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 March 31, 2021

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: 81,968,916 shares outstanding as of May 3, 2021.

TABLE OF CONTENTS

		Page
Part I — Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	5
	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	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	54
Item 4.	Controls and Procedures	55
Part II — Other Information
Item 1.	Legal Proceedings	56
Item 1A.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 3.	Defaults Upon Senior Securities	*
Item 4.	Mine Safety Disclosures	*
Item 5.	Other Information	*
Item 6.	Exhibits	58

* 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, market and social 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 our 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 in response 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;

•supply chain disruptions, including constraints on steel and semiconductors and resulting increases in costs, impacting the Company, its customers or the automotive industry;

•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 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 continued evolution of the automotive industry towards car and ride sharing, and autonomous vehicles;

•the announced plans, in an effort to reduce greenhouse gas emissions, of governments and vehicle manufactures to limit production of diesel and gasoline powered vehicles in various national and local jurisdictions globally;

•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 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);

3

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

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

•damage to the reputation of one or more of our leading brands;

•the impact of improvements in automotive parts on aftermarket demand for some of our products;

•industry-wide strikes, labor disruptions at our facilities or any labor or other economic disruptions at any of our significant customers or suppliers or any of our customers’ other suppliers;

•developments relating to our intellectual property, including our ability to 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, breach of, or potential disruption to, our information technology systems, including cyber attacks, such as ransomware or similar intrusions, cyber incidents, or misappropriation, exposure or corruption of sensitive information stored on such systems and the interruption to our business that such failure, breach or disruption 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;

•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, including 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;

4

•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 on the timeline contemplated or at all);

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

•the potential diversion of management’s attention resulting from a separation or other strategic alternative;

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

•the ongoing transaction costs and risk that we may incur greater costs following separation of the business or other strategic alternative; and

•the risk a separation is determined to be a taxable transaction.

The risks included here are not exhaustive. Refer to “Part I, Item 1A — Risk Factors” of our Annual Report on Form 10-K for the year ended December 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 March 31,
	2021		2020
Revenues
Net sales and operating revenues	$	4,731	$	3,836
Costs and expenses
Cost of sales (exclusive of depreciation and amortization)	4,061		3,339
Selling, general, and administrative	255		249
Depreciation and amortization	155		171
Engineering, research, and development	72		77
Restructuring charges, net and asset impairments	25		484
Goodwill and intangible impairment charges	—		383
	4,568		4,703
Other income (expense)
Non-service pension and postretirement benefit (costs) credits	3		1
Equity in earnings (losses) of nonconsolidated affiliates, net of tax	22		13
Gain (loss) on extinguishment of debt	8		—
Other income (expense), net	8		8
	41		22
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	204		(845)
Interest expense	(70)		(75)
Earnings (loss) before income taxes and noncontrolling interests	134		(920)
Income tax (expense) benefit	(47)		94
Net income (loss)	87		(826)
Less: Net income (loss) attributable to noncontrolling interests	22		13
Net income (loss) attributable to Tenneco Inc.	$	65	$	(839)
Earnings (loss) per share
Basic earnings (loss) per share:
Earnings (loss) per share	$	0.80	$	(10.34)
Weighted average shares outstanding	81,953,133		81,168,562
Diluted earnings (loss) per share:
Earnings (loss) per share	$	0.79	$	(10.34)
Weighted average shares outstanding	82,524,129		81,168,562

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 March 31,
	2021		2020
Net income (loss)	$	87	$	(826)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(52)		(219)
Defined benefit plans	3		4
Cash flow hedges	(2)		(2)
Other comprehensive income (loss), net of tax	(51)		(217)
Comprehensive income (loss)	36		(1,043)
Less: Comprehensive income (loss) attributable to noncontrolling interests	16		(7)
Comprehensive income (loss) attributable to common shareholders	$	20	$	(1,036)

See accompanying notes to the condensed consolidated financial statements.

7

TENNECO INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions, except shares)

	March 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	626	$	798
Restricted cash	5		5
Receivables:
Customer notes and accounts, net	2,706		2,423
Other	116		105
Inventories	1,830		1,743
Prepayments and other current assets	589		619
Total current assets	5,872		5,693
Property, plant, and equipment, net	2,955		3,057
Long-term receivables, net	9		8
Goodwill	508		508
Intangibles, net	1,154		1,194
Investments in nonconsolidated affiliates	532		581
Deferred income taxes	282		285
Other assets	525		526
Total assets	$	11,837	$	11,852
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt, including current maturities of long-term debt	$	124	$	162
Accounts payable	3,090		2,917
Accrued compensation and employee benefits	431		365
Accrued income taxes	65		54
Accrued expenses and other current liabilities	1,053		1,188
Total current liabilities	4,763		4,686
Long-term debt	5,111		5,171
Deferred income taxes	94		89
Pension and postretirement benefits	1,062		1,101
Deferred credits and other liabilities	511		546
Commitments and contingencies (Note 13)
Total liabilities	11,541		11,593
Redeemable noncontrolling interests	87		78
Tenneco Inc. shareholders’ equity:
Preferred stock - $0.01 par value; none issued	—		—
Class A voting common stock - $0.01 par value; shares issued: (March 31, 2021 - 93,486,021; December 31, 2020 - 75,714,163)	1		1
Class B non-voting convertible common stock - $0.01 par value; shares issued: (March 31, 2021 - 3,075,663; December 31, 2020 - 20,308,454)	—		—
Additional paid-in capital	4,445		4,442
Accumulated other comprehensive loss	(789)		(744)
Accumulated deficit	(2,823)		(2,888)
Shares held as treasury stock - at cost: (March 31, 2021 and December 31, 2020 - 14,592,888)	(930)		(930)
Total Tenneco Inc. shareholders’ equity (deficit)	(96)		(119)
Noncontrolling interests	305		300
Total equity	209		181
Total liabilities, redeemable noncontrolling interests, and equity	$	11,837	$	11,852

See accompanying notes to the condensed consolidated financial statements.

8

TENNECO INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in millions)

	Three Months Ended March 31,
	2021		2020
Operating Activities
Net income (loss)	$	87	$	(826)
Adjustments to reconcile net income (loss) to cash (used) provided by operating activities:
Goodwill and intangible impairment charges	—		383
Depreciation and amortization	155		171
Deferred income taxes	(4)		(166)
Stock-based compensation	5		2
Restructuring charges and asset impairments, net of cash paid	—		454
Change in pension and other postretirement benefit plans	(1)		(19)
Equity in earnings of nonconsolidated affiliates	(22)		(13)
Cash dividends received from nonconsolidated affiliates	57		13
Loss (gain) on sale of assets and other	(9)		—
Changes in operating assets and liabilities:
Receivables	(452)		139
Inventories	(120)		(73)
Payables and accrued expenses	240		(136)
Accrued interest and accrued income taxes	8		29
Other assets and liabilities	6		(110)
Net cash (used) provided by operating activities	(50)		(152)
Investing Activities
Proceeds from sale of assets	7		2
Net proceeds from sale of business	1		—
Cash payments for property, plant, and equipment	(95)		(137)
Proceeds from deferred purchase price of factored receivables	115		56
Other	—		2
Net cash (used) provided by investing activities	28		(77)
Financing Activities
Proceeds from term loans and notes	813		67
Repayments of term loans and notes	(862)		(84)
Debt issuance costs of long-term debt	(11)		(8)
Borrowings on revolving lines of credit	1,382		3,161
Payments on revolving lines of credit	(1,394)		(2,659)
Issuance (repurchase) of common shares	(2)		(1)
Net increase (decrease) in bank overdrafts	—		(2)
Distributions to noncontrolling interest partners	(7)		(2)
Other	(49)		11
Net cash (used) provided by financing activities	(130)		483
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash	(20)		(50)
Increase (decrease) in cash, cash equivalents, and restricted cash	(172)		204
Cash, cash equivalents, and restricted cash, beginning of period	803		566
Cash, cash equivalents, and restricted cash, end of period	$	631	$	770
Supplemental Cash Flow Information
Cash paid during the period for interest	$	65	$	67
Cash paid during the period for income taxes, net of refunds	$	46	$	41
Lease assets obtained in exchange for new operating lease liabilities	$	15	$	51
Non-cash Investing Activities
Period end balance of accounts payable for property, plant, and equipment	$	91	$	96
Deferred purchase price of receivables factored in the period	$	135	$	60
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 (Deficit)
	$0.01 Par Value Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Treasury Stock		Total Tenneco Inc. Shareholders’ Equity (Deficit)		Noncontrolling Interests		Total Equity
Balance at December 31, 2020	$	1	$	4,442	$	(744)	$	(2,888)	$	(930)	$	(119)	$	300	$	181
Net income (loss)							65				65		10		75
Other comprehensive income (loss)—net of tax:
Foreign currency translation adjustments					(46)						(46)		(3)		(49)
Defined benefit plans					3						3		—		3
Cash flow hedges					(2)						(2)		—		(2)
Comprehensive income (loss)											20		7		27
Stock-based compensation, net	—		3		—		—		—		3		—		3
Distributions declared to noncontrolling interests	—		—		—		—		—		—		(2)		(2)
Balance at March 31, 2021	$	1	$	4,445	$	(789)	$	(2,823)	$	(930)	$	(96)	$	305	$	209

	Tenneco Inc. Shareholders’ Equity (Deficit)
	$0.01 Par Value Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Treasury Stock		Total Tenneco Inc. Shareholders’ Equity (Deficit)		Noncontrolling Interests		Total Equity
Balance at December 31, 2019	$	1	$	4,432	$	(711)	$	(1,367)	$	(930)	$	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)
Defined benefit plans					4						4		—		4
Cash flow hedges					(2)						(2)		—		(2)
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	$	4,427	$	(908)	$	(2,206)	$	(930)	$	384	$	265	$	649

See accompanying notes to the condensed consolidated financial statements.

10

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, markets, and distributes products and services for light vehicle, commercial truck, off-highway, industrial, motorsport, and aftermarket customers. The Company manufactures innovative performance solutions, clean air and powertrain products and systems, and serves both original equipment (“OE”) manufacturers and the repair and replacement markets worldwide.

The Company is continually evaluating its portfolio and 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. Efforts to optimize shareholder value creation remain focused on operational improvements, reducing structural costs, lowering capital intensity, reducing debt, and growth in targeted business lines.

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, 2020, which was filed with the Securities and Exchange Commission on February 24, 2021. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. 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.

Beginning in the first quarter of 2021, the Company made a change to its operating segments. This change consisted of moving a reporting unit within the Powertrain segment to the Ride Performance segment to align with a change in how the Chief Operating Decision Maker (“CODM”) allocates resources and assesses performance against the Company's key growth strategies. In addition, with this change to its segments, Ride Performance was renamed Performance Solutions. As such, prior period operating segment results and related disclosures have been conformed to reflect the Company's current operating segments.

Reclassifications

Certain amounts in the prior period have been aggregated or disaggregated to conform to current year presentation, as described above for the change in operating segments.

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 March 31, 2021 and December 31, 2020, the Company held redeemable noncontrolling interests of $51 million and $45 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.

11

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

In addition, at March 31, 2021 and December 31, 2020, the Company held a redeemable noncontrolling interest of $36 million and $33 million which was probable of becoming redeemable. This noncontrolling interest is also presented in the temporary equity section of the Company’s condensed consolidated balance sheets and has been remeasured to its 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). This redeemable noncontrolling interest represents a 9.5% ownership interest in Öhlins Intressenter AB (the “KÖ Interest”) 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. During the three months ended March 31, 2021 and 2020, the Company recognized an increase of $5 million and $15 million to the carrying value of this noncontrolling interest.

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 three months ended March 31, 2020. Refer to Note 17, “Related Party Transactions”, for additional information related to the tender offer of this noncontrolling interest.

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

	Three Months Ended March 31,
	2021		2020
Balance at beginning of period	$	78	$	196
Net income (loss) attributable to redeemable noncontrolling interests	7		(4)
Other comprehensive income (loss)	(3)		(7)
Noncontrolling interest tender offer redemption	—		(46)
Redemption value measurement adjustment	5		15
Reclassification of noncontrolling interest to permanent equity	—		(82)
Balance at end of period	$	87	$	72

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 as follows:

	Three Months Ended March 31,
	2021	2020
Weighted average shares of common stock outstanding	81,953,133	81,168,562
Effect of dilutive securities:
PSUs and RSUs	570,996	—
Dilutive shares outstanding	82,524,129	81,168,562

For the three months ended March 31, 2021 and 2020, the calculation of diluted earnings (loss) per share excluded 2,075,446 and 1,610,556 of share-based awards, as the effect on the calculation would have been anti-dilutive.

3. Acquisitions and Divestitures

Assets Held for Sale

At March 31, 2021 and December 31, 2020, the Company had $12 million and $15 million of property, plant, and equipment, primarily land and buildings and non-core machinery and equipment across multiple segments that are expected to be sold in the next twelve months and have been classified as held for sale. The assets held for sale are recorded in “Prepayments and other current assets” in the condensed consolidated balance sheets at March 31, 2021 and December 31, 2020.

12

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

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. For the three months ended March 31, 2021 and 2020, restructuring charges, net and asset impairments by segment are as follows:

	Three Months Ended March 31, 2021
	Motorparts		Performance Solutions		Clean Air		Powertrain		Corporate		Total
Severance and other charges, net	$	2	$	4	$	9	$	10	$	—	$	25
Total restructuring charges, asset impairments, and other	$	2	$	4	$	9	$	10	$	—	$	25

	Three Months Ended March 31, 2020
	Motorparts		Performance Solutions		Clean Air		Powertrain		Corporate		Total
Severance and other charges, net	$	2	$	6	$	—	$	1	$	4	$	13
Other non-restructuring asset impairments	—		455		—		—		16		471
Total restructuring charges, asset impairments, and other	$	2	$	461	$	—	$	1	$	20	$	484

Severance and other charges, net

Three-months ended March 31, 2021

The Company initiated several cost reduction initiatives across all segments and regions aimed at optimizing the Company’s cost structure. The Company recognized cash severance and other charges of $17 million expected to be paid under these programs during the three months ended March 31, 2021. The Company also recognized severance and other charges of $11 million related to plant consolidations, relocations, and closures during the three months ended March 31, 2021.

In response to the COVID-19 global pandemic, the Company announced Project Accelerate and executed global headcount reductions. The Company began implementing these actions during the second quarter of 2020 and expects to complete them during 2021. The Company recognized a reduction of $3 million in revisions to estimates in connection with the cash severance costs expected to be paid in connection with these actions during the three months ended March 31, 2021.

Motorparts recognized severance and other charges related to restructuring actions for the three months ended March 31, 2021 of $2 million in connection with its supply chain rationalization and distribution network initiative to achieve efficiencies and improve throughput to its customers in North America.

Performance Solutions recognized severance and other charges for the three months ended March 31, 2021 of $4 million in connection with the other cost reduction initiatives primarily in Europe.

Clean Air recognized severance and other charges, and revisions to estimates for the three months ended March 31, 2021 as follows:

•$15 million in severance and other charges, along with a reduction of $5 million in revisions to estimates, in connection with the other cost reduction initiatives primarily in Europe;

•$2 million in severance and other charges related to plant consolidations and closures primarily in North America and Asia Pacific; and

•$3 million reduction in severance and other charges due to a revision in estimates in connection with Project Accelerate.

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TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Powertrain recognized severance and other charges, and revisions to estimates for the three months ended March 31, 2021 as follows:

•$1 million reduction in severance and other charges due to a revision in estimates in connection with the other cost reduction initiatives primarily in Europe;

•$9 million in severance and other charges related to plant consolidations, relocations, and closures, primarily in Europe and North America; and

•$2 million restructuring costs incurred related to an approved voluntary termination program at one of its European bearings plants aimed at reducing headcount. Restructuring and related charges expected to be incurred in 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.

Three-months ended March 31, 2020

The Company recognized cash severance and other charges of $7 million expected to be paid for cost reduction initiatives during the three months ended March 31, 2020. The Company also recognized severance and other charges of $6 million related to plant consolidations, relocations, and closures during the three months ended March 31, 2020.

Motorparts recognized severance and other charges related to restructuring actions for the three months ended March 31, 2020 as follows:

•$1 million in severance and other charges in connection with the other cost reduction initiatives primarily in Asia Pacific; and

•$1 million in severance and other charges related to plant consolidations, relocations, and closures primarily in Europe.

Performance Solutions recognized severance and other charges, and revisions to estimates for the three months ended March 31, 2020 of $7 million in severance and other charges, along with a reduction of $1 million in revisions to estimates, in connection with previously announced plant consolidations, relocations, and closures, primarily in North America.

Powertrain recognized severance and other charges and revisions to estimates related to restructuring actions for the three months ended March 31, 2020 as follows:

•$2 million in severance and other charges in connection with the other cost reduction initiatives primarily in Europe; and

•$1 million reduction in severance and other charges due to a revision in estimates related to plant consolidations, relocations, and closures, primarily North America.

The Company also incurred $4 million in cash severance costs for the elimination of certain redundant positions within its corporate component for the three months ended March 31, 2020.

Restructuring reserve rollforward

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

	Reportable Segments
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total Reportable Segments		Corporate		Total
Balance at December 31, 2020	$	14	$	18	$	25	$	42	$	99	$	1	$	100
Provisions	2		4		17		11		34		—		34
Revisions to estimates	—		—		(8)		(1)		(9)		—		(9)
Payments	(4)		(5)		(6)		(9)		(24)		(1)		(25)
Foreign currency	—		(1)		—		—		(1)		—		(1)
Balance at March 31, 2021	$	12	$	16	$	28	$	43	$	99	$	—	$	99

14

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

	Reportable Segments
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total Reportable Segments		Corporate		Total
Balance at December 31, 2019	$	16	$	23	$	23	$	30	$	92	$	9	$	101
Provisions	2		7		—		2		11		4		15
Revisions to estimates	—		(1)		—		(1)		(2)		—		(2)
Payments	(4)		(9)		(4)		(4)		(21)		(9)		(30)
Foreign currency	—		(1)		—		—		(1)		—		(1)
Balance at March 31, 2020	$	14	$	19	$	19	$	27	$	79	$	4	$	83

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

	Three Months Ended March 31, 2021						Three Months Ended March 31, 2020
	Employee Costs		Facility Closure and Other Costs		Total		Employee Costs		Facility Closure and Other Costs		Total
Balance at beginning of period	$	99	$	1	$	100	$	97	$	4	$	101
Provisions	31		3		34		10		5		15
Revisions to estimates	(9)		—		(9)		(2)		—		(2)
Payments	(21)		(4)		(25)		(23)		(7)		(30)
Foreign currency	(1)		—		(1)		(1)		—		(1)
Balance at end of period	$	99	$	—	$	99	$	81	$	2	$	83

Asset impairments

Other non-restructuring asset impairments

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 Performance Solutions 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 three months ended March 31, 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, during the first quarter of 2020, 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 $16 million during the three months ended March 31, 2020, consisting of $11 million of property, plant, and equipment and $5 million of operating lease right-of-use assets, included in “Other assets” within the condensed consolidated balance sheets.

5. Inventories

At March 31, 2021 and December 31, 2020, inventory by major classification was as follows:

	March 31, 2021		December 31, 2020
Finished goods	$	801	$	758
Work in process	492		449
Raw materials	442		441
Materials and supplies	95		95
Total inventories	$	1,830	$	1,743

15

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

6. Goodwill and Other Intangible Assets

As discussed in Note 2, “Summary of Significant Accounting Policies”, beginning in the first quarter of 2021, the Company moved a reporting unit within the Powertrain segment to the Ride Performance segment and Ride Performance was renamed Performance Solutions. Refer to Note 16, “Segment Information” for further information.

At March 31, 2021 and December 31, 2020, goodwill consists of the following:

	Three Months Ended March 31, 2021
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total
Gross carrying amount at December 31, 2020	$	623	$	549	$	23	$	59	$	1,254
Foreign exchange	—		(3)		—		—		(3)
Gross carrying amount at March 31, 2021	623		546		23		59		1,251
Accumulated impairment loss at December 31, 2020	(310)		(377)		—		(59)		(746)
Foreign exchange	—		3		—		—		3
Accumulated impairment loss at March 31, 2021	(310)		(374)		—		(59)		(743)
Net carrying value at March 31, 2021	$	313	$	172	$	23	$	—	$	508

The following table shows a summary of the number of reporting units with a net carrying value of goodwill in each segment at March 31, 2021 and whether or not the reporting unit’s fair value exceeds its carrying value by more or less than 25% based on each respective reporting units most recent goodwill impairment analysis:

	Segments
	Motorparts		Performance Solutions		Clean Air
Number of reporting units with goodwill	1		2		3
Number of reporting units where fair value exceeds carrying value:
Greater than 25%	1		1		3
Less than 25%	—		1		—
Goodwill for reporting units where fair value exceeds carrying value:
Greater than 25%	$	313	$	7	$	23
Less than 25%	—		165		—
	$	313	$	172	$	23

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 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 Motorparts, Performance Solutions, and Powertrain 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 three months ended March 31, 2020, which represented full impairments of the goodwill in one reporting unit in the Performance Solutions segment and one reporting unit in the Powertrain segment, and partial impairments of goodwill in one reporting unit in the Motorparts segment and one reporting unit in the Performance Solutions segment.

16

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

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 Motorparts and Performance Solutions segments. It was determined that 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 three months ended March 31, 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 Performance Solutions segment and one of the reporting units in the Motorparts segment.

As discussed in more detail in Note 4, “Restructuring Charges, Net and Asset Impairments”, the Company concluded impairment triggers had occurred during the first quarter of 2020 for certain long-lived asset groups within the Performance Solutions 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 two reporting units.

Impairment charges for goodwill and intangible assets recognized by segment during the three months ended March 31, 2020 consist of the following:

	Three Months Ended March 31, 2020
	Motorparts		Performance Solutions		Powertrain		Total
Goodwill impairment charges	$	70	$	156	$	41	$	267
Trade names and trademarks intangible asset impairment charges	40		11		—		51
Definite-lived intangible asset impairment charges	—		65		—		65
	$	110	$	232	$	41	$	383

At March 31, 2021 and December 31, 2020, the Company’s intangible assets consist of the following:

		March 31, 2021						December 31, 2020
	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	$	993	$	(304)	$	689	$	995	$	(282)	$	713
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	136		(53)		83		139		(51)		88
Packaged kits know-how	10 years	54		(14)		40		54		(12)		42
Catalogs	10 years	47		(12)		35		47		(11)		36
Licensing agreements	3 to 5 years	65		(38)		27		66		(35)		31
Land use rights	28 to 46 years	49		(5)		44		49		(4)		45
		$	1,353	$	(433)	920		$	1,359	$	(402)	957
Indefinite-lived intangible assets:
Trade names and trademarks						234						237
Total						$	1,154					$	1,194

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

	Three Months Ended March 31,
	2021		2020
Amortization expense	$	32	$	34

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

	2021		2022		2023		2024		2025		2026 and thereafter		Total
Expected amortization expense	$	97	$	125	$	122	$	114	$	114	$	348	$	920

17

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

7. Investment in Nonconsolidated Affiliates

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

	March 31, 2021		December 31, 2020
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. (U.S.)	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 March 31, 2021 and December 31, 2020 is as follows:

	March 31, 2021		December 31, 2020
Investments in nonconsolidated affiliates	$	532	$	581

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 $283 million and $287 million at March 31, 2021 and December 31, 2020.

The following table represents the activity from the Company’s investments in its nonconsolidated affiliates for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
Equity in earnings (losses) of nonconsolidated affiliates, net of tax	$	22	$	13
Cash dividends received from nonconsolidated affiliates	$	57	$	13

The following tables present summarized aggregated financial information of the Company’s nonconsolidated affiliates for the three months ended March 31, 2021 and 2020. The amounts represent 100% of the interest in the nonconsolidated affiliates and not the Company’s proportionate share:

	Three Months Ended March 31, 2021
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	102	$	49	$	112	$	263
Gross profit	$	35	$	14	$	22	$	71
Income from continuing operations	$	32	$	14	$	15	$	61
Net income	$	34	$	12	$	10	$	56

	Three Months Ended March 31, 2020
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	84	$	30	$	105	$	219
Gross profit	$	26	$	6	$	20	$	52
Income from continuing operations	$	23	$	7	$	9	$	39
Net income	$	18	$	6	$	6	$	30

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

18

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

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. In certain cases, the Company may or may not designate these derivatives instruments as hedges for accounting 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 globally. 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 to minimize foreign currency risk. Where natural hedges are not in place, the Company considers managing certain aspects of its foreign currency activities and larger transactions through the use of foreign currency options or forward contracts.

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 concentration of credit risk related to derivative contracts at March 31, 2021 and December 31, 2020 is not considered material to the condensed consolidated financial statements.

Derivative Instruments

The Company presents its derivative positions and any related material collateral under master netting agreements on a net basis. Derivative gains and losses associated with undesignated hedges are recognized in “Cost of sales (exclusive of depreciation and amortization)” in the condensed consolidated statements of income (loss).

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. 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 March 31, 2021, all of which mature in the next twelve months:

	Notional Amount
Long positions	$	273
Short positions	$	(276)

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 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 both March 31, 2021 and December 31, 2020, the Company hedged its deferred compensation liability related to approximately 1,700,000 common share equivalents. In addition, the Company has an S&P 500 index fund ETF swap agreement to further reduce its market risk, which acts as a natural hedge offsetting an equivalent amount of indexed investments in the Company's deferred compensation plans. 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.

19

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

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. Commodity rate price forward contracts are executed to offset a portion of the exposure to potential change in prices for raw materials. The Company monitors its commodity price risk exposures regularly to maximize the overall effectiveness of its commodity forward contracts.

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 reclassifying adjustments into “Cost of sales (exclusive of depreciation and amortization)” 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 $17 million and $10 million at March 31, 2021 and December 31, 2020. Substantially all of the commodity price hedge contracts mature within one year. The carrying value of these commodity price hedge contracts designated as cash flow hedges is not considered material to the condensed consolidated financial statements.

Net Investment Hedge — Foreign Currency Borrowings

At December 31, 2020, the Company had foreign currency denominated debt, of which €344 million or $420 million, was designated as a net investment hedge in certain foreign subsidiaries and affiliates of the Company and is included in “Long-term debt” in the condensed consolidated balance sheets. 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 adjustments on the underlying net assets of those foreign subsidiaries and affiliates, which are also recorded in OCL. All of the outstanding foreign currency borrowings related to the net investment hedge were discharged on March 17, 2021, as a result, there are no outstanding foreign currency borrowings designated as a net investment hedge at March 31, 2021. The Company’s debt instruments are discussed further in Note 10, “Debt and Other Financing Arrangements”.

