TENNECO INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(Millions Except Share and Per Share Amounts) | ||||||||||||
Revenues | ||||||||||||
Net sales and operating revenues | $ | 5,916 | $ | 6,184 | $ | 4,682 | ||||||
Costs and expenses | ||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 5,063 | 5,210 | 3,836 | |||||||||
Goodwill impairment charge | 114 | — | — | |||||||||
Engineering, research, and development | 127 | 114 | 88 | |||||||||
Selling, general, and administrative | 392 | 399 | 373 | |||||||||
Depreciation and amortization of intangibles | 222 | 205 | 184 | |||||||||
5,918 | 5,928 | 4,481 | ||||||||||
Other income (expense) | ||||||||||||
Loss on sale of receivables | (10 | ) | (10 | ) | (9 | ) | ||||||
Other income | 9 | 6 | 4 | |||||||||
(1 | ) | (4 | ) | (5 | ) | |||||||
Income (loss) before interest expense, income taxes, and noncontrolling interests | (3 | ) | 252 | 196 | ||||||||
Interest expense (net of interest capitalized of $6 million, $6 million and $6 million, respectively) | 113 | 164 | 136 | |||||||||
Income tax expense | 289 | 83 | 5 | |||||||||
Net income (loss) | (405 | ) | 5 | 55 | ||||||||
Less: Net income attributable to noncontrolling interests | 10 | 10 | 6 | |||||||||
Net income (loss) attributable to Tenneco Inc. | $ | (415 | ) | $ | (5 | ) | $ | 49 | ||||
Earnings (loss) per share | ||||||||||||
Weighted average shares of common stock outstanding — | ||||||||||||
Basic | 46,406,095 | 45,809,730 | 44,625,220 | |||||||||
Diluted | 46,406,095 | 45,809,730 | 46,755,573 | |||||||||
Basic earnings (loss) per share of common stock | $ | (8.95 | ) | $ | (0.11 | ) | $ | 1.11 | ||||
Diluted earnings (loss) per share of common stock | $ | (8.95 | ) | $ | (0.11 | ) | $ | 1.05 |
The accompanying notes to consolidated financial statements are an integral
part of these statements of income (loss).
part of these statements of income (loss).
1
TENNECO INC.
CONSOLIDATED BALANCE SHEETS
December 31, | ||||||||
2008 | 2007 | |||||||
(Millions) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 126 | $ | 188 | ||||
Receivables — | ||||||||
Customer notes and accounts, net | 529 | 732 | ||||||
Other | 45 | 25 | ||||||
Inventories | 513 | 539 | ||||||
Deferred income taxes | 18 | 36 | ||||||
Prepayments and other | 107 | 121 | ||||||
Total current assets | 1,338 | 1,641 | ||||||
Other assets: | ||||||||
Long-term receivables, net | 11 | 19 | ||||||
Goodwill | 95 | 208 | ||||||
Intangibles, net | 26 | 26 | ||||||
Deferred income taxes | 88 | 370 | ||||||
Other | 125 | 141 | ||||||
345 | 764 | |||||||
Plant, property, and equipment, at cost | 2,960 | 2,978 | ||||||
Less — Accumulated depreciation and amortization | (1,815 | ) | (1,793 | ) | ||||
1,145 | 1,185 | |||||||
Total assets | $ | 2,828 | $ | 3,590 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term debt (including current maturities of long-term debt) | $ | 49 | $ | 46 | ||||
Trade payables | 790 | 987 | ||||||
Accrued taxes | 30 | 41 | ||||||
Accrued interest | 22 | 22 | ||||||
Accrued liabilities | 201 | 213 | ||||||
Other | 65 | 49 | ||||||
Total current liabilities | 1,157 | 1,358 | ||||||
Long-term debt | 1,402 | 1,328 | ||||||
Deferred income taxes | 51 | 114 | ||||||
Postretirement benefits | 377 | 288 | ||||||
Deferred credits and other liabilities | 61 | 71 | ||||||
Commitments and contingencies | ||||||||
Total liabilities | 3,048 | 3,159 | ||||||
Redeemable noncontrolling interests | 7 | 6 | ||||||
Tenneco Inc. shareholders’ equity: | ||||||||
Common stock | — | — | ||||||
Premium on common stock and other capital surplus | 2,809 | 2,800 | ||||||
Accumulated other comprehensive loss | (318 | ) | (73 | ) | ||||
Retained earnings (accumulated deficit) | (2,502 | ) | (2,087 | ) | ||||
(11 | ) | 640 | ||||||
Less — Shares held as treasury stock, at cost | 240 | 240 | ||||||
Total Tenneco Inc. shareholders’ equity | (251 | ) | 400 | |||||
Noncontrolling interests | 24 | 25 | ||||||
Total equity | (227 | ) | 425 | |||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 2,828 | $ | 3,590 | ||||
The accompanying notes to consolidated financial statements are an integral
part of these balance sheets.
