Pension Plans, Postretirement and Other Employee Benefits

9 Months Ended

Sep. 30, 2012

Pension Plans, Postretirement and Other Employee Benefits

(10) Pension Plans, Postretirement and Other Employee Benefits

Net periodic pension costs (income) and postretirement benefit costs (income) consist of the following components:

	Three Months Ended September 30,
	Pension												Postretirement
	2012						2011						2012			2011
	US			Foreign			US			Foreign			US			US
	(Millions)
Service cost — benefits earned during the period	$	1		$	1		$	1		$	2		$	—		$	—
Interest cost		5			5			5			5			2			2
Expected return on plan assets		(5	)		(4	)		(6	)		(5	)		—			—
Net amortization:
Actuarial loss		1			2			1			1			1			1
Prior service cost (credit)		—			—			—			—			(2	)		(1	)
Net pension and postretirement costs	$	2		$	4		$	1		$	3		$	1		$	2
	Nine Months Ended September 30,
	Pension												Postretirement
	2012						2011						2012			2011
	US			Foreign			US			Foreign			US			US
	(Millions)
Service cost — benefits earned during the period	$	1		$	5		$	1		$	5		$	—		$	—
Interest cost		15			14			15			15			5			6
Expected return on plan assets		(16	)		(15	)		(17	)		(15	)		—			—
Net amortization:
Actuarial loss		5			6			3			4			4			3
Prior service cost (credit)		—			1			—			1			(5	)		(4	)
Net pension and postretirement costs	$	5		$	11		$	2		$	10		$	4		$	5

For the nine months ended September 30, 2012, we made pension contributions of $21 million and $16 million for our domestic and foreign pension plans, respectively. Based on current actuarial estimates, we believe we will be required to contribute approximately $11 million for the remainder of 2012. Pension contributions beyond 2012 will be required, but those amounts will vary based upon many factors, including the performance of our pension fund investments during 2012.

We made postretirement contributions of approximately $7 million during the first nine months of 2012. Based on current actuarial estimates, we believe we will be required to contribute approximately $2 million for the remainder of 2012.

The assets of some of our pension plans are invested in trusts that permit commingling of the assets of more than one employee benefit plan for investment and administrative purposes. Each of the plans participating in the trust has interests in the net assets of the underlying investment pools of the trusts. The investments for all our pension plans are recorded at estimated fair value, in compliance with the accounting guidance on fair value measurement.

Amounts recognized for pension and postretirement benefits in other comprehensive income for the three and nine month periods ended September 30, 2012 and 2011 include the following components:

	Three Months Ended September 30,
	2012								2011
	Before-Tax Amount			Tax Benefit		Net-of-Tax Amount			Before- Tax Amount			Tax Benefit		Net-of-Tax Amount
	(Millions)
Defined benefit pension and postretirement plans:
Amortization of prior service cost included in net periodic pension and postretirement cost	$	(2	)	$	—	$	(2	)	$	(1	)	$	—	$	(1	)
Amortization of actuarial loss included in net periodic pension and postretirement cost		4			1		5			3			2		5
Other comprehensive income – pension benefits	$	2		$	1	$	3		$	2		$	2	$	4

	Nine Months Ended September 30,
	2012								2011
	Before-Tax Amount			Tax Benefit		Net-of-Tax Amount			Before- Tax Amount			Tax Benefit		Net-of-Tax Amount
	(Millions)
Defined benefit pension and postretirement plans:
Amortization of prior service cost included in net periodic pension and postretirement cost	$	(4	)	$	—	$	(4	)	$	(3	)	$	—	$	(3	)
Amortization of actuarial loss included in net periodic pension and postretirement cost		15			—		15			10			1		11
Other comprehensive income – pension benefits	$	11		$	—	$	11		$	7		$	1	$	8

Effective January 1, 2012, the Tenneco Employee Stock Ownership Plan for Hourly Employees and the Tenneco Employee Stock Ownership Plan for Salaried Employees were merged into one plan called the Tenneco 401(k) Retirement Savings Plan (the “Retirement Savings Plan”). The Retirement Savings Plan has been designed to adopt a Safe-Harbor approach approved by the Internal Revenue Service and which will provide for increased company matching contributions at lower percentages of employee deferrals. The company matching contribution has changed from 50 percent on the first eight percent of employee contributions to 100 percent on the first three percent and 50 percent on the next two percent of employee contributions effective January 1, 2012.