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 months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
Commodity price hedge contracts designated as cash flow hedges	$	2	$	(3)
Foreign currency borrowings designated as a net investment hedge	$	11	$	14

The Company estimates approximately $3 million included in accumulated OCI or OCL at March 31, 2021 will be reclassified into net income (loss) within the following twelve months. Refer to Note 15, “Shareholders' Equity” for further information.

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

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.

20

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Cash-Settled Share and Index Swap Agreements

The Company’s stock price is used as an observable input (level 2) 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 (level 2) in determining the fair value of this swap agreement. The cash collateral amounts related to these swap agreements were $11 million and $7 million at March 31, 2021 and December 31, 2020, which are included in “Prepayments and other current assets” in the condensed consolidated balance sheets.

The fair value of these derivative instruments at March 31, 2021 and December 31, 2020 is not considered material to the condensed consolidated financial statements.

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 (level 2), 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 these derivative instruments at March 31, 2021 and December 31, 2020 is not considered material to the condensed consolidated financial statements.

Assets and Liabilities Measured at Fair Value on a Nonrecurring 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 three months ended March 31, 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

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 trade names and trademarks had declined 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 trade names and trademarks. The Company believes the assumptions and estimates used to determine the estimated fair values 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.

The basis of the goodwill impairment and indefinite-lived intangible asset analyses is the Company's current forecast of its annual budget and three-year strategic plan. This includes a projection of future cash flows, which requires the Company to make significant assumptions and estimates about the extent and timing of future cash flows and revenue growth rates. These represent Company-specific inputs and assumptions about the use of the assets, as observable inputs are not available (level 3). Due to the many variables inherent in estimating fair value and the relative size of the goodwill and indefinite-lived intangible assets, differences in assumptions could have a material effect on the results of the analyses.

21

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

In the goodwill impairment analysis, for reporting units with goodwill, fair values are estimated using a combination of the income approach and market approach. The Company applies a 75% weighting to the income approach and a 25% weighting to the market approach. The most significant inputs in estimating the fair value of the Company's reporting units under the income approach are (i) projected operating margins, (ii) the revenue growth rate, and (iii) the discount rate, which is risk-adjusted based on the aforementioned inputs.

For the indefinite-lived asset impairment analysis, the fair value is based upon the prospective stream of hypothetical after-tax royalty cost savings discounted at rates that reflect the rates of return appropriate for these intangible assets. The primary, and most sensitive, inputs utilized in determining fair values of trade names and trademarks are (i) projected branded product sales, (ii) the revenue growth rate, (iii) the royalty rate, and (iv) the discount rate, which is risk-adjusted based on the projected branded sales.

Refer to Note 6, “Goodwill and Other Intangible Assets”, for additional information on the goodwill and indefinite-lived intangible asset impairments.

Financial Instruments Not Carried at Fair Value

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

		March 31, 2021				December 31, 2020
	Fair value hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt (including current maturities):
Term loans and senior notes	Level 2	$	5,094	$	5,159	$	5,153	$	5,138

The fair value of the Company’s public senior notes and private borrowings under its New Credit Facility, as subsequently defined in Note 10, “Debt and Other Financing Arrangements”, is based on observable inputs, and any borrowings on the revolving credit facility approximate fair value. The Company also had $141 million and $180 million at March 31, 2021 and December 31, 2020 in other debt whose carrying value approximates fair value, which consists primarily of foreign debt with maturities of one year or less.

22

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 March 31, 2021 and December 31, 2020 is set forth in the following table:

	March 31, 2021				December 31, 2020
	Principal		Carrying Amount (a)		Principal		Carrying Amount (a)
Credit Facilities
Revolver Borrowings
Due 2023	$	—	$	—	$	—	$	—
Term Loans
LIBOR plus 2.25% Term Loan A due 2019 through 2023(b)	1,498		1,490		1,530		1,520
LIBOR plus 3.00% Term Loan B due 2019 through 2025	1,662		1,610		1,666		1,612
Senior Unsecured Notes
$225 million of 5.375% Senior Notes due 2024	225		223		225		223
$500 million of 5.000% Senior Notes due 2026	500		495		500		494
Senior Secured Notes
€300 million of Euribor plus 4.875% Euro Floating Rate Notes due 2024(c)	—		—		366		370
€350 million of 5.000% Euro Fixed Rate Notes due 2024(c)	—		—		428		445
$500 million of 7.875% Senior Secured Notes due 2029	500		490		500		489
$800 million of 5.125% Senior Secured Notes due 2029(d)	800		786		—		—
Other debt, primarily foreign instruments	24		23		24		23
			5,117				5,176
Less - maturities classified as current			6				5
Total long-term debt			$	5,111			$	5,171

(a)Carrying amount is net of unamortized debt issuance costs and debt discounts or premiums. Total unamortized debt issuance costs were $92 million and $82 million at March 31, 2021 and December 31, 2020. Total unamortized debt (premium) discount, net was $1 million and $(20) million at March 31, 2021 and December 31, 2020.

(b)The interest rate on Term Loan A at December 31, 2020 was LIBOR plus 2.50%.

(c)The Company satisfied and discharged all of its 4.875% Euro Floating Rate Notes due 2024 and 5.000% Euro Fixed Rate Notes due 2024 on March 17, 2021.

(d)On March 17, 2021, the Company issued $800 million aggregate principal amount of 5.125% senior secured notes due April 15, 2029. Interest payable semiannually on April 15 and October 15 of each year beginning on October 15, 2021 with principal due at maturity.

The Company has a senior credit facility under the credit agreement dated October 1, 2018 (as amended, restated, supplemented or otherwise modified, the “New Credit Facility”) that 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”). 

Short-Term Debt

The Company’s short-term debt at March 31, 2021 and December 31, 2020 consists of the following:

	March 31, 2021		December 31, 2020
Maturities classified as current	$	6	$	5
Short-term borrowings(a)	118		157
Total short-term debt	$	124	$	162

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

23

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 months ended March 31, 2021 and 2020 is as follows:

	Three Months Ended March 31,
	2021		2020
Amortization of debt issuance fees(a)	$	6	$	5
Accretion of debt premium	$	(2)	$	(3)

(a)Included in the table above is the amortization of debt issuance costs on the revolver of $2 million and $1 million during the three months ended March 31, 2021 and 2020.

Credit Facilities

Financing Arrangements

The table below shows the Company’s borrowing capacity on committed credit facilities at March 31, 2021 (in billions):

	March 31, 2021
	Term	Available(b)
Tenneco Inc. revolving credit facility(a)	2023	$	1.5
Tenneco Inc. Term Loan A	2023	—
Tenneco Inc. Term Loan B	2025	—
Subsidiaries’ credit agreements	2021 - 2028	—
		$	1.5

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

(b)At March 31, 2021, the Company had $28 million of outstanding letters of credit under the revolving credit facility, which reduces the available borrowings under the revolving credit facility. The Company also had $74 million of outstanding letters of credit under uncommitted facilities at March 31, 2021.

At March 31, 2021, the Company had liquidity of $2.1 billion comprised of $631 million of cash and $1.5 billion undrawn on its revolving credit facility. The Company had no outstanding borrowings on its revolving credit facility at March 31, 2021.

At March 31, 2021 and December 31, 2020, the unamortized debt issuance costs related to the revolver of $15 million and $17 million are included in “Other assets” in the condensed consolidated balance sheets.

Term Loans

New Credit Facility — Interest Rates and Fees

At March 31, 2021, after giving effect to the third amendment to the New Credit Facility dated May 5, 2020 (the “Third Amendment”), the interest rate on borrowings under the revolving credit facility and the Term Loan A facility was LIBOR plus 2.25% and, prior to the occurrence of certain covenant reset triggers (“Covenant Reset Triggers”), will remain at LIBOR plus 2.25% for each relevant period for which the Company's consolidated net leverage ratio (as defined in the New Credit Facility) is less than 6.0 to 1 and greater than 4.5 to 1. The interest rate on borrowings under the revolving credit facility and the Term Loan A facility are subject to step down as follows:

Consolidated net leverage ratio	Interest rate
greater than 3.0 to 1	LIBOR plus 2.00%
less than 3.0 to 1 and greater than 2.5 to 1	LIBOR plus 1.75%
less than 2.5 to 1 and greater than 1.5 to 1	LIBOR plus 1.50%
less than 1.5 to 1	LIBOR plus 1.25%

24

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

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

The New Credit Facility contains representations and warranties, and covenants which are customary for debt facilities of this type. The Third Amendment provided relief from the financial maintenance covenants for the revolving credit facility and Term Loan A facility subject to the non-occurrence of certain Covenant Reset Triggers that limit certain activities of the Company by implementing more restrictive affirmative and negative covenants. After giving effect to the Third Amendment, the financial maintenance covenants for the revolving credit facility and the Term Loan A facility 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 8.75 to 1	at December 31, 2020	not greater than 5.25 to 1	at March 31, 2022
not greater than 8.25 to 1	at March 31, 2021	not greater than 4.75 to 1	at June 30, 2022
not greater than 4.50 to 1	at June 30, 2021	not greater than 4.25 to 1	at September 30, 2022
not greater than 4.25 to 1	at September 30, 2021	not greater than 3.75 to 1	thereafter
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 1.50 to 1 through March 31, 2021, and 2.75 to 1 thereafter.

If a Covenant Reset Trigger occurs, the financial maintenance covenants for the revolving credit facility and the Term Loan A facility revert back to the previous financial maintenance covenants in effect immediately prior to the Third Amendment (the “Prior Financial Covenants”), including (i) a requirement to have a consolidated net leverage ratio (as defined in the New Credit Facility), at the end of each fiscal quarter, with step-downs, as follows:

(i) Consolidated net leverage ratio
not greater than 4.50 to 1	through March 31, 2021
not greater than 4.25 to 1	through September 30, 2021
not greater than 4.00 to 1	through March 31, 2022
not greater than 3.75 to 1	through September 30, 2022
not greater than 3.50 to 1	thereafter

and (ii) 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 2.75 to 1.

In addition, the Company may make a one-time election to revert back to the Prior Financial Covenants and terminate the applicability of the Covenant Reset Triggers upon delivery of a covenant reset certificate to the administrative agent under the New Credit Facility that attests to compliance with the Prior Financial Covenants as of the end of the relevant fiscal period (“Covenant Reset Certificate”).

25

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

At March 31, 2021, the Company was in compliance with all the financial covenants of the New Credit Facility.

Senior Notes

At March 31, 2021, 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 also has outstanding 7.875% senior secured notes due January 15, 2029 (“7.875% Senior Secured Notes”) which were issued on November 30, 2020, and 5.125% senior secured notes due April 15, 2029 (“5.125% Senior Secured Notes”) which were issued on March 17, 2021. The 7.875% Senior Secured Notes and 5.125% Senior Secured Notes (collectively, the “Senior Secured Notes”) were outstanding at March 31, 2021.

On March 3, 2021, the Company provided notice of its intention to redeem all of the outstanding 5.000% euro denominated senior secured notes due July 15, 2024 (the “2024 Fixed Rate Secured Notes”) and all of the outstanding floating rate euro denominated senior secured notes due April 15, 2024 (the “2024 Floating Rate Secured Notes” and, together with the 2024 Fixed Rate Secured Notes, the “2024 Secured Notes”). On March 17, 2021, the Company using the net proceeds of the offering of 5.125% Senior Secured Notes, together with cash on hand, satisfied and discharged each of the indentures governing the 2024 Secured Notes in accordance with their terms. As a result, the Company recorded a gain on extinguishment of debt of $8 million for the three months ended March 31, 2021.

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 its subsidiaries to create liens on their assets and enter into sale and leaseback transactions. In addition, the indentures governing the Senior Secured Notes and the 2024 Senior 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 the Company’s operations, including limitations on: (i) incurring additional indebtedness; (ii) paying dividends; (iii) distributions and stock repurchases; (iv) investments; (v)  asset sales; (vi) entering into transactions with the Company’s affiliates; and (vii) undertaking 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 Unsecured Notes and Senior Secured Notes to make distributions to the Company.

At March 31, 2021, the Company was in compliance with all of its financial covenants under the indentures governing the Senior Unsecured Notes and Senior Secured Notes.

Other Debt

Other debt consists primarily of subsidiary debt.

Factoring Arrangements

In the Company'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.

At March 31, 2021 and December 31, 2020, the amount of accounts receivable outstanding and derecognized for factoring arrangements was $1.0 billion and $1.0 billion, of which $0.5 billion and $0.4 billion relate to accounts receivable where the Company has continuing involvement. In addition, the deferred purchase price receivable was $69 million and $51 million at March 31, 2021 and December 31, 2020.

26

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

For the three months ended March 31, 2021 and 2020, proceeds from the factoring of accounts receivable qualifying as sales was $1.3 billion and $1.2 billion, of which $1.1 billion and $1.1 billion were received on accounts receivable where the Company has continuing involvement.

For the three months ended March 31, 2021 and 2020, the Company’s financing charges associated with the factoring of receivables, which are included in “Interest expense” in the condensed consolidated statements of income (loss), was $4 million and $6 million.

If the Company were not able to factor receivables under these programs, its borrowings under its revolving credit agreement might increase. These programs provide the Company with access to cash at costs that are generally favorable to alternative sources of financing and allow the Company to reduce borrowings under its revolving credit agreement.

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 costs (credits) for the three months ended March 31, 2021 and 2020 are as follows:

	Three Months Ended March 31,
	Pension Benefits								Other Postretirement Benefits
	2021				2020
	U.S.		Non-U.S.		U.S.		Non-U.S.		2021		2020
Service cost	$	—	$	7	$	—	$	6	$	—	$	—
Interest cost	8		4		10		4		1		2
Expected return on plan assets	(16)		(4)		(16)		(4)		—		—
Net amortization:
Actuarial loss	3		2		2		2		1		1
Prior service cost (credit)	—		—		—		—		(2)		(2)
Net pension and postretirement costs (credits)	$	(5)	$	9	$	(4)	$	8	$	—	$	1

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 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. The Company considers both positive and negative evidence and 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, reversals of existing taxable temporary differences, and tax planning strategies. In making such judgments, significant weight is given to evidence that can be objectively verified.

For the three months ended March 31, 2021, the Company recorded an income tax expense of $47 million on income from continuing operations before income taxes of $134 million. This compares to an income tax benefit of $94 million on loss from continuing operations before income taxes of $920 million in the three months ended March 31, 2020.

Income tax expense for the three months ended March 31, 2021 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 benefits.

27

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Income tax expense for the three months ended March 31, 2020 differs from the U.S. statutory rate due primarily to $105 million of tax benefit recognized relating to the asset impairment charges of $854 million, pre-tax income taxed at rates higher than the U.S. statutory rate, and pre-tax losses with no tax benefits.

The Company received notification in the first quarter of 2021 that its U.S. tax refund claim is approved and the tax years through 2016 are now effectively settled. The Company believes it is reasonably possible up to $44 million in unrecognized tax benefits related to the expiration of statute of limitations and the conclusion of income tax examinations may be recognized within the next twelve months. The Company has released $54 million of unrecognized tax benefits with a corresponding adjustment of $54 million to the Company’s valuation allowance as a result of the conclusion of income tax examinations in the first quarter of 2021.

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 that 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 actively seeking to resolve these actual and potential statutory, regulatory, and contractual obligations.

The Company expenses or capitalizes, as appropriate, expenditures for ongoing compliance with environmental regulations. At March 31, 2021, 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 at March 31, 2021 and December 31, 2020 as follows:

	March 31, 2021		December 31, 2020
Accrued expenses and other current liabilities	$	8	$	8
Deferred credits and other liabilities	25		26
	$	33	$	34

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

	2021		2022		2023		2024		2025		2026 and thereafter
Expected payments	$	5	$	5	$	2	$	2	$	2	$	14

28

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

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.

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 approximately 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.

29

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

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 March 31, 2021 and December 31, 2020 are as follows:

	March 31, 2021		December 31, 2020
Accrued expenses and other current liabilities	$	2	$	2
Deferred credits and other liabilities	12		12
	$	14	$	14

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 accounts for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
Balance at beginning of period	$	62	$	54
Accruals related to product warranties	14		3
Reductions for payments made	(8)		(6)
Foreign currency	(1)		—
Balance at end of period	$	67	$	51

30

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” in the condensed consolidated statements of income (loss). Total share-based compensation expense for the three months ended March 31, 2021 and 2020 is as follows:

	Three Months Ended March 31,
	2021		2020
Cash-settled share-based compensation expense	$	4	$	—
Share-settled share-based compensation expense	5		2
	$	9	$	2

Cash-Settled Awards

The Company has granted restricted stock units (“RSUs”) and performance share units (“PSUs”) 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 complete requisite period up until date of settlement.

Share-Settled Awards

The following table reflects the status of all share-settled RSUs and PSUs for the three months ended March 31, 2021:

	Share-Settled RSUs			Share-Settled PSUs
	Units	Weighted Avg. Grant Date Fair Value		Units	Weighted Avg. Grant Date Fair Value
Nonvested balance at beginning of period	2,118,605	$	26.00	527,105	$	36.37
Granted	2,023,782	10.60		—	—
Vested	(654,878)	32.69		(57,794)	49.18
Forfeited	(54,096)	25.90		(125,158)	47.48
Nonvested balance at end of period	3,433,413	$	15.06	344,153	$	24.60

15. Shareholders' Equity

Common Stock

Common Stock Outstanding

The Company has authorized 175,000,000 shares ($0.01 par value) of Class A Common Stock at March 31, 2021 and December 31, 2020. The Company has authorized 25,000,000 shares ($0.01 par value) of Class B Common Stock at March 31, 2021 and December 31, 2020.

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

	Class A Common Stock		Class B Common Stock
	Three Months Ended March 31,		Three Months Ended March 31,
	2021	2020	2021	2020
Shares issued at beginning of period	75,714,163	71,727,061	20,308,454	23,793,669
Issued pursuant to benefit plans	786,575	450,175	—	—
Withheld for taxes pursuant to benefit plans	(247,508)	(119,644)	—	—
Class B common stock converted to Class A common stock	17,232,791	—	(17,232,791)	—
Shares issued at end of period	93,486,021	72,057,592	3,075,663	23,793,669
Treasury stock	14,592,888	14,592,888	—	—
Total shares outstanding	78,893,133	57,464,704	3,075,663	23,793,669

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TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Class B Common Stock Conversion

During the first quarter of 2021, Icahn Enterprises L.P. (“IEP”) and its affiliates converted 17,232,791 shares of the Company’s Class B Common Stock into 17,232,791 shares of Class A Common Stock. As of March 31, 2021, IEP held 9,589,751 shares, or approximately 12.16%, of the Company’s outstanding Class A Common Stock and 3,075,663 shares of the Company’s outstanding Class B Common Stock.

Subsequent to March 31, 2021, IEP and its affiliates converted the remaining 3,075,663 shares of the Company's Class B Common Stock outstanding at March 31, 2021 into 3,075,663 shares of Class A Common Stock. Based on information contained in filings with the SEC, as of May 3, 2021, IEP and its affiliates hold 10,359,643 shares, or approximately 12.64% of the Company’s outstanding Class A Common Stock.

Shareholder Agreement

In connection with the closing of the Federal-Mogul acquisition, on October 1, 2018, the Company, American Entertainment Properties Corporation, IEP, and Icahn Enterprises Holdings L.P. entered into a Shareholders Agreement (the “Shareholders Agreement”). IEP’s representative to the Company's Board of Directors under the Shareholders Agreement submitted his resignation effective June 10, 2020.

The Shareholders Agreement contains certain standstill and voting obligations applicable to IEP and its affiliates, which expired on April 1, 2020. In addition, IEP and its affiliates were prohibited from acquiring, offering to acquire, or agreeing to acquire, directly or indirectly, any shares of Class A Common Stock or other securities until April 1, 2021.

Until the later of (i) the expiration of the standstill restrictions referenced above and (ii) the time when IEP and its affiliates cease to own at least 10% of the outstanding shares, IEP and its affiliates may not transfer any shares (a) to certain specified types of investors and (b) in an amount equal to 5% or more of the Class A Common Stock issued and outstanding at the time of such transfer (subject to certain exceptions).

For so long as IEP and its affiliates own at least 10% of the outstanding shares, if the Company proposes to issue any equity securities (other than in an excluded issuance), IEP and its affiliates have certain preemptive rights. The Shareholders Agreement also includes registration rights for IEP.

Share Repurchase Program

The Company presently has no share repurchase program in place.

Preferred Stock

The Company had 50,000,000 shares of preferred stock ($0.01 par value) authorized at both March 31, 2021 and December 31, 2020. No shares of preferred stock were issued or outstanding at those dates.

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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 months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
Foreign currency translation adjustments:
Balance at beginning of period	$	(395)	$	(369)
Other comprehensive income (loss) before reclassifications	(46)		(199)
Reclassification from other comprehensive income (loss)	—		—
Other comprehensive income (loss)	(46)		(199)
Income tax benefit (provision)	—		—
Balance at end of period	(441)		(568)
Defined benefit plans:
Balance at beginning of period	(353)		(342)
Other comprehensive income (loss) before reclassifications	4		—
Reclassification from other comprehensive income (loss)	—		3
Other comprehensive income (loss)	4		3
Income tax benefit (provision)	(1)		1
Balance at end of period	(350)		(338)
Cash flow hedges:
Balance at beginning of period	4		—
Other comprehensive income (loss) before reclassifications	2		(3)
Reclassification from other comprehensive income (loss)	(4)		—
Other comprehensive income (loss)	(2)		(3)
Income tax benefit (provision)	—		1
Balance at end of period	2		(2)
Accumulated other comprehensive loss at end of period	$	(789)	$	(908)
Other comprehensive income (loss) attributable to noncontrolling interests	$	(6)	$	(20)

33

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

16. Segment Information

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

Beginning in the first quarter of 2021, the Company made a change to its operating segments. This change consisted of moving a reporting unit within the Powertrain segment to the Ride Performance segment to align with a change in how the CODM allocates resources and assesses performance against the Company’s key growth strategies. In addition, with this change to its segments, Ride Performance was renamed Performance Solutions. As such, prior period operating segment results and related disclosures have been conformed to reflect the Company's current operating segments.

Management uses EBITDA including noncontrolling interests as the key performance measure of segment profitability and uses the measure in its financial and operational decision-making processes, for internal reporting, and for planning and forecasting purposes to effectively allocate resources. EBITDA including noncontrolling interests is defined as earnings before interest expense, income taxes, noncontrolling interests, and depreciation and amortization. Segment assets are not presented as it is not a measure reviewed by the CODM 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 months ended March 31, 2021 and 2020 are as follows:

	Reportable Segments
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total		Reclass & Elims		Total
For the Three Months Ended March 31, 2021
Revenues from external customers	$	719	$	787	$	2,124	$	1,101	$	4,731	$	—	$	4,731
Intersegment revenues	$	9	$	26	$	6	$	47	$	88	$	(88)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	3	$	1	$	—	$	18	$	22	$	—	$	22
For the Three Months Ended March 31, 2020
Revenues from external customers	$	706	$	669	$	1,545	$	916	$	3,836	$	—	$	3,836
Intersegment revenues	$	9	$	29	$	6	$	38	$	82	$	(82)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	2	$	—	$	—	$	11	$	13	$	—	$	13

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 March 31,
	2021		2020
EBITDA including noncontrolling interests by segment:
Motorparts	$	102	$	(40)
Performance Solutions	43		(674)
Clean Air	149		99
Powertrain	115		27
Total reportable segments	409		(588)
Corporate	(50)		(86)
Depreciation and amortization	(155)		(171)
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	204		(845)
Interest expense	(70)		(75)
Income tax (expense) benefit	(47)		94
Net income (loss)	$	87	$	(826)

34

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

Disaggregated Revenue

Original Equipment

Value-Added Sales

OE revenue is generated from providing OE 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 Performance Solutions segment have been reclassified from OE - Value add to Aftermarket to conform with the current year presentation. This reclassification affected the three months ended March 31, 2020. In the following tables, revenue is disaggregated accordingly:

	Reportable Segments
By Customer Type	Motorparts		Performance Solutions		Clean Air		Powertrain		Total
Three Months Ended March 31, 2021
OE - Substrate	$	—	$	—	$	1,088	$	—	$	1,088
OE - Value add	—		768		1,036		1,101		2,905
Aftermarket	719		19		—		—		738
Total	$	719	$	787	$	2,124	$	1,101	$	4,731
Three Months Ended March 31, 2020
OE - Substrate	$	—	$	—	$	700	$	—	$	700
OE - Value add	—		654		845		916		2,415
Aftermarket	706		15		—		—		721
Total	$	706	$	669	$	1,545	$	916	$	3,836

	Reportable Segments
By Geography	Motorparts		Performance Solutions		Clean Air		Powertrain		Total
Three Months Ended March 31, 2021
North America	$	454	$	240	$	851	$	328	$	1,873
Europe, Middle East, Africa and South America	212		355		682		563		1,812
Asia Pacific	53		192		591		210		1,046
Total	$	719	$	787	$	2,124	$	1,101	$	4,731
Three Months Ended March 31, 2020
North America	$	476	$	228	$	704	$	314	$	1,722
Europe, Middle East, Africa and South America	197		319		565		470		1,551
Asia Pacific	33		122		276		132		563
Total	$	706	$	669	$	1,545	$	916	$	3,836

35

TENNECO INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(Unaudited)

17. Related Party Transactions

The following table summarizes the net sales, purchases, and royalty and other income (expense) to and from related parties for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021						2020
	Net Sales		Purchases		Royalty and Other		Net Sales		Purchases		Royalty and Other
Anqing TP Goetze Piston Ring Company Limited	$	—	$	18	$	1	$	4	$	10	$	—
Anqing TP Powder Metallurgy Company Limited	$	1	$	—	$	—	$	1	$	1	$	—
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	1	$	9	$	—	$	1	$	2	$	—
Federal-Mogul Powertrain Otomotiv A.S.	$	10	$	76	$	3	$	12	$	59	$	4
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti.	$	—	$	—	$	—	$	—	$	1	$	—
Federal-Mogul TP Liners, Inc.	$	4	$	12	$	—	$	4	$	12	$	—
Icahn Automotive Group LLC	$	31	$	—	$	1	$	33	$	—	$	1
Montagewerk Abgastechnik Emden GmbH	$	4	$	—	$	—	$	3	$	—	$	—
PSC Metals, Inc.	$	—	$	—	$	1	$	—	$	—	$	—

The following table is a summary of amounts due to and from the Company's related parties at March 31, 2021 and December 31, 2020:

	March 31, 2021				December 31, 2020
	Receivables		Payables and Accruals		Receivables		Payables and Accruals
Anqing TP Goetze Piston Ring Company Limited	$	2	$	27	$	3	$	26
Anqing TP Powder Metallurgy Company Limited	$	—	$	1	$	1	$	1
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	1	$	10	$	—	$	3
Federal-Mogul Powertrain Otomotiv A.S.	$	7	$	38	$	10	$	49
Federal-Mogul TP Liners, Inc.	$	2	$	6	$	2	$	7
Icahn Automotive Group LLC	$	39	$	8	$	47	$	9
Montagewerk Abgastechnik Emden GmbH	$	2	$	—	$	1	$	—
PSC Metals, Inc.	$	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 IEH Auto Parts LLC and Pep Boys—Manny, Moe & Jack.

