18
Goodwill	3			4
Impairment on carrying value	(7		)	(8		)
Total assets held for sale	$	24		$	28
Liabilities
Accounts payable	$	2		$	4
Accrued liabilities	2			2
Total liabilities held for sale	$	4		$	6

Additionally, during the three months ended June 30, 2020, the Company identified approximately $16 million of property, plant, and equipment, primarily land and buildings and non-core machinery and equipment, and $2 million of related liabilities across multiple segments that are expected be sold in the next twelve months. The related assets and liabilities have been classified as held for sale at June 30, 2020 and are not included in the table above. The Company recognized a non-cash impairment charge of $1 million during the three and six months ended June 30, 2020 related to these assets held for sale.

The assets and liabilities held for sale are recorded in prepayments and other current assets and accrued expenses and other current liabilities in the condensed consolidated balance sheets at June 30, 2020 and December 31, 2019.

On March 1, 2019, in accordance with a stock and asset purchase agreement, the Company sold certain assets and liabilities related to a non-core business, and received sale proceeds of $22 million, subject to customary working capital adjustments, in the six months ended June 30, 2019.

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Restructuring Charges, Net and Asset Impairments (Notes)

6 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

Restructuring Charges, Net and Asset Impairments

4. Restructuring Charges, Net and Asset Impairments

The Company's restructuring activities are undertaken as necessary to execute management's strategy and streamline operations, consolidate and take advantage of available capacity and resources, and ultimately achieve net cost reductions. Restructuring activities include efforts to integrate and rationalize the Company's businesses and to relocate operations to best cost locations.

The Company's restructuring charges consist primarily of employee costs (principally severance and/or termination benefits) and facility closure and exit costs. The 2019 amounts below reflect the reclassifications to the prior period as discussed in Note 2, Summary of Significant Accounting Policies.

For the three and six months ended June 30, 2020 and 2019, restructuring charges, net and asset impairments by segment are as follows:

	Three Months Ended June 30, 2020
	Clean Air		Powertrain		Ride Performance		Motorparts			Corporate		Total
Severance and other charges, net	$	22	$	36	$	18	$	15		$	1	$	92
Asset impairments related to restructuring actions	—		3		—		25			—		28
Other non-restructuring asset impairments	—		—		—		—			1		1
Impairment of assets held for sale	—		1		—		(1		)	—		—
Total asset impairment charges	—		4		—		24			1		29
Total restructuring charges, net and asset impairments	$	22	$	40	$	18	$	39		$	2	$	121

	Three Months Ended June 30, 2019
	Clean Air		Powertrain		Ride Performance		Motorparts		Corporate		Total
Severance and other charges, net	$	14	$	17	$	10	$	6	$	—	$	47
Other non-restructuring asset impairments	1		—		—		1		—		2
Total restructuring charges, net and asset impairments	$	15	$	17	$	10	$	7	$	—	$	49

	Six Months Ended June 30, 2020
	Clean Air		Powertrain		Ride Performance		Motorparts			Corporate		Total
Severance and other charges, net	$	22	$	37	$	24	$	17		$	5	$	105
Asset impairments related to restructuring actions	—		3		—		25			—		28
Other non-restructuring asset impairments	—		—		455		—			17		472
Impairment of assets held for sale	—		1		—		(1		)	—		—
Total asset impairment charges	—		4		455		24			17		500
Total restructuring charges, net and asset impairments	$	22	$	41	$	479	$	41		$	22	$	605

	Six Months Ended June 30, 2019
	Clean Air		Powertrain		Ride Performance		Motorparts		Corporate		Total
Severance and other charges, net	$	19	$	18	$	15	$	10	$	1	$	63
Other non-restructuring asset impairments	1		—		—		1		—		2
Total restructuring charges, net and asset impairments	$	20	$	18	$	15	$	11	$	1	$	65

Severance and other charges, net

Severance and other charges, net for the three and six months ended June 30, 2020 include the following actions:

• In conjunction with the Company's previously announced Project Accelerate, and in response to the COVID-19 global pandemic, the Company is executing global headcount reductions, subject to negotiation with works councils in certain jurisdictions. The Company began implementing these actions during the second quarter of 2020 and expects to complete them during 2021. During the three and six months ended June 30, 2020, the Company recognized a charge of $25 million in connection with the cash severance costs expected to be paid in connections with these actions.

• In addition to the actions above, the Company initiated several other cost reduction initiatives across all segments and regions aimed at optimizing the Company's cost structure. During the three and six months ended June 30, 2020, the Company recognized cash severance charges of $32 million expected to be paid under these programs.

• During the three and six months ended June 30, 2020, the Powertrain segment incurred $20 million in restructuring and other costs, of which $16 million is related to plant relocations and closures, and $4 million is related to a cost reduction program in one of its product lines.

• During the three and six months ended June 30, 2020, the Company incurred $4 million and $10 million in restructuring and other costs related to previously announced plant relocation and closures within its Ride Performance segment.

• Beginning in the third quarter of 2020, the Motorparts segment will initiate a rationalization of its supply chain and distribution network to achieve supply chain efficiencies and improve throughput to its customers; as discussed in Note 1, Description of Business. During the three and six months ended June 30, 2020, the Motorparts segment recognized $4 million in restructuring charges related to cash severance expected to be paid in connection with these actions. In addition, the Motorparts segment also recognized charges during the three and six months ended June 30, 2020 of $3 million in connection with an infrastructure cost reduction program in one of its regions.

• The Company also incurred $4 million in cash severance costs for the elimination of certain redundant positions within its corporate component in the six months ended June 30, 2020.

On June 30, 2020, the Company approved a voluntary termination program within the Powertrain segment at one of its European bearings plants aimed at reducing headcount, as negotiated with the works council and union. The Company anticipates implementing headcount reductions during 2020 and continuing into 2021 through a voluntary early retirement program and a voluntary special termination program. Restructuring and related charges are expected to be incurred in the second half of 2020 and 2021 aggregate to approximately $31 million. The charges are expected to be comprised of approximately $10 million for postemployment benefits, including an early retirement program and $21 million of special termination benefits. In addition, the Company expects to incur additional costs of approximately $2 million for customer validation, equipment transfer, and related expenditures.

During the three and six months ended June 30, 2019, the Company incurred $3 million and $9 million in restructuring and related costs and reduced previously recorded estimates by $2 million related to a restructuring plan designed to achieve a portion of the synergies the Company anticipated achieving in connection with the Federal-Mogul Acquisition. Pursuant to the plan, the Company reduced its headcount globally across all segments. During the three and six months ended June 30, 2019, the Ride Performance segment incurred $5 million and $8 million in restructuring and other costs related to plant relocations and closures.

Restructuring reserve rollforward

Amounts related to activities that were charged to restructuring reserves by reportable segments are as follows:

	Reportable Segments
	Clean Air			Powertrain			Ride Performance			Motorparts			Total Reportable Segments			Corporate			Total
Balance at December 31, 2019	$	23		$	30		$	23		$	16		$	92		$	9		$	101
Provisions	—			2			7			2			11			4			15
Revisions to estimates	—			(1		)	(1		)	—			(2		)	—			(2		)
Payments	(4		)	(4		)	(9		)	(4		)	(21		)	(9		)	(30		)
Foreign currency	—			—			(1		)	—			(1		)	—			(1		)
Balance at March 31, 2020	19			27			19			14			79			4			83
Provisions	24			36			18			17			95			1			96
Revisions to estimates	(2		)	—			—			(2		)	(4		)	—			(4		)
Payments	(6		)	(6		)	(17		)	(5		)	(34		)	(1		)	(35		)
Balance at June 30, 2020	$	35		$	57		$	20		$	24		$	136		$	4		$	140

	Reportable Segments
	Clean Air			Powertrain			Ride Performance			Motorparts			Total Reportable Segments			Corporate			Total
Balance at December 31, 2018	$	17		$	15		$	25		$	43		$	100		$	3		$	103
Provisions	5			1			5			4			15			1			16
Payments	(6		)	(3		)	(5		)	(14		)	(28		)	(2		)	(30		)
Balance at March 31, 2019	16			13			25			33			87			2			89
Provisions	14			17			10			8			49			—			49
Revisions to estimates	—			—			—			(2		)	(2		)	—			(2		)
Payments	(2		)	(4		)	(7		)	(7		)	(20		)	(1		)	(21		)
Balance at June 30, 2019	$	28		$	26		$	28		$	32		$	114		$	1		$	115

The following table provides a summary of the Company's restructuring liabilities and related activity for each type of exit costs:

	Six Months Ended June 30, 2020									Six Months Ended June 30, 2019
	Employee Costs			Facility Closure and Other Costs			Total			Employee Costs			Facility Closure and Other Costs			Total
Balance at beginning of period	$	97		$	4		$	101		$	98		$	5		$	103
Provisions	10			5			15			11			5			16
Revisions to estimates	(2		)	—			(2		)	—			—			—
Payments	(23		)	(7		)	(30		)	(25		)	(5		)	(30		)
Foreign currency	(1		)	—			(1		)	—			—			—
Balance at March 31	81			2			83			84			5			89
Provisions	90			6			96			44			5			49
Revisions to estimates	(4		)	—			(4		)	(2		)	—			(2		)
Payments	(31		)	(4		)	(35		)	(16		)	(5		)	(21		)
Balance at end of period	$	136		$	4		$	140		$	110		$	5		$	115

Asset impairments

During the three and six months ended June 30, 2020, as a result of the actions in the Motorparts segment discussed above, asset impairment charges of $25 million were recognized which included $16 million related to the write-down of property, plant, and equipment to its fair value, and $9 million of impairment charge to its operating lease right-of-use assets. Refer to Note 1, Description of Business, for additional information.

During the three and six months ended June 30, 2020, the Powertrain segment incurred $3 million in asset impairment charges in connection with its plant relocation and closure actions.

Refer to Note 3, Acquisitions and Divestitures, for additional information on impairments of assets held for sale.

The Company evaluates its long-lived assets for impairment whenever events or circumstances indicate the value of these long-lived asset groups are not recoverable. During the first quarter of 2020, the Company concluded impairment triggers had occurred for certain long-lived asset groups in the Ride Performance segment as a result of the effects of the COVID-19 global pandemic on the Company's projected financial information. Accordingly, the Company tested these long-lived asset groups for recoverability by performing undiscounted cash flow analyses. Based on these analyses, the net carrying values of these asset groups exceeded their undiscounted future cash flows. As such, the Company estimated the fair values of these asset groups at March 31, 2020 and compared them to their carrying values. As the net carrying values of these long-lived asset groups exceeded their fair values, the Company recorded long-lived asset impairment charges for property, plant, and equipment of $455 million during the six months ended June 30, 2020. Refer to Note 9, Fair Value for additional information on the fair value estimates used in these analyses.

As a result of changes in the business, the Company assessed and concluded an impairment trigger had occurred for certain long-lived asset groups in its corporate component. Accordingly, the Company tested these long-lived asset groups for recoverability. The Company estimated the fair value of these asset groups and compared it to the carrying value. As the net carrying value exceeded fair value, the Company recorded long-lived asset impairment charges of $1 million and $17 million during the three and six months ended June 30, 2020. Included in the asset impairment charges for the six months ended June 30, 2020 are $11 million related to property, plant, and equipment and $6 million related to operating lease right-of-use assets.

There are many uncertainties regarding the COVID-19 global pandemic that could negatively affect the Company's results of operations, financial position, and cash flows. As a result, if there is an adverse change to the Company’s projected financial information, due to business performance or market conditions, this may be indicative the value of its long-lived assets are not recoverable, which may result in additional non-cash long-lived asset impairment charges in a future period.

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Inventories

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Inventories

5. Inventories

At June 30, 2020 and December 31, 2019, inventory consists of the following:

	June 30, 2020		December 31, 2019
Finished goods	$	728	$	1,027
Work in process	427		460
Raw materials	400		408
Materials and supplies	101		104
	$	1,656	$	1,999

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

6. Goodwill and Other Intangible Assets

During the three months ended June 30, 2020, the Company performed a review of potential triggering events, and concluded no events indicated it was more likely than not that the fair values of its reporting units had declined to below their carrying values. There are many uncertainties regarding the COVID-19 global pandemic that could negatively affect the Company's results of operations, financial position, and cash flows. As a result, if there is an adverse change to the Company’s projected financial information, due to business performance or market conditions, this may be indicative that the fair value of its reporting units have declined below their carrying values, which may result in non-cash goodwill or intangible asset impairment charges in a future period.

During the first quarter of 2020, the Company concluded it was more likely than not that the fair values of certain of its reporting units and its indefinite-lived intangible assets had declined to below their carrying values as a result of the effects of the COVID-19 global pandemic on the Company's projected financial information. The Company completed a goodwill impairment analysis for four of its reporting units with goodwill in the Powertrain, Motorparts, and Ride Performance segments. The difference between the reporting units' carrying values and fair values were recognized as impairment charges. The Company recognized $267 million in non-cash impairment charges related to its goodwill during the six months ended June 30, 2020, which represented full impairments of the goodwill in one reporting unit in the Powertrain segment and one reporting unit in the Ride Performance segment, and partial impairments of goodwill in one reporting unit in the Powertrain segment and one reporting unit in the Motorparts segment.

During the first quarter of 2020, the Company also completed an analysis to determine the fair value of its trade names and trademarks for its reporting units in the Ride Performance and Motorparts segments. It was determined their carrying values exceeded their fair values and the Company recognized $51 million in non-cash impairment charges related to these indefinite-lived intangible assets during the six months ended June 30, 2020, which represented a full impairment of the trade names and trademarks in one of the reporting units in the Motorparts segment, and a partial impairment of the trade names and trademarks in one of the reporting units in the Ride Performance segment and one of the reporting units in the Motorparts segment.

As discussed in more details in Note 4, Restructuring Charges, Net and Asset Impairments, the Company concluded impairment triggers had occurred for certain long-lived asset groups within the Ride Performance segment. As a result, the Company recorded non-cash impairment charges of $65 million related to its definite-lived intangible assets during the three months ended March 31, 2020, which represented full impairments of the definite-lived intangible assets in these two reporting units.

Impairment charges for goodwill and intangible assets recognized by segment during the six months ended June 30, 2020 consist of the following:

	Six Months Ended June 30, 2020
	Powertrain		Ride Performance		Motorparts		Total
Goodwill impairment charges	$	160	$	37	$	70	$	267
Trade names and trademarks intangible asset impairment charges	—		11		40		51
Definite-lived intangible asset impairment charges	—		65		—		65
	$	160	$	113	$	110	$	383

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% based on each respective reporting units most recent goodwill impairment analysis:

	Segments
	Clean Air		Powertrain		Ride Performance		Motorparts
Number of reporting units with goodwill	3		1		1		1
Number of reporting units where fair value exceeds carrying value:
Greater than 10%	3		—		1		—
Less than 10%	—		1		—		1
Goodwill for reporting units where fair value exceeds carrying value:
Greater than 10%	$	22	$	—	$	7	$	—
Less than 10%	—		165		—		311
	$	22	$	165	$	7	$	311

At June 30, 2020 and December 31, 2019, goodwill consists of the following:

	Clean Air		Powertrain			Ride Performance			Motorparts			Total
Gross carrying amount at December 31, 2019	$	22	$	343		$	259		$	620		$	1,244
Foreign exchange	—		—			(3		)	—			(3		)
Gross carrying amount at March 31, 2020	22		343			256			620			1,241
Foreign exchange	—		—			3			—			3
Gross carrying amount at June 30, 2020	22		343			259			620			1,244
Accumulated impairment loss at December 31, 2019	—		(18		)	(212		)	(239		)	(469		)
Impairment	—		(160		)	(37		)	(70		)	(267		)
Accumulated impairment loss at March 31, 2020	—		(178		)	(249		)	(309		)	(736		)
Foreign exchange	—		—			(3		)	—			(3		)
Accumulated impairment loss at June 30, 2020	—		(178		)	(252		)	(309		)	(739		)
Net carrying value at end of period	$	22	$	165		$	7		$	311		$	505

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 $60 million of goodwill was impaired for two reporting units within its Ride Performance segment, one of which was a full impairment of the goodwill. As a result, this non-cash charge was recorded in the six months ended June 30, 2019. Goodwill allocated to other reporting units was supported by the valuation performed at that time.

At June 30, 2020 and December 31, 2019, the Company's intangible assets consist of the following:

		June 30, 2020							December 31, 2019
	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	$	988	$	(233	)	$	755	$	988	$	(123	)	$	865
Customer contract	10 years	8		(6		)	2		8		(6		)	2
Patents	10 to 17 years	1		(1		)	—		1		(1		)	—
Technology rights	10 to 30 years	133		(44		)	89		133		(37		)	96
Packaged kits know-how	10 years	54		(9		)	45		54		(7		)	47
Catalogs	10 years	47		(8		)	39		47		(6		)	41
Licensing agreements	3 to 5 years	63		(27		)	36		63		(18		)	45
Land use rights	28 to 46 years	46		(4		)	42		47		(3		)	44
		1,340		(332		)	1,008		1,341		(201		)	1,140
Indefinite-lived intangible assets:
Trade names and trademarks							231							282
Total							$	1,239						$	1,422

The amortization expense associated with definite-lived intangible assets is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Amortization expense	$	32	$	33	$	66	$	68

The expected future amortization expense for the Company's definite-lived intangible assets is as follows:

	2020		2021		2022		2023		2024		2025 and thereafter		Total
Expected amortization expense	$	66	$	127	$	124	$	121	$	113	$	457	$	1,008

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Investment in Nonconsolidated Affiliates

6 Months Ended

Jun. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Investment in Nonconsolidated Affiliates

7. Investment in Nonconsolidated Affiliates

The Company's ownership interest in affiliates accounted for under the equity method is as follows:

	June 30, 2020		December 31, 2019
Anqing TP Goetze Piston Ring Company Limited (China)	35.7	%	35.7	%
Anqing TP Powder Metallurgy Co., Ltd (China)	20.0	%	20.0	%
Dongsuh Federal-Mogul Industrial Co. Ltd. (Korea)	50.0	%	50.0	%
Farloc Argentina SAIC Y F (Argentina)	23.9	%	23.9	%
Federal-Mogul Powertrain Otomotiv A.S. (Turkey)	50.0	%	50.0	%
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti. (Turkey)	25.0	%	25.0	%
Federal-Mogul TP Liners, Inc. (USA)	46.0	%	46.0	%
Frenos Hidraulicos Automotrices, S.A. de C.V. (Mexico)	49.0	%	49.0	%
JURID do Brasil Sistemas Automotivos Ltda. (Brazil)	19.9	%	19.9	%
KB Autosys Co., Ltd. (Korea)	33.6	%	33.6	%
Montagewerk Abgastechnik Emden GmbH (Germany)	50.0	%	50.0	%

The Company's investments in its nonconsolidated affiliates at June 30, 2020 and December 31, 2019 is as follows:

	June 30, 2020		December 31, 2019
Investments in nonconsolidated affiliates	$	513	$	518

The carrying amount of the Company's investments in its nonconsolidated affiliates accounted for under the equity method exceeded its share of the underlying net assets by $263 million and $251 million at June 30, 2020 and December 31, 2019.

The following table represents the activity from the Company's investments in its nonconsolidated affiliates for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Equity in earnings (losses) of nonconsolidated affiliates, net of tax	$	4	$	17	$	17	$	33
Cash dividends received from nonconsolidated affiliates	$	5	$	12	$	18	$	27

During the six months ended June 30, 2019, the Company made adjustments in the measurement period to the preliminary purchase price allocation for the Federal-Mogul Acquisition which resulted in a reduction to the fair value of its investments in nonconsolidated affiliates of $15 million.

The following tables present summarized aggregated financial information of the Company's nonconsolidated affiliates for the three and six months ended June 30, 2020 and 2019. The amounts represent 100% of the interest in the nonconsolidated affiliates and not the Company's proportionate share:

	Three Months Ended June 30, 2020
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	24	$	11	$	41	$	76
Gross profit	$	6	$	5	$	6	$	17
Income from continuing operations	$	4	$	4	$	2	$	10
Net income	$	5	$	4	$	2	$	11

	Three Months Ended June 30, 2019
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	85	$	39	$	120	$	244
Gross profit	$	22	$	10	$	23	$	55
Income from continuing operations	$	17	$	9	$	11	$	37
Net income	$	21	$	9	$	11	$	41

	Six Months Ended June 30, 2020
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	120	$	41	$	146	$	307
Gross profit	$	32	$	11	$	26	$	69
Income from continuing operations	$	27	$	11	$	11	$	49
Net income	$	23	$	10	$	8	$	41

	Six Months Ended June 30, 2019
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	176	$	78	$	245	$	499
Gross profit	$	43	$	26	$	46	$	115
Income from continuing operations	$	36	$	20	$	24	$	80
Net income	$	39	$	18	$	22	$	79

Refer to Note 17, Related Party Transactions, for additional information on balances and transactions with equity method investments.

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Derivatives and Hedging Activities

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

8. 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 may enter 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.

Market Risks

Foreign Currency Exchange Rate 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 exchange rate 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, Thailand bhat, South African rand, Mexican peso, and Canadian dollar.

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 June 30, 2020 and December 31, 2019 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 condensed 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 condensed 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 are recognized as foreign currency gains (losses) within cost of sales in the condensed consolidated statements of income (loss). The fair value of foreign currency forward contracts is recorded in prepayments and other current assets or accrued expenses and other current liabilities in the condensed consolidated balance sheets. The fair value of these derivative instruments is not considered material to the condensed consolidated financial statements, refer to Note 9, Fair Value for additional information.