part of these balance sheets.
2
TENNECO INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(Millions) | ||||||||||||
Operating Activities | ||||||||||||
Net income (loss) | $ | (405 | ) | $ | 5 | $ | 55 | |||||
Adjustments to reconcile net income (loss) to cash provided by operating activities — | ||||||||||||
Depreciation and amortization of other intangibles | 222 | 205 | 184 | |||||||||
Goodwill impairment charge | 114 | — | — | |||||||||
Deferred income taxes | 204 | 25 | (41 | ) | ||||||||
Stock-based compensation | 10 | 9 | 7 | |||||||||
Loss on sale of assets | 10 | 8 | 3 | |||||||||
Changes in components of working capital — | ||||||||||||
(Increase) decrease in receivables | 126 | (116 | ) | (24 | ) | |||||||
(Increase) decrease in inventories | 19 | (66 | ) | (57 | ) | |||||||
(Increase) decrease in prepayments and other current assets | 1 | 15 | (25 | ) | ||||||||
Increase (decrease) in payables | (181 | ) | 100 | 91 | ||||||||
Increase (decrease) in accrued taxes | 4 | (25 | ) | 15 | ||||||||
Increase (decrease) in accrued interest | — | (10 | ) | 2 | ||||||||
Increase (decrease) in other current liabilities | — | 19 | 5 | |||||||||
Change in long-term assets | 16 | 6 | 3 | |||||||||
Change in long-term liabilities | 19 | (13 | ) | (11 | ) | |||||||
Other | 1 | (4 | ) | (4 | ) | |||||||
Net cash provided by operating activities | 160 | 158 | 203 | |||||||||
Investing Activities | ||||||||||||
Proceeds from sale of assets | 3 | 10 | 17 | |||||||||
Cash payments for plant, property, and equipment | (233 | ) | (177 | ) | (177 | ) | ||||||
Cash payments for software related intangible assets | (15 | ) | (19 | ) | (13 | ) | ||||||
Cash payment for net assets purchased | — | (16 | ) | — | ||||||||
Acquisition of businesses (net of cash acquired) | (16 | ) | — | — | ||||||||
Investments and other | — | — | 1 | |||||||||
Net cash used by investing activities | (261 | ) | (202 | ) | (172 | ) | ||||||
Financing Activities | ||||||||||||
Issuance of common shares | 2 | 8 | 17 | |||||||||
Issuance of long-term debt | 1 | 400 | — | |||||||||
Debt issuance costs on long-term debt | (2 | ) | (11 | ) | — | |||||||
Increase (decrease) in bank overdrafts | (1 | ) | 7 | — | ||||||||
Retirement of long-term debt | (6 | ) | (591 | ) | (4 | ) | ||||||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt | 77 | 183 | 3 | |||||||||
Distribution to noncontrolling interest partners | (13 | ) | (6 | ) | (4 | ) | ||||||
Net cash provided (used) by financing activities | 58 | (10 | ) | 12 | ||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | (19 | ) | 40 | 18 | ||||||||
Increase (decrease) in cash and cash equivalents | (62 | ) | (14 | ) | 61 | |||||||
Cash and cash equivalents, January 1 | 188 | 202 | 141 | |||||||||
Cash and cash equivalents, December 31 (Note) | $ | 126 | $ | 188 | $ | 202 | ||||||
Supplemental Cash Flow Information | ||||||||||||
Cash paid during the year for interest | $ | 117 | $ | 177 | $ | 137 | ||||||
Cash paid during the year for income taxes (net of refunds) | 62 | 60 | 26 | |||||||||
Non-cash Investing and Financing Activities | ||||||||||||
Period ended balance of payables for plant, property, and equipment | $ | 28 | $ | 40 | $ | 18 | ||||||
Assumption of debt from business acquisition | 10 | — | — |
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
The accompanying notes to consolidated financial statements are an integral
part of these statements of cash flows.
part of these statements of cash flows.