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 three months ended March 31, 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 three months ended March 31, 2020. Refer to Note 2, “Summary of Significant Accounting Policies”, for further information on this noncontrolling interest.

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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 March 31, 2021 financial results are to March 31, 2020 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, 2020, which was filed with the Securities and Exchange Commission (“SEC”) on February 24, 2021 (the “2020 Form 10-K”).

EXECUTIVE OVERVIEW

Our Business

We design, manufacture, market, and distribute products and services for light vehicle, commercial truck, off-highway, industrial, motorsport, and aftermarket customers. We manufacture innovative performance solutions, clean air, and powertrain products and systems, and serve both original equipment (“OE”) manufacturers and the repair and replacement markets worldwide. We supply OE parts to vehicle manufacturers for use in light vehicles, commercial vehicles, and other mobility markets; and the global aftermarket with replacement parts that are sold to wholesalers, retailers, and installers, as well as original equipment service (“OES”) parts to OE customers to support their service channels. We serve our customers through leading brands, including Monroe®, Champion®, Öhlins®, MOOG®, Walker®, Fel-Pro®, Wagner®, Ferodo®, Rancho®, Thrush®, National®, and Sealed Power®, and others.

Factors that continue to be critical to our success include winning new business awards, managing our overall global manufacturing and fulfillment footprint to ensure proper placement and workforce levels in line with business needs, maintaining competitive wages and benefits, maximizing efficiencies in manufacturing processes, positioning the business to adapt to changes in vehicle electrification, 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 managing the availability of materials or 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.

Change in Reportable Segments

Beginning in the first quarter of 2021, we made a change to our operating segments. This change consisted of moving a reporting unit from the Powertrain segment to the Ride Performance segment to align with a change in how our Chief Operating Decision Maker allocates resources and assesses performance against our key growth strategies. With this segment change and our enhanced focus on growth, Ride Performance was renamed Performance Solutions. As such, prior period operating segment results and related disclosures have been conformed to reflect our current operating segments.

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

•The Motorparts segment designs, manufactures, sources, markets, and distributes a broad portfolio of leading brand-name products in the global vehicle aftermarket while also servicing the original equipment servicers market. Motorparts products are organized into categories, including shocks and struts, steering and suspension, braking, sealing, emissions control, engine, and maintenance;

•The Performance Solutions segment designs, manufactures, markets, and distributes a variety of performance solutions and systems to a global OE customer base, including noise, vibration, and harshness performance materials, advanced suspension technologies, ride control, braking, and system protection;

•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 light vehicle, commercial truck, and off-highway OE customers; and

•The Powertrain segment designs, manufactures, and distributes a variety of original equipment powertrain products for light vehicle, commercial truck, off-highway, and industrial applications to OE customers for use in new vehicle production and OES parts to support their service and distribution channels.

Costs related to other business activities, primarily corporate headquarter functions, are disclosed separately from the four operating segments as “Corporate.” See Note 16, “Segment Information”, in our condensed consolidated financial statements located in Part I, Item 1 of this Form 10-Q for additional information.

37

Strategic Alternatives

We are continually evaluating our portfolio and 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. Efforts to optimize shareholder value creation remain focused on operational improvements, reducing structural costs, lowering capital intensity, reducing debt, and growth in targeted business lines.

Financial Results for the Three Months Ended March 31, 2021

Consolidated revenues were $4,731 million, an increase of $895 million, or 23%, for the three months ended March 31, 2021. The primary driver of the increase is higher sales volume and favorable mix of $775 million, largely attributable to the effects of COVID-19 in the prior year. The remaining increase is attributable to the favorable effects of foreign currency exchange of $124 million and the net favorable effects of other of $2 million. The favorable effects were partially offset by the net effects of acquisitions and divestitures contributing a $6 million decrease in revenues, or less than 1%.

Cost of sales were $4,061 million, an increase of $722 million, or 22%, for the three months ended March 31, 2021. The primary driver of the increase is from higher sales volume of $667 million, largely attributable to the effects of COVID-19 in the prior year. The remaining increase is attributable to the unfavorable effects of materials sourcing of $23 million and the unfavorable effects of foreign currency exchange of $116 million. This was partially offset by the decrease in cost of sales of $6 million, or less than 1%, related to the net effects of acquisitions and divestitures and the net favorable effects of other costs of $78 million.

Net income increased by $913 million to a net income of $87 million for the three months ended March 31, 2021 as compared to a net loss of $826 million for the three months ended March 31, 2020. The increase was primarily driven by:

•a decrease in restructuring charges, net and asset impairments of $459 million primarily related to the impairment of long-lived asset groups recognized during the three months ended March 31, 2020 triggered by the effects of the COVID-19 global pandemic on the Company’s projected financial information, and global headcount and cost reduction initiatives;

•a decrease in goodwill and intangible impairment charges of $383 million, which was comprised of $267 million of goodwill impairment charges, $65 million of definite-lived intangible asset impairments, and $51 million of indefinite-lived intangible asset impairments recognized during the three months ended March 31, 2020;

•a non-cash gain on extinguishment of debt of $8 million, which was recognized during the three months ended March 31, 2021 related to the discharge of the 4.875% euro floating rate notes due 2024 and 5.000% euro fixed rate notes due 2024; and

•a decrease in interest expense of $5 million primarily attributable to lower interest rates on variable rate debt. This includes a decrease of $2 million in financing charges on sales of accounts receivable during the three months ended March 31, 2021.

These favorable effects were partially offset by an increase in income tax expense of $141 million to an income tax expense of $47 million as compared to an income tax benefit of $94 million in the three months ended March 31, 2020, primarily driven by the pre-tax loss recognized during the three months ended March 31, 2020 relating to the asset impairment charges of $854 million compared to pre-tax income for the three months ended March 31, 2021.

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.

The principal raw material that we use is steel. We obtain steel from a number of sources pursuant to various contractual and other arrangements. Due to recent supply chain constraints within the automotive industry, we may encounter difficulty in obtaining steel at current contractual prices and as a result may incur higher costs to procure steel. In addition, our customers may face supply chain constraints in obtaining computer microchips that could directly affect vehicle production in the near term.

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 four primary factors: the number of vehicles in operation; the average age of vehicles; vehicle usage trends (primarily miles driven); and component failure and wear rates.

38

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. The extent of the effects of the COVID-19 pandemic will depend on a number of factors, including the duration and severity of the pandemic or subsequent outbreaks, related government responses, the rate of economy recovery from the pandemic, and the effectiveness of available vaccines. There continues to be many uncertainties that remain related to COVID-19 that could negatively affect our results of operations, financial position, and cash flows.

Global vehicle production levels

Global light vehicle production levels (According to IHS Markit, April, 2021)

For the three months ended March 31, 2021, global light vehicle production was up 14% overall across the major markets in which we operate compared to the same period in the prior year. While some markets were experiencing increases in production, others were experiencing declines. Light vehicle production levels in China were up 78%, India was up 23%, and South America production was up 4%, while production levels in North America were down 4% and Europe was down 1%.

Global commercial truck production levels (According to IHS Markit, February, 2021)

For the three months ended March 31, 2021, global commercial truck production was up 7% across all major markets in which we operate compared to the same period in the prior year. Production increased by 17% in North America, 7% in Brazil, 10% in Europe, 26% in India, and 4% in China.

Fuel efficiency, powertrain evolution, and vehicle electrification

Various jurisdictions around the world have announced plans to limit the production of new diesel and gasoline powered vehicles in the future. Major vehicle manufacturers have announced their intention to reduce and phase out production of diesel and gasoline powered vehicles during the next two decades. However, for the foreseeable future, it is expected that the majority of the powertrains for light and commercial vehicles will be gasoline and diesel engines (including hybrids, which combine a battery electric drive with a combustion engine). While we see similar electrification trends for light vehicle and commercial vehicle, we expect light vehicles will experience those trends in advance of commercial vehicles. We expect to monitor those trends and adopt our business strategy accordingly.

Business Strategy

We are a leading diversified, global supplier of innovative products and services to light vehicle, commercial truck, off-highway, industrial, and aftermarket customers. Our strategy focuses on addressing the evolving needs of our OE and aftermarket customers around the world to drive growth. As discussed in more detail in our 2020 Form 10-K, the key components of our business strategy are as follows:

•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;

•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; and

•Adapt cost structure to economic realities.

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. As discussed in more detail in our 2020 Form 10-K, the key components of our OE strategy are as follows:

•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;

•Maintain technological leadership to drive further growth from secular market trends;

•Invest in applications that benefit from global light vehicle battery electric vehicle adoption; and

•Penetrate adjacent market segments.

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 localized strategies to address the key success factors of our customers. As discussed in more detail in our 2020 Form 10-K, the key components of our aftermarket strategy are as follows:

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

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

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

Critical Accounting Estimates

Refer to our 2020 Form 10-K, which was filed with the SEC on February 24, 2021.

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 U.S. 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 Months Ended March 31, 2021 compared to the Three Months Ended March 31, 2020

Consolidated Results of Operations

The following table presents our condensed consolidated results of operations.

	Three Months Ended March 31,				Favorable (Unfavorable)
	2021		2020		$ Change		% Change (1)
	(millions, except percent, share, and per share amounts)
Revenues
Net sales and operating revenues	$	4,731	$	3,836	$	895	23	%
Costs and expenses
Cost of sales (exclusive of depreciation and amortization)	4,061		3,339		(722)		(22)	%
Selling, general, and administrative	255		249		(6)		(2)	%
Depreciation and amortization	155		171		16		9	%
Engineering, research, and development	72		77		5		6	%
Restructuring charges, net and asset impairments	25		484		459		95	%
Goodwill and intangible impairment charges	—		383		383		n/m
	4,568		4,703		135		3	%
Other income (expense)
Non-service pension and postretirement benefit (costs) credits	3		1		2		n/m
Equity in earnings (losses) of nonconsolidated affiliates, net of tax	22		13		9		69	%
Gain (loss) on extinguishment of debt	8		—		8		n/m
Other income (expense), net	8		8		—		—	%
	41		22		19		86	%
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	204		(845)		1,049		124	%
Interest expense	(70)		(75)		5		7	%
Earnings (loss) before income taxes and noncontrolling interests	134		(920)		1,054		115	%
Income tax (expense) benefit	(47)		94		(141)		(150)	%
Net income (loss)	87		(826)		913		111	%
Less: Net income (loss) attributable to noncontrolling interests	22		13		(9)		(69)	%
Net income (loss) attributable to Tenneco Inc.	$	65	$	(839)	$	904	108	%
Earnings (loss) per share
Basic earnings (loss) per share:
Earnings (loss) per share	$	0.80	$	(10.34)
Weighted average shares outstanding	81,953,133		81,168,562
Diluted earnings (loss) per share:
Earnings (loss) per share	$	0.79	$	(10.34)
Weighted average shares outstanding	82,524,129		81,168,562

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

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Revenues

Revenues increased by $895 million, or 23%, as compared to the three months ended March 31, 2020. The primary driver of the increase is higher sales volume and favorable mix of $775 million, largely attributable to the effects of COVID-19 in the prior year. The remaining increase is attributable to the favorable effects of foreign currency exchange of $124 million and the net favorable effects of other of $2 million. The favorable effects were partially offset by the net effects of acquisitions and divestitures contributing a $6 million decrease in revenues, or less than 1%.

The table below reflects consolidated revenues for the three months ended March 31, 2021 and 2020 (amounts in millions):

Three months ended March 31, 2020	$	3,836
Acquisitions and divestitures, net	(6)
Drivers in the change of organic revenues:
Volume and mix	775
Currency exchange rates	124
Others	2
Three months ended March 31, 2021	$	4,731

Cost of sales

Cost of sales increased by $722 million, or 22%, as compared to the three months ended March 31, 2020. The primary driver of the increase is from higher sales volume of $667 million, largely attributable to the effects of COVID-19 in the prior year. The remaining increase is attributable to the unfavorable effects of materials sourcing of $23 million, the unfavorable effects of foreign currency exchange of $116 million. This was partially offset by a decrease in cost of sales of $6 million, or less than 1%, related to the net effects of acquisitions and divestitures and the net favorable effects of other costs of $78 million.

The table below reflects consolidated cost of sales for the three months ended March 31, 2021 and 2020 (amounts in millions):

Three months ended March 31, 2020	$	3,339
Acquisitions and divestitures, net	(6)
Drivers in the change of organic cost of sales:
Volume and mix	667
Materials sourcing	23
Currency exchange rates	116
Others	(78)
Three months ended March 31, 2021	$	4,061

Selling, general, and administrative (SG&A)

SG&A increased by $6 million to $255 million compared to $249 million for the three months ended March 31, 2020. The increase was primarily due to higher compensation costs during the first quarter of 2021.

Depreciation and amortization

Depreciation and amortization decreased by $16 million to $155 million as compared to $171 million for the three months ended March 31, 2020, primarily attributable to the effects of the impairments on property, plant, and equipment recognized in the first quarter of 2020.

Engineering, research, and development

Engineering, research, and development decreased by $5 million to $72 million as compared to $77 million for the three months ended March 31, 2020. The decrease was due primarily to the on-going favorable effects of cost reduction initiatives implemented in response to the COVID-19 global pandemic.

Restructuring charges, net and asset impairments

Restructuring charges, net and asset impairments decreased by $459 million to $25 million as compared to $484 million for the three months ended March 31, 2020. The decrease is primarily attributable to property, plant, and equipment asset impairments in the Performance Solutions segment of $455 million; and asset impairment charges of $5 million for operating lease right-of-use assets and $11 million for property, plant, and equipment in the corporate component recognized during the three months ended March 31, 2020. This was partially offset by an increase of $12 million for cash severance costs expected to be paid as part of global headcount and cost reduction actions across all segments and regions, including plant closures.

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Goodwill and intangible impairment charges

Goodwill and intangible impairment charges decreased by $383 million, which was comprised of $267 million of goodwill impairment charges, $65 million of definite-lived intangible asset impairments, and $51 million of indefinite-lived intangible asset impairments recognized during the three months ended March 31, 2020, which were the result of the effects of COVID-19 on the projected financial information during the first quarter of 2020.

Non-service pension and postretirement benefit (costs) credits

Non-service pension and postretirement benefit (costs) credits increased by $2 million to a net credit of $3 million as compared to a net credit of $1 million for the three months ended March 31, 2020. The increase is primarily attributable to lower interest costs resulting from lower discount rates.

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

Equity in earnings (losses) of nonconsolidated affiliates, net of tax increased by $9 million as compared to the three months ended March 31, 2020. The increase is primarily attributable to the effects of COVID-19 in the prior year affecting the equity in earnings (losses) of nonconsolidated affiliates located in Turkey and China.

Gain (loss) on extinguishment of debt

A non-cash gain on extinguishment of debt of $8 million was recognized for three months ended March 31, 2021 related to the discharge of the 4.875% euro floating rate notes due 2024 and 5.000% euro fixed rate notes due 2024.

Other income (expense), net

There was no change in other income (expense) for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020.

Interest expense

Interest expense decreased by $5 million as compared to the three months ended March 31, 2020. The decrease was primarily attributable to lower interest rates on variable rate debt as compared to the three months ended March 31, 2020. This includes a decrease of $2 million in financing charges on sales of accounts receivable during the three months ended March 31, 2021 as compared to prior year.

Income tax (expense) benefit

Income tax (expense) benefit increased by $141 million to an income tax expense of $47 million as compared to an income tax benefit of $94 million in the three months ended March 31, 2020. This difference is primarily driven by the pre-tax loss recognized during the three months ended March 31, 2020 relating to the asset impairment charges of $854 million compared to pre-tax income for the three months ended March 31, 2021.

Net income (loss)

Net income increased by $913 million to a net income of $87 million as compared to a net loss of $826 million for the three months ended March 31, 2020 as a result of the aforementioned items.

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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 months ended March 31, 2021 and 2020 (amounts in millions):

	Three Months Ended March 31,
	2021		2020
EBITDA including noncontrolling interests:
Motorparts	$	102	$	(40)
Performance Solutions	43		(674)
Clean Air	149		99
Powertrain	115		27
Corporate	(50)		(86)
Depreciation and amortization	(155)		(171)
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	204		(845)
Interest expense	(70)		(75)
Income tax (expense) benefit	(47)		94
Net income (loss)	$	87	$	(826)

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

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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.

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 March 31, 2021 and 2020 (amounts in millions):

	Segment Revenue
					Clean Air
	Motorparts		Performance Solutions		Value-add Revenues		Substrate Sales		Total		Powertrain		Total
Three months ended March 31, 2020	$	706	$	669	$	845	$	700	$	1,545	$	916	$	3,836
Acquisitions and divestitures, net	(6)		—		—		—		—		—		(6)
Drivers in the change of organic revenues:
Volume and mix	(6)		91		172		368		540		150		775
Currency exchange rates	9		27		27		20		47		41		124
Others	16		—		(8)		—		(8)		(6)		2
Three months ended March 31, 2021	$	719	$	787	$	1,036	$	1,088	$	2,124	$	1,101	$	4,731

Segment Revenue

Motorparts

Motorparts revenue increased $13 million, or 1.8%, as compared to the three months ended March 31, 2020. Foreign currency exchange had a $9 million favorable effect on Motorparts revenues and other net favorable effects contributed $16 million to the increase. The favorable effects were partially offset by lower volume of $6 million, as well as a decrease in revenues from divestitures of $6 million.

Performance Solutions

Performance Solutions revenue increased $118 million, or 17.6%, as compared to the three months ended March 31, 2020. Higher light vehicle, commercial truck, industrial, and off-highway and other vehicle revenues contributed $91 million to the increase and foreign currency exchange had a $27 million favorable effect on Performance Solutions revenue.

Clean Air

Clean Air revenue increased $579 million, or 37.5%, as compared to the three months ended March 31, 2020. The increase was primarily due to the increase in substrate sales of $388 million and the increase in value-add revenue of $191 million. Overall for the Clean Air segment, higher light vehicle and commercial truck sales were the main drivers of the value-add revenue increase while service and off-highway and other revenues also improved when compared to the prior year. In addition, foreign currency exchange had a $27 million favorable effect on Clean Air value-add revenue while other unfavorable effects decreased value-add revenue by $8 million.

Powertrain

Powertrain revenue increased $185 million, or 20.2%, as compared to the three months ended March 31, 2020. Higher light vehicle, commercial truck, industrial, and off-highway and other vehicle revenue contributed $150 million to the increase, foreign currency exchange had a $41 million favorable effect on Powertrain revenue, while other unfavorable effects decreased revenue by $6 million.

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EBITDA including noncontrolling interests

The following table presents the EBITDA including noncontrolling interests by segment for the three months ended March 31, 2021 and 2020 (amounts in millions):

	Three Months Ended March 31,				Three Months Ended March 31,
	2021		2020		2021 vs 2020 Change
EBITDA including noncontrolling interests by segment:
Motorparts	$	102	$	(40)	$	142
Performance Solutions	$	43	$	(674)	$	717
Clean Air	$	149	$	99	$	50
Powertrain	$	115	$	27	$	88

Motorparts

Motorparts EBITDA including noncontrolling interests increased $142 million as compared to the three months ended March 31, 2020. The increase is primarily attributable to the non recurrence of goodwill and intangible impairment charges of $110 million recognized during the three months ended March 31, 2020, improved operating performance, and lower SG&A and engineering, research, and development costs. These favorable factors were partially offset by lower sales volumes and unfavorable materials sourcing.

Performance Solutions

Performance Solutions EBITDA including noncontrolling interests increased $717 million as compared to the three months ended March 31, 2020. The increase is primarily attributable to the non recurrence of asset impairment charges of $455 million and goodwill and intangible impairment charges of $232 million recognized during the three months ended March 31, 2020. Also contributing to the increase is higher sales volume during the three months ended March 31, 2021 as compared to prior year.

Clean Air

Clean Air EBITDA including noncontrolling interests increased $50 million as compared to the three months ended March 31, 2020. The increase is primarily attributable to higher sales volume, favorable material sourcing, favorable operating performance, and lower SG&A and engineering, research, and development costs, partially offset by the increase in cash severance charges of $9 million during the three months ended March 31, 2021 as compared to prior year.

Powertrain

Powertrain EBITDA including noncontrolling interests increased $88 million as compared to the three months ended March 31, 2020. The increase is primarily attributable to the non recurrence of goodwill impairment charge in the amount of $41 million recognized during the three months ended March 31, 2020, higher sales volume and favorable mix, favorable operating performance, and lower SG&A and engineering, research, and development costs during the three months ended March 31, 2021 as compared to prior year. These favorable factors were partially offset by an increase in cash severance charges of $9 million during the three months ended March 31, 2021 as compared to prior year.

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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
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total		Corporate		Total
Three Months Ended March 31, 2021
Restructuring charges, net	$	2	$	4	$	9	$	10	$	25	$	—	$	25
Restructuring related costs	—		—		—		1		1		2		3
Loss on sale of business	1		—		—		—		1		—		1
Other costs (including strategic and transaction related)	—		—		(1)		—		(1)		9		8
Gain on extinguishment of debt	—		—		—		—		—		(8)		(8)
Total adjustments	$	3	$	4	$	8	$	11	$	26	$	3	$	29

	Reportable Segments
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total		Corporate		Total
Three Months Ended March 31, 2020
Restructuring charges, net	$	2	$	6	$	—	$	1	$	9	$	4	$	13
Restructuring related costs	1		19		1		(1)		20		1		21
Other non-restructuring asset impairments	—		455		—		—		455		16		471
Other costs (including strategic and transaction related)(1)	—		—		4		—		4		21		25
Goodwill and intangibles impairment charge	110		232		—		41		383		—		383
Total adjustments	$	113	$	712	$	5	$	41	$	871	$	42	$	913

(1) Includes costs related to the acquisitions and expected separation.

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Liquidity and Capital Resources

Liquidity and Financing Arrangements

For the reasons discussed above under “Recent Trends and Market Conditions - General economic conditions”, there continues to be many uncertainties that remain related to COVID-19 that could negatively affect our liquidity and cash flows.

We believe cash flows from operations, combined with our cash on hand and committed and undrawn capacity under our $1.5 billion revolving credit facility, 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 our financial ratios set forth in our 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 for the right opportunity to replace and extend maturity.

Credit Facilities

The table below shows our borrowing capacity on committed credit facilities at March 31, 2021 (amounts in billions):

	March 31, 2021
	Term	Available(b)
Tenneco Inc. revolving credit facility (a)	2023	$	1.5
Tenneco Inc. Term Loan A	2023	—
Tenneco Inc. Term Loan B	2025	—
Subsidiaries’ credit agreements	2021 - 2028	—
		$	1.5

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

(b)At March 31, 2021, we had $28 million of outstanding letters of credit under the revolving credit facility, which reduces the available borrowings under our revolving credit facility. We also had $74 million of outstanding letters of credit under our uncommitted facilities at March 31, 2021.

We have a senior credit facility under the credit agreement dated October 1, 2018 (as amended, restated, supplemented or otherwise modified, the “New Credit Facility”) that 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”). 

At March 31, 2021, we had liquidity of $2.1 billion comprised of $631 million of cash and $1.5 billion undrawn on our revolving credit facility. We had no outstanding borrowings on our revolving credit facility at March 31, 2021.

Term Loans

New Credit Facility — Interest Rates and Fees

At March 31, 2021, after giving effect to the third amendment to the New Credit Facility dated May 5, 2020 (the “Third Amendment”), the interest rate on borrowings under the revolving credit facility and the Term Loan A facility was LIBOR plus 2.25% and, prior to the occurrence of certain covenant reset triggers (“Covenant Reset Triggers”), will remain at LIBOR plus 2.25% for each relevant period for which the our consolidated net leverage ratio (as defined in the New Credit Facility) is less than 6.0 to 1 and greater than 4.5 to 1. The interest rate on borrowings under the revolving credit facility and the Term Loan A facility are subject to step down as follows:

Consolidated net leverage ratio	Interest rate
greater than 3.0 to 1	LIBOR plus 2.00%
less than 3.0 to 1 and greater than 2.5 to 1	LIBOR plus 1.75%
less than 2.5 to 1 and greater than 1.5 to 1	LIBOR plus 1.50%
less than 1.5 to 1	LIBOR plus 1.25%

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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 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%.

New Credit Facility — Other Terms and Conditions

The New Credit Facility contains representations and warranties, and covenants which are customary for debt facilities of this type. The Third Amendment provided relief from the financial maintenance covenants for the revolving credit facility and Term Loan A facility subject to the non-occurrence of certain Covenant Reset Triggers that limit certain of our activities by implementing more restrictive affirmative and negative covenants. After giving effect to the Third Amendment, the financial maintenance covenants for the revolving credit facility and the Term Loan A facility 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 8.75 to 1	at December 31, 2020	not greater than 5.25 to 1	at March 31, 2022
not greater than 8.25 to 1	at March 31, 2021	not greater than 4.75 to 1	at June 30, 2022
not greater than 4.50 to 1	at June 30, 2021	not greater than 4.25 to 1	at September 30, 2022
not greater than 4.25 to 1	at September 30, 2021	not greater than 3.75 to 1	thereafter
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 1.50 to 1 through March 31, 2021, and 2.75 to 1 thereafter.

