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