The following table summarizes by position the notional amounts for foreign currency forward contracts at June 30, 2020 (all of which mature in 2020):

	Notional Amount
Long positions	$	54
Short positions	$	(54	)

Cash-Settled Share and Index Swap Transactions

The Company selectively uses swaps to reduce market risk associated with its deferred compensation liabilities, which increase as the Company's stock price increases and decrease as the Company's stock price decreases. The Company has entered into a cash-settled share swap agreement that moves in the opposite direction of these liabilities, allowing the Company to fix a portion of the liabilities at a stated amount. At June 30, 2020, the Company hedged its deferred compensation liability related to approximately 1,350,000 common share equivalents, an increase of 750,000 common share equivalents from December 31, 2019. In the first quarter of 2020, the Company entered into an S&P 500 index fund ETF swap agreement to further reduce its market risk, which will act as a natural hedge offsetting an equivalent amount of indexed investments in the Company's deferred compensation plans. The fair value of these swap agreements is recorded in prepayments and other current assets or accrued expenses and other current liabilities in the condensed consolidated balance sheets. The fair value of these derivative instruments is not considered material to the condensed consolidated financial statements, refer to Note 9, Fair Value for additional information.

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, tin, and nickel. 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 condensed 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 $16 million and $19 million at June 30, 2020 and December 31, 2019. 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, €782 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 the condensed consolidated statements of changes in shareholders' equity in the foreign currency translation component of OCL and offset against the translation adjustment 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 10, 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 June 30, 2020 and December 31, 2019:

		Carrying Value
	Balance sheet classification	June 30, 2020		December 31, 2019
Commodity price hedge contracts designated as cash flow hedges	Prepayments and other current assets	$	1	$	—
Foreign currency borrowings designated as net investment hedges	Long-term debt	$	878	$	850

The following table represents the amount of gain (loss) recognized in accumulated other comprehensive income (loss) before any reclassifications into net income (loss) for derivative and non-derivative instruments designated as hedges for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Commodity price hedge contracts designated as cash flow hedges	$	5		$	(3	)	$	2		$	1
Foreign currency borrowings designated as net investment hedges	$	(16	)	$	(12	)	$	(2	)	$	7

The Company estimates approximately $1 million included in accumulated OCI or OCL at June 30, 2020 will be reclassified into net income (loss) within the following twelve months. Refer to Note 15, Shareholders' Equity for further information.

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Fair Value

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value

9. Fair Value

A three-level valuation hierarchy, based upon observable and unobservable inputs, is used for fair value measurements. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions based on the best evidence available. A financial instrument’s categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy definition prioritizes the inputs used in measuring fair value into the following levels:

Level 1	—	Quoted prices in active markets for identical assets or liabilities.
Level 2	—	Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.
Level 3	—	Unobservable inputs based on the Company's own assumptions.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the assets and liabilities included in the Company's condensed consolidated balance sheets at June 30, 2020 and December 31, 2019 that are recognized at fair value on a recurring basis and indicate the fair value hierarchy utilized to determine such fair values:

		June 30, 2020				December 31, 2019
	Fair value hierarchy	Carrying Amount		Fair Value		Carrying Amount			Fair Value
Derivative asset (liability) instruments:
Swap agreements	Level 2	$	1	$	1	$	(1	)	$	(1	)
Commodity contracts	Level 2	$	1	$	1	$	—		$	—

Asset and Liability Instruments

The carrying value of cash and cash equivalents, restricted cash, short and long-term receivables, accounts payable, and short-term debt approximates fair value.

Cash-Settled Share and Index Swap Agreements

The Company's stock price is used as an observable input in determining the fair value of the cash-settled share swap agreement. The S&P 500 index ETF price is used as an observable input in determining the fair value of this swap agreement.

Commodity Contracts and Foreign Currency Contracts

The Company calculates the fair value of its commodity contracts and foreign currency contracts using commodity forward rates and currency forward rates, to calculate forward values, and then discounts the forward values. The discount rates for all derivative contracts are based on bank deposit rates. The fair value of the Company's foreign currency forward contracts was a net asset position of less than $1 million at June 30, 2020 and December 31, 2019.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

In addition to items measured at fair value on a recurring basis, assets may be measured at fair value on a nonrecurring basis. These assets include long-lived assets and intangible assets which may be written down to fair value as a result of impairment.

Long-Lived Assets

The Company evaluates its long-lived assets for impairment whenever events or circumstances indicate the value of these long-lived asset groups are not recoverable. During the first quarter of 2020, the Company concluded certain impairment triggers had occurred for certain long-lived asset groups as a result of the effects of the COVID-19 global pandemic on the Company's projected financial information. After failing the undiscounted cash flow recoverability test, the Company estimated the fair values of these long-lived asset groups and compared them to their net carrying values. The fair value measurements related to these long-lived asset groups rely primarily on Company-specific inputs and the Company's assumptions about the use of the assets, as observable inputs are not available (level 3). To determine the fair value of the long-lived asset groups, the Company utilized an asset-based approach. The Company believes the assumptions and estimates used to determine the estimated fair values of the long-lived asset groups are reasonable; however, these estimates and assumptions are subject to a high degree of uncertainty. Due to the many variables inherent in estimating fair value differences in assumptions could have a material effect on the results of the analyses.

As the net carrying values of the long-lived asset groups exceeded their fair values, the Company recorded long-lived asset impairment charges consisting of $65 million of definite-lived intangible assets and $455 million of property, plant, and equipment, during the six months ended June 30, 2020. Refer to Note 4, Restructuring Charges, Net and Asset Impairments for additional information on asset impairments and refer to Note 6, Goodwill and Other Intangible Assets, for additional information on the definite-lived intangible asset impairments.

Goodwill and Indefinite-Lived Intangible Assets

The Company evaluates the carrying value of its goodwill and indefinite-lived intangible assets for impairment annually in the fourth quarter of each year, or more frequently if events or circumstances indicate these assets might be impaired. During the first quarter of 2020, the Company concluded it was more likely than not that the fair values of certain of its reporting units and its indefinite-lived intangible assets had declined to below their carrying values as a result of the effects of the COVID-19 global pandemic on the Company's projected financial information. The Company completed analyses to estimate the fair values of these reporting units and its trade names and trademarks. These fair value measurements require the Company to make significant assumptions and estimates about the (i) projected operating margins, (ii) revenue growth rate, and (iii) discount rate, which is risk-adjusted based on the aforementioned items, as observable inputs are not available (level 3). The Company believes the assumptions and estimates used to determine the estimated fair value are reasonable; however, these estimates and assumptions are subject to a high degree of uncertainty. Due to the many variables inherent in estimating fair value, differences in assumptions could have a material effect on the results of the analyses.

During the first quarter of 2020, it was determined the carrying values of certain reporting units, and the Company's trade names and trademarks exceeded their fair values. As result, the Company recognized $267 million in non-cash impairment charges related to its goodwill and $51 million in non-cash impairment charges related to its indefinite-lived intangible assets during the six months ended June 30, 2020. Refer to Note 6, Goodwill and Other Intangible Assets, for additional information on the goodwill and indefinite-lived intangible asset impairments.

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. Refer to Note 6, Goodwill and Other Intangible Assets, for additional information on the goodwill impairment recognized in the six months ended June 30, 2019.

Financial Instruments Not Carried at Fair Value

The estimated fair value of the Company's outstanding debt is as follows:

		June 30, 2020				December 31, 2019
	Fair value hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt (including current maturities):
Term loans and senior notes	Level 2	$	5,121	$	4,641	$	5,179	$	5,113

The fair value of the Company's public senior notes and private borrowings under its senior credit facility is based on observable inputs, and its borrowings on the revolving credit facility approximate fair value. The Company also had $169 million and $192 million at June 30, 2020 and December 31, 2019 in other debt whose carrying value approximates fair value, which consists primarily of foreign debt with maturities of one year or less.

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Debt and Other Financing Arrangements

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Debt and Other Financing Arrangements

10. Debt and Other Financing Arrangements

Long-Term Debt

A summary of the Company's long-term debt obligations at June 30, 2020 and December 31, 2019 is set forth in the following table:

	June 30, 2020				December 31, 2019
	Principal		Carrying Amount (a)		Principal		Carrying Amount (a)
Credit Facilities
Revolver Borrowings
Due 2023	$	1,500	$	1,500	$	183	$	183
Term Loans
LIBOR plus 2.00% Term Loan A due 2019 through 2023(b)	1,572		1,561		1,615		1,608
LIBOR plus 3.00% Term Loan B due 2019 through 2025	1,675		1,614		1,683		1,623
Senior Unsecured Notes
$225 million of 5.375% Senior Notes due 2024	225		223		225		222
$500 million of 5.000% Senior Notes due 2026	500		494		500		494
Senior Secured Notes
€415 million 4.875% Euro Fixed Rate Notes due 2022	466		477		465		479
€300 million of Euribor plus 4.875% Euro Floating Rate Notes due 2024	337		340		336		340
€350 million of 5.000% Euro Fixed Rate Notes due 2024	393		412		392		413
Other debt, primarily foreign instruments	13		12		14		13
			6,633				5,375
Less - maturities classified as current			4				4
Total long-term debt			$	6,629			$	5,371

^(a)  Carrying amount is net of unamortized debt issuance costs and debt discounts or premiums. Total unamortized debt issuance costs were $80 million and $76 million at June 30, 2020 and December 31, 2019. Total unamortized debt (premium) discount, net was $(32) million and $(37) million at June 30, 2020 and December 31, 2019.

^(b)  The interest rate on Term Loan A at December 31, 2019 was LIBOR plus 1.75%.

Short-Term Debt

The Company's short-term debt at June 30, 2020 and December 31, 2019 consists of the following:

	June 30,		December 31,
	2020		2019
Maturities classified as current	$	4	$	4
Short-term borrowings(a)	157		179
Bank overdrafts	61		2
Total short-term debt	$	222	$	185

^(a) Includes borrowings under both committed credit facilities and uncommitted lines of credit and similar arrangements.

Amortization of debt issuance costs and original issue discounts (premiums)

Interest expense associated with the amortization of the debt issuance costs and original issue discounts (premiums) recognized in the Company's condensed consolidated statements of income (loss) for the three and six months ended June 30, 2020 and 2019 is as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2020			2019		2020			2019
Amortization of debt issuance fees	$	5		$	4	$	10		$	9
Accretion of debt premium	$	(2	)	$	—	$	(6	)	$	(6	)

Included in the table above is the amortization of debt issuance costs on the revolver of $1 million in both the three months ended June 30, 2020 and 2019, and $3 million and $2 million in the six months ended June 30, 2020 and 2019. The unamortized debt issuance costs related to the revolver is included in other assets in the condensed consolidated balance sheets.

Credit Facilities

Financing Arrangements

The table below shows the Company's borrowing capacity on committed credit facilities at June 30, 2020:

	Committed Credit Facilities at June 30, 2020
	Term	Available(b)
		(in billions)
Tenneco Inc. revolving credit facility (a)	2023	$	—
Tenneco Inc. Term Loan A	2023	—
Tenneco Inc. Term Loan B	2025	—
Subsidiaries’ credit agreements	2020 - 2028	—
		$	—

^(a)  The Company is required to pay commitment fees under the revolving credit facility on the unused portion of the total commitment.

^(b)  Letters of credit reduce the available borrowings under the revolving credit facility.

The Company also had $65 million of outstanding letters of credit under uncommitted facilities at June 30, 2020.

At June 30, 2020, the Company had liquidity of $1.4 billion comprised entirely of cash. At June 30, 2020, the Company has fully utilized its $1.5 billion revolving credit facility.

Term Loans

On October 1, 2018, the Company entered into a new credit agreement with JPMorgan Chase Bank, N.A., as administrative agent and other lenders (the "New Credit Facility") in connection with the Federal-Mogul Acquisition, which has been amended by the first amendment, dated February 14, 2020 ("the "First Amendment"), by the second amendment, dated February 14, 2020 ("the Second Amendment"), and by the third amendment, dated May 5, 2020 (the "Third Amendment"). The New Credit Facility provides $4.9 billion of total debt financing, consisting of a five-year $1.5 billion revolving credit facility, a five-year $1.7 billion term loan A facility ("Term Loan A"), and a seven-year $1.7 billion term loan B facility ("Term Loan B"). The Company paid $8 million in one-time fees in connection with the First Amendment and Second Amendment, and $10 million in one-time fees in connection with the Third Amendment.

New Credit Facility — Interest Rates and Fees

The Third Amendment provides for an increase to the margin applicable to borrowings under the revolving credit facility and

the Term Loan A facility at certain leverage levels as set forth below as one of several conditions for obtaining the less restrictive financial maintenance covenants described below under New Credit Facility — Other Terms and Conditions:

Consolidated net leverage ratio	Interest rate
greater than 6.0 to 1	LIBOR plus 2.50%
less than 6.0 to 1 and greater than 4.5 to 1	LIBOR plus 2.25%

Initially, and so long as the Company’s corporate family rating is Ba3 (with a stable outlook) or higher from Moody’s Investors Service, Inc. (“Moody’s”) and BB- (with a stable outlook) or higher from Standard & Poor’s Financial Services LLC (“S&P”), the interest rate on borrowings under the Term Loan B facility will be LIBOR plus 2.75%; at any time the foregoing conditions are not satisfied, the interest rate on the Term Loan B facility will be LIBOR plus 3.00%. When the Term Loan B facility is no longer outstanding and the Company and its subsidiaries have no other secured indebtedness (with certain exceptions set forth in the New Credit Facility), and upon the Company achieving and maintaining two or more corporate credit and/or corporate family ratings higher than or equal to BBB- from S&P, BBB- from Fitch Ratings Inc. (“Fitch”) and/or Baa3 from Moody’s (in each case, with a stable or positive outlook), the collateral under the New Credit Facility may be released. On June 3, 2019, Moody’s lowered our corporate family rating to B1 and the interest rate on borrowings under the term loan B was raised to LIBOR plus 3.00%.

New Credit Facility — Other Terms and Conditions — After giving effect to the Third Amendment, the Company must comply with certain less restrictive financial maintenance covenants for the revolving credit facility and the Term Loan A facility. The financial maintenance covenants are subject to several covenant reset triggers (“Covenant Reset Triggers”) that limit certain activities of the Company by implementing more restrictive affirmative and negative covenants, as more fully described below. If a Covenant Reset Trigger occurs, the financial maintenance covenants revert back to the previous financial maintenance covenants in effect immediately prior to the Third Amendment (and described above) (the “Prior Financial Covenants”). The financial maintenance covenants include (i) a requirement to have a senior secured leverage ratio (as defined in the New Credit Facility), with step-downs, as detailed in the table below; (ii) a requirement to have a consolidated net leverage ratio (as defined in the New Credit Facility), with step-downs, as follows:

(i) Senior secured net leverage ratio		(ii) Consolidated net leverage ratio
not greater than 6.75 to 1	at June 30, 2020	not greater than 4.50 to 1	at March 31, 2020
not greater than 9.50 to 1	at September 30, 2020	not greater than 5.25 to 1	at March 31, 2022
not greater than 8.75 to 1	at December 31, 2020	not greater than 4.75 to 1	at June 30, 2022
not greater than 8.25 to 1	at March 31, 2021	not greater than 4.25 to 1	at September 30, 2022
not greater than 4.50 to 1	at June 30, 2021	not greater than 3.75 to 1	thereafter
not greater than 4.25 to 1	at September 30, 2021
not greater than 4.00 to 1	at December 31, 2021

and (iii) a requirement to maintain a consolidated interest coverage ratio (as defined in the New Credit Facility) for any period of four consecutive fiscal quarters of not less than 2.00 to 1 as of June 30, 2020, 1.50 to 1 through March 31, 2021, and 2.75 to 1 thereafter.

The Company may make a one-time election to revert back to the Prior Financial Covenants and terminate the Covenant Reset Triggers upon delivery of a covenant reset certificate that attests to compliance with the Prior Financial Covenants as of the end of the relevant fiscal period (“Covenant Reset Certificate”).

The Covenant Reset Triggers include certain limitations on the ability of the Company and its restricted subsidiaries to, among other things, (a) incur additional indebtedness, (b) enter into additional sales and leasebacks, (c) create additional liens over their assets, (d) pay dividends or distributions to Tenneco’s stockholders, (e) prepay certain unsecured indebtedness of the Company or its restricted subsidiaries (as more fully described below), (f) make additional investments, (g) dispose of material intellectual property, and (h) reinvest the proceeds of certain asset sales in the business in lieu of repaying indebtedness, each as more specifically described in the Third Amendment. These limitations are in addition to other affirmative and negative covenants (with customary exceptions, materiality qualifiers and limitations) in the New Credit Agreement, including with respect to: financial reporting; payment of taxes; maintenance of existence; compliance with law and material contractual obligations; maintenance of property and insurance; inspection of property, books and records; notices of certain events; compliance with environmental laws; provision and maintenance of collateral perfection; satisfaction of the financial maintenance covenants described above; incurrence of indebtedness; permitting liens over assets; mergers, consolidations, dispositions or other fundamental transactions; dispositions and asset sales; restricted payments; investments; compliance with limitations on certain transactions with nonconsolidated affiliates; sale and leaseback transactions; changes in fiscal periods; negative pledge clauses in certain contracts; changes to lines of business; prepayments and modifications of certain subordinated indebtedness (as more fully described below); use of proceeds; transactions involving special purpose finance subsidiaries; and transactions related to effectuating a spin-off (as defined in the New Credit Agreement), each as more specifically described in the New Credit Agreement.

After giving effect to the Third Amendment, so long as no default exists under its New Credit Facility, the Company would be permitted to (i) make regularly scheduled interest and principal payments as and when due in respect of the Senior Unsecured Notes, (ii) refinance the Senior Unsecured Notes with the net cash proceeds of permitted refinancing indebtedness (as defined in the New Credit Facility); (iii) make payments in respect of the Senior Unsecured Notes in an amount equal to the net cash proceeds of qualified capital stock (as defined in the New Credit Facility) issued after May 5, 2020; (iv) convert any Senior Unsecured Notes into qualified capital stock issued after May 5, 2020; and (v) make additional payments of the Senior Unsecured Notes provided that after giving effect to such additional payments the consolidated leverage ratio would be equal to or less than 2.00 to 1 after giving effect to such additional payments. The foregoing limitations regarding repayment and refinancing of the Senior Unsecured Notes and such incremental equivalent debt apply from the effectiveness of the Third Amendment until delivery of a Covenant Reset Certificate.

The covenants in the New Credit Facility generally prohibit the Company from repaying certain subordinated indebtedness. So long as no default exists, the Company would, under its New Credit Facility, be permitted to repay or refinance its subordinated indebtedness (i) with the net cash proceeds of permitted refinancing indebtedness (as defined in the New Credit Facility); (ii) in an amount equal to the net cash proceeds of qualified capital stock (as defined in the New Credit Facility) issued after October 1, 2018; (iii) in exchange for qualified capital stock issued after October 1, 2018; and (iv) with additional payments provided that such additional payments are capped based on a pro forma consolidated leverage ratio after giving effect to such additional payments.

Such additional payments on subordinated indebtedness (x) will not be permitted at any time the pro forma consolidated leverage ratio is greater than 2.00 to 1 after giving effect to such additional payments and (y) will be permitted in an unlimited amount at any time the pro forma consolidated leverage ratio is equal to or less than 2.00 to 1 after giving effect to such additional payments.

The New Credit Facility contains customary representations and warranties, including, as a condition to future revolver borrowings, that all such representations and warranties are true and correct, in all material respects, on the date of borrowing, including representations (with customary exceptions, materiality qualifiers and limitations) as to: existence; compliance with law; power, authority and enforceability; no violation of law or material contracts; material litigation; no default under the New Credit Agreement and related documents; ownership of property, including material intellectual property; payment of material taxes; compliance with margin stock regulations; labor matters; ERISA; Investment Company Act matters; subsidiaries; use of loan proceeds; environmental matters; accuracy of information; security documents; solvency; anti-corruption laws and sanctions; and that since December 31, 2017 there has been no development or event that has had a material adverse effect on the business or financial condition of the Company and its subsidiaries, each as more specifically described in the New Credit Facility.

The New Credit Facility includes customary events of default and other provisions that could require all amounts due thereunder to become immediately due and payable, either automatically or at the option of the lenders, if the Company fails to comply with the terms of the New Credit Facility or if other customary events occur. These events of default (with customary exceptions, materiality qualifiers, limitations and grace periods) include (i) failure to pay obligations under the New Credit Agreement when due; (ii) material inaccuracy of representations and warranties; (iii) failure to comply with the covenants in the New Credit Facility and related documents (as summarized above); (iv) cross-default to material indebtedness; (v) commencement of bankruptcy or insolvency proceedings; (vi) ERISA events; (vii) certain material judgments; (viii) invalidity of unenforceability of security and guarantee documents; and (ix) change of control, each as more specifically described in the New Credit Facility.

Senior Notes

The Company has outstanding 5.375% senior unsecured notes due December 15, 2024 ("2024 Senior Notes") and 5.000% senior unsecured notes due July 15, 2026 ("2026 Senior Notes" and together with the 2024 Senior Notes, the "Senior Unsecured Notes"). The Company has outstanding 5.000% euro denominated fixed rate notes which are due July 15, 2024 ("5.000% Euro Fixed Rate Notes"), 4.875% euro denominated fixed rate notes due April 15, 2022 ("4.875% Euro Fixed Rate Notes"), and floating rate notes due April 15, 2024 ("Euro Floating Rate Notes", together with the 5.000% Euro Fixed Rate Notes and the 4.875% Euro Fixed Notes, the "Senior Secured Notes").