If a Covenant Reset Trigger occurs, the financial maintenance covenants for the revolving credit facility and the Term Loan A facility revert back to the previous financial maintenance covenants in effect immediately prior to the Third Amendment (the “Prior Financial Covenants”), including (i) a requirement to have a consolidated net leverage ratio (as defined in the New Credit Facility), at the end of each fiscal quarter, with step-downs, as follows:

(i) Consolidated net leverage ratio
not greater than 4.50 to 1	through March 31, 2021
not greater than 4.25 to 1	through September 30, 2021
not greater than 4.00 to 1	through March 31, 2022
not greater than 3.75 to 1	through September 30, 2022
not greater than 3.50 to 1	thereafter

and (ii) 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 2.75 to 1.

In addition, we may make a one-time election to revert back to the Prior Financial Covenants and terminate the applicability of the Covenant Reset Triggers upon delivery of a covenant reset certificate to the administrative agent under the New Credit Facility 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.

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The financial ratios required under the New Credit Facility and the actual ratios we calculated as of March 31, 2021 are as follows: senior secured net leverage ratio of 2.62 actual versus 8.25 (maximum required under the Third Amendment); and interest coverage ratio of 6.10 actual versus 1.50 (minimum required under the Third Amendment).

Senior Notes

A summary of our senior unsecured and secured notes at March 31, 2021 are as follows (amounts in millions):

	Principal		Carrying Amount(a)
Senior Unsecured Notes
$225 million of 5.375% Senior Notes due 2024	$	225	$	223
$500 million of 5.000% Senior Notes due 2026	$	500	$	495
Senior Secured Notes
$500 million of 7.875% Senior Secured Notes due 2029	$	500	$	490
$800 million of 5.125% Senior Secured Notes due 2029	$	800	$	786

(a) Carrying amount is net of unamortized debt issuance costs and debt discounts or premiums. Total unamortized debt issuance costs were $92 million at March 31, 2021.

At March 31, 2021, we had 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 also had the following outstanding at March 31, 2021, 7.875% senior secured notes due January 15, 2029 (“7.875% Senior Secured Notes”) and 5.125% senior secured notes due April 15, 2029 (“5.125% Senior Secured Notes” and together with the 7.875% Senior Secured Notes, the “Senior Secured Notes”).

On March 3, 2021, we provided notice of our intention to redeem all of the outstanding 5.000% euro denominated senior secured notes due July 15, 2024 (the “2024 Fixed Rate Secured Notes”) and all of the outstanding floating rate euro denominated senior secured notes due April 15, 2024 (the “2024 Floating Rate Secured Notes” and, together with the 2024 Fixed Rate Secured Notes, the “2024 Secured Notes”). On March 17, 2021, we, using the net proceeds from the offering of 5.125% Senior Secured Notes, together with cash on hand, satisfied and discharged each of the indentures governing the 2024 Secured Notes in accordance with their terms. As a result, we recorded a gain on extinguishment of debt of $8 million for the three months ended March 31, 2021.

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 and our subsidiaries’ ability to create liens and enter into sale and leaseback transactions. In addition, the indentures governing the Senior Secured Notes and 2024 Senior 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; (vi) entering into transactions with our affiliates; and (vii) 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 Unsecured Notes and Senior Secured Notes to make distributions to us.

At March 31, 2021, we were in compliance with all of our financial covenants under the indentures governing the Senior Unsecured Notes and Senior Secured Notes.

Factoring Arrangements

In our factoring programs, accounts receivables are transferred in their entirety 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.

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.

50

At March 31, 2021 and December 31, 2020, the amount of accounts receivable outstanding and derecognized for factoring arrangements was $1.0 billion and $1.0 billion, of which $0.5 billion and $0.4 billion as of March 31, 2021 and December 31, 2020 relate to accounts receivable where we have continuing involvement. In addition, the deferred purchase price receivable was $69 million and $51 million at March 31, 2021 and December 31, 2020.

For the three months ended March 31, 2021 and 2020, proceeds from the factoring of accounts receivable qualifying as sales was $1.3 billion and $1.2 billion, of which $1.1 billion and $1.1 billion were received on accounts receivable where we have continuing involvement.

For the three months ended March 31, 2021 and 2020, financing charges associated with our factored receivables, which are included in “Interest expense” in the condensed consolidated statements of income (loss), were $4 million and $6 million.

If we were not able to factor receivables under these programs, our borrowings under our revolving credit agreement might increase. These programs provide us with access to cash at costs that are generally favorable to alternative sources of financing and allow us to reduce borrowings under our revolving credit agreement.

Cash Flows

Operating Activities

Operating activities for the three months ended March 31, 2021 and 2020 were as follows (amounts in millions):

	Three Months Ended March 31,
	2021		2020
Operational cash flow before changes in operating assets and liabilities	$	268	$	(1)
Changes in operating assets and liabilities:
Receivables	(452)		139
Inventories	(120)		(73)
Payables and accrued expenses	240		(136)
Accrued interest and accrued income taxes	8		29
Other assets and liabilities	6		(110)
Total change in operating assets and liabilities	(318)		(151)
Net cash (used) provided by operating activities	$	(50)	$	(152)

Net cash used by operating activities for the three months ended March 31, 2021 was $50 million, a decrease of $102 million compared to the three months ended March 31, 2020. The activity was the result of:

•an improvement in net cash provided by operating activities before operating assets and liabilities of $269 million; and

•a net increase of $167 million in net cash used by operating activities due to unfavorable changes in working capital items.

51

Investing Activities

Investing activities for the three months ended March 31, 2021 and 2020 were as follows (amounts in millions):

	Three Months Ended March 31,
	2021		2020
Proceeds from sale of assets	$	7	$	2
Net proceeds from sale of business	1		—
Cash payments for property, plant, and equipment	(95)		(137)
Proceeds from deferred purchase price of factored receivables	115		56
Other	—		2
Net cash (used) provided by investing activities	$	28	$	(77)

Net cash provided by investing activities for the three months ended March 31, 2021 increased by $105 million primarily due to an increase in proceeds from deferred purchase price of factored receivables of $59 million, and an increase in net proceeds from sale of assets of $5 million. Cash payments for property, plant, and equipment were $95 million for the three months ended March 31, 2021 as compared to $137 million for the three months ended March 31, 2020.

Financing Activities

Financing activities for the three months ended March 31, 2021 and 2020 were as follows (amounts in millions):

	Three Months Ended March 31,
	2021		2020
Proceeds from term loans and notes	$	813	$	67
Repayments of term loans and notes	(862)		(84)
Debt issuance costs of long-term debt	(11)		(8)
Borrowings on revolving lines of credit	1,382		3,161
Payments on revolving lines of credit	(1,394)		(2,659)
Issuance (repurchase) of common shares	(2)		(1)
Net increase (decrease) in bank overdrafts	—		(2)
Distributions to noncontrolling interest partners	(7)		(2)
Other	(49)		11
Net cash (used) provided by financing activities	$	(130)	$	483

Net cash flow used by financing activities was $130 million for the three months ended March 31, 2021. This included net repayments on term loans and notes of $49 million, net repayments on revolving lines of credit of $12 million and net repayments on other financing arrangements of $56 million.

Net cash flow provided by financing activities was $483 million for the three months ended March 31, 2020. This included net repayments on term loans of $17 million, and net borrowings on revolving lines of credit of $502 million.

Dividends on Common Stock

We did not pay dividends during the three months ended March 31, 2021 and 2020, due to the suspension of the dividend program in the second quarter of 2019.

52

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 senior 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 (amounts in millions):

Income Statements

	Three Months Ended March 31, 2021		Year Ended December 31, 2020
Net sales and operating revenues	$	1,859	$	6,181
Operating expenses	$	1,871	$	6,896
Net income (loss)	$	(67)	$	(1,221)
Net income (loss) attributable to Tenneco Inc.	$	(67)	$	(1,221)

Balance Sheets

	March 31, 2021		December 31, 2020
ASSETS
Current assets	$	1,106	$	1,150
Non-current assets	$	1,953	$	2,022
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities	$	1,530	$	1,463
Non-current liabilities	$	5,737	$	5,834
Intercompany due to (due from)	$	486	$	100

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.

53

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 globally. 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 the foreign markets in which we manufacture and sell our products. We generally try to use natural hedges within our foreign currency activities to minimize foreign currency 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.

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. 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 March 31, 2021, all of which mature in the next twelve months (amounts in millions):

	Notional Amount
Long positions	$	273
Short positions	$	(276)

Commodity Price Risk

Our production processes are dependent upon the supply of certain raw materials that are exposed to price fluctuations on the open market. Commodity rate price forward contracts are executed to offset a portion of our exposure to the potential change in prices for raw materials. We monitor our commodity price risk exposures regularly to maximize the overall effectiveness of its commodity forward contracts. The fair value of our commodity price forward contracts is not considered material to the condensed consolidated financial statements.

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 March 31, 2021, we had $2.0 billion par value of fixed rate debt and $3.2 billion par value of floating rate debt. Of the fixed rate debt, $225 million is fixed through 2024, $500 million is fixed through 2026, and $1.3 billion is fixed through 2029. For more detailed explanations on our debt structure and New Credit Facility, refer to “Liquidity and Capital Resources” earlier in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 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 March 31, 2021 was approximately 101% 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 $32 million.

Equity Price Risk

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 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 March 31, 2021, we hedged our deferred compensation liability related to approximately 1,700,000 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 derivative instruments is not considered material to the condensed consolidated financial statements.

54

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 Officer 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 the Company’s disclosure controls and procedures were effective as of March 31, 2021 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.

Changes in Internal Control Over Financial Reporting

During the quarter ended March 31, 2021, there were no changes in the Company's internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

55

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. 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, 2020. The risks described 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.

56

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 first quarter of 2021. 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)
January 2021	1,307	$	12.75	—	$	—
February 2021	92,987	11.58		—	—
March 2021	153,214	11.44		—	—
Total	247,508	$	11.50	—	$	—

(1)     Shares withheld upon vesting of share settled restricted stock units in the first quarter of 2021.

57

ITEM 6.EXHIBITS

INDEX TO EXHIBITS

QUARTERLY REPORT ON FORM 10-Q

FOR QUARTER ENDED MARCH 31, 2021

Exhibit Number		Description
4.1	—	Indenture, dated March 17, 2021, by and among Tenneco Inc., the guarantors party thereto and Wilmington Trust, National Association, as trustee (incorporated herein by reference to Exhibit 4.1 of the registrant’s Current Report on Form 8-K filed March 17, 2021, File No. 1-12387).
*31.1	—	Certification of Brian J. Kesseler under Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2	—	Certification of Matti Masanovich under Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1	—	Certification of Brian J. Kesseler and Matti Masanovich 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.

58

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/ MATTI MASANOVICH
	Matti Masanovich
	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: May 6, 2021

59

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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of the registrant’s internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/	BRIAN J. KESSELER
	Brian J. Kesseler
	Chief Executive Officer

Dated: May 6, 2021

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Matti Masanovich, 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of the registrant’s internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/	MATTI MASANOVICH
	Matti Masanovich
	Executive Vice President and Chief Financial Officer

Dated: May 6, 2021

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 March 31, 2021, 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, as Chief Executive Officer of the Company and Matti Masanovich, as Executive Vice President and 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/ MATTI MASANOVICH

Matti Masanovich

Executive Vice President and Chief Financial Officer

May 6, 2021

    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	3 Months Ended
	Mar. 31, 2021	May 03, 2021
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
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	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		81,968,916
Entity Central Index Key	0001024725
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
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
Preferred Stock Purchase Rights
Document Information [Line Items]
Title of 12(b) Security	Preferred Stock Purchase Rights
Security Exchange Name	NYSE
No Trading Symbol Flag	true

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenues
Net sales and operating revenues	$ 4,731	$ 3,836
Costs and expenses
Cost of sales (exclusive of depreciation and amortization)	4,061	3,339
Selling, general, and administrative	255	249
Depreciation and amortization	155	171
Engineering, research, and development	72	77
Restructuring charges, net and asset impairments	25	484
Goodwill and intangible impairment charges	0	383
Costs and expenses	4,568	4,703
Other income (expense)
Non-service pension and postretirement benefit (costs) credits	3	1
Equity in earnings (losses) of nonconsolidated affiliates, net of tax	22	13
Gain (loss) on extinguishment of debt	8	0
Other income (expense), net	8	8
Total other expense (income)	41	22
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	204	(845)
Interest expense	(70)	(75)
Earnings (loss) before income taxes and noncontrolling interests	134	(920)
Income tax (expense) benefit	(47)	94
Net income (loss)	87	(826)
Less: Net income (loss) attributable to noncontrolling interests	22	13
Net income (loss) attributable to Tenneco Inc.	$ 65	$ (839)
Basic earnings (loss) per share:
Earnings (loss) per share (in dollars per share)	$ 0.80	$ (10.34)
Weighted average shares outstanding (in shares)	81,953,133	81,168,562
Diluted earnings (loss) per share:
Earnings (loss) per share (in dollars per share)	$ 0.79	$ (10.34)
Weighted average shares outstanding (in shares)	82,524,129	81,168,562

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 87	$ (826)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(52)	(219)
Defined benefit plans	3	4
Cash flow hedges	(2)	(2)
Other comprehensive income (loss), net of tax	(51)	(217)
Comprehensive income (loss)	36	(1,043)
Less: Comprehensive income (loss) attributable to noncontrolling interests	16	(7)
Comprehensive income (loss) attributable to common shareholders	$ 20	$ (1,036)

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 626	$ 798
Restricted cash	5	5
Receivables:
Customer notes and accounts, net	2,706	2,423
Other	116	105
Inventories	1,830	1,743
Prepayments and other current assets	589	619
Total current assets	5,872	5,693
Property, plant, and equipment, net	2,955	3,057
Long-term receivables, net	9	8
Goodwill	508	508
Intangibles, net	1,154	1,194
Investments in nonconsolidated affiliates	532	581
Deferred income taxes	282	285
Other assets	525	526
Total assets	11,837	11,852
Current liabilities:
Short-term debt, including current maturities of long-term debt	124	162
Accounts payable	3,090	2,917
Accrued compensation and employee benefits	431	365
Accrued income taxes	65	54
Accrued expenses and other current liabilities	1,053	1,188
Total current liabilities	4,763	4,686
Long-term debt	5,111	5,171
Deferred income taxes	94	89
Pension and postretirement benefits	1,062	1,101
Deferred credits and other liabilities	511	546
Commitments and contingencies (Note 13)
Total liabilities	11,541	11,593
Redeemable noncontrolling interests	87	78
Tenneco Inc. shareholders’ equity:
Preferred stock - $0.01 par value; none issued	0	0
Additional paid-in capital	4,445	4,442
Accumulated other comprehensive loss	(789)	(744)
Accumulated deficit	(2,823)	(2,888)
Shares held as treasury stock - at cost: (March 31, 2021 and December 31, 2020 - 14,592,888)	(930)	(930)
Total Tenneco Inc. shareholders’ equity (deficit)	(96)	(119)
Noncontrolling interests	305	300
Total equity	209	181
Total liabilities, redeemable noncontrolling interests, and equity	11,837	11,852
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	Mar. 31, 2021	Dec. 31, 2020
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)	93,486,021	75,714,163
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)	3,075,663	20,308,454
Treasury shares (in shares)	0

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating Activities
Net income (loss)	$ 87	$ (826)
Adjustments to reconcile net income (loss) to cash (used) provided by operating activities:
Goodwill and intangible impairment charges	0	383
Depreciation and amortization	155	171
Deferred income taxes	(4)	(166)
Stock-based compensation	5	2
Restructuring charges and asset impairments, net of cash paid	0	454
Change in pension and other postretirement benefit plans	(1)	(19)
Equity in earnings of nonconsolidated affiliates	(22)	(13)
Cash dividends received from nonconsolidated affiliates	57	13
Loss (gain) on sale of assets and other	(9)	0
Changes in operating assets and liabilities:
Receivables	(452)	139
Inventories	(120)	(73)
Payables and accrued expenses	240	(136)
Accrued interest and accrued income taxes	8	29
Other assets and liabilities	6	(110)
Net cash (used) provided by operating activities	(50)	(152)
Investing Activities
Proceeds from sale of assets	7	2
Net proceeds from sale of business	1	0
Cash payments for property, plant, and equipment	(95)	(137)
Proceeds from deferred purchase price of factored receivables	115	56
Other	0	2
Net cash (used) provided by investing activities	28	(77)
Financing Activities
Proceeds from term loans and notes	813	67
Repayments of term loans and notes	(862)	(84)
Debt issuance costs of long-term debt	(11)	(8)
Borrowings on revolving lines of credit	1,382	3,161
Payments on revolving lines of credit	(1,394)	(2,659)
Issuance (repurchase) of common shares	(2)	(1)
Net increase (decrease) in bank overdrafts	0	(2)
Distributions to noncontrolling interest partners	(7)	(2)
Other	(49)	11
Net cash (used) provided by financing activities	(130)	483
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash	(20)	(50)
Increase (decrease) in cash, cash equivalents, and restricted cash	(172)	204
Cash, cash equivalents, and restricted cash, beginning of period	803	566
Cash, cash equivalents, and restricted cash, end of period	631	770
Supplemental Cash Flow Information
Cash paid during the period for interest	65	67
Cash paid during the period for income taxes, net of refunds	46	41
Lease assets obtained in exchange for new operating lease liabilities	15	51
Non-cash Investing Activities
Period end balance of accounts payable for property, plant, and equipment	91	96
Deferred purchase price of receivables factored in the period	135	60
Reduction in assets from redeemable noncontrolling interest transaction with owner	$ 0	$ 53

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited) - USD ($) shares in Millions, $ in Millions	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Treasury Stock	Total Tenneco Inc. Shareholders’ Equity (Deficit)	Noncontrolling Interests	Total Equity
Beginning balance (in shares) at Dec. 31, 2019		1
Balance at beginning of period at Dec. 31, 2019			$ 4,432	$ (711)	$ (1,367)	$ (930)	$ 1,425	$ 194	$ 1,619
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ (839)				(839)		(839)	2	(837)
Foreign currency translation adjustments	(219)			(199)			(199)	(13)	(212)
Defined benefit plans	4			4			4		4
Cash flow hedges	(2)			(2)			(2)		(2)
Comprehensive income (loss)	(1,043)						(1,036)	(11)	(1,047)
Stock-based compensation, net			2				2		2
Reclassification of redeemable noncontrolling interest to permanent equity								82	82
Distributions declared to noncontrolling interests	(82)		(7)				(7)		(7)
Ending balance (in shares) at Mar. 31, 2020		1
Balance at end of period at Mar. 31, 2020			4,427	(908)	(2,206)	(930)	384	265	649
Beginning balance (in shares) at Dec. 31, 2020		1
Balance at beginning of period at Dec. 31, 2020	181		4,442	(744)	(2,888)	(930)	(119)	300	181
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	65				65		65	10	75
Foreign currency translation adjustments	(52)			(46)			(46)	(3)	(49)
Defined benefit plans	3			3			3		3
Cash flow hedges	(2)			(2)			(2)		(2)
Comprehensive income (loss)	36						20	7	27
Stock-based compensation, net			3				3		3
Distributions declared to noncontrolling interests	0
Ending balance (in shares) at Mar. 31, 2021		1
Balance at end of period at Mar. 31, 2021	$ 209		$ 4,445	$ (789)	$ (2,823)	$ (930)	$ (96)	$ 305	$ 209

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Description of Business

3 Months Ended

Mar. 31, 2021

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, markets, and distributes products and services for light vehicle, commercial truck, off-highway, industrial, motorsport, and aftermarket customers. The Company manufactures innovative performance solutions, clean air and powertrain products and systems, and serves both original equipment (“OE”) manufacturers and the repair and replacement markets worldwide.

The Company is continually evaluating its portfolio and 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. Efforts to optimize shareholder value creation remain focused on operational improvements, reducing structural costs, lowering capital intensity, reducing debt, and growth in targeted business lines.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

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, 2020, which was filed with the Securities and Exchange Commission on February 24, 2021. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. 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.

Beginning in the first quarter of 2021, the Company made a change to its operating segments. This change consisted of moving a reporting unit within the Powertrain segment to the Ride Performance segment to align with a change in how the Chief Operating Decision Maker (“CODM”) allocates resources and assesses performance against the Company's key growth strategies. In addition, with this change to its segments, Ride Performance was renamed Performance Solutions. As such, prior period operating segment results and related disclosures have been conformed to reflect the Company's current operating segments.

Reclassifications

Certain amounts in the prior period have been aggregated or disaggregated to conform to current year presentation, as described above for the change in operating segments.

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 March 31, 2021 and December 31, 2020, the Company held redeemable noncontrolling interests of $51 million and $45 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 March 31, 2021 and December 31, 2020, the Company held a redeemable noncontrolling interest of $36 million and $33 million which was probable of becoming redeemable. This noncontrolling interest is also presented in the temporary equity section of the Company’s condensed consolidated balance sheets and has been remeasured to its 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). This redeemable noncontrolling interest represents a 9.5% ownership interest in Öhlins Intressenter AB (the “KÖ Interest”) 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. During the three months ended March 31, 2021 and 2020, the Company recognized an increase of $5 million and $15 million to the carrying value of this noncontrolling interest.

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 three months ended March 31, 2020. Refer to Note 17, “Related Party Transactions”, for additional information related to the tender offer of this noncontrolling interest.

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

	Three Months Ended March 31,
	2021		2020
Balance at beginning of period	$	78	$	196
Net income (loss) attributable to redeemable noncontrolling interests	7		(4)
Other comprehensive income (loss)	(3)		(7)
Noncontrolling interest tender offer redemption	—		(46)
Redemption value measurement adjustment	5		15
Reclassification of noncontrolling interest to permanent equity	—		(82)
Balance at end of period	$	87	$	72

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 as follows:

	Three Months Ended March 31,
	2021	2020
Weighted average shares of common stock outstanding	81,953,133	81,168,562
Effect of dilutive securities:
PSUs and RSUs	570,996	—
Dilutive shares outstanding	82,524,129	81,168,562

For the three months ended March 31, 2021 and 2020, the calculation of diluted earnings (loss) per share excluded 2,075,446 and 1,610,556 of share-based awards, as the effect on the calculation would have been anti-dilutive.

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Acquisitions and Divestitures

3 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

Acquisitions and Divestitures

3. Acquisitions and Divestitures

Assets Held for Sale

At March 31, 2021 and December 31, 2020, the Company had $12 million and $15 million of property, plant, and equipment, primarily land and buildings and non-core machinery and equipment across multiple segments that are expected to be sold in the next twelve months and have been classified as held for sale. The assets held for sale are recorded in “Prepayments and other current assets” in the condensed consolidated balance sheets at March 31, 2021 and December 31, 2020.

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Restructuring Charges, Net and Asset Impairments

3 Months Ended

Mar. 31, 2021

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. For the three months ended March 31, 2021 and 2020, restructuring charges, net and asset impairments by segment are as follows:

	Three Months Ended March 31, 2021
	Motorparts		Performance Solutions		Clean Air		Powertrain		Corporate		Total
Severance and other charges, net	$	2	$	4	$	9	$	10	$	—	$	25
Total restructuring charges, asset impairments, and other	$	2	$	4	$	9	$	10	$	—	$	25

	Three Months Ended March 31, 2020
	Motorparts		Performance Solutions		Clean Air		Powertrain		Corporate		Total
Severance and other charges, net	$	2	$	6	$	—	$	1	$	4	$	13
Other non-restructuring asset impairments	—		455		—		—		16		471
Total restructuring charges, asset impairments, and other	$	2	$	461	$	—	$	1	$	20	$	484

Severance and other charges, net

Three-months ended March 31, 2021

The Company initiated several cost reduction initiatives across all segments and regions aimed at optimizing the Company’s cost structure. The Company recognized cash severance and other charges of $17 million expected to be paid under these programs during the three months ended March 31, 2021. The Company also recognized severance and other charges of $11 million related to plant consolidations, relocations, and closures during the three months ended March 31, 2021.

In response to the COVID-19 global pandemic, the Company announced Project Accelerate and executed global headcount reductions. The Company began implementing these actions during the second quarter of 2020 and expects to complete them during 2021. The Company recognized a reduction of $3 million in revisions to estimates in connection with the cash severance costs expected to be paid in connection with these actions during the three months ended March 31, 2021.

Motorparts recognized severance and other charges related to restructuring actions for the three months ended March 31, 2021 of $2 million in connection with its supply chain rationalization and distribution network initiative to achieve efficiencies and improve throughput to its customers in North America.

Performance Solutions recognized severance and other charges for the three months ended March 31, 2021 of $4 million in connection with the other cost reduction initiatives primarily in Europe.

Clean Air recognized severance and other charges, and revisions to estimates for the three months ended March 31, 2021 as follows:

•$15 million in severance and other charges, along with a reduction of $5 million in revisions to estimates, in connection with the other cost reduction initiatives primarily in Europe;

•$2 million in severance and other charges related to plant consolidations and closures primarily in North America and Asia Pacific; and

•$3 million reduction in severance and other charges due to a revision in estimates in connection with Project Accelerate.

Powertrain recognized severance and other charges, and revisions to estimates for the three months ended March 31, 2021 as follows:

•$1 million reduction in severance and other charges due to a revision in estimates in connection with the other cost reduction initiatives primarily in Europe;

•$9 million in severance and other charges related to plant consolidations, relocations, and closures, primarily in Europe and North America; and

•$2 million restructuring costs incurred related to an approved voluntary termination program at one of its European bearings plants aimed at reducing headcount. Restructuring and related charges expected to be incurred in 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.

Three-months ended March 31, 2020

The Company recognized cash severance and other charges of $7 million expected to be paid for cost reduction initiatives during the three months ended March 31, 2020. The Company also recognized severance and other charges of $6 million related to plant consolidations, relocations, and closures during the three months ended March 31, 2020.

Motorparts recognized severance and other charges related to restructuring actions for the three months ended March 31, 2020 as follows:

•$1 million in severance and other charges in connection with the other cost reduction initiatives primarily in Asia Pacific; and

•$1 million in severance and other charges related to plant consolidations, relocations, and closures primarily in Europe.

Performance Solutions recognized severance and other charges, and revisions to estimates for the three months ended March 31, 2020 of $7 million in severance and other charges, along with a reduction of $1 million in revisions to estimates, in connection with previously announced plant consolidations, relocations, and closures, primarily in North America.