3
TENNECO INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Year Ended December 31, | ||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
(Millions Except Share Amounts) | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||
Balance January 1 | 47,892,532 | $ | — | 47,085,274 | $ | — | 45,544,668 | $ | — | |||||||||||||||
Issued (Reacquired) pursuant to benefit plans | 238,982 | — | 209,558 | — | (104,240 | ) | — | |||||||||||||||||
Stock options exercised | 182,976 | — | 597,700 | — | 1,644,846 | — | ||||||||||||||||||
Balance December 31 | 48,314,490 | — | 47,892,532 | — | 47,085,274 | — | ||||||||||||||||||
Premium on Common Stock and Other Capital Surplus | ||||||||||||||||||||||||
Balance January 1 | 2,800 | 2,790 | 2,776 | |||||||||||||||||||||
Premium on common stock issued pursuant to benefit plans | 9 | 10 | 14 | |||||||||||||||||||||
Balance December 31 | 2,809 | 2,800 | 2,790 | |||||||||||||||||||||
Accumulated Other Comprehensive Loss | ||||||||||||||||||||||||
Balance January 1 | (73 | ) | (252 | ) | (281 | ) | ||||||||||||||||||
Adoption of recognition provision of Statement of Financial Accounting Standard (SFAS) No. 158, net of tax of $31 million | — | — | (59 | ) | ||||||||||||||||||||
Measurement date implementation of SFAS No. 158, net of tax of $7 million | — | 14 | — | |||||||||||||||||||||
Other comprehensive income (loss) | (245 | ) | 165 | 88 | ||||||||||||||||||||
Balance December 31 | (318 | ) | (73 | ) | (252 | ) | ||||||||||||||||||
Retained Earnings (Accumulated Deficit) | ||||||||||||||||||||||||
Balance January 1 | (2,087 | ) | (2,072 | ) | (2,118 | ) | ||||||||||||||||||
Net income (loss) attributable to Tenneco Inc. | (415 | ) | (5 | ) | 49 | |||||||||||||||||||
Measurement date implementation of SFAS No. 158, net of tax of $2 million | — | (8 | ) | — | ||||||||||||||||||||
Other | — | (2 | ) | (3 | ) | |||||||||||||||||||
Balance December 31 | (2,502 | ) | (2,087 | ) | (2,072 | ) | ||||||||||||||||||
Less — Common Stock Held as Treasury Stock, at Cost | ||||||||||||||||||||||||
Balance January 1 and December 31 | 1,294,692 | 240 | 1,294,692 | 240 | 1,294,692 | 240 | ||||||||||||||||||
Total Tenneco Inc. shareholders’ equity | $ | (251 | ) | $ | 400 | $ | 226 | |||||||||||||||||
Noncontrolling interests: | ||||||||||||||||||||||||
Balance January 1 | 25 | 24 | 21 | |||||||||||||||||||||
Net income | 6 | 7 | 4 | |||||||||||||||||||||
Dividends declared | (7 | ) | (6 | ) | (1 | ) | ||||||||||||||||||
Balance December 31 | $ | 24 | $ | 25 | $ | 24 | ||||||||||||||||||
Total equity | $ | (227 | ) | $ | 425 | $ | 250 | |||||||||||||||||
The accompanying notes to consolidated financial statements are an integral
part of these statements of changes in shareholders’ equity.
part of these statements of changes in shareholders’ equity.