Senior Unsecured Notes and Senior Secured Notes — Other Terms and Conditions — The Senior Unsecured Notes and Senior Secured Notes contain covenants that will, among other things, limit the Company's ability to create liens and enter into sale and leaseback transactions. In addition, the Senior Secured Notes and 2024 Senior Unsecured Notes also require that, as a condition precedent to incurring certain types of indebtedness not otherwise permitted, the Company's consolidated fixed charge coverage ratio, as calculated on a pro forma basis, be greater than 2.00, as well as containing restrictions on its operations, including limitations on: (i) incurring additional indebtedness; (ii) paying dividends; (iii) distributions and stock repurchases; (iv) investments; (v) asset sales and (vi) mergers and consolidations.

Subject to limited exceptions, all of the Company's existing and future material domestic wholly owned subsidiaries fully and unconditionally guarantee its Senior Unsecured Notes and Senior Secured Notes on a joint and several basis. There are no significant restrictions on the ability of the subsidiaries that have guaranteed the Company's Senior Notes to make distributions to the Company.

At June 30, 2020, the Company was in compliance with all of its financial covenants.

Other Debt

Other debt consists primarily of subsidiary debt.

Accounts Receivable Securitization and Factoring

On-Balance Sheet Arrangements

The Company has securitization programs for some of its accounts receivable, with limited recourse provisions. Borrowings on these securitization programs, which are recorded in short-term debt, at June 30, 2020 and December 31, 2019 are as follows:

	June 30, 2020		December 31, 2019
Borrowings on securitization programs	$	3	$	4

Off-Balance Sheet Arrangements

In the Company's European and U.S. accounts receivable factoring programs, accounts receivables are transferred in their entirety to the acquiring entities and are accounted for as a sale. The fair value of assets received as proceeds in exchange for the transfer of accounts receivable under these factoring programs approximates the fair value of such receivables. Some of these programs have deferred purchase price arrangements with the banks.

The Company is the servicer of the receivables under some of these arrangements and is responsible for performing all accounts receivable administration functions. Where the Company receives a fee to service and monitor these transferred accounts receivables, such fees are sufficient to offset the costs and as such, a servicing asset or liability is not recorded as a result of such activities.

In the U.S and Canada, the Company participates in supply chain financing programs with certain of the Company's aftermarket customers through drafting programs.

The amount of accounts receivable outstanding and derecognized for these factoring and drafting arrangements was $0.9 billion and $1.0 billion at June 30, 2020 and December 31, 2019. In addition, the deferred purchase price receivable was $38 million and $33 million at June 30, 2020 and December 31, 2019.

Proceeds from the factoring of accounts receivable qualifying as sales and drafting programs was $0.7 billion and $1.3 billion for the three months ended June 30, 2020 and 2019 and was $1.9 billion and $2.5 billion for the six months ended June 30, 2020 and 2019.

The following table represents the Company's expenses associated with these arrangements for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Loss on sale of receivables(a)	$	4	$	6	$	10	$	14

^(a) Amount is included in "Interest expense" in the condensed consolidated statements of income (loss).

These programs provide the Company with access to cash at costs that are generally favorable to alternative sources of financing.

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Pension Plans, Postretirement and Other Employee Benefits

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Pension Plans, Postretirement and Other Employee Benefits

11. Pension Plans, Postretirement and Other Employee Benefits

The Company sponsors several defined benefit pension plans ("Pension Benefits") and health care and life insurance benefits ("Other Postretirement Benefits" or "OPEB") for certain employees and retirees around the world.

Components of net periodic benefit cost (credit) for the three and six months ended June 30, 2020 and 2019 are as follows:

	Three Months Ended June 30,
	Pension Benefits												Other Postretirement Benefits
	2020						2019
	U.S.			Non-U.S.			U.S.			Non-U.S.			2020			2019
Service cost	$	1		$	6		$	—		$	6		$	—		$	—
Interest cost	10			5			14			5			3			4
Expected return on plan assets	(16		)	(4		)	(17		)	(4		)	—			—
Net amortization:
Actuarial loss	1			2			1			2			—			1
Prior service cost (credit)	—			—			—			—			(2		)	(2		)
Net pension and postretirement costs (credits)	$	(4	)	$	9		$	(2	)	$	9		$	1		$	3

	Six Months Ended June 30,
	Pension Benefits												Other Postretirement Benefits
	2020						2019
	U.S.			Non-U.S.			U.S.			Non-U.S.			2020			2019
Service cost	$	1		$	12		$	1		$	12		$	—		$	—
Interest cost	20			9			27			12			5			7
Expected return on plan assets	(32		)	(8		)	(34		)	(9		)	—			—
Net amortization:
Actuarial loss	3			4			2			3			1			2
Prior service cost (credit)	—			—			—			—			(4		)	(4		)
Net pension and postretirement costs (credits)	$	(8	)	$	17		$	(4	)	$	18		$	2		$	5

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Income Taxes

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

For interim tax reporting, the Company estimates its annual effective tax rate and applies it to year-to-date ordinary income. Jurisdictions where no tax benefit can be recognized due to a valuation allowance are excluded from the estimated annual effective tax rate. The effect of including these jurisdictions on the quarterly effective tax rate calculation could result in a higher or lower effective tax rate during a quarter due to the mix and timing of actual earnings versus annual projections. The tax effects of certain items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur.

For the three months ended June 30, 2020, the Company recorded income tax benefit of $101 million on loss from continuing operations before income taxes of $441 million. This compares to income tax expense of $14 million on income from continuing operations of $59 million in the three months ended June 30, 2019.

For the six months ended June 30, 2020, the Company recorded income tax benefit of $195 million on loss from continuing operations before income taxes of $1.4 billion. This compares to income tax expense of $14 million on loss from continuing operations before income taxes of $46 million in the same period of 2019.

Income tax benefit for the three months ended June 30, 2020 differs from the U.S. statutory rate due primarily to pre-tax income taxed at rates higher than the U.S. statutory tax rate and pre-tax losses with no tax benefit.

Income tax benefit for the six months ended June 30, 2020 differs from the U.S. statutory rate due primarily to $111 million of tax benefit recognized related to asset impairment charges of $883 million, pre-tax income taxed at rates higher than the U.S. statutory tax rate, and pre-tax losses with no tax benefit.

Income tax expense for the three and six months ended June 30, 2019 differs from the U.S. statutory rate due primarily to pre-tax income taxed at rates higher than the U.S. statutory rate and pre-tax losses with no tax benefit.

The Company evaluates its deferred tax assets quarterly to determine if valuation allowances are required or should be adjusted. This assessment considers, among other matters, the nature, frequency and amount of recent losses, the duration of statutory carryforward periods, and tax planning strategies. In making such judgments, significant weight is given to evidence that can be objectively verified. There are many uncertainties regarding the COVID-19 global pandemic that could negatively affect the Company's results of operations, financial position, and cash flows. As a result, if there is an adverse change to the Company’s business performance or the market conditions in which it operates, it is reasonably possible there may be sufficient negative evidence for a valuation allowance to be recorded in the next twelve months. This may result in a one-time charge to income tax expense of up to $595 million, primarily related to the U.S., China, France, Poland, and Spain.

The Company believes it is reasonably possible up to $51 million in unrecognized tax benefits related to the expiration of foreign statute of limitations and the conclusion of income tax examinations may be recognized within the next twelve months.

After considering the effect of COVID-19 on the 2020 forecast, the Company is not projecting sufficient income to utilize its 2011 and 2012 foreign tax credit carryforwards of $29 million and $21 million. The Company has certain U.S. reserves that provide positive evidence these foreign tax credits would be utilized in the event of an assessment by the U.S. tax authorities; therefore, it has netted the foreign tax credit carryforward deferred tax assets with its uncertain tax position liability on the condensed consolidated balance sheets. Should the 2011 and 2012 foreign tax credit carryforwards expire without utilization, the foreign tax credit carryforward deferred tax assets would be written off with a charge to income tax expense.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

Environmental Matters

The Company is subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which it operates. The Company has been notified by the U.S. Environmental Protection Agency, other national environmental agencies, and various provincial and state agencies it may be a potentially responsible party (“PRP”) under such laws for the cost of remediating hazardous substances pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") and other national and state or provincial environmental laws. PRP designation typically requires the funding of site investigations and subsequent remedial activities. Many of the sites that are likely to be the costliest to remediate are often current or former commercial waste disposal facilities to which numerous companies sent wastes. Despite the potential joint and several liability which might be imposed on the Company under CERCLA and some of the other laws pertaining to these sites, its share of the total waste sent to these sites generally has been small. The Company believes its exposure for liability at these sites is not material.

On a global basis, the Company has also identified certain other present and former properties at which it may be responsible for cleaning up or addressing environmental contamination, in some cases as a result of contractual commitments and/or federal or state environmental laws. The Company is seeking to resolve its responsibilities for those sites for which a claim has been received.

The Company expenses or capitalizes, as appropriate, expenditures for ongoing compliance with environmental regulations. At June 30, 2020, the Company has an obligation to remediate or contribute towards the remediation of certain sites, including the sites discussed above at which it may be a PRP.

The Company's estimated share of environmental remediation costs for all these sites is recognized in the condensed consolidated balance sheets on a discounted basis and the amounts at June 30, 2020 and December 31, 2019 are as follows:

	June 30, 2020		December 31, 2019
Accrued expenses and other current liabilities	$	9	$	8
Deferred credits and other liabilities	26		28
	$	35	$	36

For those locations where the liability was discounted, the weighted average discount rate used was 0.45% and 1.30% at June 30, 2020 and December 31, 2019.

The Company's expected payments for environmental remediation costs for non-indemnified locations are estimated to be approximately:

	2020		2021		2022		2023		2024		2025 and thereafter
Expected payments	$	5	$	4	$	2	$	2	$	2	$	15

Based on information known to the Company from site investigations and the professional judgment of consultants, the Company has established reserves it believes are adequate for these costs. Although the Company believes these estimates of remediation costs are reasonable and are based on the latest available information, the costs are estimates, difficult to quantify based on the complexity of the issues, and are subject to revision as more information becomes available about the extent of remediation required. At some sites, the Company expects other parties will contribute to the remediation costs. In addition, certain environmental statutes provide the Company's liability could be joint and several, meaning the Company could be required to pay amounts in excess of its share of remediation costs. The financial strength of the other PRPs at these sites has been considered, where appropriate, in the determination of the estimated liability. The Company does not believe any potential costs associated with its current status as a PRP, or as a liable party at the other locations referenced herein, will be material to its annual consolidated financial position, results of operations, or liquidity.

Antitrust Investigations and Litigation

On March 25, 2014, representatives of the European Commission (EC) were at Tenneco GmbH's Edenkoben, Germany administrative facility to gather information in connection with an ongoing global antitrust investigation concerning multiple automotive suppliers. On the same date, the Company also received a related subpoena from the U.S. Department of Justice (“DOJ”).

On November 5, 2014, the DOJ granted conditional leniency to the Company, its subsidiaries, and its 50% affiliates as of such date ("2014 Tenneco Entities") pursuant to an agreement the Company entered into under the Antitrust Division's Corporate Leniency Policy. This agreement provides important benefits to the 2014 Tenneco Entities in exchange for the Company's self-reporting of matters to the DOJ and its continuing full cooperation with the DOJ's resulting investigation. For example, the DOJ will not bring any criminal antitrust prosecution against the 2014 Tenneco Entities, nor seek any criminal fines or penalties, in connection with the matters the Company reported to the DOJ. Additionally, there are limits on the liability of the 2014 Tenneco Entities related to any follow-on civil antitrust litigation in the United States. The limits include single rather than treble damages, as well as relief from joint and several antitrust liability with other relevant civil antitrust action defendants. These limits are subject to the Company satisfying the DOJ and any court presiding over such follow-on civil litigation.

On April 27, 2017, the Company received notification from the EC that it has administratively closed its global antitrust inquiry regarding the production, assembly, and supply of complete exhaust systems. No charges against the Company or any other competitor were initiated at any time and the EC inquiry is now closed.

Certain other competition agencies are also investigating possible violations of antitrust laws relating to products supplied by the Company and its subsidiaries, including Federal-Mogul. The Company has cooperated and continues to cooperate fully with all of these antitrust investigations and take other actions to minimize its potential exposure.

The Company and certain of its competitors are also currently defendants in civil putative class action litigation and are subject to similar claims filed by other plaintiffs, in the United States and Canada. More related lawsuits may be filed, including in other jurisdictions. Plaintiffs in these cases generally allege that defendants have engaged in anticompetitive conduct, in violation of federal and state laws, relating to the sale of automotive exhaust systems or components thereof. Plaintiffs seek to recover, on behalf of themselves and various purported classes of purchasers, injunctive relief, damages and attorneys’ fees.

However, as explained above, because the DOJ granted conditional leniency to the 2014 Tenneco Entities, the Company's civil liability in U.S. follow-on actions with respect to these entities is limited to single damages and the Company will not be jointly and severally liable with the other defendants, provided that the Company has satisfied its obligations under the DOJ leniency agreement and approval is granted by the presiding court. Typically, exposure for follow-on actions in Canada is less than the exposure for U.S. follow-on actions.

Following the EC's decision to administratively close its antitrust inquiry into exhaust systems in 2017, receipt by the 2014 Tenneco Entities of conditional leniency from the DOJ and discussions during the third quarter of 2017 following the appointment of a special settlement master in the civil putative class action cases pending against the Company and/or certain of its competitors in the United States, the Company continues to vigorously defend itself and/or take actions to minimize its potential exposure to matters pertaining to the global antitrust investigation, including engaging in settlement discussions when it is in the best interests of the Company and its stockholders. For example, in October 2017, the Company settled an administrative action brought by Brazil's competition authority for an amount that was not material. In December 2018, the Company settled a separate administrative action brought by Brazil’s competition authority against a Federal-Mogul subsidiary, also for an amount that was not material.

Additionally, in February 2018, the Company settled civil putative class action litigation in the United States brought by classes of direct purchasers, end-payors and auto dealers. No other classes of plaintiffs have brought claims against the Company in the United States. Based upon those earlier developments, including settlement discussions, the Company established a reserve of $132 million in its second quarter 2017 financial results for settlement costs that were probable, reasonably estimable, and expected to be necessary to resolve its antitrust matters globally, which primarily involves the resolution of civil suits and related claims. Of the $132 million reserve that was established, $109 million has been paid through June 30, 2020, which included $30 million paid in the six months ended June 30, 2020 from amounts that were included in the reserve. In connection with the resolution of certain claims, $9 million was released from the reserve in the third quarter of 2019. At June 30, 2020, the reserve was $14 million, of which $2 million was recorded in accrued expenses and other current liabilities and $12 million was recorded in deferred credits and other liabilities in the Company's condensed consolidated balance sheets. While the Company, including its Federal-Mogul subsidiaries, continues to cooperate with certain competition agencies investigating possible violations of antitrust laws relating to products supplied by the Company, and the Company may be subject to other civil lawsuits and/or related claims, no amount of this reserve is attributable to matters with the DOJ or the EC, and no such amount is expected based on current information.

The Company's reserve for its antitrust matters is based upon all currently available information and an assessment of the probability of events for those matters where the Company can make a reasonable estimate of the costs to resolve such outstanding matters. The Company's estimate involves significant judgment, given the number, variety and potential outcomes of actual and potential claims, the uncertainty of future rulings and approvals by a court or other authority, the behavior or incentives of adverse parties or regulatory authorities, and other factors outside of its control. As a result, the Company's reserve may change from time to time, and actual costs may vary. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on current information, the Company does not expect any such change in the reserve will have a material adverse effect on the Company's annual consolidated financial position, results of operations or liquidity.

Other Legal Proceedings, Claims and Investigations

For many years the Company has been and continues to be subject to lawsuits initiated by claimants alleging health problems as a result of exposure to asbestos. The Company's current docket of active and inactive cases is less than 500 cases in the United States and less than 50 in Europe.

With respect to the claims filed in the United States, the substantial majority of the claims are related to alleged exposure to asbestos in the Company's line of Walker® exhaust automotive products although a significant number of those claims appear also to involve occupational exposures sustained in industries other than automotive. A small number of claims have been asserted against one of the Company's subsidiaries by railroad workers alleging exposure to asbestos products in railroad cars. The Company believes, based on scientific and other evidence, it is unlikely that U.S. claimants were exposed to asbestos by the Company's former products and that, in any event, they would not be at increased risk of asbestos-related disease based on their work with these products. Further, many of these cases involve numerous defendants. Additionally, in many cases the plaintiffs either do not specify any, or specify the jurisdictional minimum, dollar amount for damages.

With respect to the claims filed in Europe, the substantial majority relate to occupational exposure claims brought by current and former employees of Federal-Mogul facilities in France and amounts paid out were not material. A small number of occupational exposure claims have also been asserted against Federal-Mogul entities in Italy and Spain.

As major asbestos manufacturers and/or users continue to go out of business or file for bankruptcy, the Company may experience an increased number of these claims. The Company vigorously defends itself against these claims as part of its ordinary course of business. In future periods, the Company could be subject to cash costs or charges to earnings if any of these matters are resolved unfavorably to the Company. To date, with respect to claims that have proceeded sufficiently through the judicial process, the Company has regularly achieved favorable resolutions. Accordingly, the Company presently believes that these asbestos-related claims will not have a material adverse effect on the Company's annual consolidated financial position, results of operations or liquidity.

The Company is also from time to time involved in other legal proceedings, claims or investigations. Some of these matters involve allegations of damages against the Company relating to environmental liabilities (including toxic tort, property damage and remediation), intellectual property matters (including patent, trademark and copyright infringement, and licensing disputes), personal injury claims (including injuries due to product failure, design or warning issues, and other product liability related matters), taxes, unclaimed property, employment matters, advertising matters, and commercial or contractual disputes, sometimes related to acquisitions or divestitures. Additionally, some of these matters involve allegations relating to legal compliance.

While the Company vigorously defends itself against all of these legal proceedings, claims and investigations and take other actions to minimize its potential exposure, in future periods, the Company could be subject to cash costs or charges to earnings if any of these matters are resolved on unfavorable terms. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on current information, including the Company's assessment of the merits of the particular claim, the Company does not expect the legal proceedings, claims or investigations currently pending against it will have any material adverse effect on its annual consolidated financial position, results of operations or liquidity.

Asset Retirement Obligations

The Company’s primary asset retirement obligations ("ARO") activities relate to the removal of hazardous building materials at its facilities. The Company records an ARO at fair value upon initial recognition when the amount is probable and can be reasonably estimated. ARO fair values are determined based on the Company’s determination of what a third party would charge to perform the remediation activities, generally using a present value technique.

The Company's ARO liabilities at June 30, 2020 and December 31, 2019 are as follows:

	June 30, 2020		December 31, 2019
Accrued expenses and other current liabilities	$	3	$	3
Deferred credits and other liabilities	12		13
	$	15	$	16

Warranty Matters

The Company provides warranties on some of its products. The warranty terms vary but range from one year up to limited lifetime warranties on some of its premium aftermarket products. Provisions for estimated expenses related to product warranty are made at the time products are sold or when specific warranty issues are identified with the Company's products. These estimates are established using historical information about the nature, frequency, and average cost of warranty claims. The Company believes the warranty reserve is appropriate; however, actual claims incurred could differ from the original estimates, requiring adjustments to the reserve. The reserve is included in both current and long-term liabilities on the condensed consolidated balance sheets.

The following represents the changes in the Company's warranty accrual for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Balance at beginning of period	$	51		$	48		$	54		$	45
Accruals related to product warranties	1			16			4			21
Reductions for payments made	(1		)	(11		)	(7		)	(13		)
Foreign currency	(1		)	—			(1		)	—
Balance at end of period	$	50		$	53		$	50		$	53

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Share-Based Compensation

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Share-Based Compensation

14. Share-Based Compensation

Share-based compensation expense is included in selling, general, and administrative expenses in the condensed consolidated statements of income (loss). Total share-based compensation expense (benefit) for the three and six months ended June 30, 2020 and 2019 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Cash-settled share-based compensation expense (benefit)	$	1	$	1	$	1	$	—
Share-settled share-based compensation expense (benefit)	7		6		9		13
	$	8	$	7	$	10	$	13

Cash-Settled Awards

The Company has granted restricted stock units ("RSUs") to certain key employees that are payable in cash. These awards are classified as liabilities, valued based on the fair value of the award at the grant date, and 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 June 30, 2020, approximately $5 million of total unrecognized compensation costs is expected to be recognized on the cash-settled RSU's over a weighted average period of approximately 3 years.

Share-Settled Awards

The Company has granted restricted stock, RSUs, and performance share units ("PSUs") to its directors and certain key employees that are payable in common stock. These awards are settled in shares upon vesting and recognized in equity based on their fair value.

The following table reflects the status of all nonvested restricted shares, share-settled RSUs, and PSUs for the six months ended June 30, 2020:

	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	35,630		$	63.27	1,125,346		$	37.91	806,233		$	34.12
Granted	169,781		9.15		1,511,307		7.83		6,654		12.26
Vested	(200,223	)	40.69		(289,074	)	41.39		—		—
Forfeited	(1,781	)	58.01		(339,120	)	34.93		(264,471	)	28.91
Nonvested balance at end of period	3,407		$	59.87	2,008,459		$	27.60	548,416		$	36.15

At June 30, 2020, approximately $27 million of total unrecognized compensation costs is expected to be recognized on the share-settled awards over a weighted average period of approximately 2 years.