Powertrain recognized severance and other charges and revisions to estimates related to restructuring actions for the three months ended March 31, 2020 as follows:

•$2 million in severance and other charges in connection with the other cost reduction initiatives primarily in Europe; and

•$1 million reduction in severance and other charges due to a revision in estimates related to plant consolidations, relocations, and closures, primarily North America.

The Company also incurred $4 million in cash severance costs for the elimination of certain redundant positions within its corporate component for the three months ended March 31, 2020.

Restructuring reserve rollforward

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

	Reportable Segments
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total Reportable Segments		Corporate		Total
Balance at December 31, 2020	$	14	$	18	$	25	$	42	$	99	$	1	$	100
Provisions	2		4		17		11		34		—		34
Revisions to estimates	—		—		(8)		(1)		(9)		—		(9)
Payments	(4)		(5)		(6)		(9)		(24)		(1)		(25)
Foreign currency	—		(1)		—		—		(1)		—		(1)
Balance at March 31, 2021	$	12	$	16	$	28	$	43	$	99	$	—	$	99

	Reportable Segments
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total Reportable Segments		Corporate		Total
Balance at December 31, 2019	$	16	$	23	$	23	$	30	$	92	$	9	$	101
Provisions	2		7		—		2		11		4		15
Revisions to estimates	—		(1)		—		(1)		(2)		—		(2)
Payments	(4)		(9)		(4)		(4)		(21)		(9)		(30)
Foreign currency	—		(1)		—		—		(1)		—		(1)
Balance at March 31, 2020	$	14	$	19	$	19	$	27	$	79	$	4	$	83

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

	Three Months Ended March 31, 2021						Three Months Ended March 31, 2020
	Employee Costs		Facility Closure and Other Costs		Total		Employee Costs		Facility Closure and Other Costs		Total
Balance at beginning of period	$	99	$	1	$	100	$	97	$	4	$	101
Provisions	31		3		34		10		5		15
Revisions to estimates	(9)		—		(9)		(2)		—		(2)
Payments	(21)		(4)		(25)		(23)		(7)		(30)
Foreign currency	(1)		—		(1)		(1)		—		(1)
Balance at end of period	$	99	$	—	$	99	$	81	$	2	$	83

Asset impairments

Other non-restructuring asset impairments

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 Performance Solutions 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 three months ended March 31, 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, during the first quarter of 2020, 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 $16 million during the three months ended March 31, 2020, consisting of $11 million of property, plant, and equipment and $5 million of operating lease right-of-use assets, included in “Other assets” within the condensed consolidated balance sheets.

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Inventories

3 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Inventories

5. Inventories

At March 31, 2021 and December 31, 2020, inventory by major classification was as follows:

	March 31, 2021		December 31, 2020
Finished goods	$	801	$	758
Work in process	492		449
Raw materials	442		441
Materials and supplies	95		95
Total inventories	$	1,830	$	1,743

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Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

6. Goodwill and Other Intangible Assets

As discussed in Note 2, “Summary of Significant Accounting Policies”, beginning in the first quarter of 2021, the Company moved a reporting unit within the Powertrain segment to the Ride Performance segment and Ride Performance was renamed Performance Solutions. Refer to Note 16, “Segment Information” for further information.

At March 31, 2021 and December 31, 2020, goodwill consists of the following:

	Three Months Ended March 31, 2021
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total
Gross carrying amount at December 31, 2020	$	623	$	549	$	23	$	59	$	1,254
Foreign exchange	—		(3)		—		—		(3)
Gross carrying amount at March 31, 2021	623		546		23		59		1,251
Accumulated impairment loss at December 31, 2020	(310)		(377)		—		(59)		(746)
Foreign exchange	—		3		—		—		3
Accumulated impairment loss at March 31, 2021	(310)		(374)		—		(59)		(743)
Net carrying value at March 31, 2021	$	313	$	172	$	23	$	—	$	508

The following table shows a summary of the number of reporting units with a net carrying value of goodwill in each segment at March 31, 2021 and whether or not the reporting unit’s fair value exceeds its carrying value by more or less than 25% based on each respective reporting units most recent goodwill impairment analysis:

	Segments
	Motorparts		Performance Solutions		Clean Air
Number of reporting units with goodwill	1		2		3
Number of reporting units where fair value exceeds carrying value:
Greater than 25%	1		1		3
Less than 25%	—		1		—
Goodwill for reporting units where fair value exceeds carrying value:
Greater than 25%	$	313	$	7	$	23
Less than 25%	—		165		—
	$	313	$	172	$	23

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 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 Motorparts, Performance Solutions, and Powertrain 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 three months ended March 31, 2020, which represented full impairments of the goodwill in one reporting unit in the Performance Solutions segment and one reporting unit in the Powertrain segment, and partial impairments of goodwill in one reporting unit in the Motorparts segment and one reporting unit in the Performance Solutions 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 Motorparts and Performance Solutions segments. It was determined that 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 three months ended March 31, 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 Performance Solutions segment and one of the reporting units in the Motorparts segment.

As discussed in more detail in Note 4, “Restructuring Charges, Net and Asset Impairments”, the Company concluded impairment triggers had occurred during the first quarter of 2020 for certain long-lived asset groups within the Performance Solutions 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 two reporting units.

Impairment charges for goodwill and intangible assets recognized by segment during the three months ended March 31, 2020 consist of the following:

	Three Months Ended March 31, 2020
	Motorparts		Performance Solutions		Powertrain		Total
Goodwill impairment charges	$	70	$	156	$	41	$	267
Trade names and trademarks intangible asset impairment charges	40		11		—		51
Definite-lived intangible asset impairment charges	—		65		—		65
	$	110	$	232	$	41	$	383

At March 31, 2021 and December 31, 2020, the Company’s intangible assets consist of the following:

		March 31, 2021						December 31, 2020
	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	$	993	$	(304)	$	689	$	995	$	(282)	$	713
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	136		(53)		83		139		(51)		88
Packaged kits know-how	10 years	54		(14)		40		54		(12)		42
Catalogs	10 years	47		(12)		35		47		(11)		36
Licensing agreements	3 to 5 years	65		(38)		27		66		(35)		31
Land use rights	28 to 46 years	49		(5)		44		49		(4)		45
		$	1,353	$	(433)	920		$	1,359	$	(402)	957
Indefinite-lived intangible assets:
Trade names and trademarks						234						237
Total						$	1,154					$	1,194

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

	Three Months Ended March 31,
	2021		2020
Amortization expense	$	32	$	34

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

	2021		2022		2023		2024		2025		2026 and thereafter		Total
Expected amortization expense	$	97	$	125	$	122	$	114	$	114	$	348	$	920

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Investment in Nonconsolidated Affiliates

3 Months Ended

Mar. 31, 2021

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:

	March 31, 2021		December 31, 2020
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. (U.S.)	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 March 31, 2021 and December 31, 2020 is as follows:

	March 31, 2021		December 31, 2020
Investments in nonconsolidated affiliates	$	532	$	581

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 $283 million and $287 million at March 31, 2021 and December 31, 2020.

The following table represents the activity from the Company’s investments in its nonconsolidated affiliates for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
Equity in earnings (losses) of nonconsolidated affiliates, net of tax	$	22	$	13
Cash dividends received from nonconsolidated affiliates	$	57	$	13

The following tables present summarized aggregated financial information of the Company’s nonconsolidated affiliates for the three months ended March 31, 2021 and 2020. The amounts represent 100% of the interest in the nonconsolidated affiliates and not the Company’s proportionate share:

	Three Months Ended March 31, 2021
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	102	$	49	$	112	$	263
Gross profit	$	35	$	14	$	22	$	71
Income from continuing operations	$	32	$	14	$	15	$	61
Net income	$	34	$	12	$	10	$	56

	Three Months Ended March 31, 2020
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	84	$	30	$	105	$	219
Gross profit	$	26	$	6	$	20	$	52
Income from continuing operations	$	23	$	7	$	9	$	39
Net income	$	18	$	6	$	6	$	30

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

3 Months Ended

Mar. 31, 2021

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. In certain cases, the Company may or may not designate these derivatives instruments as hedges for accounting 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 globally. 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 to minimize foreign currency risk. Where natural hedges are not in place, the Company considers managing certain aspects of its foreign currency activities and larger transactions through the use of foreign currency options or forward contracts.

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 concentration of credit risk related to derivative contracts at March 31, 2021 and December 31, 2020 is not considered material to the condensed consolidated financial statements.

Derivative Instruments

The Company presents its derivative positions and any related material collateral under master netting agreements on a net basis. Derivative gains and losses associated with undesignated hedges are recognized in “Cost of sales (exclusive of depreciation and amortization)” in the condensed consolidated statements of income (loss).

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. 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 March 31, 2021, all of which mature in the next twelve months:

	Notional Amount
Long positions	$	273
Short positions	$	(276)

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 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 both March 31, 2021 and December 31, 2020, the Company hedged its deferred compensation liability related to approximately 1,700,000 common share equivalents. In addition, the Company has an S&P 500 index fund ETF swap agreement to further reduce its market risk, which acts as a natural hedge offsetting an equivalent amount of indexed investments in the Company's deferred compensation plans. 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. Commodity rate price forward contracts are executed to offset a portion of the exposure to potential change in prices for raw materials. The Company monitors its commodity price risk exposures regularly to maximize the overall effectiveness of its commodity forward contracts.

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 reclassifying adjustments into “Cost of sales (exclusive of depreciation and amortization)” 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 $17 million and $10 million at March 31, 2021 and December 31, 2020. Substantially all of the commodity price hedge contracts mature within one year. The carrying value of these commodity price hedge contracts designated as cash flow hedges is not considered material to the condensed consolidated financial statements.

Net Investment Hedge — Foreign Currency Borrowings

At December 31, 2020, the Company had foreign currency denominated debt, of which €344 million or $420 million, was designated as a net investment hedge in certain foreign subsidiaries and affiliates of the Company and is included in “Long-term debt” in the condensed consolidated balance sheets. 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 adjustments on the underlying net assets of those foreign subsidiaries and affiliates, which are also recorded in OCL. All of the outstanding foreign currency borrowings related to the net investment hedge were discharged on March 17, 2021, as a result, there are no outstanding foreign currency borrowings designated as a net investment hedge at March 31, 2021. The Company’s debt instruments are discussed further in Note 10, “Debt and Other Financing Arrangements”.

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 months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
Commodity price hedge contracts designated as cash flow hedges	$	2	$	(3)
Foreign currency borrowings designated as a net investment hedge	$	11	$	14

The Company estimates approximately $3 million included in accumulated OCI or OCL at March 31, 2021 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

3 Months Ended

Mar. 31, 2021

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

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 (level 2) 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 (level 2) in determining the fair value of this swap agreement. The cash collateral amounts related to these swap agreements were $11 million and $7 million at March 31, 2021 and December 31, 2020, which are included in “Prepayments and other current assets” in the condensed consolidated balance sheets.

The fair value of these derivative instruments at March 31, 2021 and December 31, 2020 is not considered material to the condensed consolidated financial statements.

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 (level 2), 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 these derivative instruments at March 31, 2021 and December 31, 2020 is not considered material to the condensed consolidated financial statements.

Assets and Liabilities Measured at Fair Value on a Nonrecurring 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 three months ended March 31, 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

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 trade names and trademarks had declined 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 trade names and trademarks. The Company believes the assumptions and estimates used to determine the estimated fair values 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.

The basis of the goodwill impairment and indefinite-lived intangible asset analyses is the Company's current forecast of its annual budget and three-year strategic plan. This includes a projection of future cash flows, which requires the Company to make significant assumptions and estimates about the extent and timing of future cash flows and revenue growth rates. These represent Company-specific inputs and assumptions about the use of the assets, as observable inputs are not available (level 3). Due to the many variables inherent in estimating fair value and the relative size of the goodwill and indefinite-lived intangible assets, differences in assumptions could have a material effect on the results of the analyses.

In the goodwill impairment analysis, for reporting units with goodwill, fair values are estimated using a combination of the income approach and market approach. The Company applies a 75% weighting to the income approach and a 25% weighting to the market approach. The most significant inputs in estimating the fair value of the Company's reporting units under the income approach are (i) projected operating margins, (ii) the revenue growth rate, and (iii) the discount rate, which is risk-adjusted based on the aforementioned inputs.

For the indefinite-lived asset impairment analysis, the fair value is based upon the prospective stream of hypothetical after-tax royalty cost savings discounted at rates that reflect the rates of return appropriate for these intangible assets. The primary, and most sensitive, inputs utilized in determining fair values of trade names and trademarks are (i) projected branded product sales, (ii) the revenue growth rate, (iii) the royalty rate, and (iv) the discount rate, which is risk-adjusted based on the projected branded sales.

Refer to Note 6, “Goodwill and Other Intangible Assets”, for additional information on the goodwill and indefinite-lived intangible asset impairments.

Financial Instruments Not Carried at Fair Value

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

		March 31, 2021				December 31, 2020
	Fair value hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt (including current maturities):
Term loans and senior notes	Level 2	$	5,094	$	5,159	$	5,153	$	5,138

The fair value of the Company’s public senior notes and private borrowings under its New Credit Facility, as subsequently defined in Note 10, “Debt and Other Financing Arrangements”, is based on observable inputs, and any borrowings on the revolving credit facility approximate fair value. The Company also had $141 million and $180 million at March 31, 2021 and December 31, 2020 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

3 Months Ended

Mar. 31, 2021

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 March 31, 2021 and December 31, 2020 is set forth in the following table:

	March 31, 2021				December 31, 2020
	Principal		Carrying Amount (a)		Principal		Carrying Amount (a)
Credit Facilities
Revolver Borrowings
Due 2023	$	—	$	—	$	—	$	—
Term Loans
LIBOR plus 2.25% Term Loan A due 2019 through 2023(b)	1,498		1,490		1,530		1,520
LIBOR plus 3.00% Term Loan B due 2019 through 2025	1,662		1,610		1,666		1,612
Senior Unsecured Notes
$225 million of 5.375% Senior Notes due 2024	225		223		225		223
$500 million of 5.000% Senior Notes due 2026	500		495		500		494
Senior Secured Notes
€300 million of Euribor plus 4.875% Euro Floating Rate Notes due 2024(c)	—		—		366		370
€350 million of 5.000% Euro Fixed Rate Notes due 2024(c)	—		—		428		445
$500 million of 7.875% Senior Secured Notes due 2029	500		490		500		489
$800 million of 5.125% Senior Secured Notes due 2029(d)	800		786		—		—
Other debt, primarily foreign instruments	24		23		24		23
			5,117				5,176
Less - maturities classified as current			6				5
Total long-term debt			$	5,111			$	5,171

(a)Carrying amount is net of unamortized debt issuance costs and debt discounts or premiums. Total unamortized debt issuance costs were $92 million and $82 million at March 31, 2021 and December 31, 2020. Total unamortized debt (premium) discount, net was $1 million and $(20) million at March 31, 2021 and December 31, 2020.

(b)The interest rate on Term Loan A at December 31, 2020 was LIBOR plus 2.50%.

(c)The Company satisfied and discharged all of its 4.875% Euro Floating Rate Notes due 2024 and 5.000% Euro Fixed Rate Notes due 2024 on March 17, 2021.

(d)On March 17, 2021, the Company issued $800 million aggregate principal amount of 5.125% senior secured notes due April 15, 2029. Interest payable semiannually on April 15 and October 15 of each year beginning on October 15, 2021 with principal due at maturity.

The Company has a senior credit facility under the credit agreement dated October 1, 2018 (as amended, restated, supplemented or otherwise modified, the “New Credit Facility”) that 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”). 

Short-Term Debt

The Company’s short-term debt at March 31, 2021 and December 31, 2020 consists of the following:

	March 31, 2021		December 31, 2020
Maturities classified as current	$	6	$	5
Short-term borrowings(a)	118		157
Total short-term debt	$	124	$	162

(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 months ended March 31, 2021 and 2020 is as follows:

	Three Months Ended March 31,
	2021		2020
Amortization of debt issuance fees(a)	$	6	$	5
Accretion of debt premium	$	(2)	$	(3)

(a)Included in the table above is the amortization of debt issuance costs on the revolver of $2 million and $1 million during the three months ended March 31, 2021 and 2020.

Credit Facilities

Financing Arrangements

The table below shows the Company’s borrowing capacity on committed credit facilities at March 31, 2021 (in billions):

	March 31, 2021
	Term	Available(b)
Tenneco Inc. revolving credit facility(a)	2023	$	1.5
Tenneco Inc. Term Loan A	2023	—
Tenneco Inc. Term Loan B	2025	—
Subsidiaries’ credit agreements	2021 - 2028	—
		$	1.5

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

(b)At March 31, 2021, the Company had $28 million of outstanding letters of credit under the revolving credit facility, which reduces the available borrowings under the revolving credit facility. The Company also had $74 million of outstanding letters of credit under uncommitted facilities at March 31, 2021.

At March 31, 2021, the Company had liquidity of $2.1 billion comprised of $631 million of cash and $1.5 billion undrawn on its revolving credit facility. The Company had no outstanding borrowings on its revolving credit facility at March 31, 2021.

At March 31, 2021 and December 31, 2020, the unamortized debt issuance costs related to the revolver of $15 million and $17 million are included in “Other assets” in the condensed consolidated balance sheets.

Term Loans

New Credit Facility — Interest Rates and Fees

At March 31, 2021, after giving effect to the third amendment to the New Credit Facility dated May 5, 2020 (the “Third Amendment”), the interest rate on borrowings under the revolving credit facility and the Term Loan A facility was LIBOR plus 2.25% and, prior to the occurrence of certain covenant reset triggers (“Covenant Reset Triggers”), will remain at LIBOR plus 2.25% for each relevant period for which the Company's consolidated net leverage ratio (as defined in the New Credit Facility) is less than 6.0 to 1 and greater than 4.5 to 1. The interest rate on borrowings under the revolving credit facility and the Term Loan A facility are subject to step down as follows:

Consolidated net leverage ratio	Interest rate
greater than 3.0 to 1	LIBOR plus 2.00%
less than 3.0 to 1 and greater than 2.5 to 1	LIBOR plus 1.75%
less than 2.5 to 1 and greater than 1.5 to 1	LIBOR plus 1.50%
less than 1.5 to 1	LIBOR plus 1.25%

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

The New Credit Facility contains representations and warranties, and covenants which are customary for debt facilities of this type. The Third Amendment provided relief from the financial maintenance covenants for the revolving credit facility and Term Loan A facility subject to the non-occurrence of certain Covenant Reset Triggers that limit certain activities of the Company by implementing more restrictive affirmative and negative covenants. After giving effect to the Third Amendment, the financial maintenance covenants for the revolving credit facility and the Term Loan A facility 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 8.75 to 1	at December 31, 2020	not greater than 5.25 to 1	at March 31, 2022
not greater than 8.25 to 1	at March 31, 2021	not greater than 4.75 to 1	at June 30, 2022
not greater than 4.50 to 1	at June 30, 2021	not greater than 4.25 to 1	at September 30, 2022
not greater than 4.25 to 1	at September 30, 2021	not greater than 3.75 to 1	thereafter
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 1.50 to 1 through March 31, 2021, and 2.75 to 1 thereafter.

If a Covenant Reset Trigger occurs, the financial maintenance covenants for the revolving credit facility and the Term Loan A facility revert back to the previous financial maintenance covenants in effect immediately prior to the Third Amendment (the “Prior Financial Covenants”), including (i) a requirement to have a consolidated net leverage ratio (as defined in the New Credit Facility), at the end of each fiscal quarter, with step-downs, as follows:

(i) Consolidated net leverage ratio
not greater than 4.50 to 1	through March 31, 2021
not greater than 4.25 to 1	through September 30, 2021
not greater than 4.00 to 1	through March 31, 2022
not greater than 3.75 to 1	through September 30, 2022
not greater than 3.50 to 1	thereafter

and (ii) 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 2.75 to 1.

In addition, the Company may make a one-time election to revert back to the Prior Financial Covenants and terminate the applicability of the Covenant Reset Triggers upon delivery of a covenant reset certificate to the administrative agent under the New Credit Facility that attests to compliance with the Prior Financial Covenants as of the end of the relevant fiscal period (“Covenant Reset Certificate”).

At March 31, 2021, the Company was in compliance with all the financial covenants of the New Credit Facility.

Senior Notes

At March 31, 2021, 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 also has outstanding 7.875% senior secured notes due January 15, 2029 (“7.875% Senior Secured Notes”) which were issued on November 30, 2020, and 5.125% senior secured notes due April 15, 2029 (“5.125% Senior Secured Notes”) which were issued on March 17, 2021. The 7.875% Senior Secured Notes and 5.125% Senior Secured Notes (collectively, the “Senior Secured Notes”) were outstanding at March 31, 2021.

On March 3, 2021, the Company provided notice of its intention to redeem all of the outstanding 5.000% euro denominated senior secured notes due July 15, 2024 (the “2024 Fixed Rate Secured Notes”) and all of the outstanding floating rate euro denominated senior secured notes due April 15, 2024 (the “2024 Floating Rate Secured Notes” and, together with the 2024 Fixed Rate Secured Notes, the “2024 Secured Notes”). On March 17, 2021, the Company using the net proceeds of the offering of 5.125% Senior Secured Notes, together with cash on hand, satisfied and discharged each of the indentures governing the 2024 Secured Notes in accordance with their terms. As a result, the Company recorded a gain on extinguishment of debt of $8 million for the three months ended March 31, 2021.

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 its subsidiaries to create liens on their assets and enter into sale and leaseback transactions. In addition, the indentures governing the Senior Secured Notes and the 2024 Senior 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 the Company’s operations, including limitations on: (i) incurring additional indebtedness; (ii) paying dividends; (iii) distributions and stock repurchases; (iv) investments; (v)  asset sales; (vi) entering into transactions with the Company’s affiliates; and (vii) undertaking 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 Unsecured Notes and Senior Secured Notes to make distributions to the Company.

At March 31, 2021, the Company was in compliance with all of its financial covenants under the indentures governing the Senior Unsecured Notes and Senior Secured Notes.

Other Debt

Other debt consists primarily of subsidiary debt.

Factoring Arrangements

In the Company'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.

At March 31, 2021 and December 31, 2020, the amount of accounts receivable outstanding and derecognized for factoring arrangements was $1.0 billion and $1.0 billion, of which $0.5 billion and $0.4 billion relate to accounts receivable where the Company has continuing involvement. In addition, the deferred purchase price receivable was $69 million and $51 million at March 31, 2021 and December 31, 2020.

For the three months ended March 31, 2021 and 2020, proceeds from the factoring of accounts receivable qualifying as sales was $1.3 billion and $1.2 billion, of which $1.1 billion and $1.1 billion were received on accounts receivable where the Company has continuing involvement.

For the three months ended March 31, 2021 and 2020, the Company’s financing charges associated with the factoring of receivables, which are included in “Interest expense” in the condensed consolidated statements of income (loss), was $4 million and $6 million.

If the Company were not able to factor receivables under these programs, its borrowings under its revolving credit agreement might increase. These programs provide the Company with access to cash at costs that are generally favorable to alternative sources of financing and allow the Company to reduce borrowings under its revolving credit agreement.

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Pension Plans, Postretirement and Other Employee Benefits

3 Months Ended

Mar. 31, 2021

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 costs (credits) for the three months ended March 31, 2021 and 2020 are as follows:

	Three Months Ended March 31,
	Pension Benefits								Other Postretirement Benefits
	2021				2020
	U.S.		Non-U.S.		U.S.		Non-U.S.		2021		2020
Service cost	$	—	$	7	$	—	$	6	$	—	$	—
Interest cost	8		4		10		4		1		2
Expected return on plan assets	(16)		(4)		(16)		(4)		—		—
Net amortization:
Actuarial loss	3		2		2		2		1		1
Prior service cost (credit)	—		—		—		—		(2)		(2)
Net pension and postretirement costs (credits)	$	(5)	$	9	$	(4)	$	8	$	—	$	1

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Income Taxes

3 Months Ended

Mar. 31, 2021

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 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. The Company considers both positive and negative evidence and 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, reversals of existing taxable temporary differences, and tax planning strategies. In making such judgments, significant weight is given to evidence that can be objectively verified.

For the three months ended March 31, 2021, the Company recorded an income tax expense of $47 million on income from continuing operations before income taxes of $134 million. This compares to an income tax benefit of $94 million on loss from continuing operations before income taxes of $920 million in the three months ended March 31, 2020.

Income tax expense for the three months ended March 31, 2021 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 benefits.

Income tax expense for the three months ended March 31, 2020 differs from the U.S. statutory rate due primarily to $105 million of tax benefit recognized relating to the asset impairment charges of $854 million, pre-tax income taxed at rates higher than the U.S. statutory rate, and pre-tax losses with no tax benefits.The Company received notification in the first quarter of 2021 that its U.S. tax refund claim is approved and the tax years through 2016 are now effectively settled. The Company believes it is reasonably possible up to $44 million in unrecognized tax benefits related to the expiration of statute of limitations and the conclusion of income tax examinations may be recognized within the next twelve months. The Company has released $54 million of unrecognized tax benefits with a corresponding adjustment of $54 million to the Company’s valuation allowance as a result of the conclusion of income tax examinations in the first quarter of 2021.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

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 that 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 actively seeking to resolve these actual and potential statutory, regulatory, and contractual obligations.

The Company expenses or capitalizes, as appropriate, expenditures for ongoing compliance with environmental regulations. At March 31, 2021, 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 at March 31, 2021 and December 31, 2020 as follows:

	March 31, 2021		December 31, 2020
Accrued expenses and other current liabilities	$	8	$	8
Deferred credits and other liabilities	25		26
	$	33	$	34

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

	2021		2022		2023		2024		2025		2026 and thereafter
Expected payments	$	5	$	5	$	2	$	2	$	2	$	14

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.

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 approximately 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 March 31, 2021 and December 31, 2020 are as follows:

	March 31, 2021		December 31, 2020
Accrued expenses and other current liabilities	$	2	$	2
Deferred credits and other liabilities	12		12
	$	14	$	14

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 accounts for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
Balance at beginning of period	$	62	$	54
Accruals related to product warranties	14		3
Reductions for payments made	(8)		(6)
Foreign currency	(1)		—
Balance at end of period	$	67	$	51

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Share-Based Compensation

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Share-Based Compensation

14. Share-Based Compensation

Share-based compensation expense is included in “Selling, general, and administrative” in the condensed consolidated statements of income (loss). Total share-based compensation expense for the three months ended March 31, 2021 and 2020 is as follows:

	Three Months Ended March 31,
	2021		2020
Cash-settled share-based compensation expense	$	4	$	—
Share-settled share-based compensation expense	5		2
	$	9	$	2

Cash-Settled Awards

The Company has granted restricted stock units (“RSUs”) and performance share units (“PSUs”) 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 complete requisite period up until date of settlement.