4
TENNECO INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Year Ended December 31, 2008 | ||||||||||||||||||||||||
Tenneco Inc. | Noncontrolling Interests | Total | ||||||||||||||||||||||
Accumulated | Accumulated | Accumulated | ||||||||||||||||||||||
Other | Other | Other | ||||||||||||||||||||||
Comprehensive | Comprehensive | Comprehensive | Comprehensive | Comprehensive | Comprehensive | |||||||||||||||||||
Income | Income | Income | Income | Income | Income | |||||||||||||||||||
(Loss) | (Loss) | (Loss) | (Loss) | (Loss) | (Loss) | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Net Income (Loss) | $ | (415 | ) | $ | 6 | $ | (409 | ) | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||
Cumulative Translation Adjustment | �� | |||||||||||||||||||||||
Balance January 1 | $ | 85 | $ | — | $ | 85 | ||||||||||||||||||
Translation of foreign currency statements | (127 | ) | (127 | ) | — | (127 | ) | (127 | ) | |||||||||||||||
Balance December 31 | (42 | ) | — | (42 | ) | |||||||||||||||||||
Additional Liability for Pension Benefits | ||||||||||||||||||||||||
Balance January 1 | (158 | ) | — | (158 | ) | |||||||||||||||||||
Additional liability for pension and postretirement benefits, net of tax of $9 million | (118 | ) | (118 | ) | — | (118 | ) | (118 | ) | |||||||||||||||
Balance December 31 | (276 | ) | — | (276 | ) | |||||||||||||||||||
Balance December 31 | $ | (318 | ) | $ | — | $ | (318 | ) | ||||||||||||||||
Other comprehensive income (loss) | (245 | ) | — | (245 | ) | |||||||||||||||||||
Comprehensive Income (Loss) | $ | (660 | ) | $ | 6 | $ | (654 | ) | ||||||||||||||||
Year Ended December 31, 2007 | ||||||||||||||||||||||||
Tenneco Inc. | Noncontrolling Interests | Total | ||||||||||||||||||||||
Accumulated | Accumulated | Accumulated | ||||||||||||||||||||||
Other | Other | Other | ||||||||||||||||||||||
Comprehensive | Comprehensive | Comprehensive | Comprehensive | Comprehensive | Comprehensive | |||||||||||||||||||
Income | Income | Income | Income | Income | Income | |||||||||||||||||||
(Loss) | (Loss) | (Loss) | (Loss) | (Loss) | (Loss) | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Net Income (Loss) | $ | (5 | ) | $ | 7 | $ | 2 | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||
Cumulative Translation Adjustment | ||||||||||||||||||||||||
Balance January 1 | $ | (53 | ) | $ | — | $ | (53 | ) | ||||||||||||||||
Translation of foreign currency statements | 138 | 138 | — | 138 | 138 | |||||||||||||||||||
Balance December 31 | 85 | — | 85 | |||||||||||||||||||||
Additional Liability for Pension Benefits | ||||||||||||||||||||||||
Balance January 1 | (199 | ) | — | (199 | ) | |||||||||||||||||||
Additional liability for pension and postretirement benefits, net of tax of $(15) million | 27 | 27 | — | 27 | 27 | |||||||||||||||||||
Measurement date implementation of SFAS No. 158, net of tax of $7 million | 14 | — | — | — | 14 | — | ||||||||||||||||||
Balance December 31 | (158 | ) | — | (158 | ) | |||||||||||||||||||
Balance December 31 | $ | (73 | ) | $ | — | $ | (73 | ) | ||||||||||||||||
Other comprehensive income (loss) | 165 | — | 165 | |||||||||||||||||||||
Comprehensive Income (Loss) | $ | 160 | $ | 7 | $ | 167 | ||||||||||||||||||
The accompanying notes to financial statements are an integral part
of these statements of comprehensive income (loss).