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Shareholders' Equity

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Shareholders' Equity

15. Shareholders' Equity

Common Stock Outstanding

The Company has authorized 175,000,000 shares ($0.01 par value) of Class A Common Stock at June 30, 2020 and December 31, 2019. The Company has authorized 25,000,000 shares ($0.01 par value) of Class B Common Stock at June 30, 2020 and December 31, 2019.

Total common stock outstanding and changes in common stock issued are as follows:

	Six Months Ended June 30,
	Class A Common Stock				Class B Common Stock
	2020		2019		2020		2019
Shares issued at beginning of period	71,727,061		71,675,379		23,793,669		23,793,669
Issuance (repurchased) pursuant to benefit plans	458,855		123,216		—		—
Restricted stock forfeited and withheld for taxes	(124,440	)	(60,081	)	—		—
Stock options exercised	—		8,438		—		—
Class B common stock converted to Class A common stock	3,485,215		—		(3,485,215	)	—
Shares issued at end of period	75,546,691		71,746,952		20,308,454		23,793,669
Treasury stock	14,592,888		14,592,888		—		—
Total shares outstanding	60,953,803		57,154,064		20,308,454		23,793,669

Class B Common Stock Conversion

Effective April 1, 2020, Icahn Enterprises L.P. ("IEP") exercised its right to convert 3,485,215 shares of the Company’s Class B Common Stock into 3,485,215 shares of the Company’s Class A Common Stock. As a result, IEP holds 9,136,392 shares, or approximately 14.99%, of the Company’s outstanding Class A Common Stock and 20,308,454 shares of the Company’s outstanding Class B Common Stock.

Preferred Stock

The Company had 50,000,000 shares of preferred stock ($0.01 par value) authorized at both June 30, 2020 and December 31, 2019. No shares of preferred stock were issued or outstanding at those dates.

Shareholder Rights Plan

On April 15, 2020, the Company's Board of Directors approved a Section 382 Rights Plan, which will expire on the earliest to occur of (i) the close of business on the day following the certification of the voting results of the Company’s 2021 annual meeting of stockholders, if at such stockholder meeting or any other meeting of stockholders of the Company duly held prior to such meeting, a proposal to ratify the Section 382 Rights Plan has not been passed by the requisite vote of the Company’s stockholders; (ii) the date on which the Board of Directors determines in its sole discretion that (x) the Section 382 Rights Plan is no longer necessary for the preservation of material valuable tax attributes or (y) the tax attributes have been fully utilized and may no longer be carried forward; and (iii) the close of business on October 2, 2021.

Pursuant to the Section 382 Rights Plan, our Board of Directors declared a dividend of (i) one preferred share purchase right (a “Class A Right”), payable on April 27, 2020, for each share of Class A Voting Common Stock and (ii) one preferred share purchase right (a “Class B Right” and, together with the Class A Rights, the “Rights”), payable on April 27, 2020, for each share of Class B Non-Voting Common Stock, in each case, outstanding on April 27, 2020 to the stockholders of record on that date. Each Right, which is exercisable only in the event that any person or group acquires 4.9% or more of the Company’s outstanding shares of Class A Voting Common Stock (with certain limited exceptions), would entitle any holder other than the person or group whose ownership position has exceeded the ownership limit to purchase common stock having a value equal to twice the exercise price of the Right, or, at the election of the Board of Directors, to exchange each Right for one share of Class A Common Stock per Class A Right or one share of Class B Non-Voting Common Stock per Class B Right.

Accumulated Other Comprehensive Income (Loss)

The following represents the Company's changes in accumulated other comprehensive income (loss) by component, net of tax for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Foreign currency translation adjustments and other:
Balance at beginning of period	$	(568	)	$	(366	)	$	(369	)	$	(395	)
Other comprehensive income (loss) before reclassifications	34			(16		)	(165		)	11
Reclassification from other comprehensive income (loss)	—			—			—			—
Other comprehensive income (loss)	34			(16		)	(165		)	11
Income tax benefit (provision)	1			(1		)	1			1
Balance at end of period	(533		)	(383		)	(533		)	(383		)
Pensions and other postretirement benefits:
Balance at beginning of period	(338		)	(296		)	(342		)	(297		)
Other comprehensive income (loss) before reclassifications	—			—			—			—
Reclassification from other comprehensive income (loss)	1			2			4			3
Other comprehensive income (loss)	1			2			4			3
Income tax benefit (provision)	(6		)	(4		)	(5		)	(4		)
Balance at end of period	(343		)	(298		)	(343		)	(298		)
Cash flow hedge instruments:
Balance at beginning of period	(2		)	4			—			—
Other comprehensive income (loss) before reclassifications	5			(3		)	2			1
Reclassification from other comprehensive income (loss)	—			—			—			—
Other comprehensive income (loss)	5			(3		)	2			1
Income tax benefit (provision)	(1		)	—			—			—
Balance at end of period	2			1			2			1
Accumulated other comprehensive loss at end of period	$	(874	)	$	(680	)	$	(874	)	$	(680	)
Other comprehensive income (loss) attributable to noncontrolling interests	$	7		$	(1	)	$	(13	)	$	5

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Segment Information

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Segment Information

16. Segment Information

Tenneco consists of four operating segments: Powertrain, Clean Air, Ride Performance, and Motorparts. Costs related to other business activities, primarily corporate headquarter functions, are disclosed separately from the four operating segments as "Corporate."

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 U.S. 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 U.S. 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 the three and six months ended June 30, 2020 and 2019 are as follows:

	Reportable Segments
	Clean Air		Powertrain		Ride Performance		Motorparts		Total		Reclass & Elims			Total
For the Three Months Ended June 30, 2020
Revenues from external customers	$	1,140	$	602	$	336	$	559	$	2,637	$	—		$	2,637
Intersegment revenues	$	3	$	21	$	21	$	6	$	51	$	(51	)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	—	$	2	$	1	$	1	$	4	$	—		$	4
For the Three Months Ended June 30, 2019
Revenues from external customers	$	1,827	$	1,133	$	709	$	835	$	4,504	$	—		$	4,504
Intersegment revenues	$	—	$	40	$	38	$	11	$	89	$	(89	)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	—	$	14	$	1	$	2	$	17	$	—		$	17
For the Six Months Ended June 30, 2020
Revenues from external customers	$	2,685	$	1,599	$	924	$	1,265	$	6,473	$	—		$	6,473
Intersegment revenues	$	9	$	59	$	50	$	15	$	133	$	(133	)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	—	$	13	$	1	$	3	$	17	$	—		$	17
For the Six Months Ended June 30, 2019
Revenues from external customers	$	3,606	$	2,308	$	1,442	$	1,632	$	8,988	$	—		$	8,988
Intersegment revenues	$	—	$	86	$	84	$	22	$	192	$	(192	)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	—	$	27	$	2	$	4	$	33	$	—		$	33

Segment EBITDA including noncontrolling interests and the reconciliation to earnings (loss) before interest expense, income taxes, and noncontrolling interests are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
EBITDA including noncontrolling interests by segment:
Clean Air	$	17		$	152		$	116		$	283
Powertrain	(62		)	100			(132		)	213
Ride Performance	(70		)	26			(647		)	(19		)
Motorparts	(52		)	110			(92		)	155
Total reportable segments	(167		)	388			(755		)	632
Corporate	(49		)	(78		)	(135		)	(177		)
Depreciation and amortization	(159		)	(169		)	(330		)	(338		)
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	(375		)	141			(1,220		)	117
Interest expense	(66		)	(82		)	(141		)	(163		)
Income tax (expense) benefit	101			(14		)	195			(14		)
Net income (loss)	$	(340	)	$	45		$	(1,166	)	$	(60	)

Disaggregated Revenue

Original Equipment

Value-Added Sales

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 customer type and geography, as it depicts the nature and amount of the Company’s revenue that is aligned with the Company's key growth strategies. Certain amounts in the prior period for the Ride Performance segment have been reclassified from OE - Value add to Aftermarket to conform with the current year presentation. This reclassification affected the three and six months ended June 30, 2019 and has no effect on the previously reported totals. In the following tables, revenue is disaggregated accordingly:

	Reportable Segments
By Customer Type	Clean Air		Powertrain		Ride Performance		Motorparts		Total
Three Months Ended June 30, 2020
OE - Substrate	$	623	$	—	$	—	$	—	$	623
OE - Value add	517		602		326		—		1,445
Aftermarket	—		—		10		559		569
Total	$	1,140	$	602	$	336	$	559	$	2,637
Three Months Ended June 30, 2019
OE - Substrate	$	777	$	—	$	—	$	—	$	777
OE - Value add	1,050		1,133		695		—		2,878
Aftermarket	—		—		14		835		849
Total	$	1,827	$	1,133	$	709	$	835	$	4,504
Six Months Ended June 30, 2020
OE - Substrate	$	1,323	$	—	$	—	$	—	$	1,323
OE - Value add	1,362		1,599		899		—		3,860
Aftermarket	—		—		25		1,265		1,290
Total	$	2,685	$	1,599	$	924	$	1,265	$	6,473
Six Months Ended June 30, 2019
OE - Substrate	$	1,483	$	—	$	—	$	—	$	1,483
OE - Value add	2,123		2,308		1,414		—		5,845
Aftermarket	—		—		28		1,632		1,660
Total	$	3,606	$	2,308	$	1,442	$	1,632	$	8,988

	Reportable Segments
By Geography	Clean Air		Powertrain		Ride Performance		Motorparts		Total
Three Months Ended June 30, 2020
North America	$	335	$	168	$	81	$	389	$	973
Europe, Middle East and Africa	248		263		161		135		807
Rest of world	557		171		94		35		857
Total	$	1,140	$	602	$	336	$	559	$	2,637
Three Months Ended June 30, 2019
North America	$	800	$	398	$	228	$	536	$	1,962
Europe, Middle East and Africa	609		540		349		241		1,739
Rest of world	418		195		132		58		803
Total	$	1,827	$	1,133	$	709	$	835	$	4,504
Six Months Ended June 30, 2020
North America	$	1,039	$	512	$	279	$	865	$	2,695
Europe, Middle East and Africa	813		755		458		332		2,358
Rest of world	833		332		187		68		1,420
Total	$	2,685	$	1,599	$	924	$	1,265	$	6,473
Six Months Ended June 30, 2019
North America	$	1,593	$	803	$	460	$	1,043	$	3,899
Europe, Middle East and Africa	1,250		1,115		727		478		3,570
Rest of world	763		390		255		111		1,519
Total	$	3,606	$	2,308	$	1,442	$	1,632	$	8,988

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Related Party Transactions

6 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

Related Party Transactions

17. Related Party Transactions

The following table summarizes the net sales, purchases, and royalty and other income to and from related parties for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,
	2020						2019
	Net Sales		Purchases		Royalty and Other		Net Sales		Purchases		Royalty and Other
Anqing TP Goetze Piston Ring Company Limited	$	1	$	16	$	1	$	—	$	15	$	1
Anqing TP Powder Metallurgy Company Limited	$	2	$	1	$	—	$	1	$	2	$	—
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	—	$	1	$	—	$	2	$	5	$	—
Federal-Mogul Powertrain Otomotiv A.S.	$	5	$	17	$	2	$	16	$	53	$	1
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti.	$	—	$	1	$	—	$	—	$	2	$	—
Federal-Mogul TP Liners, Inc.	$	3	$	4	$	—	$	4	$	—	$	1
Frenos Hidraulicos Autos	$	—	$	—	$	—	$	1	$	—	$	—
Icahn Automotive Group LLC	$	32	$	—	$	1	$	47	$	—	$	1
Montagewerk Abgastechnik Emden GmbH	$	1	$	—	$	—	$	—	$	—	$	—
PSC Metals, Inc.	$	1	$	—	$	—	$	—	$	—	$	—

	Six Months Ended June 30,
	2020						2019
	Net Sales		Purchases		Royalty and Other		Net Sales		Purchases		Royalty and Other
Anqing TP Goetze Piston Ring Company Limited	$	5	$	26	$	1	$	—	$	29	$	—
Anqing TP Powder Metallurgy Company Limited	$	3	$	2	$	—	$	1	$	3	$	—
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	1	$	3	$	—	$	3	$	7	$	—
Federal-Mogul Powertrain Otomotiv A.S.	$	17	$	76	$	6	$	44	$	112	$	2
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti.	$	—	$	2	$	—	$	—	$	5	$	—
Federal-Mogul TP Liners, Inc.	$	7	$	16	$	—	$	8	$	—	$	1
Frenos Hidraulicos Autos	$	—	$	—	$	—	$	1	$	—	$	—
Icahn Automotive Group LLC	$	65	$	—	$	2	$	90	$	—	$	2
Montagewerk Abgastechnik Emden GmbH	$	4	$	—	$	—	$	2	$	—	$	—
PSC Metals, Inc.	$	1	$	—	$	—	$	1	$	—	$	—

The following table is a summary of amounts due to and from the Company's related parties at June 30, 2020 and December 31, 2019:

	June 30, 2020				December 31, 2019
	Receivables		Payables and Accruals		Receivables		Payables and Accruals
Anqing TP Goetze Piston Ring Company Limited	$	2	$	22	$	1	$	26
Anqing TP Powder Metallurgy Company Limited	$	1	$	1	$	—	$	1
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	—	$	1	$	—	$	2
Farloc Argentina SAIC	$	—	$	—	$	1	$	—
Federal-Mogul Powertrain Otomotiv A.S.	$	8	$	24	$	8	$	31
Federal-Mogul TP Liners, Inc.	$	1	$	4	$	2	$	7
Icahn Automotive Group LLC	$	45	$	8	$	52	$	10
Montagewerk Abgastechnik Emden GmbH	$	3	$	—	$	1	$	—

Refer to Note 7, Investment in Nonconsolidated Affiliates, for further information for companies within the tables above that represent equity method investments.

Amounts presented as Icahn Automotive Group LLC represent the Company's activities with Auto Plus and Pep Boys.

As part of the Federal-Mogul Acquisition, the Company acquired a redeemable noncontrolling interest related to a subsidiary in India. In accordance with local regulations, the Company initiated a process to make a tender offer of the shares it did 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. During the first quarter of 2020, the tender offer for the shares was completed. Since the transaction was funded and executed by IEP, the completion of the tender offer resulted in an adjustment to additional paid-in capital during the six months ended June 30, 2020. Immediately following the completion of the tender offer, the shares of this noncontrolling interest not owned by the Company were no longer redeemable, or probable of becoming redeemable; therefore, the noncontrolling interest was reclassified from temporary equity to permanent equity during the six months ended June 30, 2020. Refer to Note 2, Summary of Significant Accounting Policies, for further information on this noncontrolling interest.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation — Interim Financial Statements

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. These statements include all adjustments (consisting of normal recurring adjustments) management believes are necessary to fairly state the results of operations, comprehensive income, financial position, changes in shareholders' equity, and cash flows. The Company's management believes the disclosures are adequate to make the information presented not misleading when read in conjunction with the audited consolidated financial statements and the notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission on March 2, 2020. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. There are many uncertainties related to the COVID-19 global pandemic that could negatively affect the Company's results of operations, financial position, and cash flows. In response to the expected economic effects of COVID-19, the Company implemented and plans to continue various cost reduction initiatives, including, but not limited to reductions to salary costs and unpaid furloughs; the restructuring actions as discussed in Note 4, Restructuring Charges, Net and Asset Impairments; and the deferral of the Company’s portion of its 2020 employer paid payroll taxes and its U.S. qualified pension plan contributions under the Coronavirus Aid, Relief, and Economic Security Act.

At June 30, 2020, the Company was in compliance with all financial covenants under its credit agreement. On May 5, 2020, the Company entered into a third amendment to its credit agreement to increase the maximum leverage ratio and decrease the minimum interest coverage ratio. The amendment is discussed in more detail in Note 10, Debt and Other Financing Arrangements.

Reclassifications

Reclassifications: Certain amounts in the prior period have been aggregated or disaggregated to conform to current year presentation. These reclassifications included reclassifying amounts from restructuring charges, net and asset impairments to cost of sales (exclusive of depreciation and amortization), and selling, general, and administrative expenses. These reclassifications affected the three and six months ended June 30, 2019 and have no effect on previously reported net income within the condensed consolidated statements of income (loss), other comprehensive income (loss) within the condensed consolidated statements of comprehensive income (loss), and the cash (used) provided by operating, investing or financing activities within the condensed consolidated statements of cash flows.

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 or the passage of time.

Earnings (loss) per share

Earnings (loss) per share: Basic earnings (loss) per share is calculated by dividing net earnings (loss) by the weighted average shares outstanding during the period. Diluted earnings (loss) per share reflects the weighted average effect of all potentially dilutive securities from the date of issuance.

New Accounting Pronouncements

New Accounting Pronouncements

Adoption of New Accounting Standards

Income Taxes — In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2019-12: Simplifying the Accounting for Income Taxes (Topic 740), which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The ASU allows certain simplifications in the annual effective tax rate computations, which did not have a material effect on the financial statements. The Company early adopted this ASU on a prospective basis beginning January 1, 2020.

Intangibles — On January 1, 2020, the Company adopted 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, which includes amendments to align the accounting for costs incurred to implement a cloud computing arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The Company adopted this guidance on a prospective basis beginning January 1, 2020 and the effects of the adoption were not material on the 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 new standard (i) requires the removal of disclosures that are no longer considered cost beneficial; (ii) clarifies specific requirements of certain disclosures; and (iii) adds new disclosure requirements, including reasons for significant gains and losses related to changes in the benefit obligation. The amendments in this update are effective for fiscal years ending after December 15, 2020. The Company will adopt the enhanced disclosures in the consolidated financial statements for the year ending December 31, 2020.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Redeemable Noncontrolling Interests

The following is a rollforward of activities in the Company's redeemable noncontrolling interests:

	Six Months Ended June 30,
	2020			2019
Balance at beginning of period	$	196		$	138
Net income (loss) attributable to redeemable noncontrolling interests	5			15
Other comprehensive income (loss)	(4		)	1
Acquisition and other	—			16
Noncontrolling interest tender offer redemption	(46		)	—
Redemption value measurement adjustment	10			—
Purchase accounting measurement period adjustment	—			(8		)
Reclassification of noncontrolling interest to permanent equity	(82		)	—
Dividends declared	—			(17		)
Balance at end of period	$	79		$	145

Schedule of Earnings Per Share, Basic and Diluted

Actual weighted average shares outstanding used in calculating earnings (loss) per share were:

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
Weighted average shares of common stock outstanding	81,350,773	80,920,825	81,259,667	80,897,731
Effect of dilutive securities:
Restricted stock, PSUs, and RSUs	—	—	—	—
Stock options	—	—	—	—
Dilutive shares outstanding	81,350,773	80,920,825	81,259,667	80,897,731

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Acquisitions and Divestitures (Tables)

6 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

Disposal Groups, Including Discontinued Operations

The related assets and liabilities for this non-core business are classified as held for sale at June 30, 2020 and December 31, 2019:

	June 30, 2020			December 31, 2019
Assets
Receivables	$	3		$	5
Inventories	7			8
Other current assets	2			1
Long-lived assets	16			18
Goodwill	3			4
Impairment on carrying value	(7		)	(8		)
Total assets held for sale	$	24		$	28
Liabilities
Accounts payable	$	2		$	4
Accrued liabilities	2			2
Total liabilities held for sale	$	4		$	6

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Restructuring Charges, Net and Asset Impairments (Tables)

6 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

Schedule of Restructuring

For the three and six months ended June 30, 2020 and 2019, restructuring charges, net and asset impairments by segment are as follows:

	Three Months Ended June 30, 2020
	Clean Air		Powertrain		Ride Performance		Motorparts			Corporate		Total
Severance and other charges, net	$	22	$	36	$	18	$	15		$	1	$	92
Asset impairments related to restructuring actions	—		3		—		25			—		28
Other non-restructuring asset impairments	—		—		—		—			1		1
Impairment of assets held for sale	—		1		—		(1		)	—		—
Total asset impairment charges	—		4		—		24			1		29
Total restructuring charges, net and asset impairments	$	22	$	40	$	18	$	39		$	2	$	121

	Three Months Ended June 30, 2019
	Clean Air		Powertrain		Ride Performance		Motorparts		Corporate		Total
Severance and other charges, net	$	14	$	17	$	10	$	6	$	—	$	47
Other non-restructuring asset impairments	1		—		—		1		—		2
Total restructuring charges, net and asset impairments	$	15	$	17	$	10	$	7	$	—	$	49

	Six Months Ended June 30, 2020
	Clean Air		Powertrain		Ride Performance		Motorparts			Corporate		Total
Severance and other charges, net	$	22	$	37	$	24	$	17		$	5	$	105
Asset impairments related to restructuring actions	—		3		—		25			—		28
Other non-restructuring asset impairments	—		—		455		—			17		472
Impairment of assets held for sale	—		1		—		(1		)	—		—
Total asset impairment charges	—		4		455		24			17		500
Total restructuring charges, net and asset impairments	$	22	$	41	$	479	$	41		$	22	$	605

	Six Months Ended June 30, 2019
	Clean Air		Powertrain		Ride Performance		Motorparts		Corporate		Total
Severance and other charges, net	$	19	$	18	$	15	$	10	$	1	$	63
Other non-restructuring asset impairments	1		—		—		1		—		2
Total restructuring charges, net and asset impairments	$	20	$	18	$	15	$	11	$	1	$	65

Amounts related to activities that were charged to restructuring reserves by reportable segments are as follows:

	Reportable Segments
	Clean Air			Powertrain			Ride Performance			Motorparts			Total Reportable Segments			Corporate			Total
Balance at December 31, 2019	$	23		$	30		$	23		$	16		$	92		$	9		$	101
Provisions	—			2			7			2			11			4			15
Revisions to estimates	—			(1		)	(1		)	—			(2		)	—			(2		)
Payments	(4		)	(4		)	(9		)	(4		)	(21		)	(9		)	(30		)
Foreign currency	—			—			(1		)	—			(1		)	—			(1		)
Balance at March 31, 2020	19			27			19			14			79			4			83
Provisions	24			36			18			17			95			1			96
Revisions to estimates	(2		)	—			—			(2		)	(4		)	—			(4		)
Payments	(6		)	(6		)	(17		)	(5		)	(34		)	(1		)	(35		)
Balance at June 30, 2020	$	35		$	57		$	20		$	24		$	136		$	4		$	140

	Reportable Segments
	Clean Air			Powertrain			Ride Performance			Motorparts			Total Reportable Segments			Corporate			Total
Balance at December 31, 2018	$	17		$	15		$	25		$	43		$	100		$	3		$	103
Provisions	5			1			5			4			15			1			16
Payments	(6		)	(3		)	(5		)	(14		)	(28		)	(2		)	(30		)
Balance at March 31, 2019	16			13			25			33			87			2			89
Provisions	14			17			10			8			49			—			49
Revisions to estimates	—			—			—			(2		)	(2		)	—			(2		)
Payments	(2		)	(4		)	(7		)	(7		)	(20		)	(1		)	(21		)
Balance at June 30, 2019	$	28		$	26		$	28		$	32		$	114		$	1		$	115

The following table provides a summary of the Company's restructuring liabilities and related activity for each type of exit costs:

	Six Months Ended June 30, 2020									Six Months Ended June 30, 2019
	Employee Costs			Facility Closure and Other Costs			Total			Employee Costs			Facility Closure and Other Costs			Total
Balance at beginning of period	$	97		$	4		$	101		$	98		$	5		$	103
Provisions	10			5			15			11			5			16
Revisions to estimates	(2		)	—			(2		)	—			—			—
Payments	(23		)	(7		)	(30		)	(25		)	(5		)	(30		)
Foreign currency	(1		)	—			(1		)	—			—			—
Balance at March 31	81			2			83			84			5			89
Provisions	90			6			96			44			5			49
Revisions to estimates	(4		)	—			(4		)	(2		)	—			(2		)
Payments	(31		)	(4		)	(35		)	(16		)	(5		)	(21		)
Balance at end of period	$	136		$	4		$	140		$	110		$	5		$	115

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Inventories (Tables)

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Inventory

At June 30, 2020 and December 31, 2019, inventory consists of the following:

	June 30, 2020		December 31, 2019
Finished goods	$	728	$	1,027
Work in process	427		460
Raw materials	400		408
Materials and supplies	101		104
	$	1,656	$	1,999

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill

Impairment charges for goodwill and intangible assets recognized by segment during the six months ended June 30, 2020 consist of the following:

	Six Months Ended June 30, 2020
	Powertrain		Ride Performance		Motorparts		Total
Goodwill impairment charges	$	160	$	37	$	70	$	267
Trade names and trademarks intangible asset impairment charges	—		11		40		51
Definite-lived intangible asset impairment charges	—		65		—		65
	$	160	$	113	$	110	$	383

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% based on each respective reporting units most recent goodwill impairment analysis:

	Segments
	Clean Air		Powertrain		Ride Performance		Motorparts
Number of reporting units with goodwill	3		1		1		1
Number of reporting units where fair value exceeds carrying value:
Greater than 10%	3		—		1		—
Less than 10%	—		1		—		1
Goodwill for reporting units where fair value exceeds carrying value:
Greater than 10%	$	22	$	—	$	7	$	—
Less than 10%	—		165		—		311
	$	22	$	165	$	7	$	311

At June 30, 2020 and December 31, 2019, goodwill consists of the following:

	Clean Air		Powertrain			Ride Performance			Motorparts			Total
Gross carrying amount at December 31, 2019	$	22	$	343		$	259		$	620		$	1,244
Foreign exchange	—		—			(3		)	—			(3		)
Gross carrying amount at March 31, 2020	22		343			256			620			1,241
Foreign exchange	—		—			3			—			3
Gross carrying amount at June 30, 2020	22		343			259			620			1,244
Accumulated impairment loss at December 31, 2019	—		(18		)	(212		)	(239		)	(469		)
Impairment	—		(160		)	(37		)	(70		)	(267		)
Accumulated impairment loss at March 31, 2020	—		(178		)	(249		)	(309		)	(736		)
Foreign exchange	—		—			(3		)	—			(3		)
Accumulated impairment loss at June 30, 2020	—		(178		)	(252		)	(309		)	(739		)
Net carrying value at end of period	$	22	$	165		$	7		$	311		$	505

Schedule of Indefinite-Lived Intangible Assets

At June 30, 2020 and December 31, 2019, the Company's intangible assets consist of the following:

		June 30, 2020							December 31, 2019
	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	$	988	$	(233	)	$	755	$	988	$	(123	)	$	865
Customer contract	10 years	8		(6		)	2		8		(6		)	2
Patents	10 to 17 years	1		(1		)	—		1		(1		)	—
Technology rights	10 to 30 years	133		(44		)	89		133		(37		)	96
Packaged kits know-how	10 years	54		(9		)	45		54		(7		)	47
Catalogs	10 years	47		(8		)	39		47		(6		)	41
Licensing agreements	3 to 5 years	63		(27		)	36		63		(18		)	45
Land use rights	28 to 46 years	46		(4		)	42		47		(3		)	44
		1,340		(332		)	1,008		1,341		(201		)	1,140
Indefinite-lived intangible assets:
Trade names and trademarks							231							282
Total							$	1,239						$	1,422

Schedule of Finite-Lived Intangible Assets

At June 30, 2020 and December 31, 2019, the Company's intangible assets consist of the following:

		June 30, 2020							December 31, 2019
	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	$	988	$	(233	)	$	755	$	988	$	(123	)	$	865
Customer contract	10 years	8		(6		)	2		8		(6		)	2
Patents	10 to 17 years	1		(1		)	—		1		(1		)	—
Technology rights	10 to 30 years	133		(44		)	89		133		(37		)	96
Packaged kits know-how	10 years	54		(9		)	45		54		(7		)	47
Catalogs	10 years	47		(8		)	39		47		(6		)	41
Licensing agreements	3 to 5 years	63		(27		)	36		63		(18		)	45
Land use rights	28 to 46 years	46		(4		)	42		47		(3		)	44
		1,340		(332		)	1,008		1,341		(201		)	1,140
Indefinite-lived intangible assets:
Trade names and trademarks							231							282
Total							$	1,239						$	1,422

Finite-lived Intangible Assets Amortization Expense

The amortization expense associated with definite-lived intangible assets is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Amortization expense	$	32	$	33	$	66	$	68

The expected future amortization expense for the Company's definite-lived intangible assets is as follows:

	2020		2021		2022		2023		2024		2025 and thereafter		Total
Expected amortization expense	$	66	$	127	$	124	$	121	$	113	$	457	$	1,008

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Investment in Nonconsolidated Affiliates (Tables)

6 Months Ended

Jun. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

The following table represents the activity from the Company's investments in its nonconsolidated affiliates for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Equity in earnings (losses) of nonconsolidated affiliates, net of tax	$	4	$	17	$	17	$	33
Cash dividends received from nonconsolidated affiliates	$	5	$	12	$	18	$	27

The following tables present summarized aggregated financial information of the Company's nonconsolidated affiliates for the three and six months ended June 30, 2020 and 2019. The amounts represent 100% of the interest in the nonconsolidated affiliates and not the Company's proportionate share:

	Three Months Ended June 30, 2020
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	24	$	11	$	41	$	76
Gross profit	$	6	$	5	$	6	$	17
Income from continuing operations	$	4	$	4	$	2	$	10
Net income	$	5	$	4	$	2	$	11

	Three Months Ended June 30, 2019
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	85	$	39	$	120	$	244
Gross profit	$	22	$	10	$	23	$	55
Income from continuing operations	$	17	$	9	$	11	$	37
Net income	$	21	$	9	$	11	$	41

	Six Months Ended June 30, 2020
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	120	$	41	$	146	$	307
Gross profit	$	32	$	11	$	26	$	69
Income from continuing operations	$	27	$	11	$	11	$	49
Net income	$	23	$	10	$	8	$	41

	Six Months Ended June 30, 2019
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	176	$	78	$	245	$	499
Gross profit	$	43	$	26	$	46	$	115
Income from continuing operations	$	36	$	20	$	24	$	80
Net income	$	39	$	18	$	22	$	79

The Company's ownership interest in affiliates accounted for under the equity method is as follows:

	June 30, 2020		December 31, 2019
Anqing TP Goetze Piston Ring Company Limited (China)	35.7	%	35.7	%
Anqing TP Powder Metallurgy Co., Ltd (China)	20.0	%	20.0	%
Dongsuh Federal-Mogul Industrial Co. Ltd. (Korea)	50.0	%	50.0	%
Farloc Argentina SAIC Y F (Argentina)	23.9	%	23.9	%
Federal-Mogul Powertrain Otomotiv A.S. (Turkey)	50.0	%	50.0	%
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti. (Turkey)	25.0	%	25.0	%
Federal-Mogul TP Liners, Inc. (USA)	46.0	%	46.0	%
Frenos Hidraulicos Automotrices, S.A. de C.V. (Mexico)	49.0	%	49.0	%
JURID do Brasil Sistemas Automotivos Ltda. (Brazil)	19.9	%	19.9	%
KB Autosys Co., Ltd. (Korea)	33.6	%	33.6	%
Montagewerk Abgastechnik Emden GmbH (Germany)	50.0	%	50.0	%

The Company's investments in its nonconsolidated affiliates at June 30, 2020 and December 31, 2019 is as follows:

	June 30, 2020		December 31, 2019
Investments in nonconsolidated affiliates	$	513	$	518

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Derivatives and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summarization for Foreign Currency Forward Purchase and Sale Contracts

The following table summarizes by position the notional amounts for foreign currency forward contracts at June 30, 2020 (all of which mature in 2020):

	Notional Amount
Long positions	$	54
Short positions	$	(54	)

Schedule of Derivative Instruments

The following table is a summary of the carrying value of derivative and non-derivative instruments designated as hedges at June 30, 2020 and December 31, 2019:

		Carrying Value
	Balance sheet classification	June 30, 2020		December 31, 2019
Commodity price hedge contracts designated as cash flow hedges	Prepayments and other current assets	$	1	$	—
Foreign currency borrowings designated as net investment hedges	Long-term debt	$	878	$	850

The following table represents the amount of gain (loss) recognized in accumulated other comprehensive income (loss) before any reclassifications into net income (loss) for derivative and non-derivative instruments designated as hedges for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Commodity price hedge contracts designated as cash flow hedges	$	5		$	(3	)	$	2		$	1
Foreign currency borrowings designated as net investment hedges	$	(16	)	$	(12	)	$	(2	)	$	7

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Carrying and Estimated Fair Value

The estimated fair value of the Company's outstanding debt is as follows:

		June 30, 2020				December 31, 2019
	Fair value hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt (including current maturities):
Term loans and senior notes	Level 2	$	5,121	$	4,641	$	5,179	$	5,113

The following table presents the assets and liabilities included in the Company's condensed consolidated balance sheets at June 30, 2020 and December 31, 2019 that are recognized at fair value on a recurring basis and indicate the fair value hierarchy utilized to determine such fair values:

		June 30, 2020				December 31, 2019
	Fair value hierarchy	Carrying Amount		Fair Value		Carrying Amount			Fair Value
Derivative asset (liability) instruments:
Swap agreements	Level 2	$	1	$	1	$	(1	)	$	(1	)
Commodity contracts	Level 2	$	1	$	1	$	—		$	—

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Debt and Other Financing Arrangements (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Summary of Long-term Debt Obligations

Interest expense associated with the amortization of the debt issuance costs and original issue discounts (premiums) recognized in the Company's condensed consolidated statements of income (loss) for the three and six months ended June 30, 2020 and 2019 is as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2020			2019		2020			2019
Amortization of debt issuance fees	$	5		$	4	$	10		$	9
Accretion of debt premium	$	(2	)	$	—	$	(6	)	$	(6	)

A summary of the Company's long-term debt obligations at June 30, 2020 and December 31, 2019 is set forth in the following table:

	June 30, 2020				December 31, 2019
	Principal		Carrying Amount (a)		Principal		Carrying Amount (a)
Credit Facilities
Revolver Borrowings
Due 2023	$	1,500	$	1,500	$	183	$	183
Term Loans
LIBOR plus 2.00% Term Loan A due 2019 through 2023(b)	1,572		1,561		1,615		1,608
LIBOR plus 3.00% Term Loan B due 2019 through 2025	1,675		1,614		1,683		1,623
Senior Unsecured Notes
$225 million of 5.375% Senior Notes due 2024	225		223		225		222
$500 million of 5.000% Senior Notes due 2026	500		494		500		494
Senior Secured Notes
€415 million 4.875% Euro Fixed Rate Notes due 2022	466		477		465		479
€300 million of Euribor plus 4.875% Euro Floating Rate Notes due 2024	337		340		336		340
€350 million of 5.000% Euro Fixed Rate Notes due 2024	393		412		392		413
Other debt, primarily foreign instruments	13		12		14		13
			6,633				5,375
Less - maturities classified as current			4				4
Total long-term debt			$	6,629			$	5,371

^(a)  Carrying amount is net of unamortized debt issuance costs and debt discounts or premiums. Total unamortized debt issuance costs were $80 million and $76 million at June 30, 2020 and December 31, 2019. Total unamortized debt (premium) discount, net was $(32) million and $(37) million at June 30, 2020 and December 31, 2019.

^(b)  The interest rate on Term Loan A at December 31, 2019 was LIBOR plus 1.75%.

Schedule of Short-term Debt

The Company's short-term debt at June 30, 2020 and December 31, 2019 consists of the following:

	June 30,		December 31,
	2020		2019
Maturities classified as current	$	4	$	4
Short-term borrowings(a)	157		179
Bank overdrafts	61		2
Total short-term debt	$	222	$	185

^(a) Includes borrowings under both committed credit facilities and uncommitted lines of credit and similar arrangements.

Financing Arrangements

The financial maintenance covenants include (i) a requirement to have a senior secured leverage ratio (as defined in the New Credit Facility), with step-downs, as detailed in the table below; (ii) a requirement to have a consolidated net leverage ratio (as defined in the New Credit Facility), with step-downs, as follows:

(i) Senior secured net leverage ratio		(ii) Consolidated net leverage ratio
not greater than 6.75 to 1	at June 30, 2020	not greater than 4.50 to 1	at March 31, 2020
not greater than 9.50 to 1	at September 30, 2020	not greater than 5.25 to 1	at March 31, 2022
not greater than 8.75 to 1	at December 31, 2020	not greater than 4.75 to 1	at June 30, 2022
not greater than 8.25 to 1	at March 31, 2021	not greater than 4.25 to 1	at September 30, 2022
not greater than 4.50 to 1	at June 30, 2021	not greater than 3.75 to 1	thereafter
not greater than 4.25 to 1	at September 30, 2021
not greater than 4.00 to 1	at December 31, 2021

Financing Arrangements

The table below shows the Company's borrowing capacity on committed credit facilities at June 30, 2020:

	Committed Credit Facilities at June 30, 2020
	Term	Available(b)
		(in billions)
Tenneco Inc. revolving credit facility (a)	2023	$	—
Tenneco Inc. Term Loan A	2023	—
Tenneco Inc. Term Loan B	2025	—
Subsidiaries’ credit agreements	2020 - 2028	—
		$	—

^(a)  The Company is required to pay commitment fees under the revolving credit facility on the unused portion of the total commitment.

^(b) 

Letters of credit reduce the available borrowings under the revolving credit facility.

The Third Amendment provides for an increase to the margin applicable to borrowings under the revolving credit facility and

the Term Loan A facility at certain leverage levels as set forth below as one of several conditions for obtaining the less restrictive financial maintenance covenants described below under New Credit Facility — Other Terms and Conditions:

Consolidated net leverage ratio	Interest rate
greater than 6.0 to 1	LIBOR plus 2.50%
less than 6.0 to 1 and greater than 4.5 to 1	LIBOR plus 2.25%

Schedule of Gain (Loss) on Securitizations or Asset-backed Financing Arrangements of Financial Assets Accounted for as Sale

The Company has securitization programs for some of its accounts receivable, with limited recourse provisions. Borrowings on these securitization programs, which are recorded in short-term debt, at June 30, 2020 and December 31, 2019 are as follows:

	June 30, 2020		December 31, 2019
Borrowings on securitization programs	$	3	$	4

The following table represents the Company's expenses associated with these arrangements for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Loss on sale of receivables(a)	$	4	$	6	$	10	$	14

^(a) Amount is included in "Interest expense" in the condensed consolidated statements of income (loss).

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Pension Plans, Postretirement and Other Employee Benefits (Tables)

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Cost

Components of net periodic benefit cost (credit) for the three and six months ended June 30, 2020 and 2019 are as follows:

	Three Months Ended June 30,
	Pension Benefits												Other Postretirement Benefits
	2020						2019
	U.S.			Non-U.S.			U.S.			Non-U.S.			2020			2019
Service cost	$	1		$	6		$	—		$	6		$	—		$	—
Interest cost	10			5			14			5			3			4
Expected return on plan assets	(16		)	(4		)	(17		)	(4		)	—			—
Net amortization:
Actuarial loss	1			2			1			2			—			1
Prior service cost (credit)	—			—			—			—			(2		)	(2		)
Net pension and postretirement costs (credits)	$	(4	)	$	9		$	(2	)	$	9		$	1		$	3

	Six Months Ended June 30,
	Pension Benefits												Other Postretirement Benefits
	2020						2019
	U.S.			Non-U.S.			U.S.			Non-U.S.			2020			2019
Service cost	$	1		$	12		$	1		$	12		$	—		$	—
Interest cost	20			9			27			12			5			7
Expected return on plan assets	(32		)	(8		)	(34		)	(9		)	—			—
Net amortization:
Actuarial loss	3			4			2			3			1			2
Prior service cost (credit)	—			—			—			—			(4		)	(4		)
Net pension and postretirement costs (credits)	$	(8	)	$	17		$	(4	)	$	18		$	2		$	5

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Environmental Loss Contingencies

The Company's expected payments for environmental remediation costs for non-indemnified locations are estimated to be approximately:

	2020		2021		2022		2023		2024		2025 and thereafter
Expected payments	$	5	$	4	$	2	$	2	$	2	$	15

The Company's estimated share of environmental remediation costs for all these sites is recognized in the condensed consolidated balance sheets on a discounted basis and the amounts at June 30, 2020 and December 31, 2019 are as follows:

	June 30, 2020		December 31, 2019
Accrued expenses and other current liabilities	$	9	$	8
Deferred credits and other liabilities	26		28
	$	35	$	36

Schedule of Asset Retirement Obligations

The Company's ARO liabilities at June 30, 2020 and December 31, 2019 are as follows:

	June 30, 2020		December 31, 2019
Accrued expenses and other current liabilities	$	3	$	3
Deferred credits and other liabilities	12		13
	$	15	$	16

Warranty Accrual Table

The following represents the changes in the Company's warranty accrual for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Balance at beginning of period	$	51		$	48		$	54		$	45
Accruals related to product warranties	1			16			4			21
Reductions for payments made	(1		)	(11		)	(7		)	(13		)
Foreign currency	(1		)	—			(1		)	—
Balance at end of period	$	50		$	53		$	50		$	53

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Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Share-based Compensation

Total share-based compensation expense (benefit) for the three and six months ended June 30, 2020 and 2019 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Cash-settled share-based compensation expense (benefit)	$	1	$	1	$	1	$	—
Share-settled share-based compensation expense (benefit)	7		6		9		13
	$	8	$	7	$	10	$	13

Unvested Restricted Shares

The following table reflects the status of all nonvested restricted shares, share-settled RSUs, and PSUs for the six months ended June 30, 2020:

	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	35,630		$	63.27	1,125,346		$	37.91	806,233		$	34.12
Granted	169,781		9.15		1,511,307		7.83		6,654		12.26
Vested	(200,223	)	40.69		(289,074	)	41.39		—		—
Forfeited	(1,781	)	58.01		(339,120	)	34.93		(264,471	)	28.91
Nonvested balance at end of period	3,407		$	59.87	2,008,459		$	27.60	548,416		$	36.15

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Shareholders' Equity (Tables)

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Schedule of Stock by Class

Total common stock outstanding and changes in common stock issued are as follows:

	Six Months Ended June 30,
	Class A Common Stock				Class B Common Stock
	2020		2019		2020		2019
Shares issued at beginning of period	71,727,061		71,675,379		23,793,669		23,793,669
Issuance (repurchased) pursuant to benefit plans	458,855		123,216		—		—
Restricted stock forfeited and withheld for taxes	(124,440	)	(60,081	)	—		—
Stock options exercised	—		8,438		—		—
Class B common stock converted to Class A common stock	3,485,215		—		(3,485,215	)	—
Shares issued at end of period	75,546,691		71,746,952		20,308,454		23,793,669
Treasury stock	14,592,888		14,592,888		—		—
Total shares outstanding	60,953,803		57,154,064		20,308,454		23,793,669