Share-Settled Awards

The following table reflects the status of all share-settled RSUs and PSUs for the three months ended March 31, 2021:

	Share-Settled RSUs			Share-Settled PSUs
	Units	Weighted Avg. Grant Date Fair Value		Units	Weighted Avg. Grant Date Fair Value
Nonvested balance at beginning of period	2,118,605	$	26.00	527,105	$	36.37
Granted	2,023,782	10.60		—	—
Vested	(654,878)	32.69		(57,794)	49.18
Forfeited	(54,096)	25.90		(125,158)	47.48
Nonvested balance at end of period	3,433,413	$	15.06	344,153	$	24.60

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Shareholders' Equity

3 Months Ended

Mar. 31, 2021

Equity [Abstract]

Shareholders' Equity

15. Shareholders' Equity

Common Stock

Common Stock Outstanding

The Company has authorized 175,000,000 shares ($0.01 par value) of Class A Common Stock at March 31, 2021 and December 31, 2020. The Company has authorized 25,000,000 shares ($0.01 par value) of Class B Common Stock at March 31, 2021 and December 31, 2020.

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

	Class A Common Stock		Class B Common Stock
	Three Months Ended March 31,		Three Months Ended March 31,
	2021	2020	2021	2020
Shares issued at beginning of period	75,714,163	71,727,061	20,308,454	23,793,669
Issued pursuant to benefit plans	786,575	450,175	—	—
Withheld for taxes pursuant to benefit plans	(247,508)	(119,644)	—	—
Class B common stock converted to Class A common stock	17,232,791	—	(17,232,791)	—
Shares issued at end of period	93,486,021	72,057,592	3,075,663	23,793,669
Treasury stock	14,592,888	14,592,888	—	—
Total shares outstanding	78,893,133	57,464,704	3,075,663	23,793,669

Class B Common Stock Conversion

During the first quarter of 2021, Icahn Enterprises L.P. (“IEP”) and its affiliates converted 17,232,791 shares of the Company’s Class B Common Stock into 17,232,791 shares of Class A Common Stock. As of March 31, 2021, IEP held 9,589,751 shares, or approximately 12.16%, of the Company’s outstanding Class A Common Stock and 3,075,663 shares of the Company’s outstanding Class B Common Stock.

Subsequent to March 31, 2021, IEP and its affiliates converted the remaining 3,075,663 shares of the Company's Class B Common Stock outstanding at March 31, 2021 into 3,075,663 shares of Class A Common Stock. Based on information contained in filings with the SEC, as of May 3, 2021, IEP and its affiliates hold 10,359,643 shares, or approximately 12.64% of the Company’s outstanding Class A Common Stock.

Shareholder Agreement

In connection with the closing of the Federal-Mogul acquisition, on October 1, 2018, the Company, American Entertainment Properties Corporation, IEP, and Icahn Enterprises Holdings L.P. entered into a Shareholders Agreement (the “Shareholders Agreement”). IEP’s representative to the Company's Board of Directors under the Shareholders Agreement submitted his resignation effective June 10, 2020.

The Shareholders Agreement contains certain standstill and voting obligations applicable to IEP and its affiliates, which expired on April 1, 2020. In addition, IEP and its affiliates were prohibited from acquiring, offering to acquire, or agreeing to acquire, directly or indirectly, any shares of Class A Common Stock or other securities until April 1, 2021.

Until the later of (i) the expiration of the standstill restrictions referenced above and (ii) the time when IEP and its affiliates cease to own at least 10% of the outstanding shares, IEP and its affiliates may not transfer any shares (a) to certain specified types of investors and (b) in an amount equal to 5% or more of the Class A Common Stock issued and outstanding at the time of such transfer (subject to certain exceptions).

For so long as IEP and its affiliates own at least 10% of the outstanding shares, if the Company proposes to issue any equity securities (other than in an excluded issuance), IEP and its affiliates have certain preemptive rights. The Shareholders Agreement also includes registration rights for IEP.

Share Repurchase Program

The Company presently has no share repurchase program in place.

Preferred Stock

The Company had 50,000,000 shares of preferred stock ($0.01 par value) authorized at both March 31, 2021 and December 31, 2020. No shares of preferred stock were issued or outstanding at those dates.

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 months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
Foreign currency translation adjustments:
Balance at beginning of period	$	(395)	$	(369)
Other comprehensive income (loss) before reclassifications	(46)		(199)
Reclassification from other comprehensive income (loss)	—		—
Other comprehensive income (loss)	(46)		(199)
Income tax benefit (provision)	—		—
Balance at end of period	(441)		(568)
Defined benefit plans:
Balance at beginning of period	(353)		(342)
Other comprehensive income (loss) before reclassifications	4		—
Reclassification from other comprehensive income (loss)	—		3
Other comprehensive income (loss)	4		3
Income tax benefit (provision)	(1)		1
Balance at end of period	(350)		(338)
Cash flow hedges:
Balance at beginning of period	4		—
Other comprehensive income (loss) before reclassifications	2		(3)
Reclassification from other comprehensive income (loss)	(4)		—
Other comprehensive income (loss)	(2)		(3)
Income tax benefit (provision)	—		1
Balance at end of period	2		(2)
Accumulated other comprehensive loss at end of period	$	(789)	$	(908)
Other comprehensive income (loss) attributable to noncontrolling interests	$	(6)	$	(20)

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Segment Information

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segment Information

16. Segment Information

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

Beginning in the first quarter of 2021, the Company made a change to its operating segments. This change consisted of moving a reporting unit within the Powertrain segment to the Ride Performance segment to align with a change in how the CODM allocates resources and assesses performance against the Company’s key growth strategies. In addition, with this change to its segments, Ride Performance was renamed Performance Solutions. As such, prior period operating segment results and related disclosures have been conformed to reflect the Company's current operating segments.

Management uses EBITDA including noncontrolling interests as the key performance measure of segment profitability and uses the measure in its financial and operational decision-making processes, for internal reporting, and for planning and forecasting purposes to effectively allocate resources. EBITDA including noncontrolling interests is defined as earnings before interest expense, income taxes, noncontrolling interests, and depreciation and amortization. Segment assets are not presented as it is not a measure reviewed by the CODM 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 months ended March 31, 2021 and 2020 are as follows:

	Reportable Segments
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total		Reclass & Elims		Total
For the Three Months Ended March 31, 2021
Revenues from external customers	$	719	$	787	$	2,124	$	1,101	$	4,731	$	—	$	4,731
Intersegment revenues	$	9	$	26	$	6	$	47	$	88	$	(88)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	3	$	1	$	—	$	18	$	22	$	—	$	22
For the Three Months Ended March 31, 2020
Revenues from external customers	$	706	$	669	$	1,545	$	916	$	3,836	$	—	$	3,836
Intersegment revenues	$	9	$	29	$	6	$	38	$	82	$	(82)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	2	$	—	$	—	$	11	$	13	$	—	$	13

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 March 31,
	2021		2020
EBITDA including noncontrolling interests by segment:
Motorparts	$	102	$	(40)
Performance Solutions	43		(674)
Clean Air	149		99
Powertrain	115		27
Total reportable segments	409		(588)
Corporate	(50)		(86)
Depreciation and amortization	(155)		(171)
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	204		(845)
Interest expense	(70)		(75)
Income tax (expense) benefit	(47)		94
Net income (loss)	$	87	$	(826)

Disaggregated Revenue

Original Equipment

Value-Added Sales

OE revenue is generated from providing OE 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 Performance Solutions segment have been reclassified from OE - Value add to Aftermarket to conform with the current year presentation. This reclassification affected the three months ended March 31, 2020. In the following tables, revenue is disaggregated accordingly:

	Reportable Segments
By Customer Type	Motorparts		Performance Solutions		Clean Air		Powertrain		Total
Three Months Ended March 31, 2021
OE - Substrate	$	—	$	—	$	1,088	$	—	$	1,088
OE - Value add	—		768		1,036		1,101		2,905
Aftermarket	719		19		—		—		738
Total	$	719	$	787	$	2,124	$	1,101	$	4,731
Three Months Ended March 31, 2020
OE - Substrate	$	—	$	—	$	700	$	—	$	700
OE - Value add	—		654		845		916		2,415
Aftermarket	706		15		—		—		721
Total	$	706	$	669	$	1,545	$	916	$	3,836

	Reportable Segments
By Geography	Motorparts		Performance Solutions		Clean Air		Powertrain		Total
Three Months Ended March 31, 2021
North America	$	454	$	240	$	851	$	328	$	1,873
Europe, Middle East, Africa and South America	212		355		682		563		1,812
Asia Pacific	53		192		591		210		1,046
Total	$	719	$	787	$	2,124	$	1,101	$	4,731
Three Months Ended March 31, 2020
North America	$	476	$	228	$	704	$	314	$	1,722
Europe, Middle East, Africa and South America	197		319		565		470		1,551
Asia Pacific	33		122		276		132		563
Total	$	706	$	669	$	1,545	$	916	$	3,836

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Related Party Transactions

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Related Party Transactions

17. Related Party Transactions

The following table summarizes the net sales, purchases, and royalty and other income (expense) to and from related parties for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021						2020
	Net Sales		Purchases		Royalty and Other		Net Sales		Purchases		Royalty and Other
Anqing TP Goetze Piston Ring Company Limited	$	—	$	18	$	1	$	4	$	10	$	—
Anqing TP Powder Metallurgy Company Limited	$	1	$	—	$	—	$	1	$	1	$	—
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	1	$	9	$	—	$	1	$	2	$	—
Federal-Mogul Powertrain Otomotiv A.S.	$	10	$	76	$	3	$	12	$	59	$	4
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti.	$	—	$	—	$	—	$	—	$	1	$	—
Federal-Mogul TP Liners, Inc.	$	4	$	12	$	—	$	4	$	12	$	—
Icahn Automotive Group LLC	$	31	$	—	$	1	$	33	$	—	$	1
Montagewerk Abgastechnik Emden GmbH	$	4	$	—	$	—	$	3	$	—	$	—
PSC Metals, Inc.	$	—	$	—	$	1	$	—	$	—	$	—

The following table is a summary of amounts due to and from the Company's related parties at March 31, 2021 and December 31, 2020:

	March 31, 2021				December 31, 2020
	Receivables		Payables and Accruals		Receivables		Payables and Accruals
Anqing TP Goetze Piston Ring Company Limited	$	2	$	27	$	3	$	26
Anqing TP Powder Metallurgy Company Limited	$	—	$	1	$	1	$	1
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	1	$	10	$	—	$	3
Federal-Mogul Powertrain Otomotiv A.S.	$	7	$	38	$	10	$	49
Federal-Mogul TP Liners, Inc.	$	2	$	6	$	2	$	7
Icahn Automotive Group LLC	$	39	$	8	$	47	$	9
Montagewerk Abgastechnik Emden GmbH	$	2	$	—	$	1	$	—
PSC Metals, Inc.	$	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 IEH Auto Parts LLC and Pep Boys—Manny, Moe & Jack.

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 three months ended March 31, 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 three months ended March 31, 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)

3 Months Ended

Mar. 31, 2021

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, 2020, which was filed with the Securities and Exchange Commission on February 24, 2021. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. 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.

Beginning in the first quarter of 2021, the Company made a change to its operating segments. This change consisted of moving a reporting unit within the Powertrain segment to the Ride Performance segment to align with a change in how the Chief Operating Decision Maker (“CODM”) allocates resources and assesses performance against the Company's key growth strategies. In addition, with this change to its segments, Ride Performance was renamed Performance Solutions. As such, prior period operating segment results and related disclosures have been conformed to reflect the Company's current operating segments.

Reclassifications

ReclassificationsCertain amounts in the prior period have been aggregated or disaggregated to conform to current year presentation, as described above for the change in operating segments.

Redeemable noncontrolling interests

Redeemable noncontrolling interestsThe 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 shareBasic 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.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Redeemable Noncontrolling Interests

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

	Three Months Ended March 31,
	2021		2020
Balance at beginning of period	$	78	$	196
Net income (loss) attributable to redeemable noncontrolling interests	7		(4)
Other comprehensive income (loss)	(3)		(7)
Noncontrolling interest tender offer redemption	—		(46)
Redemption value measurement adjustment	5		15
Reclassification of noncontrolling interest to permanent equity	—		(82)
Balance at end of period	$	87	$	72

Schedule of Earnings Per Share, Basic and Diluted

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

	Three Months Ended March 31,
	2021	2020
Weighted average shares of common stock outstanding	81,953,133	81,168,562
Effect of dilutive securities:
PSUs and RSUs	570,996	—
Dilutive shares outstanding	82,524,129	81,168,562

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Restructuring Charges, Net and Asset Impairments (Tables)

3 Months Ended

Mar. 31, 2021

Restructuring and Related Activities [Abstract]

Schedule of Restructuring

For the three months ended March 31, 2021 and 2020, restructuring charges, net and asset impairments by segment are as follows:

	Three Months Ended March 31, 2021
	Motorparts		Performance Solutions		Clean Air		Powertrain		Corporate		Total
Severance and other charges, net	$	2	$	4	$	9	$	10	$	—	$	25
Total restructuring charges, asset impairments, and other	$	2	$	4	$	9	$	10	$	—	$	25

	Three Months Ended March 31, 2020
	Motorparts		Performance Solutions		Clean Air		Powertrain		Corporate		Total
Severance and other charges, net	$	2	$	6	$	—	$	1	$	4	$	13
Other non-restructuring asset impairments	—		455		—		—		16		471
Total restructuring charges, asset impairments, and other	$	2	$	461	$	—	$	1	$	20	$	484

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

	Reportable Segments
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total Reportable Segments		Corporate		Total
Balance at December 31, 2020	$	14	$	18	$	25	$	42	$	99	$	1	$	100
Provisions	2		4		17		11		34		—		34
Revisions to estimates	—		—		(8)		(1)		(9)		—		(9)
Payments	(4)		(5)		(6)		(9)		(24)		(1)		(25)
Foreign currency	—		(1)		—		—		(1)		—		(1)
Balance at March 31, 2021	$	12	$	16	$	28	$	43	$	99	$	—	$	99

	Reportable Segments
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total Reportable Segments		Corporate		Total
Balance at December 31, 2019	$	16	$	23	$	23	$	30	$	92	$	9	$	101
Provisions	2		7		—		2		11		4		15
Revisions to estimates	—		(1)		—		(1)		(2)		—		(2)
Payments	(4)		(9)		(4)		(4)		(21)		(9)		(30)
Foreign currency	—		(1)		—		—		(1)		—		(1)
Balance at March 31, 2020	$	14	$	19	$	19	$	27	$	79	$	4	$	83

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

	Three Months Ended March 31, 2021						Three Months Ended March 31, 2020
	Employee Costs		Facility Closure and Other Costs		Total		Employee Costs		Facility Closure and Other Costs		Total
Balance at beginning of period	$	99	$	1	$	100	$	97	$	4	$	101
Provisions	31		3		34		10		5		15
Revisions to estimates	(9)		—		(9)		(2)		—		(2)
Payments	(21)		(4)		(25)		(23)		(7)		(30)
Foreign currency	(1)		—		(1)		(1)		—		(1)
Balance at end of period	$	99	$	—	$	99	$	81	$	2	$	83

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Inventories (Tables)

3 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Schedule of Inventory

At March 31, 2021 and December 31, 2020, inventory by major classification was as follows:

	March 31, 2021		December 31, 2020
Finished goods	$	801	$	758
Work in process	492		449
Raw materials	442		441
Materials and supplies	95		95
Total inventories	$	1,830	$	1,743

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

As discussed in Note 2, “Summary of Significant Accounting Policies”, beginning in the first quarter of 2021, the Company moved a reporting unit within the Powertrain segment to the Ride Performance segment and Ride Performance was renamed Performance Solutions. Refer to Note 16, “Segment Information” for further information.

At March 31, 2021 and December 31, 2020, goodwill consists of the following:

	Three Months Ended March 31, 2021
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total
Gross carrying amount at December 31, 2020	$	623	$	549	$	23	$	59	$	1,254
Foreign exchange	—		(3)		—		—		(3)
Gross carrying amount at March 31, 2021	623		546		23		59		1,251
Accumulated impairment loss at December 31, 2020	(310)		(377)		—		(59)		(746)
Foreign exchange	—		3		—		—		3
Accumulated impairment loss at March 31, 2021	(310)		(374)		—		(59)		(743)
Net carrying value at March 31, 2021	$	313	$	172	$	23	$	—	$	508

The following table shows a summary of the number of reporting units with a net carrying value of goodwill in each segment at March 31, 2021 and whether or not the reporting unit’s fair value exceeds its carrying value by more or less than 25% based on each respective reporting units most recent goodwill impairment analysis:

	Segments
	Motorparts		Performance Solutions		Clean Air
Number of reporting units with goodwill	1		2		3
Number of reporting units where fair value exceeds carrying value:
Greater than 25%	1		1		3
Less than 25%	—		1		—
Goodwill for reporting units where fair value exceeds carrying value:
Greater than 25%	$	313	$	7	$	23
Less than 25%	—		165		—
	$	313	$	172	$	23

Schedule of Intangible Assets and Goodwill

Impairment charges for goodwill and intangible assets recognized by segment during the three months ended March 31, 2020 consist of the following:

	Three Months Ended March 31, 2020
	Motorparts		Performance Solutions		Powertrain		Total
Goodwill impairment charges	$	70	$	156	$	41	$	267
Trade names and trademarks intangible asset impairment charges	40		11		—		51
Definite-lived intangible asset impairment charges	—		65		—		65
	$	110	$	232	$	41	$	383

Schedule of Indefinite-Lived Intangible Assets

At March 31, 2021 and December 31, 2020, the Company’s intangible assets consist of the following:

		March 31, 2021						December 31, 2020
	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	$	993	$	(304)	$	689	$	995	$	(282)	$	713
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	136		(53)		83		139		(51)		88
Packaged kits know-how	10 years	54		(14)		40		54		(12)		42
Catalogs	10 years	47		(12)		35		47		(11)		36
Licensing agreements	3 to 5 years	65		(38)		27		66		(35)		31
Land use rights	28 to 46 years	49		(5)		44		49		(4)		45
		$	1,353	$	(433)	920		$	1,359	$	(402)	957
Indefinite-lived intangible assets:
Trade names and trademarks						234						237
Total						$	1,154					$	1,194

Schedule of Finite-Lived Intangible Assets

At March 31, 2021 and December 31, 2020, the Company’s intangible assets consist of the following:

		March 31, 2021						December 31, 2020
	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	$	993	$	(304)	$	689	$	995	$	(282)	$	713
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	136		(53)		83		139		(51)		88
Packaged kits know-how	10 years	54		(14)		40		54		(12)		42
Catalogs	10 years	47		(12)		35		47		(11)		36
Licensing agreements	3 to 5 years	65		(38)		27		66		(35)		31
Land use rights	28 to 46 years	49		(5)		44		49		(4)		45
		$	1,353	$	(433)	920		$	1,359	$	(402)	957
Indefinite-lived intangible assets:
Trade names and trademarks						234						237
Total						$	1,154					$	1,194

Finite-lived Intangible Assets Amortization Expense

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

	Three Months Ended March 31,
	2021		2020
Amortization expense	$	32	$	34

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

	2021		2022		2023		2024		2025		2026 and thereafter		Total
Expected amortization expense	$	97	$	125	$	122	$	114	$	114	$	348	$	920

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Investment in Nonconsolidated Affiliates (Tables)

3 Months Ended

Mar. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

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

	March 31, 2021		December 31, 2020
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. (U.S.)	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 March 31, 2021 and December 31, 2020 is as follows:

	March 31, 2021		December 31, 2020
Investments in nonconsolidated affiliates	$	532	$	581

The following table represents the activity from the Company’s investments in its nonconsolidated affiliates for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
Equity in earnings (losses) of nonconsolidated affiliates, net of tax	$	22	$	13
Cash dividends received from nonconsolidated affiliates	$	57	$	13

The following tables present summarized aggregated financial information of the Company’s nonconsolidated affiliates for the three months ended March 31, 2021 and 2020. The amounts represent 100% of the interest in the nonconsolidated affiliates and not the Company’s proportionate share:

	Three Months Ended March 31, 2021
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	102	$	49	$	112	$	263
Gross profit	$	35	$	14	$	22	$	71
Income from continuing operations	$	32	$	14	$	15	$	61
Net income	$	34	$	12	$	10	$	56

	Three Months Ended March 31, 2020
Statements of Income	Otomotiv A.S.		Anqing TP Goetze		Other		Total
Sales	$	84	$	30	$	105	$	219
Gross profit	$	26	$	6	$	20	$	52
Income from continuing operations	$	23	$	7	$	9	$	39
Net income	$	18	$	6	$	6	$	30

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Derivatives and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2021

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 March 31, 2021, all of which mature in the next twelve months:

	Notional Amount
Long positions	$	273
Short positions	$	(276)

Schedule of Derivative Instruments

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 months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
Commodity price hedge contracts designated as cash flow hedges	$	2	$	(3)
Foreign currency borrowings designated as a net investment hedge	$	11	$	14

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Fair Value (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Carrying and Estimated Fair Value

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

		March 31, 2021				December 31, 2020
	Fair value hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt (including current maturities):
Term loans and senior notes	Level 2	$	5,094	$	5,159	$	5,153	$	5,138

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Debt and Other Financing Arrangements (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Summary of Long-term Debt Obligations

A summary of the Company’s long-term debt obligations at March 31, 2021 and December 31, 2020 is set forth in the following table:

	March 31, 2021				December 31, 2020
	Principal		Carrying Amount (a)		Principal		Carrying Amount (a)
Credit Facilities
Revolver Borrowings
Due 2023	$	—	$	—	$	—	$	—
Term Loans
LIBOR plus 2.25% Term Loan A due 2019 through 2023(b)	1,498		1,490		1,530		1,520
LIBOR plus 3.00% Term Loan B due 2019 through 2025	1,662		1,610		1,666		1,612
Senior Unsecured Notes
$225 million of 5.375% Senior Notes due 2024	225		223		225		223
$500 million of 5.000% Senior Notes due 2026	500		495		500		494
Senior Secured Notes
€300 million of Euribor plus 4.875% Euro Floating Rate Notes due 2024(c)	—		—		366		370
€350 million of 5.000% Euro Fixed Rate Notes due 2024(c)	—		—		428		445
$500 million of 7.875% Senior Secured Notes due 2029	500		490		500		489
$800 million of 5.125% Senior Secured Notes due 2029(d)	800		786		—		—
Other debt, primarily foreign instruments	24		23		24		23
			5,117				5,176
Less - maturities classified as current			6				5
Total long-term debt			$	5,111			$	5,171

(a)Carrying amount is net of unamortized debt issuance costs and debt discounts or premiums. Total unamortized debt issuance costs were $92 million and $82 million at March 31, 2021 and December 31, 2020. Total unamortized debt (premium) discount, net was $1 million and $(20) million at March 31, 2021 and December 31, 2020.

(b)The interest rate on Term Loan A at December 31, 2020 was LIBOR plus 2.50%.

(c)The Company satisfied and discharged all of its 4.875% Euro Floating Rate Notes due 2024 and 5.000% Euro Fixed Rate Notes due 2024 on March 17, 2021.

(d)On March 17, 2021, the Company issued $800 million aggregate principal amount of 5.125% senior secured notes due April 15, 2029. Interest payable semiannually on April 15 and October 15 of each year beginning on October 15, 2021 with principal due at maturity.

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 months ended March 31, 2021 and 2020 is as follows:

	Three Months Ended March 31,
	2021		2020
Amortization of debt issuance fees(a)	$	6	$	5
Accretion of debt premium	$	(2)	$	(3)

(a)Included in the table above is the amortization of debt issuance costs on the revolver of $2 million and $1 million during the three months ended March 31, 2021 and 2020.

Schedule of Short-term Debt

The Company’s short-term debt at March 31, 2021 and December 31, 2020 consists of the following:

	March 31, 2021		December 31, 2020
Maturities classified as current	$	6	$	5
Short-term borrowings(a)	118		157
Total short-term debt	$	124	$	162

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

Financing Arrangements

Financing Arrangements

The table below shows the Company’s borrowing capacity on committed credit facilities at March 31, 2021 (in billions):

	March 31, 2021
	Term	Available(b)
Tenneco Inc. revolving credit facility(a)	2023	$	1.5
Tenneco Inc. Term Loan A	2023	—
Tenneco Inc. Term Loan B	2025	—
Subsidiaries’ credit agreements	2021 - 2028	—
		$	1.5

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

(b)At March 31, 2021, the Company had $28 million of outstanding letters of credit under the revolving credit facility, which reduces the available borrowings under the revolving credit facility. The Company also had $74 million of outstanding letters of credit under uncommitted facilities at March 31, 2021.