5
TENNECO INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) — (Continued)
Year Ended December 31, 2006 | ||||||||||||||||||||||||
Tenneco Inc. | Noncontrolling Interests | Total | ||||||||||||||||||||||
Accumulated | Accumulated | Accumulated | ||||||||||||||||||||||
Other | Other | Other | ||||||||||||||||||||||
Comprehensive | Comprehensive | Comprehensive | Comprehensive | Comprehensive | Comprehensive | |||||||||||||||||||
Income | Income | Income | Income | Income | Income | |||||||||||||||||||
(Loss) | (Loss) | (Loss) | (Loss) | (Loss) | (Loss) | |||||||||||||||||||
(Millions) | ||||||||||||||||||||||||
Net Income (Loss) | $ | 49 | $ | 4 | $ | 53 | ||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||
Cumulative Translation Adjustment | ||||||||||||||||||||||||
Balance January 1 | $ | (149 | ) | $ | — | $ | (149 | ) | ||||||||||||||||
Translation of foreign currency statements | 96 | 96 | — | 96 | 96 | |||||||||||||||||||
Balance December 31 | (53 | ) | — | (53 | ) | |||||||||||||||||||
Additional Liability for Pension Benefits | ||||||||||||||||||||||||
Balance January 1 | (132 | ) | �� | — | (132 | ) | ||||||||||||||||||
Additional liability for pension and postretirement benefits, net of tax of $2 million | (5 | ) | (5 | ) | — | (5 | ) | (5 | ) | |||||||||||||||
Deferred tax valuation allowance adjustment | (3 | ) | (3 | ) | — | — | (3 | ) | (3 | ) | ||||||||||||||
Balance December 31 | (140 | ) | — | (140 | ) | |||||||||||||||||||
Adoption of recognition provision of SFAS No. 158, net of tax of $31 million | (59 | ) | — | — | — | (59 | ) | — | ||||||||||||||||
Balance December 31 | $ | (252 | ) | — | $ | (252 | ) | |||||||||||||||||
Other comprehensive income (loss) | 88 | — | 88 | |||||||||||||||||||||
Comprehensive Income (Loss) | $ | 137 | $ | 4 | $ | 141 | ||||||||||||||||||
The accompanying notes to consolidated financial statements are an integral
part of these statements of comprehensive income (loss).
part of these statements of comprehensive income (loss).
6
14. | Supplemental Guarantor Condensed Consolidating Financial Statements |
Basis of Presentation
Subject to limited exceptions, all of our existing and future material domestic 100% owned subsidiaries (which are referred to as the Guarantor Subsidiaries) fully and unconditionally guarantee our senior subordinated notes due in 2014, our senior notes due in 2015 and our senior secured notes due 2013 on a joint and several basis. We have not presented separate financial statements and other disclosures concerning each of the Guarantor Subsidiaries because management has determined that such information is not material to the holders of the notes. Therefore, the Guarantor Subsidiaries are combined in the presentation below.
These condensed consolidating financial statements are presented on the equity method. Under this method, our investments are recorded at cost and adjusted for our ownership share of a subsidiary’s cumulative results of operations, capital contributions and distributions, and other equity changes. You should read the condensed consolidating financial information of the Guarantor Subsidiaries in connection with our consolidated financial statements and related notes of which this note is an integral part.
Distributions
There are no significant restrictions on the ability of the Guarantor Subsidiaries to make distributions to us.
TENNECO INC.