Schedule of AOCI

The following represents the Company's changes in accumulated other comprehensive income (loss) by component, net of tax for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Foreign currency translation adjustments and other:
Balance at beginning of period	$	(568	)	$	(366	)	$	(369	)	$	(395	)
Other comprehensive income (loss) before reclassifications	34			(16		)	(165		)	11
Reclassification from other comprehensive income (loss)	—			—			—			—
Other comprehensive income (loss)	34			(16		)	(165		)	11
Income tax benefit (provision)	1			(1		)	1			1
Balance at end of period	(533		)	(383		)	(533		)	(383		)
Pensions and other postretirement benefits:
Balance at beginning of period	(338		)	(296		)	(342		)	(297		)
Other comprehensive income (loss) before reclassifications	—			—			—			—
Reclassification from other comprehensive income (loss)	1			2			4			3
Other comprehensive income (loss)	1			2			4			3
Income tax benefit (provision)	(6		)	(4		)	(5		)	(4		)
Balance at end of period	(343		)	(298		)	(343		)	(298		)
Cash flow hedge instruments:
Balance at beginning of period	(2		)	4			—			—
Other comprehensive income (loss) before reclassifications	5			(3		)	2			1
Reclassification from other comprehensive income (loss)	—			—			—			—
Other comprehensive income (loss)	5			(3		)	2			1
Income tax benefit (provision)	(1		)	—			—			—
Balance at end of period	2			1			2			1
Accumulated other comprehensive loss at end of period	$	(874	)	$	(680	)	$	(874	)	$	(680	)
Other comprehensive income (loss) attributable to noncontrolling interests	$	7		$	(1	)	$	(13	)	$	5

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Segment Information

Segment results for the three and six months ended June 30, 2020 and 2019 are as follows:

	Reportable Segments
	Clean Air		Powertrain		Ride Performance		Motorparts		Total		Reclass & Elims			Total
For the Three Months Ended June 30, 2020
Revenues from external customers	$	1,140	$	602	$	336	$	559	$	2,637	$	—		$	2,637
Intersegment revenues	$	3	$	21	$	21	$	6	$	51	$	(51	)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	—	$	2	$	1	$	1	$	4	$	—		$	4
For the Three Months Ended June 30, 2019
Revenues from external customers	$	1,827	$	1,133	$	709	$	835	$	4,504	$	—		$	4,504
Intersegment revenues	$	—	$	40	$	38	$	11	$	89	$	(89	)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	—	$	14	$	1	$	2	$	17	$	—		$	17
For the Six Months Ended June 30, 2020
Revenues from external customers	$	2,685	$	1,599	$	924	$	1,265	$	6,473	$	—		$	6,473
Intersegment revenues	$	9	$	59	$	50	$	15	$	133	$	(133	)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	—	$	13	$	1	$	3	$	17	$	—		$	17
For the Six Months Ended June 30, 2019
Revenues from external customers	$	3,606	$	2,308	$	1,442	$	1,632	$	8,988	$	—		$	8,988
Intersegment revenues	$	—	$	86	$	84	$	22	$	192	$	(192	)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	—	$	27	$	2	$	4	$	33	$	—		$	33

Segment EBITDA including noncontrolling interests and the reconciliation to earnings (loss) before interest expense, income taxes, and noncontrolling interests are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
EBITDA including noncontrolling interests by segment:
Clean Air	$	17		$	152		$	116		$	283
Powertrain	(62		)	100			(132		)	213
Ride Performance	(70		)	26			(647		)	(19		)
Motorparts	(52		)	110			(92		)	155
Total reportable segments	(167		)	388			(755		)	632
Corporate	(49		)	(78		)	(135		)	(177		)
Depreciation and amortization	(159		)	(169		)	(330		)	(338		)
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	(375		)	141			(1,220		)	117
Interest expense	(66		)	(82		)	(141		)	(163		)
Income tax (expense) benefit	101			(14		)	195			(14		)
Net income (loss)	$	(340	)	$	45		$	(1,166	)	$	(60	)

Disaggregation of Revenue

Revenue from contracts with customers is disaggregated by customer type and geography, as it depicts the nature and amount of the Company’s revenue that is aligned with the Company's key growth strategies. Certain amounts in the prior period for the Ride Performance segment have been reclassified from OE - Value add to Aftermarket to conform with the current year presentation. This reclassification affected the three and six months ended June 30, 2019 and has no effect on the previously reported totals. In the following tables, revenue is disaggregated accordingly:

	Reportable Segments
By Customer Type	Clean Air		Powertrain		Ride Performance		Motorparts		Total
Three Months Ended June 30, 2020
OE - Substrate	$	623	$	—	$	—	$	—	$	623
OE - Value add	517		602		326		—		1,445
Aftermarket	—		—		10		559		569
Total	$	1,140	$	602	$	336	$	559	$	2,637
Three Months Ended June 30, 2019
OE - Substrate	$	777	$	—	$	—	$	—	$	777
OE - Value add	1,050		1,133		695		—		2,878
Aftermarket	—		—		14		835		849
Total	$	1,827	$	1,133	$	709	$	835	$	4,504
Six Months Ended June 30, 2020
OE - Substrate	$	1,323	$	—	$	—	$	—	$	1,323
OE - Value add	1,362		1,599		899		—		3,860
Aftermarket	—		—		25		1,265		1,290
Total	$	2,685	$	1,599	$	924	$	1,265	$	6,473
Six Months Ended June 30, 2019
OE - Substrate	$	1,483	$	—	$	—	$	—	$	1,483
OE - Value add	2,123		2,308		1,414		—		5,845
Aftermarket	—		—		28		1,632		1,660
Total	$	3,606	$	2,308	$	1,442	$	1,632	$	8,988

	Reportable Segments
By Geography	Clean Air		Powertrain		Ride Performance		Motorparts		Total
Three Months Ended June 30, 2020
North America	$	335	$	168	$	81	$	389	$	973
Europe, Middle East and Africa	248		263		161		135		807
Rest of world	557		171		94		35		857
Total	$	1,140	$	602	$	336	$	559	$	2,637
Three Months Ended June 30, 2019
North America	$	800	$	398	$	228	$	536	$	1,962
Europe, Middle East and Africa	609		540		349		241		1,739
Rest of world	418		195		132		58		803
Total	$	1,827	$	1,133	$	709	$	835	$	4,504
Six Months Ended June 30, 2020
North America	$	1,039	$	512	$	279	$	865	$	2,695
Europe, Middle East and Africa	813		755		458		332		2,358
Rest of world	833		332		187		68		1,420
Total	$	2,685	$	1,599	$	924	$	1,265	$	6,473
Six Months Ended June 30, 2019
North America	$	1,593	$	803	$	460	$	1,043	$	3,899
Europe, Middle East and Africa	1,250		1,115		727		478		3,570
Rest of world	763		390		255		111		1,519
Total	$	3,606	$	2,308	$	1,442	$	1,632	$	8,988

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Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The following table is a summary of amounts due to and from the Company's related parties at June 30, 2020 and December 31, 2019:

	June 30, 2020				December 31, 2019
	Receivables		Payables and Accruals		Receivables		Payables and Accruals
Anqing TP Goetze Piston Ring Company Limited	$	2	$	22	$	1	$	26
Anqing TP Powder Metallurgy Company Limited	$	1	$	1	$	—	$	1
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	—	$	1	$	—	$	2
Farloc Argentina SAIC	$	—	$	—	$	1	$	—
Federal-Mogul Powertrain Otomotiv A.S.	$	8	$	24	$	8	$	31
Federal-Mogul TP Liners, Inc.	$	1	$	4	$	2	$	7
Icahn Automotive Group LLC	$	45	$	8	$	52	$	10
Montagewerk Abgastechnik Emden GmbH	$	3	$	—	$	1	$	—

The following table summarizes the net sales, purchases, and royalty and other income to and from related parties for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,
	2020						2019
	Net Sales		Purchases		Royalty and Other		Net Sales		Purchases		Royalty and Other
Anqing TP Goetze Piston Ring Company Limited	$	1	$	16	$	1	$	—	$	15	$	1
Anqing TP Powder Metallurgy Company Limited	$	2	$	1	$	—	$	1	$	2	$	—
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	—	$	1	$	—	$	2	$	5	$	—
Federal-Mogul Powertrain Otomotiv A.S.	$	5	$	17	$	2	$	16	$	53	$	1
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti.	$	—	$	1	$	—	$	—	$	2	$	—
Federal-Mogul TP Liners, Inc.	$	3	$	4	$	—	$	4	$	—	$	1
Frenos Hidraulicos Autos	$	—	$	—	$	—	$	1	$	—	$	—
Icahn Automotive Group LLC	$	32	$	—	$	1	$	47	$	—	$	1
Montagewerk Abgastechnik Emden GmbH	$	1	$	—	$	—	$	—	$	—	$	—
PSC Metals, Inc.	$	1	$	—	$	—	$	—	$	—	$	—

	Six Months Ended June 30,
	2020						2019
	Net Sales		Purchases		Royalty and Other		Net Sales		Purchases		Royalty and Other
Anqing TP Goetze Piston Ring Company Limited	$	5	$	26	$	1	$	—	$	29	$	—
Anqing TP Powder Metallurgy Company Limited	$	3	$	2	$	—	$	1	$	3	$	—
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	1	$	3	$	—	$	3	$	7	$	—
Federal-Mogul Powertrain Otomotiv A.S.	$	17	$	76	$	6	$	44	$	112	$	2
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti.	$	—	$	2	$	—	$	—	$	5	$	—
Federal-Mogul TP Liners, Inc.	$	7	$	16	$	—	$	8	$	—	$	1
Frenos Hidraulicos Autos	$	—	$	—	$	—	$	1	$	—	$	—
Icahn Automotive Group LLC	$	65	$	—	$	2	$	90	$	—	$	2
Montagewerk Abgastechnik Emden GmbH	$	4	$	—	$	—	$	2	$	—	$	—
PSC Metals, Inc.	$	1	$	—	$	—	$	1	$	—	$	—

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Description of Business - Narrative (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020
Asset impairment charges	$ 29				$ 500
Restructuring charges	96	$ 15	$ 49	$ 16
Severance
Restructuring charges	90	$ 10	$ 44	$ 11
Motorparts
Inventory write-down	82				82
Asset impairment charges	16				16
Operating lease impairment	9				9
Motorparts | Severance
Restructuring charges	$ 4				$ 4

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Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Jan. 10, 2019
Redeemable Noncontrolling Interest [Line Items]
Redeemable noncontrolling interest, not currently redeemable	$ 50		$ 44
Redeemable noncontrolling interest, redemption value	29		$ 152
Reclassification of noncontrolling interest to permanent equity	(82)	$ 0
Noncontrolling interest tender offer redemption	10	0
Purchase accounting measurement period adjustment	$ 0	$ 8
Öhlins Intressenter AB | K Öhlin Holding AB
Redeemable Noncontrolling Interest [Line Items]
Ownership percentage				9.50%

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Summary of Significant Accounting Policies - Redeemable Non Controlling Interest (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Redeemable Noncontrolling Interest [Roll Forward]
Balance at beginning of period	$ 196	$ 138
Net income (loss) attributable to redeemable noncontrolling interests	5	15
Other comprehensive income (loss)	(4)	1
Acquisition and other	0	16
Noncontrolling interest tender offer redemption	(46)	0
Noncontrolling interest tender offer redemption	10	0
Purchase accounting measurement period adjustment	0	(8)
Reclassification of noncontrolling interest to permanent equity	(82)	0
Dividends declared	0	(17)
Balance at end of period	$ 79	$ 145

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Summary of Significant Accounting Policies - Earnings Per Share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted average shares of common stock outstanding (in shares)	81,350,773	80,920,825	81,259,667	80,897,731
Dilutive shares outstanding (in shares)	81,350,773	80,920,825	81,259,667	80,897,731
Anti-dilutive shares (in shares)	3,133,035	1,990,099	2,508,565	1,850,850
Restricted stock, PSUs, and RSUs
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Effect of dilutive securities (in shares)	0	0	0	0
Stock options
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Effect of dilutive securities (in shares)	0	0	0	0

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Acquisitions and Divestitures - Öhlins Intressenter AB (Details) $ in Millions	Jan. 10, 2019 USD ($)
Öhlins Intressenter AB | K Öhlin Holding AB
Business Acquisition [Line Items]
Ownership percentage	9.50%
Öhlins Intressenter AB
Business Acquisition [Line Items]
Percentage of business acquired	90.50%
Purchase price	$ 162
Cash acquired	$ 4

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Acquisitions and Divestitures - Assets Held For Sale (Details) - USD ($) $ in Millions		3 Months Ended	6 Months Ended
	Mar. 01, 2019	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Asset impairment charges		$ 1	$ 1
Proceeds from sale of assets			5	$ 5
Held-for-sale
Assets
Receivables		3	3		$ 5
Inventories		7	7		8
Other current assets		2	2		1
Long-lived assets		16	16		18
Goodwill		3	3		4
Impairment on carrying value		(7)	(7)		(8)
Total assets held for sale		24	24		28
Liabilities
Accounts payable		2	2		4
Accrued liabilities		2	2		2
Total liabilities held for sale		$ 4	4		$ 6
Motorsports Certain Assets and Liabilities | Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale of assets	$ 22		$ 16

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Restructuring Charges, Net and Asset Impairments - Incurred Costs (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Restructuring Cost and Reserve [Line Items]
Severance and other charges, net	$ 92	$ 47	$ 105	$ 63
Asset impairments related to restructuring actions	28		28
Other non-restructuring asset impairments	1	2	472	2
Impairment of assets held for sale	0		0
Total asset impairment charges	29		500
Total restructuring charges, net and asset impairments	121	49	605	65
Motorparts
Restructuring Cost and Reserve [Line Items]
Asset impairments related to restructuring actions			25
Total asset impairment charges	16		16
Total Reportable Segments | Clean Air
Restructuring Cost and Reserve [Line Items]
Severance and other charges, net	22	14	22	19
Asset impairments related to restructuring actions	0		0
Other non-restructuring asset impairments	0	1	0	1
Impairment of assets held for sale	0		0
Total asset impairment charges	0		0
Total restructuring charges, net and asset impairments	22	15	22	20
Total Reportable Segments | Powertrain
Restructuring Cost and Reserve [Line Items]
Severance and other charges, net	36	17	37	18
Asset impairments related to restructuring actions	3		3
Other non-restructuring asset impairments	0	0	0	0
Impairment of assets held for sale	1		1
Total asset impairment charges	4		4
Total restructuring charges, net and asset impairments	40	17	41	18
Total Reportable Segments | Ride Performance
Restructuring Cost and Reserve [Line Items]
Severance and other charges, net	18	10	24	15
Asset impairments related to restructuring actions	0		0
Other non-restructuring asset impairments	0	0	455	0
Impairment of assets held for sale	0		0
Total asset impairment charges	0		455
Total restructuring charges, net and asset impairments	18	10	479	15
Total Reportable Segments | Motorparts
Restructuring Cost and Reserve [Line Items]
Severance and other charges, net	15	6	17	10
Asset impairments related to restructuring actions	25		25
Other non-restructuring asset impairments	0	1	0	1
Impairment of assets held for sale	(1)		(1)
Total asset impairment charges	24		24
Total restructuring charges, net and asset impairments	39	7	41	11
Corporate
Restructuring Cost and Reserve [Line Items]
Severance and other charges, net	1	0	5	1
Asset impairments related to restructuring actions	0		0
Other non-restructuring asset impairments	1	0	17	0
Impairment of assets held for sale	0		0
Total asset impairment charges	1		17
Total restructuring charges, net and asset impairments	$ 2	$ 0	$ 22	$ 1

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Restructuring Charges, Net and Asset Impairments - Additional Information (Details) - USD ($) $ in Millions		3 Months Ended				6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Restructuring Cost and Reserve [Line Items]
Restructuring charges		$ 96	$ 15	$ 49	$ 16
Severance and other charges, net		92		47		$ 105	$ 63
Revisions to estimates		(4)	(2)	(2)	0
Asset impairments, restructuring charges		28				28
Asset impairment charges		29				500
Impairment of property, plant and equipment		1				1
Federal-Mogul
Restructuring Cost and Reserve [Line Items]
Restructuring costs				3			9
Revisions to estimates				2			2
Corporate
Restructuring Cost and Reserve [Line Items]
Restructuring charges		1	4	0	1
Severance and other charges, net		1		0		5	1
Revisions to estimates		0	0	0
Asset impairments, restructuring charges		0				0
Asset impairment charges		1				17
Operating lease impairment						6
Impairment of property, plant and equipment						11
Powertrain
Restructuring Cost and Reserve [Line Items]
Restructuring costs		20				20
Ride Performance
Restructuring Cost and Reserve [Line Items]
Impairment of property, plant and equipment						455
Motorparts
Restructuring Cost and Reserve [Line Items]
Asset impairments, restructuring charges						25
Asset impairment charges		16				16
Operating lease impairment		9				9
Employee Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges		90	10	44	11
Revisions to estimates		(4)	(2)	(2)	0
Employee Costs | Corporate
Restructuring Cost and Reserve [Line Items]
Restructuring charges						4
Employee Costs | Motorparts
Restructuring Cost and Reserve [Line Items]
Restructuring charges		4				4
Facility Closure and Other Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges		6	5	5	5
Revisions to estimates		0	$ 0	0	$ 0
Facility Closure and Other Costs | Powertrain
Restructuring Cost and Reserve [Line Items]
Restructuring costs		16				16
Asset impairment charges		3				3
Facility Closure and Other Costs | Ride Performance
Restructuring Cost and Reserve [Line Items]
Restructuring costs		4		$ 5		10	$ 8
Facility Closure and Other Costs | Motorparts
Restructuring Cost and Reserve [Line Items]
Restructuring charges		3				3
Other restructuring | Powertrain
Restructuring Cost and Reserve [Line Items]
Restructuring costs		4				4
Project Accelerate | Employee Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges		25				25
Cost Reduction Programs
Restructuring Cost and Reserve [Line Items]
Severance and other charges, net		$ 32				$ 32
Voluntary Termination Program | Employee Costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 10
Voluntary Termination Program | Termination benefits
Restructuring Cost and Reserve [Line Items]
Restructuring costs	31
Voluntary Termination Program | Special termination benefits
Restructuring Cost and Reserve [Line Items]
Restructuring costs	21
Voluntary Termination Program | Other restructuring
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 2

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Restructuring Charges, Net and Asset Impairments - Roll Forward of Restructuring Reserve (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	$ 83	$ 101	$ 89	$ 103	$ 101	$ 103
Provisions	96	15	49	16
Revisions to estimates	(4)	(2)	(2)	0
Payments	(35)	(30)	(21)	(30)
Foreign currency		(1)		0
Restructuring reserve, ending balance	140	83	115	89	140	115
Employee Costs
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	81	97	84	98	97	98
Provisions	90	10	44	11
Revisions to estimates	(4)	(2)	(2)	0
Payments	(31)	(23)	(16)	(25)
Foreign currency		(1)		0
Restructuring reserve, ending balance	136	81	110	84	136	110
Facility Closure and Other Costs
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	2	4	5	5	4	5
Provisions	6	5	5	5
Revisions to estimates	0	0	0	0
Payments	(4)	(7)	(5)	(5)
Foreign currency		0		0
Restructuring reserve, ending balance	4	2	5	5	4	5
Motorparts | Employee Costs
Restructuring Reserve [Roll Forward]
Provisions	4				4
Motorparts | Facility Closure and Other Costs
Restructuring Reserve [Roll Forward]
Provisions	3				3
Total Reportable Segments
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	79	92	87	100	92	100
Provisions	95	11	49	15
Revisions to estimates	(4)	(2)	(2)
Payments	(34)	(21)	(20)	(28)
Foreign currency		(1)
Restructuring reserve, ending balance	136	79	114	87	136	114
Total Reportable Segments | Clean Air
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	19	23	16	17	23	17
Provisions	24	0	14	5
Revisions to estimates	(2)	0	0
Payments	(6)	(4)	(2)	(6)
Foreign currency		0
Restructuring reserve, ending balance	35	19	28	16	35	28
Total Reportable Segments | Powertrain
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	27	30	13	15	30	15
Provisions	36	2	17	1
Revisions to estimates	0	(1)	0
Payments	(6)	(4)	(4)	(3)
Foreign currency		0
Restructuring reserve, ending balance	57	27	26	13	57	26
Total Reportable Segments | Ride Performance
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	19	23	25	25	23	25
Provisions	18	7	10	5
Revisions to estimates	0	(1)	0
Payments	(17)	(9)	(7)	(5)
Foreign currency		(1)
Restructuring reserve, ending balance	20	19	28	25	20	28
Total Reportable Segments | Motorparts
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	14	16	33	43	16	43
Provisions	17	2	8	4
Revisions to estimates	(2)	0	(2)
Payments	(5)	(4)	(7)	(14)
Foreign currency		0
Restructuring reserve, ending balance	24	14	32	33	24	32
Corporate
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	4	9	2	3	9	3
Provisions	1	4	0	1
Revisions to estimates	0	0	0
Payments	(1)	(9)	(1)	(2)
Foreign currency		0
Restructuring reserve, ending balance	$ 4	$ 4	$ 1	$ 2	4	$ 1
Corporate | Employee Costs
Restructuring Reserve [Roll Forward]
Provisions					$ 4

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Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Finished goods	$ 728	$ 1,027
Work in process	427	460
Raw materials	400	408
Materials and supplies	101	104
Total inventories	$ 1,656	$ 1,999