The interest rate on borrowings under the revolving credit facility and the Term Loan A facility are subject to step down as follows:

Consolidated net leverage ratio	Interest rate
greater than 3.0 to 1	LIBOR plus 2.00%
less than 3.0 to 1 and greater than 2.5 to 1	LIBOR plus 1.75%
less than 2.5 to 1 and greater than 1.5 to 1	LIBOR plus 1.50%
less than 1.5 to 1	LIBOR plus 1.25%

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%

The New Credit Facility contains representations and warranties, and covenants which are customary for debt facilities of this type. The Third Amendment provided relief from the financial maintenance covenants for the revolving credit facility and Term Loan A facility subject to the non-occurrence of certain Covenant Reset Triggers that limit certain activities of the Company by implementing more restrictive affirmative and negative covenants. After giving effect to the Third Amendment, the financial maintenance covenants for the revolving credit facility and the Term Loan A facility 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 8.75 to 1	at December 31, 2020	not greater than 5.25 to 1	at March 31, 2022
not greater than 8.25 to 1	at March 31, 2021	not greater than 4.75 to 1	at June 30, 2022
not greater than 4.50 to 1	at June 30, 2021	not greater than 4.25 to 1	at September 30, 2022
not greater than 4.25 to 1	at September 30, 2021	not greater than 3.75 to 1	thereafter
not greater than 4.00 to 1	at December 31, 2021

If a Covenant Reset Trigger occurs, the financial maintenance covenants for the revolving credit facility and the Term Loan A facility revert back to the previous financial maintenance covenants in effect immediately prior to the Third Amendment (the “Prior Financial Covenants”), including (i) a requirement to have a consolidated net leverage ratio (as defined in the New Credit Facility), at the end of each fiscal quarter, with step-downs, as follows:

(i) Consolidated net leverage ratio
not greater than 4.50 to 1	through March 31, 2021
not greater than 4.25 to 1	through September 30, 2021
not greater than 4.00 to 1	through March 31, 2022
not greater than 3.75 to 1	through September 30, 2022
not greater than 3.50 to 1	thereafter

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Pension Plans, Postretirement and Other Employee Benefits (Tables)

3 Months Ended

Mar. 31, 2021

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Cost

Components of net periodic benefit costs (credits) for the three months ended March 31, 2021 and 2020 are as follows:

	Three Months Ended March 31,
	Pension Benefits								Other Postretirement Benefits
	2021				2020
	U.S.		Non-U.S.		U.S.		Non-U.S.		2021		2020
Service cost	$	—	$	7	$	—	$	6	$	—	$	—
Interest cost	8		4		10		4		1		2
Expected return on plan assets	(16)		(4)		(16)		(4)		—		—
Net amortization:
Actuarial loss	3		2		2		2		1		1
Prior service cost (credit)	—		—		—		—		(2)		(2)
Net pension and postretirement costs (credits)	$	(5)	$	9	$	(4)	$	8	$	—	$	1

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Schedule of Environmental Loss Contingencies

The Company’s estimated share of environmental remediation costs for all these sites is recognized in the condensed consolidated balance sheets at March 31, 2021 and December 31, 2020 as follows:

	March 31, 2021		December 31, 2020
Accrued expenses and other current liabilities	$	8	$	8
Deferred credits and other liabilities	25		26
	$	33	$	34

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

	2021		2022		2023		2024		2025		2026 and thereafter
Expected payments	$	5	$	5	$	2	$	2	$	2	$	14

Schedule of Asset Retirement Obligations

The Company’s ARO liabilities at March 31, 2021 and December 31, 2020 are as follows:

	March 31, 2021		December 31, 2020
Accrued expenses and other current liabilities	$	2	$	2
Deferred credits and other liabilities	12		12
	$	14	$	14

Warranty Accrual Table

The following represents the changes in the Company’s warranty accrual accounts for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
Balance at beginning of period	$	62	$	54
Accruals related to product warranties	14		3
Reductions for payments made	(8)		(6)
Foreign currency	(1)		—
Balance at end of period	$	67	$	51

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Share-based Compensation

Total share-based compensation expense for the three months ended March 31, 2021 and 2020 is as follows:

	Three Months Ended March 31,
	2021		2020
Cash-settled share-based compensation expense	$	4	$	—
Share-settled share-based compensation expense	5		2
	$	9	$	2

Unvested Restricted Shares

The following table reflects the status of all share-settled RSUs and PSUs for the three months ended March 31, 2021:

	Share-Settled RSUs			Share-Settled PSUs
	Units	Weighted Avg. Grant Date Fair Value		Units	Weighted Avg. Grant Date Fair Value
Nonvested balance at beginning of period	2,118,605	$	26.00	527,105	$	36.37
Granted	2,023,782	10.60		—	—
Vested	(654,878)	32.69		(57,794)	49.18
Forfeited	(54,096)	25.90		(125,158)	47.48
Nonvested balance at end of period	3,433,413	$	15.06	344,153	$	24.60

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Shareholders' Equity (Tables)

3 Months Ended

Mar. 31, 2021

Equity [Abstract]

Schedule of Stock by Class

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

	Class A Common Stock		Class B Common Stock
	Three Months Ended March 31,		Three Months Ended March 31,
	2021	2020	2021	2020
Shares issued at beginning of period	75,714,163	71,727,061	20,308,454	23,793,669
Issued pursuant to benefit plans	786,575	450,175	—	—
Withheld for taxes pursuant to benefit plans	(247,508)	(119,644)	—	—
Class B common stock converted to Class A common stock	17,232,791	—	(17,232,791)	—
Shares issued at end of period	93,486,021	72,057,592	3,075,663	23,793,669
Treasury stock	14,592,888	14,592,888	—	—
Total shares outstanding	78,893,133	57,464,704	3,075,663	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 months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
Foreign currency translation adjustments:
Balance at beginning of period	$	(395)	$	(369)
Other comprehensive income (loss) before reclassifications	(46)		(199)
Reclassification from other comprehensive income (loss)	—		—
Other comprehensive income (loss)	(46)		(199)
Income tax benefit (provision)	—		—
Balance at end of period	(441)		(568)
Defined benefit plans:
Balance at beginning of period	(353)		(342)
Other comprehensive income (loss) before reclassifications	4		—
Reclassification from other comprehensive income (loss)	—		3
Other comprehensive income (loss)	4		3
Income tax benefit (provision)	(1)		1
Balance at end of period	(350)		(338)
Cash flow hedges:
Balance at beginning of period	4		—
Other comprehensive income (loss) before reclassifications	2		(3)
Reclassification from other comprehensive income (loss)	(4)		—
Other comprehensive income (loss)	(2)		(3)
Income tax benefit (provision)	—		1
Balance at end of period	2		(2)
Accumulated other comprehensive loss at end of period	$	(789)	$	(908)
Other comprehensive income (loss) attributable to noncontrolling interests	$	(6)	$	(20)

XML

Segment Information (Tables)

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segment Information

Segment results for the three months ended March 31, 2021 and 2020 are as follows:

	Reportable Segments
	Motorparts		Performance Solutions		Clean Air		Powertrain		Total		Reclass & Elims		Total
For the Three Months Ended March 31, 2021
Revenues from external customers	$	719	$	787	$	2,124	$	1,101	$	4,731	$	—	$	4,731
Intersegment revenues	$	9	$	26	$	6	$	47	$	88	$	(88)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	3	$	1	$	—	$	18	$	22	$	—	$	22
For the Three Months Ended March 31, 2020
Revenues from external customers	$	706	$	669	$	1,545	$	916	$	3,836	$	—	$	3,836
Intersegment revenues	$	9	$	29	$	6	$	38	$	82	$	(82)	$	—
Equity in earnings of nonconsolidated affiliates, net of tax	$	2	$	—	$	—	$	11	$	13	$	—	$	13

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 March 31,
	2021		2020
EBITDA including noncontrolling interests by segment:
Motorparts	$	102	$	(40)
Performance Solutions	43		(674)
Clean Air	149		99
Powertrain	115		27
Total reportable segments	409		(588)
Corporate	(50)		(86)
Depreciation and amortization	(155)		(171)
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	204		(845)
Interest expense	(70)		(75)
Income tax (expense) benefit	(47)		94
Net income (loss)	$	87	$	(826)

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 Performance Solutions segment have been reclassified from OE - Value add to Aftermarket to conform with the current year presentation. This reclassification affected the three months ended March 31, 2020. In the following tables, revenue is disaggregated accordingly:

	Reportable Segments
By Customer Type	Motorparts		Performance Solutions		Clean Air		Powertrain		Total
Three Months Ended March 31, 2021
OE - Substrate	$	—	$	—	$	1,088	$	—	$	1,088
OE - Value add	—		768		1,036		1,101		2,905
Aftermarket	719		19		—		—		738
Total	$	719	$	787	$	2,124	$	1,101	$	4,731
Three Months Ended March 31, 2020
OE - Substrate	$	—	$	—	$	700	$	—	$	700
OE - Value add	—		654		845		916		2,415
Aftermarket	706		15		—		—		721
Total	$	706	$	669	$	1,545	$	916	$	3,836

	Reportable Segments
By Geography	Motorparts		Performance Solutions		Clean Air		Powertrain		Total
Three Months Ended March 31, 2021
North America	$	454	$	240	$	851	$	328	$	1,873
Europe, Middle East, Africa and South America	212		355		682		563		1,812
Asia Pacific	53		192		591		210		1,046
Total	$	719	$	787	$	2,124	$	1,101	$	4,731
Three Months Ended March 31, 2020
North America	$	476	$	228	$	704	$	314	$	1,722
Europe, Middle East, Africa and South America	197		319		565		470		1,551
Asia Pacific	33		122		276		132		563
Total	$	706	$	669	$	1,545	$	916	$	3,836

XML

Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The following table summarizes the net sales, purchases, and royalty and other income (expense) to and from related parties for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021						2020
	Net Sales		Purchases		Royalty and Other		Net Sales		Purchases		Royalty and Other
Anqing TP Goetze Piston Ring Company Limited	$	—	$	18	$	1	$	4	$	10	$	—
Anqing TP Powder Metallurgy Company Limited	$	1	$	—	$	—	$	1	$	1	$	—
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	1	$	9	$	—	$	1	$	2	$	—
Federal-Mogul Powertrain Otomotiv A.S.	$	10	$	76	$	3	$	12	$	59	$	4
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti.	$	—	$	—	$	—	$	—	$	1	$	—
Federal-Mogul TP Liners, Inc.	$	4	$	12	$	—	$	4	$	12	$	—
Icahn Automotive Group LLC	$	31	$	—	$	1	$	33	$	—	$	1
Montagewerk Abgastechnik Emden GmbH	$	4	$	—	$	—	$	3	$	—	$	—
PSC Metals, Inc.	$	—	$	—	$	1	$	—	$	—	$	—

The following table is a summary of amounts due to and from the Company's related parties at March 31, 2021 and December 31, 2020:

	March 31, 2021				December 31, 2020
	Receivables		Payables and Accruals		Receivables		Payables and Accruals
Anqing TP Goetze Piston Ring Company Limited	$	2	$	27	$	3	$	26
Anqing TP Powder Metallurgy Company Limited	$	—	$	1	$	1	$	1
Dongsuh Federal-Mogul Industrial Co., Ltd.	$	1	$	10	$	—	$	3
Federal-Mogul Powertrain Otomotiv A.S.	$	7	$	38	$	10	$	49
Federal-Mogul TP Liners, Inc.	$	2	$	6	$	2	$	7
Icahn Automotive Group LLC	$	39	$	8	$	47	$	9
Montagewerk Abgastechnik Emden GmbH	$	2	$	—	$	1	$	—
PSC Metals, Inc.	$	1	$	—	$	—	$	—

XML

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Redeemable Noncontrolling Interest [Line Items]
Redeemable noncontrolling interest, not currently redeemable	$ 51		$ 45
Redeemable noncontrolling interest, redemption value	36		$ 33
Redemption value measurement adjustment	5	$ 15
Reclassification of noncontrolling interest to permanent equity	$ 0	$ (82)
Öhlins Intressenter AB | K Öhlin Holding AB
Redeemable Noncontrolling Interest [Line Items]
Ownership percentage	9.50%

XML

Summary of Significant Accounting Policies - Redeemable Non Controlling Interest (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Redeemable Noncontrolling Interest [Roll Forward]
Balance at beginning of period	$ 78	$ 196
Net income (loss) attributable to redeemable noncontrolling interests	7	(4)
Other comprehensive income (loss)	(3)	(7)
Noncontrolling interest tender offer redemption	0	46
Redemption value measurement adjustment	5	15
Reclassification of noncontrolling interest to permanent equity	0	(82)
Balance at end of period	$ 87	$ 72

XML

Summary of Significant Accounting Policies - Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted average shares of common stock outstanding (in shares)	81,953,133	81,168,562
Dilutive shares outstanding (in shares)	82,524,129	81,168,562
Anti-dilutive shares (in shares)	2,075,446	1,610,556
PSUs and RSUs
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Effect of dilutive securities (in shares)	570,996	0

XML

Acquisitions and Divestitures - Assets Held For Sale (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Property, plant and equipment	$ 12	$ 15

XML

Restructuring Charges, Net and Asset Impairments - Incurred Costs (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Restructuring Cost and Reserve [Line Items]
Severance and other charges, net	$ 25	$ 13
Other non-restructuring asset impairments		471
Total restructuring charges, asset impairments, and other	25	484
Total Reportable Segments | Motorparts
Restructuring Cost and Reserve [Line Items]
Severance and other charges, net	2	2
Other non-restructuring asset impairments		0
Total restructuring charges, asset impairments, and other	2	2
Total Reportable Segments | Performance Solutions
Restructuring Cost and Reserve [Line Items]
Severance and other charges, net	4	6
Other non-restructuring asset impairments		455
Total restructuring charges, asset impairments, and other	4	461
Total Reportable Segments | Clean Air
Restructuring Cost and Reserve [Line Items]
Severance and other charges, net	9	0
Other non-restructuring asset impairments		0
Total restructuring charges, asset impairments, and other	9	0
Total Reportable Segments | Powertrain
Restructuring Cost and Reserve [Line Items]
Severance and other charges, net	10	1
Other non-restructuring asset impairments		0
Total restructuring charges, asset impairments, and other	10	1
Corporate
Restructuring Cost and Reserve [Line Items]
Severance and other charges, net	0	4
Other non-restructuring asset impairments		16
Total restructuring charges, asset impairments, and other	$ 0	$ 20

XML

Restructuring Charges, Net and Asset Impairments - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 34	$ 15
Corporate
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0	4
Asset impairment charges		16
Impairment of property, plant and equipment	11
Operating lease impairment	5
Motorparts | Europe
Restructuring Cost and Reserve [Line Items]
Restructuring charges		1
Motorparts | Asia
Restructuring Cost and Reserve [Line Items]
Restructuring charges		1
Performance Solutions
Restructuring Cost and Reserve [Line Items]
Impairment of property, plant and equipment	455
Performance Solutions | North America
Restructuring Cost and Reserve [Line Items]
Restructuring charges		7
Restructuring costs		1
Powertrain | Europe
Restructuring Cost and Reserve [Line Items]
Restructuring charges		2
Powertrain | North America
Restructuring Cost and Reserve [Line Items]
Restructuring charges		1
Employee Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges	31	10
Restructuring costs		4
Employee Costs | Performance Solutions | Europe
Restructuring Cost and Reserve [Line Items]
Restructuring charges	4
Employee Costs | Clean Air | Europe
Restructuring Cost and Reserve [Line Items]
Restructuring charges	15
Employee Costs | Clean Air | Europe And Asia Pacific
Restructuring Cost and Reserve [Line Items]
Restructuring charges	2
Employee Costs | Powertrain | Europe
Restructuring Cost and Reserve [Line Items]
Restructuring charges	1
Employee Costs | Powertrain | Europe And North America
Restructuring Cost and Reserve [Line Items]
Restructuring charges	9
Facility Closure and Other Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges	3	5
Other restructuring | Motorparts
Restructuring Cost and Reserve [Line Items]
Restructuring charges	2
Other restructuring | Clean Air | Europe
Restructuring Cost and Reserve [Line Items]
Restructuring costs	5
Cost Reduction Programs | Employee Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges	17	7
Plant Consolidations, Relocations And Closures | Employee Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges	11	$ 6
Project Accelerate | Employee Costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges	3
Project Accelerate | Employee Costs | Clean Air
Restructuring Cost and Reserve [Line Items]
Restructuring charges	3
Voluntary Termination Program | Powertrain
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 2
Voluntary Termination Program | Employee Costs | Powertrain | Forecast
Restructuring Cost and Reserve [Line Items]
Restructuring costs			$ 10
Voluntary Termination Program | Termination benefits | Powertrain | Forecast
Restructuring Cost and Reserve [Line Items]
Restructuring costs			31
Voluntary Termination Program | Special termination benefits | Powertrain | Forecast
Restructuring Cost and Reserve [Line Items]
Restructuring costs			21
Voluntary Termination Program | Other restructuring | Powertrain | Forecast
Restructuring Cost and Reserve [Line Items]
Restructuring costs			$ 2

XML

Restructuring Charges, Net and Asset Impairments - Roll Forward of Restructuring Reserve (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	$ 100	$ 101
Provisions	34	15
Revisions to estimates	(9)	(2)
Payments	(25)	(30)
Foreign currency	(1)	(1)
Restructuring reserve, ending balance	99	83
Employee Costs
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	99	97
Provisions	31	10
Revisions to estimates	(9)	(2)
Payments	(21)	(23)
Foreign currency	(1)	(1)
Restructuring reserve, ending balance	99	81
Facility Closure and Other Costs
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	1	4
Provisions	3	5
Revisions to estimates	0	0
Payments	(4)	(7)
Foreign currency	0	0
Restructuring reserve, ending balance	0	2
Total Reportable Segments
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	99	92
Provisions	34	11
Revisions to estimates	(9)	(2)
Payments	(24)	(21)
Foreign currency	(1)	(1)
Restructuring reserve, ending balance	99	79
Total Reportable Segments | Clean Air
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	25	23
Provisions	17	0
Revisions to estimates	(8)	0
Payments	(6)	(4)
Foreign currency	0	0
Restructuring reserve, ending balance	28	19
Total Reportable Segments | Powertrain
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	42	30
Provisions	11	2
Revisions to estimates	(1)	(1)
Payments	(9)	(4)
Foreign currency	0
Restructuring reserve, ending balance	43	27
Total Reportable Segments | Performance Solutions
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	18	23
Provisions	4	7
Revisions to estimates	0	(1)
Payments	(5)	(9)
Foreign currency	(1)	(1)
Restructuring reserve, ending balance	16	19
Total Reportable Segments | Motorparts
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	14	16
Provisions	2	2
Revisions to estimates	0	0
Payments	(4)	(4)
Foreign currency	0	0
Restructuring reserve, ending balance	12	14
Corporate
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	1	9
Provisions	0	4
Revisions to estimates	0	0
Payments	(1)	(9)
Foreign currency	0	0
Restructuring reserve, ending balance	$ 0	$ 4

XML

Inventories (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Finished goods	$ 801	$ 758
Work in process	492	449
Raw materials	442	441
Materials and supplies	95	95
Total inventories	$ 1,830	$ 1,743

XML

Goodwill and Other Intangible Assets - Additional Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021 reporting_unit	Mar. 31, 2020 USD ($) reporting_unit
Goodwill [Line Items]
Goodwill impairment charges		$ 267
Number of reporting units with goodwill | reporting_unit		2
Trade names and trademarks intangible asset impairment charges		$ 51
Definite-lived intangible assets impairment charges		65
Motorparts
Goodwill [Line Items]
Goodwill impairment charges		$ 70
Number of reporting units with goodwill | reporting_unit	1	1
Trade names and trademarks intangible asset impairment charges		$ 40
Definite-lived intangible assets impairment charges		$ 0
Motorparts | Trademarks and Trade Names
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit		1
Performance Solutions
Goodwill [Line Items]
Goodwill impairment charges		$ 156
Number of reporting units with goodwill | reporting_unit	2	1
Trade names and trademarks intangible asset impairment charges		$ 11
Performance Solutions | Trademarks and Trade Names
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit		1
Powertrain
Goodwill [Line Items]
Goodwill impairment charges		$ 41
Number of reporting units with goodwill | reporting_unit		1
Trade names and trademarks intangible asset impairment charges		$ 0
Definite-lived intangible assets impairment charges		$ 0

XML

Goodwill and Other Intangible Assets - Impairment Charges (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Segment Reporting Information [Line Items]
Goodwill impairment charges		$ 267
Trade names and trademarks intangible asset impairment charges		51
Definite-lived intangible asset impairment charges		65
Total impairment charges	$ 0	383
Motorparts
Segment Reporting Information [Line Items]
Goodwill impairment charges		70
Trade names and trademarks intangible asset impairment charges		40
Definite-lived intangible asset impairment charges		0
Total impairment charges		110
Performance Solutions
Segment Reporting Information [Line Items]
Goodwill impairment charges		156
Trade names and trademarks intangible asset impairment charges		11
Total impairment charges		232
Powertrain
Segment Reporting Information [Line Items]
Goodwill impairment charges		41
Trade names and trademarks intangible asset impairment charges		0
Definite-lived intangible asset impairment charges		0
Total impairment charges		$ 41

XML

Goodwill and Other Intangible Assets - Goodwill (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($) reporting_unit	Mar. 31, 2020 USD ($) reporting_unit	Dec. 31, 2020 USD ($)
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit		2
Goodwill [Roll Forward]
Gross carrying amount at beginning of period	$ 1,254
Foreign exchange	3	$ (3)
Gross carrying amount at end of period	1,251
Accumulated impairment loss, beginning balance	(746)
Impairment		$ (267)
Accumulated impairment loss, ending balance	(743)
Net carrying value at March 31, 2021	$ 508		$ 508
Motorparts
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit	1	1
Goodwill [Roll Forward]
Gross carrying amount at beginning of period	$ 623
Foreign exchange	0	$ 0
Gross carrying amount at end of period	623
Accumulated impairment loss, beginning balance	(310)
Impairment		$ (70)
Accumulated impairment loss, ending balance	(310)
Net carrying value at March 31, 2021	$ 313
Performance Solutions
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit	2	1
Goodwill [Roll Forward]
Gross carrying amount at beginning of period	$ 549
Foreign exchange	3	$ (3)
Gross carrying amount at end of period	546
Accumulated impairment loss, beginning balance	(377)
Impairment		(156)
Accumulated impairment loss, ending balance	(374)
Net carrying value at March 31, 2021	$ 172
Clean Air
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit	3
Goodwill [Roll Forward]
Gross carrying amount at beginning of period	$ 23
Foreign exchange	0	$ 0
Gross carrying amount at end of period	23
Accumulated impairment loss, beginning balance	0
Accumulated impairment loss, ending balance	0
Net carrying value at March 31, 2021	23
Powertrain
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit		1
Goodwill [Roll Forward]
Gross carrying amount at beginning of period	59
Foreign exchange	0	$ 0
Gross carrying amount at end of period	59
Accumulated impairment loss, beginning balance	(59)
Impairment		$ (41)
Accumulated impairment loss, ending balance	(59)
Net carrying value at March 31, 2021	$ 0
Greater than 25% | Motorparts
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit	1
Goodwill for reporting units where fair value exceeds carrying value	$ 313
Greater than 25% | Performance Solutions
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit	1
Goodwill for reporting units where fair value exceeds carrying value	$ 7
Greater than 25% | Clean Air
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit	3
Goodwill for reporting units where fair value exceeds carrying value	$ 23
Less than 25% | Motorparts
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit	0
Goodwill for reporting units where fair value exceeds carrying value	$ 0
Less than 25% | Performance Solutions
Goodwill [Line Items]
Number of reporting units with goodwill | reporting_unit	1
Goodwill for reporting units where fair value exceeds carrying value	$ 165
Less than 25% | 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

XML

Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 1,353	$ 1,359
Accumulated Amortization	(433)	(402)
Net Carrying Value	920	957
Trade names and trademarks	234	237
Total	$ 1,154	1,194
Customer relationships and platforms
Finite-Lived Intangible Assets [Line Items]
Useful Lives	10 years
Gross Carrying Value	$ 993	995
Accumulated Amortization	(304)	(282)
Net Carrying Value	$ 689	713
Customer contract
Finite-Lived Intangible Assets [Line Items]
Useful Lives	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]
Useful Lives	10 years
Patents | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Lives	17 years
Technology rights
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 136	139
Accumulated Amortization	(53)	(51)
Net Carrying Value	$ 83	88
Technology rights | Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Lives	10 years
Technology rights | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Lives	30 years
Packaged kits know-how
Finite-Lived Intangible Assets [Line Items]
Useful Lives	10 years
Gross Carrying Value	$ 54	54
Accumulated Amortization	(14)	(12)
Net Carrying Value	$ 40	42
Catalogs
Finite-Lived Intangible Assets [Line Items]
Useful Lives	10 years
Gross Carrying Value	$ 47	47
Accumulated Amortization	(12)	(11)
Net Carrying Value	35	36
Licensing agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	65	66
Accumulated Amortization	(38)	(35)
Net Carrying Value	$ 27	31
Licensing agreements | Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Lives	3 years
Licensing agreements | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Lives	5 years
Land use rights
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 49	49
Accumulated Amortization	(5)	(4)
Net Carrying Value	$ 44	$ 45
Land use rights | Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Lives	28 years
Land use rights | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Lives	46 years

XML

Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 32	$ 34
2021	97
2022	125
2023	122
2024	114
2025	114
2026 and thereafter	348
Net Carrying Value	$ 920		$ 957

XML

Investment in Nonconsolidated Affiliates (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Schedule of Equity Method Investments [Line Items]
Investments in nonconsolidated affiliates	$ 532		$ 581
Difference between carrying amount and underlying net assets	283		287
Equity in earnings of nonconsolidated affiliates, net of tax	22	$ 13
Cash dividends received from nonconsolidated affiliates	57	$ 13
Equity Method Investment, Nonconsolidated
Schedule of Equity Method Investments [Line Items]
Investments in nonconsolidated affiliates	$ 532		$ 581
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%
Equity Method Investment, Nonconsolidated | Anqing TP Powder Metallurgy Co., Ltd (China)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	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%
Equity Method Investment, Nonconsolidated | Farloc Argentina SAIC Y F (Argentina)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	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%
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%
Equity Method Investment, Nonconsolidated | Federal-Mogul TP Liners, Inc. (U.S.)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	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%
Equity Method Investment, Nonconsolidated | JURID do Brasil Sistemas Automotivos Ltda. (Brazil)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	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%
Equity Method Investment, Nonconsolidated | Montagewerk Abgastechnik Emden GmbH (Germany)
Schedule of Equity Method Investments [Line Items]
Ownership percentage	50.00%		50.00%

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Investment in Nonconsolidated Affiliates - Summarized Financial Data (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Schedule of Equity Method Investments [Line Items]
Sales	$ 4,731	$ 3,836
Income from continuing operations	134	(920)
Net income	87	(826)
Equity Method Investment, Nonconsolidated
Schedule of Equity Method Investments [Line Items]
Sales	263	219
Gross profit	71	52
Income from continuing operations	61	39
Net income	56	30
Equity Method Investment, Nonconsolidated | Otomotiv A.S.
Schedule of Equity Method Investments [Line Items]
Sales	102	84
Gross profit	35	26
Income from continuing operations	32	23
Net income	34	18
Equity Method Investment, Nonconsolidated | Anqing TP Goetze
Schedule of Equity Method Investments [Line Items]
Sales	49	30
Gross profit	14	6
Income from continuing operations	14	7
Net income	12	6
Equity Method Investment, Nonconsolidated | Other
Schedule of Equity Method Investments [Line Items]
Sales	112	105
Gross profit	22	20
Income from continuing operations	15	9
Net income	$ 10	$ 6