STATEMENT OF INCOME (LOSS)
For the Year Ended December 31, 2008 | ||||||||||||||||||||
Tenneco Inc. | ||||||||||||||||||||
Guarantor | Nonguarantor | (Parent | Reclass | |||||||||||||||||
Subsidiaries | Subsidiaries | Company) | & Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
Net sales and operating revenues — | ||||||||||||||||||||
External | $ | 2,392 | $ | 3,524 | $ | — | $ | — | $ | 5,916 | ||||||||||
Affiliated companies | 66 | 476 | — | (542 | ) | — | ||||||||||||||
2,458 | 4,000 | — | (542 | ) | 5,916 | |||||||||||||||
Costs and expenses | ||||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 2,058 | 3,547 | — | (542 | ) | 5,063 | ||||||||||||||
Goodwill impairment charge | 114 | — | — | — | 114 | |||||||||||||||
Engineering, research, and development | 52 | 75 | — | — | 127 | |||||||||||||||
Selling, general, and administrative | 124 | 264 | 4 | — | 392 | |||||||||||||||
Depreciation and amortization of intangibles | 86 | 136 | — | — | 222 | |||||||||||||||
2,434 | 4,022 | 4 | (542 | ) | 5,918 | |||||||||||||||
Other income (expense) | ||||||||||||||||||||
Loss on sale of receivables | — | (10 | ) | — | — | (10 | ) | |||||||||||||
Other income (expense) | 63 | (1 | ) | (1 | ) | (52 | ) | 9 | ||||||||||||
63 | (11 | ) | (1 | ) | (52 | ) | (1 | ) | ||||||||||||
Income (loss) before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies | 87 | (33 | ) | (5 | ) | (52 | ) | (3 | ) | |||||||||||
Interest expense — | ||||||||||||||||||||
External (net of interest capitalized) | (3 | ) | 3 | 113 | — | 113 | ||||||||||||||
Affiliated companies (net of interest income) | 124 | (10 | ) | (114 | ) | — | — | |||||||||||||
Income tax expense (benefit) | 20 | 89 | 185 | (5 | ) | 289 | ||||||||||||||
Equity in net income (loss) from affiliated companies | (138 | ) | — | (226 | ) | 364 | — | |||||||||||||
Net income (loss) | (192 | ) | (115 | ) | (415 | ) | 317 | (405 | ) | |||||||||||
Less: Net income attributable to noncontrolling interests | — | 10 | — | — | 10 | |||||||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | (192 | ) | $ | (125 | ) | $ | (415 | ) | $ | 317 | $ | (415 | ) | ||||||
7
TENNECO INC.
STATEMENT OF INCOME (LOSS)
For the Year Ended December 31, 2007 | ||||||||||||||||||||
Tenneco Inc. | ||||||||||||||||||||
Guarantor | Nonguarantor | (Parent | Reclass | |||||||||||||||||
Subsidiaries | Subsidiaries | Company) | & Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
Net sales and operating revenues — | ||||||||||||||||||||
External | $ | 2,827 | $ | 3,357 | $ | — | $ | — | $ | 6,184 | ||||||||||
Affiliated companies | 95 | 895 | — | (990 | ) | — | ||||||||||||||
2,922 | 4,252 | — | (990 | ) | 6,184 | |||||||||||||||
Costs and expenses | ||||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 2,619 | 3,582 | (1 | ) | (990 | ) | 5,210 | |||||||||||||
Engineering, research, and development | 55 | 59 | — | — | 114 | |||||||||||||||
Selling, general, and administrative | 145 | 249 | 4 | 1 | 399 | |||||||||||||||
Depreciation and amortization of intangibles | 80 | 125 | — | — | 205 | |||||||||||||||
2,899 | 4,015 | 3 | (989 | ) | 5,928 | |||||||||||||||
Other income (expense) | ||||||||||||||||||||
Loss on sale of receivables | — | (10 | ) | — | — | (10 | ) | |||||||||||||
Other income (expense) | 13 | 3 | — | (10 | ) | 6 | ||||||||||||||
13 | (7 | ) | — | (10 | ) | (4 | ) | |||||||||||||
Income (loss) before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies | 36 | 230 | (3 | ) | (11 | ) | 252 | |||||||||||||
Interest expense — | ||||||||||||||||||||
External (net of interest capitalized) | (2 | ) | 2 | 164 | — | 164 | ||||||||||||||
Affiliated companies (net of interest income) | 185 | (16 | ) | (169 | ) | — | — | |||||||||||||
Income tax expense (benefit) | (42 | ) | 78 | 57 | (10 | ) | 83 | |||||||||||||
Equity in net income (loss) from affiliated companies | 135 | — | 50 | (185 | ) | — | ||||||||||||||
Net income (loss) | 30 | 166 | (5 | ) | (186 | ) | 5 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | 10 | — | — | 10 | |||||||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | 30 | $ | 156 | $ | (5 | ) | $ | (186 | ) | $ | (5 | ) | |||||||
8
TENNECO INC.