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Goodwill and Other Intangible Assets - Additional Information (Details) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2020 USD ($) reporting_unit	Mar. 31, 2019 USD ($) reporting_unit	Jun. 30, 2020 USD ($) reporting_unit
Goodwill [Line Items]
Goodwill impairment charges	$ 267		$ 267
Trade names and trademarks intangible asset impairment charges			51
Definite-lived intangible assets impairment charges			65
Powertrain
Goodwill [Line Items]
Goodwill impairment charges	160		160
Trade names and trademarks intangible asset impairment charges			$ 0
Number of reporting units with goodwill | reporting_unit			1
Definite-lived intangible assets impairment charges			$ 0
Motorparts
Goodwill [Line Items]
Goodwill impairment charges	70		70
Trade names and trademarks intangible asset impairment charges			$ 40
Number of reporting units with goodwill | reporting_unit			1
Definite-lived intangible assets impairment charges			$ 0
Ride Performance
Goodwill [Line Items]
Goodwill impairment charges	$ 37	$ 60	37
Trade names and trademarks intangible asset impairment charges			$ 11
Number of reporting units with goodwill | reporting_unit	2	2	1
Definite-lived intangible assets impairment charges			$ 65

XML

Goodwill and Other Intangible Assets - Impairment Charges (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Segment Reporting Information [Line Items]
Goodwill impairment charges		$ 267			$ 267
Trade names and trademarks intangible asset impairment charges					51
Definite-lived intangible asset impairment charges					65
Total impairment charges	$ 0		$ 0		383	$ 60
Powertrain
Segment Reporting Information [Line Items]
Goodwill impairment charges		160			160
Trade names and trademarks intangible asset impairment charges					0
Definite-lived intangible asset impairment charges					0
Total impairment charges					160
Ride Performance
Segment Reporting Information [Line Items]
Goodwill impairment charges		37		$ 60	37
Trade names and trademarks intangible asset impairment charges					11
Definite-lived intangible asset impairment charges					65
Total impairment charges					113
Motorparts
Segment Reporting Information [Line Items]
Goodwill impairment charges		$ 70			70
Trade names and trademarks intangible asset impairment charges					40
Definite-lived intangible asset impairment charges					0
Total impairment charges					$ 110

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Goodwill and Other Intangible Assets - Goodwill (Details) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($) reporting_unit	Mar. 31, 2019 USD ($) reporting_unit	Jun. 30, 2020 USD ($) reporting_unit	Dec. 31, 2019 USD ($)
Goodwill [Roll Forward]
Gross carrying amount at beginning of period	$ 1,241	$ 1,244		$ 1,244
Foreign exchange	3	(3)
Gross carrying amount at end of period	1,244	1,241		1,244
Accumulated impairment loss, beginning balance	(736)	(469)		(469)
Impairment		(267)		(267)
Accumulated foreign exchange	(3)
Accumulated impairment loss, ending balance	(739)	(736)		(739)
Net carrying value at end of period	505			$ 505	$ 775
Clean Air
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit				3
Goodwill [Roll Forward]
Gross carrying amount at beginning of period	22	22		$ 22
Foreign exchange	0	0
Gross carrying amount at end of period	22	22		22
Accumulated impairment loss, beginning balance	0	0		0
Impairment		0
Accumulated foreign exchange	0
Accumulated impairment loss, ending balance	0	0		0
Net carrying value at end of period	22			$ 22
Powertrain
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit				1
Goodwill [Roll Forward]
Gross carrying amount at beginning of period	343	343		$ 343
Foreign exchange	0	0
Gross carrying amount at end of period	343	343		343
Accumulated impairment loss, beginning balance	(178)	(18)		(18)
Impairment		(160)		(160)
Accumulated foreign exchange	0
Accumulated impairment loss, ending balance	(178)	$ (178)		(178)
Net carrying value at end of period	165			$ 165
Ride Performance
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit		2	2	1
Goodwill [Roll Forward]
Gross carrying amount at beginning of period	256	$ 259		$ 259
Foreign exchange	3	(3)
Gross carrying amount at end of period	259	256		259
Accumulated impairment loss, beginning balance	(249)	(212)		(212)
Impairment		(37)	$ (60)	(37)
Accumulated foreign exchange	(3)
Accumulated impairment loss, ending balance	(252)	(249)		(252)
Net carrying value at end of period	7			$ 7
Motorparts
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit				1
Goodwill [Roll Forward]
Gross carrying amount at beginning of period	620	620		$ 620
Foreign exchange	0	0
Gross carrying amount at end of period	620	620		620
Accumulated impairment loss, beginning balance	(309)	(239)		(239)
Impairment		(70)		(70)
Accumulated foreign exchange	0
Accumulated impairment loss, ending balance	(309)	$ (309)		(309)
Net carrying value at end of period	311			$ 311
Greater than 10% | Clean Air
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit				3
Goodwill for reporting units where fair value exceeds carrying value	22			$ 22
Greater than 10% | Powertrain
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit				0
Goodwill for reporting units where fair value exceeds carrying value	0			$ 0
Greater than 10% | Ride Performance
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit				1
Goodwill for reporting units where fair value exceeds carrying value	7			$ 7
Greater than 10% | Motorparts
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit				0
Goodwill for reporting units where fair value exceeds carrying value	0			$ 0
Less than 10% | Clean Air
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit				0
Goodwill for reporting units where fair value exceeds carrying value	0			$ 0
Less than 10% | Powertrain
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit				1
Goodwill for reporting units where fair value exceeds carrying value	165			$ 165
Less than 10% | Ride Performance
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit				0
Goodwill for reporting units where fair value exceeds carrying value	0			$ 0
Less than 10% | Motorparts
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit				1
Goodwill for reporting units where fair value exceeds carrying value	$ 311			$ 311

XML

Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 1,340	$ 1,341
Accumulated Amortization	(332)	(201)
Net Carrying Value	1,008	1,140
Indefinite-lived intangible assets	231	282
Intangible assets, net	$ 1,239	1,422
Customer relationships and platforms
Finite-Lived Intangible Assets [Line Items]
Finite useful life of intangible assets	10 years
Gross Carrying Value	$ 988	988
Accumulated Amortization	(233)	(123)
Net Carrying Value	$ 755	865
Customer contract
Finite-Lived Intangible Assets [Line Items]
Finite useful life of intangible assets	10 years
Gross Carrying Value	$ 8	8
Accumulated Amortization	(6)	(6)
Net Carrying Value	2	2
Patents
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	1	1
Accumulated Amortization	(1)	(1)
Net Carrying Value	$ 0	0
Patents | Minimum
Finite-Lived Intangible Assets [Line Items]
Finite useful life of intangible assets	10 years
Patents | Maximum
Finite-Lived Intangible Assets [Line Items]
Finite useful life of intangible assets	17 years
Technology rights
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 133	133
Accumulated Amortization	(44)	(37)
Net Carrying Value	$ 89	96
Technology rights | Minimum
Finite-Lived Intangible Assets [Line Items]
Finite useful life of intangible assets	10 years
Technology rights | Maximum
Finite-Lived Intangible Assets [Line Items]
Finite useful life of intangible assets	30 years
Packaged kits know-how
Finite-Lived Intangible Assets [Line Items]
Finite useful life of intangible assets	10 years
Gross Carrying Value	$ 54	54
Accumulated Amortization	(9)	(7)
Net Carrying Value	$ 45	47
Catalogs
Finite-Lived Intangible Assets [Line Items]
Finite useful life of intangible assets	10 years
Gross Carrying Value	$ 47	47
Accumulated Amortization	(8)	(6)
Net Carrying Value	39	41
Licensing agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	63	63
Accumulated Amortization	(27)	(18)
Net Carrying Value	$ 36	45
Licensing agreements | Minimum
Finite-Lived Intangible Assets [Line Items]
Finite useful life of intangible assets	3 years
Licensing agreements | Maximum
Finite-Lived Intangible Assets [Line Items]
Finite useful life of intangible assets	5 years
Land use rights
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 46	47
Accumulated Amortization	(4)	(3)
Net Carrying Value	$ 42	$ 44
Land use rights | Minimum
Finite-Lived Intangible Assets [Line Items]
Finite useful life of intangible assets	28 years
Land use rights | Maximum
Finite-Lived Intangible Assets [Line Items]
Finite useful life of intangible assets	46 years

XML

Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 32	$ 33	$ 66	$ 68
2020	66		66
2021	127		127
2022	124		124
2023	121		121
2024	113		113
2025 and thereafter	457		457
Net Carrying Value	$ 1,008		$ 1,008		$ 1,140

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Investment in Nonconsolidated Affiliates (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Schedule of Equity Method Investments [Line Items]
Investments in nonconsolidated affiliates	$ 513		$ 513		$ 518
Difference between carrying amount and underlying net assets	263		263		251
Equity in earnings of nonconsolidated affiliates, net of tax	4	$ 17	17	$ 33
Cash dividends received from nonconsolidated affiliates	5	$ 12	18	27
Federal-Mogul
Schedule of Equity Method Investments [Line Items]
Investments in nonconsolidated affiliates adjustment				$ 15
Equity Method Investment, Nonconsolidated
Schedule of Equity Method Investments [Line Items]
Investments in nonconsolidated affiliates	$ 513		$ 513		$ 518
Equity Method Investment, Nonconsolidated | Anqing TP Goetze Piston Ring Company Limited (China)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	35.70%		35.70%		35.70%
Equity Method Investment, Nonconsolidated | Anqing TP Powder Metallurgy Co., Ltd (China)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	20.00%		20.00%		20.00%
Equity Method Investment, Nonconsolidated | Dongsuh Federal-Mogul Industrial Co. Ltd. (Korea)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	50.00%		50.00%		50.00%
Equity Method Investment, Nonconsolidated | Farloc Argentina SAIC Y F (Argentina)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	23.90%		23.90%		23.90%
Equity Method Investment, Nonconsolidated | Federal-Mogul Powertrain Otomotiv A.S. (Turkey)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	50.00%		50.00%		50.00%
Equity Method Investment, Nonconsolidated | Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti. (Turkey)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	25.00%		25.00%		25.00%
Equity Method Investment, Nonconsolidated | Federal-Mogul TP Liners, Inc. (USA)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	46.00%		46.00%		46.00%
Equity Method Investment, Nonconsolidated | Frenos Hidraulicos Automotrices, S.A. de C.V. (Mexico)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	49.00%		49.00%		49.00%
Equity Method Investment, Nonconsolidated | JURID do Brasil Sistemas Automotivos Ltda. (Brazil)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	19.90%		19.90%		19.90%
Equity Method Investment, Nonconsolidated | KB Autosys Co., Ltd. (Korea)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	33.60%		33.60%		33.60%
Equity Method Investment, Nonconsolidated | Montagewerk Abgastechnik Emden GmbH (Germany)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	50.00%		50.00%		50.00%

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Investment in Nonconsolidated Affiliates - Summarized Financial Data (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Schedule of Equity Method Investments [Line Items]
Sales	$ 2,637	$ 4,504	$ 6,473	$ 8,988
Income from continuing operations	(441)	59	(1,361)	(46)
Net income	(340)	45	(1,166)	(60)
Equity Method Investment, Nonconsolidated
Schedule of Equity Method Investments [Line Items]
Sales	76	244	307	499
Gross profit	17	55	69	115
Income from continuing operations	10	37	49	80
Net income	11	41	41	79
Equity Method Investment, Nonconsolidated | Otomotiv A.S.
Schedule of Equity Method Investments [Line Items]
Sales	24	85	120	176
Gross profit	6	22	32	43
Income from continuing operations	4	17	27	36
Net income	5	21	23	39
Equity Method Investment, Nonconsolidated | Anqing TP Goetze
Schedule of Equity Method Investments [Line Items]
Sales	11	39	41	78
Gross profit	5	10	11	26
Income from continuing operations	4	9	11	20
Net income	4	9	10	18
Equity Method Investment, Nonconsolidated | Other
Schedule of Equity Method Investments [Line Items]
Sales	41	120	146	245
Gross profit	6	23	26	46
Income from continuing operations	2	11	11	24
Net income	$ 2	$ 11	$ 8	$ 22

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Derivatives and Hedging Activities - Summarization for Foreign Currency Forward Purchase and Sale Contracts (Details) - Foreign exchange forward $ in Millions	Jun. 30, 2020 USD ($)
Long positions
Notional amount	$ 54
Short positions
Notional amount	$ 54

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Fair Value - Carrying and Estimated Fair Value (Details) - Level 2 - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Carrying Amount | Swap agreements
Carrying And Estimated Fair Value [Line Items]
Derivative asset	$ (1)
Derivative liability		$ (1)
Carrying Amount | Commodity contracts
Carrying And Estimated Fair Value [Line Items]
Derivative asset	(1)
Derivative liability		0
Fair Value | Swap agreements
Carrying And Estimated Fair Value [Line Items]
Derivative asset	(1)
Derivative liability		(1)
Fair Value | Commodity contracts
Carrying And Estimated Fair Value [Line Items]
Derivative asset	$ (1)
Derivative liability		$ 0

XML

Derivatives and Hedging Activities - Additional Information (Details) € in Millions, $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($) shares	Jun. 30, 2020 EUR (€) shares	Dec. 31, 2019 USD ($) shares
Financial Instruments [Line Items]
Long-term debt	$ 6,629		$ 5,371
Net derivative losses to be reclassified within twelve months (less than)	$ 1
Net investment hedging
Financial Instruments [Line Items]
Long-term debt | €		€ 782
Swap agreements
Financial Instruments [Line Items]
Notional amount (in shares) | shares	1,350,000	1,350,000	750,000
Commodity contracts
Financial Instruments [Line Items]
Period of forecasted purchases	18 months
Derivative, notional amount	$ 16		$ 19
Term of derivative	1 year

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Fair Value - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Definite-lived intangible assets impairment charges				$ 65
Impairment of property, plant and equipment	$ 1			1
Goodwill impairment charges		$ 267		267
Trade names and trademarks intangible asset impairment charges				51
Ride Performance
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Definite-lived intangible assets impairment charges				65
Impairment of property, plant and equipment				455
Goodwill impairment charges		$ 37	$ 60	37
Trade names and trademarks intangible asset impairment charges				11
Foreign exchange forward
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	$ 1			$ 1	$ 1

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Derivatives and Hedging Activities - Carrying and Estimated Fair Value (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Commodity contracts | Cash flow hedging
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amount of gain (loss) recognized in accumulated OCI or OCL (effective portion)	$ 5	$ (3)	$ 2	$ 1
Foreign Currency | Net investment hedging
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amount of gain (loss) recognized in accumulated OCI or OCL (effective portion)	(16)	$ (12)	(2)	$ 7
Prepayments and other current assets | Commodity contracts | Cash flow hedging | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset (liabilities)	1		1		$ 0
Long-term debt | Foreign Currency | Net investment hedging | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset (liabilities)	$ 878		$ 878		$ 850

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Fair Value - Fair Value of Long Term Debt (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Term loans and senior notes | Carrying Amount | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of long term debt	$ 5,121	$ 5,179
Term loans and senior notes | Fair Value | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of long term debt	4,641	5,113
Other Debt
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of long term debt	$ 169	$ 192

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Debt and Other Financing Arrangements - Summary of Long-Term Debt Obligations (Details)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 EUR (€)	Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Carrying amount	$ 6,633,000,000		$ 5,375,000,000
Less - maturities classified as current	4,000,000		4,000,000
Total long-term debt	6,629,000,000		5,371,000,000
Unamortized debt issuance costs	80,000,000		76,000,000
Unamortized premium	(32,000,000)		(37,000,000)
Line of Credit | Revolver Borrowings Due 2023
Debt Instrument [Line Items]
Principal	1,500,000,000		183,000,000
Carrying amount	1,500,000,000		183,000,000
Term Loans | Tenneco Inc. Term Loan A
Debt Instrument [Line Items]
Principal	1,572,000,000		1,615,000,000
Carrying amount	$ 1,561,000,000		$ 1,608,000,000
Stated rate	2.00%	2.00%	1.75%
Term Loans | Tenneco Inc. Term Loan B
Debt Instrument [Line Items]
Principal	$ 1,675,000,000		$ 1,683,000,000
Carrying amount	$ 1,614,000,000		1,623,000,000
Stated rate	3.00%	3.00%
Senior Notes | 5.375% Senior Notes due 2024
Debt Instrument [Line Items]
Principal	$ 225,000,000	€ 225,000,000	225,000,000
Carrying amount	$ 223,000,000		222,000,000
Stated rate	5.375%	5.375%
Senior Notes | 5.000% Senior Notes due 2026
Debt Instrument [Line Items]
Principal	$ 500,000,000	€ 500,000,000	500,000,000
Carrying amount	$ 494,000,000		494,000,000
Stated rate	5.00%	5.00%
Senior Notes | 4.875% Euro Fixed Rate Notes due 2022
Debt Instrument [Line Items]
Principal	$ 466,000,000	€ 415,000,000	465,000,000
Carrying amount	$ 477,000,000		479,000,000
Stated rate	4.875%	4.875%
Senior Notes | Euro Floating Rate Notes due 2024
Debt Instrument [Line Items]
Principal	$ 337,000,000	€ 300,000,000	336,000,000
Carrying amount	$ 340,000,000		340,000,000
Stated rate	4.875%	4.875%
Senior Notes | 5.000% Euro Fixed Rate Notes due 2024
Debt Instrument [Line Items]
Principal	$ 393,000,000	€ 350,000,000	392,000,000
Carrying amount	$ 412,000,000		413,000,000
Stated rate	5.00%	5.00%
Other debt, primarily foreign instruments
Debt Instrument [Line Items]
Principal	$ 13,000,000		14,000,000
Carrying amount	$ 12,000,000		$ 13,000,000

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Debt and Other Financing Arrangements - Short Term Debt (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Debt Disclosure [Abstract]
Maturities classified as current	$ 4	$ 4
Short-term borrowings	157	179
Bank overdrafts	61	2
Total short-term debt	$ 222	$ 185

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Debt and Other Financing Arrangements - Interest Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Other assets
Debt Instrument [Line Items]
Amortization of debt issuance fees	$ 1	$ 1	$ 3	$ 2
Interest Expense
Debt Instrument [Line Items]
Amortization of debt issuance fees	5	4	10	9
Accretion of debt premium	$ (2)	$ 0	$ (6)	$ (6)

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Debt and Other Financing Arrangements - Financing Arrangements (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Available	$ 0
Liquidity	1,400,000,000
Letters of credit
Debt Instrument [Line Items]
Available	65,000,000
Line of Credit | Revolver Borrowings Due 2023
Debt Instrument [Line Items]
Principal	1,500,000,000	$ 183,000,000
Tenneco Inc. revolving credit agreement
Debt Instrument [Line Items]
Available	0
Tenneco Inc. Term Loan A
Debt Instrument [Line Items]
Available	0
Tenneco Inc. Term Loan B
Debt Instrument [Line Items]
Available	0
Subsidiaries’ credit agreements
Debt Instrument [Line Items]
Available	$ 0

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Debt and Other Financing Arrangements - Term Loans (Details) - USD ($) $ in Millions		6 Months Ended
	Oct. 01, 2018	Jun. 30, 2020
Line of Credit
Line of Credit Facility [Line Items]
Borrowing capacity	$ 4,900
Revolving Credit Facility | Line of Credit
Line of Credit Facility [Line Items]
Borrowing capacity	$ 1,500
Debt term	5 years
Term Loan A Facility | Term Loans
Line of Credit Facility [Line Items]
Borrowing capacity	$ 1,700
Debt term	5 years
Term Loan B Facility | Term Loans
Line of Credit Facility [Line Items]
Borrowing capacity	$ 1,700
Debt term	7 years
First Amendment and Second Amendment | Line of Credit
Line of Credit Facility [Line Items]
One-time fees		$ 8
Third Amendment | Line of Credit
Line of Credit Facility [Line Items]
One-time fees		$ 10

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Debt and Other Financing Arrangements - New Credit Facility (Details) - Term Loans	6 Months Ended
	Jun. 30, 2020
LIBOR | Term Loan B Facility
Line of Credit Facility [Line Items]
Basis spread	2.75%
Debt Covenant, Term 1 | LIBOR | Term Loan A, New Credit Facility, Third Amendment
Line of Credit Facility [Line Items]
Basis spread	2.50%
Debt Covenant, Term 1 | LIBOR | Term Loan B Facility
Line of Credit Facility [Line Items]
Basis spread	3.00%
Debt Covenant, Term 1 | Minimum | Term Loan A, New Credit Facility, Third Amendment
Line of Credit Facility [Line Items]
Consolidated net leverage ratio	6.0
Debt Covenant, Term 2 | LIBOR | Term Loan A, New Credit Facility, Third Amendment
Line of Credit Facility [Line Items]
Basis spread	2.25%
Debt Covenant, Term 2 | Minimum | Term Loan A, New Credit Facility, Third Amendment
Line of Credit Facility [Line Items]
Consolidated net leverage ratio	4.5
Debt Covenant, Term 2 | Maximum | Term Loan A, New Credit Facility, Third Amendment
Line of Credit Facility [Line Items]
Consolidated net leverage ratio	6.0