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Derivatives and Hedging Activities - Summarization for Foreign Currency Forward Purchase and Sale Contracts (Details) - Foreign exchange forward $ in Millions	Mar. 31, 2021 USD ($)
Long positions
Derivative [Line Items]
Notional amount	$ 273
Short positions
Derivative [Line Items]
Notional amount	$ 276

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Derivatives and Hedging Activities - Additional Information (Details) € in Millions	3 Months Ended
	Mar. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($)	Dec. 31, 2020 EUR (€)
Financial Instruments [Line Items]
Long-term debt	$ 5,111,000,000	$ 5,171,000,000
Net derivative losses to be reclassified within twelve months (less than)	3,000,000
Net investment hedging
Financial Instruments [Line Items]
Long-term debt	$ 0	420,000,000	€ 344
Swap agreements(a)
Financial Instruments [Line Items]
Notional amount (in shares) | shares	1,700,000
Commodity contracts
Financial Instruments [Line Items]
Notional amount	$ 17,000,000	$ 10,000,000
Term of derivative	1 year

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Derivatives and Hedging Activities - Carrying and Estimated Fair Value (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
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)	$ 2	$ (3)
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)	$ 11	$ 14

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Fair Value - Carrying and Estimated Fair Value (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Carrying And Estimated Fair Value [Line Items]
Collateral amount	$ 11	$ 7

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Fair Value - Additional Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Definite-lived intangible assets impairment charges		$ 65
Valuation, Income Approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Goodwill measurement input		0.75
Valuation, Market Approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Goodwill measurement input		0.25
Performance Solutions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of property, plant and equipment	$ 455

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Fair Value - Fair Value of Long Term Debt (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
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	$ 5,094	$ 5,153
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	5,159	5,138
Other Debt
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of long term debt	$ 141	$ 180

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Debt and Other Financing Arrangements - Summary of Long-Term Debt Obligations (Details)	Mar. 31, 2021 USD ($)	Mar. 31, 2021 EUR (€)	Mar. 17, 2021 USD ($)	Mar. 03, 2021	Dec. 31, 2020 USD ($)
Debt Instrument [Line Items]
Carrying amount	$ 5,117,000,000				$ 5,176,000,000
Less - maturities classified as current	6,000,000				5,000,000
Total long-term debt	5,111,000,000				5,171,000,000
Unamortized debt issuance costs	92,000,000				82,000,000
Debt discount	1,000,000
Unamortized premium					(20,000,000)
Line of Credit | Due 2023
Debt Instrument [Line Items]
Principal	0				0
Carrying amount	0				0
Term Loans | Tenneco Inc. Term Loan A
Debt Instrument [Line Items]
Principal	1,498,000,000				1,530,000,000
Carrying amount	$ 1,490,000,000				$ 1,520,000,000
Stated rate	2.25%	2.25%
Term Loans | Tenneco Inc. Term Loan A | LIBOR
Debt Instrument [Line Items]
Stated rate					2.50%
Term Loans | Tenneco Inc. Term Loan B
Debt Instrument [Line Items]
Stated rate	3.00%	3.00%
Term Loans | 3.00% Term Loan B Due 2019 Through 2025
Debt Instrument [Line Items]
Principal	$ 1,662,000,000				$ 1,666,000,000
Carrying amount	1,610,000,000				1,612,000,000
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				223,000,000
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	$ 495,000,000				494,000,000
Stated rate	5.00%	5.00%
Senior Notes | Euro Floating Rate Notes due 2024
Debt Instrument [Line Items]
Principal	$ 0	€ 300,000,000			366,000,000
Carrying amount	$ 0				370,000,000
Stated rate	4.875%	4.875%
Senior Notes | 5.000% Euro Fixed Rate Notes due 2024
Debt Instrument [Line Items]
Principal	$ 0	€ 350,000,000			428,000,000
Carrying amount	$ 0				445,000,000
Stated rate	5.00%	5.00%		5.00%
Senior Notes | 7.875% Senior Secured Notes Due 2029
Debt Instrument [Line Items]
Principal	$ 500,000,000				500,000,000
Carrying amount	$ 490,000,000				489,000,000
Stated rate	7.875%	7.875%
Senior Notes | 5.125% Senior Secured Notes Due 2029
Debt Instrument [Line Items]
Principal	$ 800,000,000		$ 800,000,000		0
Carrying amount	$ 786,000,000				0
Stated rate	5.125%	5.125%	5.125%
Other debt, primarily foreign instruments
Debt Instrument [Line Items]
Principal	$ 24,000,000				24,000,000
Carrying amount	$ 23,000,000				$ 23,000,000

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Debt and Other Financing Arrangements - Term Loans (Details) $ in Billions	Oct. 01, 2018 USD ($)
Line of Credit
Line of Credit Facility [Line Items]
Borrowing capacity	$ 4.9
Revolving Credit Facility | Line of Credit
Line of Credit Facility [Line Items]
Borrowing capacity	$ 1.5
Debt term	5 years
Term Loan A Facility | Term Loans
Line of Credit Facility [Line Items]
Borrowing capacity	$ 1.7
Debt term	5 years
Term Loan B Facility | Term Loans
Line of Credit Facility [Line Items]
Borrowing capacity	$ 1.7
Debt term	7 years

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Debt and Other Financing Arrangements - Short Term Debt (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Debt Disclosure [Abstract]
Maturities classified as current	$ 6	$ 5
Short-term borrowings	118	157
Total short-term debt	$ 124	$ 162

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Debt and Other Financing Arrangements - Interest Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ 92		$ 82
Other assets
Debt Instrument [Line Items]
Amortization of debt issuance fees	2	$ 1
Unamortized debt issuance costs	15		$ 17
Interest Expense
Debt Instrument [Line Items]
Amortization of debt issuance fees	6	5
Accretion of debt premium	$ (2)	$ (3)

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Debt and Other Financing Arrangements - Financing Arrangements (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Available	$ 1,500
Liquidity	2,100
Cash	631
Unamortized debt issuance costs	92	$ 82
Long-term Debt	5,111	5,171
Other assets
Debt Instrument [Line Items]
Unamortized debt issuance costs	15	$ 17
Tenneco Inc. revolving credit agreement
Debt Instrument [Line Items]
Available	1,500
Long-term Debt	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 - New Credit Facility (Details) - Term Loans	3 Months Ended
	Mar. 31, 2021
LIBOR | Term Loan A, New Credit Facility, Third Amendment
Line of Credit Facility [Line Items]
Basis spread	225.00%
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	2.00%
Debt Covenant, Term 1 | LIBOR | Term Loan A, New Credit Facility, Third Amendment, Scenario 2
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	3.0
Debt Covenant, Term 1 | Minimum | Term Loan A, New Credit Facility, Third Amendment, Scenario 2
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	1.75%
Debt Covenant, Term 2 | LIBOR | Term Loan A, New Credit Facility, Third Amendment, Scenario 2
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	2.5
Debt Covenant, Term 2 | Minimum | Term Loan A, New Credit Facility, Third Amendment, Scenario 2
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	3.0
Debt Covenant, Term 2 | Maximum | Term Loan A, New Credit Facility, Third Amendment, Scenario 2
Line of Credit Facility [Line Items]
Consolidated net leverage ratio	6.0
Debt Covenant, Term 3 | LIBOR | Term Loan A, New Credit Facility, Third Amendment
Line of Credit Facility [Line Items]
Basis spread	1.50%
Debt Covenant, Term 3 | Minimum | Term Loan A, New Credit Facility, Third Amendment
Line of Credit Facility [Line Items]
Consolidated net leverage ratio	1.5
Debt Covenant, Term 3 | Maximum | Term Loan A, New Credit Facility, Third Amendment
Line of Credit Facility [Line Items]
Consolidated net leverage ratio	2.5
Debt Covenant, Term 4 | LIBOR | Term Loan A, New Credit Facility, Third Amendment
Line of Credit Facility [Line Items]
Basis spread	1.25%
Debt Covenant, Term 4 | Maximum | Term Loan A, New Credit Facility, Third Amendment
Line of Credit Facility [Line Items]
Consolidated net leverage ratio	1.5

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Debt and Other Financing Arrangements - New Credit Facility - Other Terms (Details) - Term Loan A, New Credit Facility, Third Amendment - Term Loans	3 Months Ended
	Mar. 31, 2021
Minimum | Debt Covenant, Term 1
Debt Instrument [Line Items]
Consolidated net leverage ratio	3.0
Minimum | Debt Covenant, Term 2
Debt Instrument [Line Items]
Consolidated net leverage ratio	2.5
Minimum | Debt Covenant, Term 3
Debt Instrument [Line Items]
Consolidated net leverage ratio	1.5
Maximum | Debt Covenant, Term 2
Debt Instrument [Line Items]
Consolidated net leverage ratio	3.0
Maximum | Debt Covenant, Term 3
Debt Instrument [Line Items]
Consolidated net leverage ratio	2.5
Maximum | Debt Covenant, Term 4
Debt Instrument [Line Items]
Consolidated net leverage ratio	1.5
Financial Maintenance Covenant | Debt Covenant, Term 1
Debt Instrument [Line Items]
Senior secured net leverage ratio	8.75
Consolidated net leverage ratio	5.25
Financial Maintenance Covenant | Debt Covenant, Term 2
Debt Instrument [Line Items]
Senior secured net leverage ratio	8.25
Consolidated net leverage ratio	4.75
Consolidated interest coverage ratio	2.75
Financial Maintenance Covenant | Debt Covenant, Term 3
Debt Instrument [Line Items]
Senior secured net leverage ratio	4.50
Consolidated net leverage ratio	4.25
Consolidated interest coverage ratio	1.50
Financial Maintenance Covenant | Debt Covenant, Term 4
Debt Instrument [Line Items]
Senior secured net leverage ratio	4.25
Consolidated net leverage ratio	3.75
Consolidated interest coverage ratio	2.75
Financial Maintenance Covenant | Debt Covenant, Term 5
Debt Instrument [Line Items]
Senior secured net leverage ratio	4.00
Covenant Reset Trigger | Debt Covenant, Term 1 | Revolving Credit Facility
Debt Instrument [Line Items]
Consolidated net leverage ratio	4.50
Covenant Reset Trigger | Debt Covenant, Term 2 | Revolving Credit Facility
Debt Instrument [Line Items]
Consolidated net leverage ratio	4.25
Covenant Reset Trigger | Debt Covenant, Term 3 | Revolving Credit Facility
Debt Instrument [Line Items]
Consolidated net leverage ratio	4.00
Covenant Reset Trigger | Debt Covenant, Term 4 | Revolving Credit Facility
Debt Instrument [Line Items]
Consolidated net leverage ratio	3.75
Covenant Reset Trigger | Debt Covenant, Term 5 | Revolving Credit Facility
Debt Instrument [Line Items]
Consolidated net leverage ratio	3.50

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Debt and Other Financing Arrangements - Senior Notes (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Mar. 17, 2021	Mar. 03, 2021
Debt Instrument [Line Items]
Gain (loss) on extinguishment of debt	$ 8	$ 0
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%			5.00%
Senior Notes | 7.875% Euro Fixed Rate Notes Due 2029
Debt Instrument [Line Items]
Stated rate	7.875%
Senior Notes | 5.125% Senior Secured Notes Due 2029
Debt Instrument [Line Items]
Stated rate	5.125%		5.125%
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
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Debt Instrument [Line Items]
Accounts receivable outstanding and derecognized	$ 1,000		$ 1,000
Cash proceeds received for assets derecognized, amount	500		400
Deferred purchase price receivable	69		$ 51
Proceeds from factoring qualifying as sales	1,300	$ 1,200
Proceeds from factoring qualifying as draft amount	1,100	1,100
Interest Expense
Debt Instrument [Line Items]
Loss on sale of receivables	$ 4	$ 6

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Debt and Other Financing Arrangements - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ 92		$ 82
Liquidity	2,100
Cash	631
Long-term Debt	5,111		5,171
Letters of credit
Debt Instrument [Line Items]
Letters of Credit Outstanding, Amount	28
Uncommitted Letters of Credit
Debt Instrument [Line Items]
Letters of Credit Outstanding, Amount	74
Tenneco Inc. revolving credit agreement
Debt Instrument [Line Items]
Long-term Debt	0
Other assets
Debt Instrument [Line Items]
Amortization of debt issuance fees	2	$ 1
Unamortized debt issuance costs	$ 15		$ 17

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Pension Plans, Postretirement and Other Employee Benefits - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Other Postretirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 0	$ 0
Interest cost	1	2
Expected return on plan assets	0	0
Net amortization:
Actuarial loss	1	1
Prior service cost (credit)	(2)	(2)
Net pension and postretirement costs (credits)	0	1
U.S. | Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	0	0
Interest cost	8	10
Expected return on plan assets	(16)	(16)
Net amortization:
Actuarial loss	3	2
Prior service cost (credit)	0	0
Net pension and postretirement costs (credits)	(5)	(4)
Non-U.S. | Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	7	6
Interest cost	4	4
Expected return on plan assets	(4)	(4)
Net amortization:
Actuarial loss	2	2
Prior service cost (credit)	0	0
Net pension and postretirement costs (credits)	$ 9	$ 8

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Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Income tax (expense) benefit	$ (47)	$ 94
Earnings (loss) before income taxes and noncontrolling interests	134	(920)
Tax expense (benefit) relating to valuation allowance		105
Asset impairments		$ 854
Decrease in UTB that is reasonably possible	44
Unrecognized tax benefits	54
Valuation Allowance	$ 54

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Commitments and Contingencies - Environmental Matters (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Accrued expenses and other current liabilities	$ 8	$ 8
Deferred credits and other liabilities	25	26
Environmental remediation accrual, discounted basis	33	$ 34
Expected payments of environmental remediation costs, 2021	5
Expected payments of environmental remediation costs, 2022	5
Expected payments of environmental remediation costs, 2023	2
Expected payments of environmental remediation costs, 2024	2
Expected payments of environmental remediation costs, 2025	2
Expected payments of environmental remediation costs, 2026 and thereafter	$ 14

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Commitments and Contingencies - Other Legal Proceedings, Claims and Investigations (Details)	3 Months Ended
	Mar. 31, 2021 case
United states
Loss Contingencies [Line Items]
Current docket of active and inactive cases nationwide relating to alleged exposure to asbestos from our product categories	500
Europe
Loss Contingencies [Line Items]
Current docket of active and inactive cases nationwide relating to alleged exposure to asbestos from our product categories	50
Minimum
Loss Contingencies [Line Items]
Warranty term	1 year

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Commitments and Contingencies - Asset Retirement Obligations (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Loss Contingencies [Line Items]
Asset retirement obligation	$ 14	$ 14
Accrued expenses and other current liabilities
Loss Contingencies [Line Items]
Asset retirement obligation	2	2
Deferred credits and other liabilities
Loss Contingencies [Line Items]
Asset retirement obligation	$ 12	$ 12

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Commitments and Contingencies - Warranty Accrual Table (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
Beginning balance	$ 62	$ 54
Accruals related to product warranties	14	3
Reductions for payments made	(8)	(6)
Foreign currency	(1)	0
Ending balance	$ 67	$ 51

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Share-Based Compensation (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Compensation expense	$ 9	$ 2
Cash-settled
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Compensation expense	4	0
Share-settled
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Compensation expense	$ 5	$ 2

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Share-Based Compensation - Unvested Restricted Shares (Details)	3 Months Ended
	Mar. 31, 2021 $ / shares shares
Share-Settled RSUs
Nonvested Restricted Shares
Unvested, beginning balance (in shares) | shares	2,118,605
Granted (in shares) | shares	2,023,782
Vested (in shares) | shares	(654,878)
Forfeited (in shares) | shares	(54,096)
Unvested, ending balance (in shares) | shares	3,433,413
Weighted Avg. Grant Date Fair Value
Unvested, beginning balance (in dollars per share) | $ / shares	$ 26.00
Granted (in dollars per share) | $ / shares	10.60
Vested (in dollars per share) | $ / shares	32.69
Forfeited (in dollars per share) | $ / shares	25.90
Unvested, ending balance (in dollars per share) | $ / shares	$ 15.06
Share-Settled PSUs
Nonvested Restricted Shares
Unvested, beginning balance (in shares) | shares	527,105
Granted (in shares) | shares	0
Vested (in shares) | shares	(57,794)
Forfeited (in shares) | shares	(125,158)
Unvested, ending balance (in shares) | shares	344,153
Weighted Avg. Grant Date Fair Value
Unvested, beginning balance (in dollars per share) | $ / shares	$ 36.37
Granted (in dollars per share) | $ / shares	0
Vested (in dollars per share) | $ / shares	49.18
Forfeited (in dollars per share) | $ / shares	47.48
Unvested, ending balance (in dollars per share) | $ / shares	$ 24.60

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Shareholders' Equity - Shares Outstanding (Details) - $ / shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
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)	75,714,163	71,727,061
Issued pursuant to benefit plans (in shares)	786,575	450,175
Withheld for taxes pursuant to benefit plans (in shares)	(247,508)	(119,644)
Class B common stock converted to Class A common stock (in shares)	17,232,791	0
Shares issued at end of period (in shares)	93,486,021	72,057,592
Treasury stock (in shares)	14,592,888	14,592,888
Total shares outstanding (in shares)	78,893,133	57,464,704
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)	20,308,454	23,793,669
Issued pursuant to benefit plans (in shares)	0	0
Withheld for taxes pursuant to benefit plans (in shares)	0	0
Class B common stock converted to Class A common stock (in shares)	(17,232,791)	0
Shares issued at end of period (in shares)	3,075,663	23,793,669
Treasury stock (in shares)	0	0
Total shares outstanding (in shares)	3,075,663	23,793,669

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Shareholders' Equity - Share Conversion (Details) - shares	1 Months Ended	3 Months Ended
	May 06, 2021	Mar. 31, 2021
Class B
Conversion of Stock [Line Items]
Shares converted (in shares)		17,232,791
Class B | Subsequent Event
Conversion of Stock [Line Items]
Shares converted (in shares)	3,075,663
Class A
Conversion of Stock [Line Items]
Shares converted (in shares)		17,232,791
Class A | Subsequent Event
Conversion of Stock [Line Items]
Shares converted (in shares)	3,075,663
Tenneco | Icahn Enterprises L.P. | Class B
Conversion of Stock [Line Items]
Shares owned (in shares)		3,075,663
Tenneco | Icahn Enterprises L.P. | Class A
Conversion of Stock [Line Items]
Ownership percentage		12.16%
Shares owned (in shares)		9,589,751
Tenneco | Icahn Enterprises L.P. | Class A | Subsequent Event
Conversion of Stock [Line Items]
Ownership percentage	12.64%
Shares owned (in shares)	10,359,643

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Shareholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	$ 181
Balance at end of period	209
Other comprehensive income (loss) attributable to noncontrolling interests	(6)	$ (20)
Accumulated Other Comprehensive Income (Loss)
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	(744)	(711)
Balance at end of period	(789)	(908)
Foreign currency translation adjustments:
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	(395)	(369)
Other comprehensive income (loss) before reclassifications	(46)	(199)
Reclassification from other comprehensive income (loss)	0	0
Other comprehensive income (loss)	(46)	(199)
Income tax benefit (provision)	0	0
Balance at end of period	(441)	(568)
Defined benefit plans:
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	(353)	(342)
Other comprehensive income (loss) before reclassifications	4	0
Reclassification from other comprehensive income (loss)	0	3
Other comprehensive income (loss)	4	3
Income tax benefit (provision)	(1)	1
Balance at end of period	(350)	(338)
Cash flow hedges:
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	4	0
Other comprehensive income (loss) before reclassifications	2	(3)
Reclassification from other comprehensive income (loss)	(4)	0
Other comprehensive income (loss)	(2)	(3)
Income tax benefit (provision)	0	1
Balance at end of period	$ 2	$ (2)

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Segment Information - Additional Information (Details)	3 Months Ended
	Mar. 31, 2021 Segment
Segment Reporting [Abstract]
Number of operating segments	4

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Segment Information - Segment Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Segment Reporting [Line Items]
Net sales and operating revenues	$ 4,731	$ 3,836
Equity in earnings of nonconsolidated affiliates, net of tax	22	13
Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	4,731	3,836
Equity in earnings of nonconsolidated affiliates, net of tax	22	13
Motorparts
Segment Reporting [Line Items]
Net sales and operating revenues	719	706
Motorparts | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	719	706
Equity in earnings of nonconsolidated affiliates, net of tax	3	2
Performance Solutions
Segment Reporting [Line Items]
Net sales and operating revenues	787	669
Performance Solutions | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	787	669
Equity in earnings of nonconsolidated affiliates, net of tax	1	0
Clean Air
Segment Reporting [Line Items]
Net sales and operating revenues	2,124	1,545
Clean Air | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	2,124	1,545
Equity in earnings of nonconsolidated affiliates, net of tax	0	0
Powertrain
Segment Reporting [Line Items]
Net sales and operating revenues	1,101	916
Powertrain | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	1,101	916
Equity in earnings of nonconsolidated affiliates, net of tax	18	11
Intersegment Revenues
Segment Reporting [Line Items]
Net sales and operating revenues	0	0
Intersegment Revenues | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	(88)	(82)
Intersegment Revenues | Reclass & Elims
Segment Reporting [Line Items]
Net sales and operating revenues	88	82
Intersegment Revenues | Motorparts | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	(9)	(9)
Intersegment Revenues | Performance Solutions | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	(26)	(29)
Intersegment Revenues | Clean Air | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	(6)	(6)
Intersegment Revenues | Powertrain | Operating Segments
Segment Reporting [Line Items]
Net sales and operating revenues	$ (47)	$ (38)

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Segment Information - Segment Adjusted EBITDA (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Segment Reporting Information [Line Items]
Depreciation and amortization	$ (155)	$ (171)
Earnings (loss) before interest expense, income taxes, and noncontrolling interests	204	(845)
Interest expense	(70)	(75)
Income tax (expense) benefit	(47)	94
Net income (loss)	87	(826)
Total Reportable Segments
Segment Reporting Information [Line Items]
EBITDA including noncontrolling interests	409	(588)
Total Reportable Segments | Motorparts
Segment Reporting Information [Line Items]
EBITDA including noncontrolling interests	102	(40)
Total Reportable Segments | Performance Solutions
Segment Reporting Information [Line Items]
EBITDA including noncontrolling interests	43	(674)
Total Reportable Segments | Clean Air
Segment Reporting Information [Line Items]
EBITDA including noncontrolling interests	149	99
Total Reportable Segments | Powertrain
Segment Reporting Information [Line Items]
EBITDA including noncontrolling interests	115	27
Corporate
Segment Reporting Information [Line Items]
EBITDA including noncontrolling interests	$ (50)	$ (86)

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Segment Information - Segment Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	$ 4,731	$ 3,836
Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	719	706
Performance Solutions
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	787	669
Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	2,124	1,545
Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	1,101	916
North America
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	1,873	1,722
North America | Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	454	476
North America | Performance Solutions
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	240	228
North America | Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	851	704
North America | Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	328	314
Europe, Middle East, Africa and South America
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	1,812	1,551
Europe, Middle East, Africa and South America | Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	212	197
Europe, Middle East, Africa and South America | Performance Solutions
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	355	319
Europe, Middle East, Africa and South America | Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	682	565
Europe, Middle East, Africa and South America | Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	563	470
Asia Pacific
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	1,046	563
Asia Pacific | Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	53	33
Asia Pacific | Performance Solutions
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	192	122
Asia Pacific | Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	591	276
Asia Pacific | Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	210	132
OE - Substrate
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	1,088	700
OE - Substrate | Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	0	0
OE - Substrate | Performance Solutions
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	0	0
OE - Substrate | Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	1,088	700
OE - Substrate | Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	0	0
OE - Value add
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	2,905	2,415
OE - Value add | Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	0	0
OE - Value add | Performance Solutions
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	768	654
OE - Value add | Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	1,036	845
OE - Value add | Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	1,101	916
Aftermarket
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	738	721
Aftermarket | Motorparts
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	719	706
Aftermarket | Performance Solutions
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	19	15
Aftermarket | Clean Air
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	0	0
Aftermarket | Powertrain
Disaggregation of Revenue [Line Items]
Net sales and operating revenues	$ 0	$ 0

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Related Party Transactions (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Anqing TP Goetze Piston Ring Company Limited
Related Party Transaction [Line Items]
Net Sales	$ 0	$ 4
Purchases	18	10
Royalty and Other	1	0
Receivables	2		$ 3
Payables and Accruals	27		26
Anqing TP Powder Metallurgy Company Limited
Related Party Transaction [Line Items]
Net Sales	1	1
Purchases	0	1
Royalty and Other	0	0
Receivables	0		1
Payables and Accruals	1		1
Dongsuh Federal-Mogul Industrial Co., Ltd.
Related Party Transaction [Line Items]
Net Sales	1	1
Purchases	9	2
Royalty and Other	0	0
Receivables	1		0
Payables and Accruals	10		3
Federal-Mogul Powertrain Otomotiv A.S.
Related Party Transaction [Line Items]
Net Sales	10	12
Purchases	76	59
Royalty and Other	3	4
Receivables	7		10
Payables and Accruals	38		49
Federal-Mogul TP Liner Europe Otomotiv Ltd. Sti.
Related Party Transaction [Line Items]
Net Sales	0	0
Purchases	0	1
Royalty and Other	0	0
Federal-Mogul TP Liners, Inc.
Related Party Transaction [Line Items]
Net Sales	4	4
Purchases	12	12
Royalty and Other	0	0
Receivables	2		2
Payables and Accruals	6		7
Icahn Automotive Group LLC
Related Party Transaction [Line Items]
Net Sales	31	33
Purchases	0	0
Royalty and Other	1	1
Receivables	39		47
Payables and Accruals	8		9
Montagewerk Abgastechnik Emden GmbH
Related Party Transaction [Line Items]
Net Sales	4	3
Purchases	0	0
Royalty and Other	0	0
Receivables	2		1
Payables and Accruals	0		0
PSC Metals, Inc.
Related Party Transaction [Line Items]
Net Sales	0	0
Purchases	0	0
Royalty and Other	1	$ 0
Receivables	1		0
Payables and Accruals	$ 0		$ 0

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Label	Element	Value
Total Equity [Member]
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders	us-gaap_MinorityInterestDecreaseFromDistributionsToNoncontrollingInterestHolders	$ 2,000,000
Noncontrolling Interest [Member]
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders	us-gaap_MinorityInterestDecreaseFromDistributionsToNoncontrollingInterestHolders	$ 2,000,000