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Debt and Other Financing Arrangements - New Credit Facility - Other Terms (Details) - Term Loans	6 Months Ended
	Jun. 30, 2020
Minimum | Term Loan A, New Credit Facility, Third Amendment | Debt Covenant, Term 1
Debt Instrument [Line Items]
Consolidated net leverage ratio	6.0
Minimum | Term Loan A, New Credit Facility, Third Amendment | Debt Covenant, Term 2
Debt Instrument [Line Items]
Consolidated net leverage ratio	4.5
Maximum | Term Loan A, New Credit Facility, Third Amendment | Debt Covenant, Term 2
Debt Instrument [Line Items]
Consolidated net leverage ratio	6.0
Financial Maintenance Covenant | Term Loan A, New Credit Facility, Third Amendment | Debt Covenant, Term 1
Debt Instrument [Line Items]
Consolidated net leverage ratio	4.50
Senior secured net leverage ratio	6.75
Financial Maintenance Covenant | Term Loan A, New Credit Facility, Third Amendment | Debt Covenant, Term 2
Debt Instrument [Line Items]
Consolidated net leverage ratio	5.25
Consolidated interest coverage ratio	2.00
Senior secured net leverage ratio	9.50
Financial Maintenance Covenant | Term Loan A, New Credit Facility, Third Amendment | Debt Covenant, Term 3
Debt Instrument [Line Items]
Consolidated net leverage ratio	4.75
Consolidated interest coverage ratio	1.50
Senior secured net leverage ratio	8.75
Financial Maintenance Covenant | Term Loan A, New Credit Facility, Third Amendment | Debt Covenant, Term 4
Debt Instrument [Line Items]
Consolidated net leverage ratio	4.25
Consolidated interest coverage ratio	2.75
Senior secured net leverage ratio	8.25
Financial Maintenance Covenant | Term Loan A, New Credit Facility, Third Amendment | Debt Covenant, Term 5
Debt Instrument [Line Items]
Consolidated net leverage ratio	3.75
Senior secured net leverage ratio	4.50
Financial Maintenance Covenant | Term Loan A, New Credit Facility, Third Amendment | Debt Covenant, Term 6
Debt Instrument [Line Items]
Senior secured net leverage ratio	4.25
Financial Maintenance Covenant | Term Loan A, New Credit Facility, Third Amendment | Debt Covenant, Term 7
Debt Instrument [Line Items]
Senior secured net leverage ratio	4.00
Financial Maintenance Covenant | Minimum | Term Loan A, New Credit Facility | Debt Covenant, Term 1
Debt Instrument [Line Items]
Consolidated net leverage ratio	2.00
Financial Maintenance Covenant | Maximum | Term Loan A, New Credit Facility | Debt Covenant, Term 1
Debt Instrument [Line Items]
Consolidated net leverage ratio	2.00

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Debt and Other Financing Arrangements - Senior Notes (Details)	6 Months Ended
	Jun. 30, 2020
Senior Notes | 5 3/8% Senior Notes due 2024
Debt Instrument [Line Items]
Stated rate	5.375%
Senior Notes | 5.000% Senior Notes due 2026
Debt Instrument [Line Items]
Stated rate	5.00%
Senior Notes | 5.000% Euro Fixed Rate Notes due 2024
Debt Instrument [Line Items]
Stated rate	5.00%
Senior Notes | 4.875% Euro Fixed Rate Notes due 2022
Debt Instrument [Line Items]
Stated rate	4.875%
Senior Notes | 4.875% Euro Fixed Rate Notes due 2024
Debt Instrument [Line Items]
Stated rate	4.875%
Line of Credit
Debt Instrument [Line Items]
Consolidated fixed charge coverage ratio	2.00

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Debt and Other Financing Arrangements - Accounts Receivable Securitization (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Debt Instrument [Line Items]
Accounts receivable outstanding and derecognized	$ 900		$ 900		$ 1,000
Deferred purchase price receivable	38		38		33
Proceeds from factoring qualifying as sales	700	$ 1,300	1,900	$ 2,500
Borrowings on securitization programs
Debt Instrument [Line Items]
Borrowings on securitization programs	3		3		$ 4
Interest Expense
Debt Instrument [Line Items]
Loss on sale of receivables	$ 4	$ 6	$ 10	$ 14

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Pension Plans, Postretirement and Other Employee Benefits - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Other Postretirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 0	$ 0	$ 0	$ 0
Interest cost	3	4	5	7
Expected return on plan assets	0	0	0	0
Net amortization:
Actuarial loss	0	1	1	2
Prior service cost (credit)	(2)	(2)	(4)	(4)
Net pension and postretirement costs (credits)	1	3	2	5
U.S. | Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	1	0	1	1
Interest cost	10	14	20	27
Expected return on plan assets	(16)	(17)	(32)	(34)
Net amortization:
Actuarial loss	1	1	3	2
Prior service cost (credit)	0	0	0	0
Net pension and postretirement costs (credits)	(4)	(2)	(8)	(4)
Non-U.S. | Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	6	6	12	12
Interest cost	5	5	9	12
Expected return on plan assets	(4)	(4)	(8)	(9)
Net amortization:
Actuarial loss	2	2	4	3
Prior service cost (credit)	0	0	0	0
Net pension and postretirement costs (credits)	$ 9	$ 9	$ 17	$ 18

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Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Tax Contingency [Line Items]
Income tax (expense) benefit	$ 101	$ (14)	$ 195	$ (14)
Earnings (loss) before income taxes and noncontrolling interests	(441)	$ 59	(1,361)	$ (46)
Tax benefit relating to impairment			111
Asset impairments			883
Reasonably possible change in unrecognized tax benefits	51		51
Tax Year 2011 | Foreign
Income Tax Contingency [Line Items]
Tax credit carryforward	29		29
Tax Year 2012 | Foreign
Income Tax Contingency [Line Items]
Tax credit carryforward	$ 21		21
U.S., China, France, Poland, and Spain
Income Tax Contingency [Line Items]
One-time tax expense			$ 595

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Commitments and Contingencies - Environmental Matters (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Accrued expenses and other current liabilities	$ 9	$ 8
Deferred credits and other liabilities	26	28
Environmental remediation accrual, discounted basis	$ 35	$ 36
Weighted average discount rate	0.45%	1.30%
Expected payments of environmental remediation costs, 2020	$ 5
Expected payments of environmental remediation costs, 2021	4
Expected payments of environmental remediation costs, 2022	2
Expected payments of environmental remediation costs, 2023	2
Expected payments of environmental remediation costs, 2024	2
Expected payments of environmental remediation costs, 2025 and thereafter	$ 15

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Commitments and Contingencies - Other Legal Proceedings, Claims and Investigations (Details) $ in Millions	3 Months Ended	6 Months Ended	36 Months Ended
	Sep. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) LegalMatter	Jun. 30, 2020 USD ($)	Jun. 30, 2017 USD ($)
Loss Contingencies [Line Items]
Estimated liability		$ 14	$ 14	$ 132
Payments for settlement		$ 30	109
Decrease in estimated liability	$ 9
United states
Loss Contingencies [Line Items]
Current docket of active and inactive cases nationwide relating to alleged exposure to asbestos from our product categories | LegalMatter		500
Europe
Loss Contingencies [Line Items]
Current docket of active and inactive cases nationwide relating to alleged exposure to asbestos from our product categories | LegalMatter		50
Minimum
Loss Contingencies [Line Items]
Warranty term		1 year
Accrued expenses and other current liabilities
Loss Contingencies [Line Items]
Estimated liability		$ 2	2
Deferred credits and other liabilities
Loss Contingencies [Line Items]
Estimated liability		$ 12	$ 12

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Commitments and Contingencies - Asset Retirement Obligations (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Loss Contingencies [Line Items]
Asset retirement obligation	$ 15	$ 16
Accrued expenses and other current liabilities
Loss Contingencies [Line Items]
Asset retirement obligation	3	3
Deferred credits and other liabilities
Loss Contingencies [Line Items]
Asset retirement obligation	$ 12	$ 13

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Commitments and Contingencies - Warranty Accrual Table (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
Beginning balance	$ 51	$ 48	$ 54	$ 45
Accruals related to product warranties	1	16	4	21
Reductions for payments made	(1)	(11)	(7)	(13)
Foreign currency	(1)	0	(1)	0
Ending balance	$ 50	$ 53	$ 50	$ 53

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Share-Based Compensation (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Compensation expense	$ 8	$ 7	$ 10	$ 13
Cash-settled
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Compensation expense	1	1	1	0
Unrecognized compensation costs	5		$ 5
Unrecognized compensation costs, not yet recognized			3 years
Share-settled
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Compensation expense	7	$ 6	$ 9	$ 13
Unrecognized compensation costs	$ 27		$ 27
Unrecognized compensation costs, not yet recognized			2 years

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Share-Based Compensation - Unvested Restricted Shares (Details)	6 Months Ended
	Jun. 30, 2020 $ / shares shares
Restricted Shares
Nonvested Restricted Shares
Unvested, beginning balance (in shares) | shares	35,630
Granted (in shares) | shares	169,781
Vested (in shares) | shares	(200,223)
Forfeited (in shares) | shares	(1,781)
Unvested, ending balance (in shares) | shares	3,407
Weighted Avg. Grant Date Fair Value
Unvested, beginning balance (in dollars per share) | $ / shares	$ 63.27
Granted (in dollars per share) | $ / shares	9.15
Vested (in dollars per share) | $ / shares	40.69
Forfeited (in dollars per share) | $ / shares	58.01
Unvested, ending balance (in dollars per share) | $ / shares	$ 59.87
Share-Settled RSUs
Nonvested Restricted Shares
Unvested, beginning balance (in shares) | shares	1,125,346
Granted (in shares) | shares	1,511,307
Vested (in shares) | shares	(289,074)
Forfeited (in shares) | shares	(339,120)
Unvested, ending balance (in shares) | shares	2,008,459
Weighted Avg. Grant Date Fair Value
Unvested, beginning balance (in dollars per share) | $ / shares	$ 37.91
Granted (in dollars per share) | $ / shares	7.83
Vested (in dollars per share) | $ / shares	41.39
Forfeited (in dollars per share) | $ / shares	34.93
Unvested, ending balance (in dollars per share) | $ / shares	$ 27.60
PSUs
Nonvested Restricted Shares
Unvested, beginning balance (in shares) | shares	806,233
Granted (in shares) | shares	6,654
Vested (in shares) | shares	0
Forfeited (in shares) | shares	(264,471)
Unvested, ending balance (in shares) | shares	548,416
Weighted Avg. Grant Date Fair Value
Unvested, beginning balance (in dollars per share) | $ / shares	$ 34.12
Granted (in dollars per share) | $ / shares	12.26
Vested (in dollars per share) | $ / shares	0
Forfeited (in dollars per share) | $ / shares	28.91
Unvested, ending balance (in dollars per share) | $ / shares	$ 36.15

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Shareholders' Equity - Shares Outstanding (Details) - $ / shares	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Treasury stock (in shares)	14,592,888		14,592,888
Preferred stock, shares authorized (in shares)	50,000,000		50,000,000
Preferred stock, par value (in dollars per share)	$ 0.01		$ 0.01
Preferred stock, shares issued (in shares)	0		0
Preferred stock, shares outstanding (in shares)	0		0
Class A
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	175,000,000		175,000,000
Common stock, par value (in dollars per share)	$ 0.01		$ 0.01
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued at beginning of period (in shares)	71,727,061	71,675,379
Issuance (repurchased) pursuant to benefit plans (in shares)	458,855	123,216
Restricted stock forfeited and withheld for taxes (in shares)	(124,440)	(60,081)
Stock options exercised (in shares)	0	8,438
Class B common stock converted to Class A common stock (in shares)	3,485,215	0
Shares issued at end of period (in shares)	75,546,691	71,746,952
Treasury stock (in shares)	14,592,888	14,592,888
Total shares outstanding (in shares)	60,953,803	57,154,064
Class B
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	25,000,000		25,000,000
Common stock, par value (in dollars per share)	$ 0.01		$ 0.01
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued at beginning of period (in shares)	23,793,669	23,793,669
Issuance (repurchased) pursuant to benefit plans (in shares)	0	0
Restricted stock forfeited and withheld for taxes (in shares)	0	0
Stock options exercised (in shares)	0	0
Class B common stock converted to Class A common stock (in shares)	(3,485,215)	0
Shares issued at end of period (in shares)	20,308,454	23,793,669
Treasury stock (in shares)	0	0
Total shares outstanding (in shares)	20,308,454	23,793,669

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Shareholders' Equity - Share Conversion (Details)	Apr. 01, 2020 shares
Class B
Conversion of Stock [Line Items]
Shares converted (in shares)	3,485,215
Class A
Conversion of Stock [Line Items]
Shares issued upon conversion (in shares)	3,485,215
Tenneco | Icahn Enterprises L.P. | Class B
Conversion of Stock [Line Items]
Shares owned (in shares)	20,308,454
Tenneco | Icahn Enterprises L.P. | Class A
Conversion of Stock [Line Items]
Shares owned (in shares)	9,136,392
Ownership percentage	14.99%

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Shareholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period			$ 1,619
Balance at end of period	$ 349		349
Other comprehensive income (loss) attributable to noncontrolling interests	7	$ (1)	(13)	$ 5
Foreign currency translation adjustments and other:
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	(568)	(366)	(369)	(395)
Other comprehensive income (loss) before reclassifications	34	(16)	(165)	11
Reclassification from other comprehensive income (loss)	0	0	0	0
Other comprehensive income (loss)	34	(16)	(165)	11
Income tax benefit (provision)	1	(1)	1	1
Balance at end of period	(533)	(383)	(533)	(383)
Pensions and other postretirement benefits:
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	(338)	(296)	(342)	(297)
Other comprehensive income (loss) before reclassifications	0	0	0	0
Reclassification from other comprehensive income (loss)	1	2	4	3
Other comprehensive income (loss)	1	2	4	3
Income tax benefit (provision)	(6)	(4)	(5)	(4)
Balance at end of period	(343)	(298)	(343)	(298)
Cash flow hedge instruments:
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	(2)	4	0	0
Other comprehensive income (loss) before reclassifications	5	(3)	2	1
Reclassification from other comprehensive income (loss)	0	0	0	0
Other comprehensive income (loss)	5	(3)	2	1
Income tax benefit (provision)	(1)	0	0	0
Balance at end of period	2	1	2	1
Accumulated Other Comprehensive Income (Loss)
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	(908)	(658)	(711)	(692)
Balance at end of period	$ (874)	$ (680)	$ (874)	$ (680)

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Segment Information - Additional Information (Details) - Segment	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2020
Segment Reporting Information [Line Items]
Number of operating segments	4
Forecast
Segment Reporting Information [Line Items]
Number of operating segments		4

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Segment Information - Segment Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Segment Reporting [Line Items]
Net sales and operating revenues	$ 2,637	$ 4,504	$ 6,473	$ 8,988
Equity in earnings of nonconsolidated affiliates, net of tax	4	17	17	33
Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	2,637	4,504	6,473	8,988
Equity in earnings of nonconsolidated affiliates, net of tax	4	17	17	33
Clean Air
Segment Reporting [Line Items]
Net sales and operating revenues	1,140	1,827	2,685	3,606
Clean Air | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	1,140	1,827	2,685	3,606
Equity in earnings of nonconsolidated affiliates, net of tax	0	0	0	0
Powertrain
Segment Reporting [Line Items]
Net sales and operating revenues	602	1,133	1,599	2,308
Powertrain | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	602	1,133	1,599	2,308
Equity in earnings of nonconsolidated affiliates, net of tax	2	14	13	27
Ride Performance
Segment Reporting [Line Items]
Net sales and operating revenues	336	709	924	1,442
Ride Performance | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	336	709	924	1,442
Equity in earnings of nonconsolidated affiliates, net of tax	1	1	1	2
Motorparts
Segment Reporting [Line Items]
Net sales and operating revenues	559	835	1,265	1,632
Motorparts | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	559	835	1,265	1,632
Equity in earnings of nonconsolidated affiliates, net of tax	1	2	3	4
Intersegment Revenues | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	(51)	(89)	(133)	(192)
Intersegment Revenues | Reclass & Elims
Segment Reporting [Line Items]
Net sales and operating revenues	(51)	(89)	(133)	(192)
Intersegment Revenues | Clean Air | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	(3)	0	(9)	0
Intersegment Revenues | Powertrain | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	(21)	(40)	(59)	(86)
Intersegment Revenues | Ride Performance | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	(21)	(38)	(50)	(84)
Intersegment Revenues | Motorparts | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	$ (6)	$ (11)	$ (15)	$ (22)

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Segment Information - Segment Adjusted EBITDA (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Segment Reporting Information [Line Items]
Depreciation and amortization	$ (159)	$ (169)	$ (330)	$ (338)
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	(375)	141	(1,220)	117
Interest expense	(66)	(82)	(141)	(163)
Income tax (expense) benefit	101	(14)	195	(14)
Net income (loss)	(340)	45	(1,166)	(60)
Total Reportable Segments
Segment Reporting Information [Line Items]
EBITDA including noncontrolling interests	(167)	388	(755)	632
Total Reportable Segments | Clean Air
Segment Reporting Information [Line Items]
EBITDA including noncontrolling interests	17	152	116	283
Total Reportable Segments | Powertrain
Segment Reporting Information [Line Items]
EBITDA including noncontrolling interests	(62)	100	(132)	213
Total Reportable Segments | Ride Performance
Segment Reporting Information [Line Items]
EBITDA including noncontrolling interests	(70)	26	(647)	(19)
Total Reportable Segments | Motorparts
Segment Reporting Information [Line Items]
EBITDA including noncontrolling interests	(52)	110	(92)	155
Corporate
Segment Reporting Information [Line Items]
EBITDA including noncontrolling interests	$ (49)	$ (78)	$ (135)	$ (177)

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Segment Information - Segment Revenue (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	$ 2,637	$ 4,504	$ 6,473	$ 8,988
Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	1,140	1,827	2,685	3,606
Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	602	1,133	1,599	2,308
Ride Performance
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	336	709	924	1,442
Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	559	835	1,265	1,632
North America
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	973	1,962	2,695	3,899
North America | Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	335	800	1,039	1,593
North America | Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	168	398	512	803
North America | Ride Performance
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	81	228	279	460
North America | Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	389	536	865	1,043
Europe, Middle East and Africa
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	807	1,739	2,358	3,570
Europe, Middle East and Africa | Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	248	609	813	1,250
Europe, Middle East and Africa | Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	263	540	755	1,115
Europe, Middle East and Africa | Ride Performance
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	161	349	458	727
Europe, Middle East and Africa | Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	135	241	332	478
Rest of world
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	857	803	1,420	1,519
Rest of world | Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	557	418	833	763
Rest of world | Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	171	195	332	390
Rest of world | Ride Performance
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	94	132	187	255
Rest of world | Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	35	58	68	111
OE - Substrate
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	623	777	1,323	1,483
OE - Substrate | Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	623	777	1,323	1,483
OE - Substrate | Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	0	0	0	0
OE - Substrate | Ride Performance
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	0	0	0	0
OE - Substrate | Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	0	0	0	0
OE - Value add
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	1,445	2,878	3,860	5,845
OE - Value add | Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	517	1,050	1,362	2,123
OE - Value add | Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	602	1,133	1,599	2,308
OE - Value add | Ride Performance
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	326	695	899	1,414
OE - Value add | Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	0	0	0	0
Aftermarket
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	569	849	1,290	1,660
Aftermarket | Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	0	0	0	0
Aftermarket | Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	0	0	0	0
Aftermarket | Ride Performance
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	10	14	25	28
Aftermarket | Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	$ 559	$ 835	$ 1,265	$ 1,632

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Related Party Transactions (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Anqing TP Goetze Piston Ring Company Limited
Related Party Transaction [Line Items]
Net Sales	$ 1	$ 0	$ 5	$ 0
Purchases	16	15	26	29
Royalty and Other	1	1	1	0
Receivables	2		2		$ 1
Payables and Accruals	22		22		26
Anqing TP Powder Metallurgy Company Limited
Related Party Transaction [Line Items]
Net Sales	2	1	3	1
Purchases	1	2	2	3
Royalty and Other	0	0	0	0
Receivables	1		1		0
Payables and Accruals	1		1		1
Dongsuh Federal-Mogul Industrial Co., Ltd.
Related Party Transaction [Line Items]
Net Sales	0	2	1	3
Purchases	1	5	3	7
Royalty and Other	0	0	0	0
Receivables	0		0		0
Payables and Accruals	1		1		2
Farloc Argentina SAIC
Related Party Transaction [Line Items]
Receivables	0		0		1
Payables and Accruals	0		0		0
Federal-Mogul Powertrain Otomotiv A.S.
Related Party Transaction [Line Items]
Net Sales	5	16	17	44
Purchases	17	53	76	112
Royalty and Other	2	1	6	2
Receivables	8		8		8
Payables and Accruals	24		24		31
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti.
Related Party Transaction [Line Items]
Net Sales	0	0	0	0
Purchases	1	2	2	5
Royalty and Other	0	0	0	0
Federal-Mogul TP Liners, Inc.
Related Party Transaction [Line Items]
Net Sales	3	4	7	8
Purchases	4	0	16	0
Royalty and Other	0	1	0	1
Receivables	1		1		2
Payables and Accruals	4		4		7
Frenos Hidraulicos Autos
Related Party Transaction [Line Items]
Net Sales	0	1	0	1
Purchases	0	0	0	0
Royalty and Other	0	0	0	0
Icahn Automotive Group LLC
Related Party Transaction [Line Items]
Net Sales	32	47	65	90
Purchases	0	0	0	0
Royalty and Other	1	1	2	2
Receivables	45		45		52
Payables and Accruals	8		8		10
Montagewerk Abgastechnik Emden GmbH
Related Party Transaction [Line Items]
Net Sales	1	0	4	2
Purchases	0	0	0	0
Royalty and Other	0	0	0	0
Receivables	3		3		1
Payables and Accruals	0		0		$ 0
PSC Metals, Inc.
Related Party Transaction [Line Items]
Net Sales	1	0	1	1
Purchases	0	0	0	0
Royalty and Other	$ 0	$ 0	$ 0	$ 0