STATEMENT OF INCOME (LOSS)
For the Year Ended December 31, 2006 | ||||||||||||||||||||
Tenneco Inc. | ||||||||||||||||||||
Guarantor | Nonguarantor | (Parent | Reclass | |||||||||||||||||
Subsidiaries | Subsidiaries | Company) | & Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
Net sales and operating revenues — | ||||||||||||||||||||
External | $ | 1,892 | $ | 2,790 | $ | — | $ | — | $ | 4,682 | ||||||||||
Affiliated companies | 88 | 483 | — | (571 | ) | — | ||||||||||||||
1,980 | 3,273 | — | (571 | ) | 4,682 | |||||||||||||||
Costs and expenses | ||||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 1,614 | 2,793 | — | (571 | ) | 3,836 | ||||||||||||||
Engineering, research, and development | 45 | 43 | — | — | 88 | |||||||||||||||
Selling, general, and administrative | 131 | 238 | 4 | — | 373 | |||||||||||||||
Depreciation and amortization of intangibles | 71 | 113 | — | — | 184 | |||||||||||||||
1,861 | 3,187 | 4 | (571 | ) | 4,481 | |||||||||||||||
Other income (expense) | ||||||||||||||||||||
Loss on sale of receivables | — | (9 | ) | — | — | (9 | ) | |||||||||||||
Other income (expense) | — | 6 | (3 | ) | 1 | 4 | ||||||||||||||
— | (3 | ) | (3 | ) | 1 | (5 | ) | |||||||||||||
Income (loss) before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies | 119 | 83 | (7 | ) | 1 | 196 | ||||||||||||||
Interest expense — | ||||||||||||||||||||
External (net of interest capitalized) | (4 | ) | 3 | 137 | — | 136 | ||||||||||||||
Affiliated companies (net of interest income) | 165 | (11 | ) | (154 | ) | — | — | |||||||||||||
Income tax expense (benefit) | (33 | ) | 41 | (4 | ) | 1 | 5 | |||||||||||||
Equity in net income (loss) from affiliated companies | 24 | 3 | 35 | (62 | ) | — | ||||||||||||||
Net income (loss) | 15 | 53 | 49 | (62 | ) | 55 | ||||||||||||||
Less: Net income attributable to noncontrolling interests | — | 6 | — | — | 6 | |||||||||||||||
Net income (loss) attributable to Tenneco Inc. | $ | 15 | $ | 47 | $ | 49 | $ | (62 | ) | $ | 49 | |||||||||
9
TENNECO INC.
BALANCE SHEET
December 31, 2008 | ||||||||||||||||||||
Tenneco Inc. | ||||||||||||||||||||
Guarantor | Nonguarantor | (Parent | Reclass | |||||||||||||||||
Subsidiaries | Subsidiaries | Company) | & Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 16 | $ | 110 | $ | — | $ | — | $ | 126 | ||||||||||
Receivables, net | 461 | 792 | 33 | (712 | ) | 574 | ||||||||||||||
Inventories | 193 | 320 | — | — | 513 | |||||||||||||||
Deferred income taxes | 58 | — | — | (40 | ) | 18 | ||||||||||||||
Prepayments and other | 24 | 83 | — | — | 107 | |||||||||||||||
752 | 1,305 | 33 | (752 | ) | 1,338 | |||||||||||||||
Other assets: | ||||||||||||||||||||
Investment in affiliated companies | 399 | — | 614 | (1,013 | ) | — | ||||||||||||||
Notes and advances receivable from affiliates | 3,641 | 234 | 5,605 | (9,480 | ) | — | ||||||||||||||
Long-term receivables, net | 1 | 10 | — | — | 11 | |||||||||||||||
Goodwill | 22 | 73 | — | — | 95 | |||||||||||||||
Intangibles, net | 17 | 9 | — | — | 26 | |||||||||||||||
Deferred income taxes | 64 | 24 | 46 | (46 | ) | 88 | ||||||||||||||
Other | 36 | 66 | 23 | — | 125 | |||||||||||||||
4,180 | 416 | 6,288 | (10,539 | ) | 345 | |||||||||||||||
Plant, property, and equipment, at cost | 1,039 | 1,921 | — | — | 2,960 | |||||||||||||||
Less — Accumulated depreciation and amortization | (687 | ) | (1,128 | ) | — | — | (1,815 | ) | ||||||||||||
352 | 793 | — | — | 1,145 | ||||||||||||||||
Total assets | $ | 5,284 | $ | 2,514 | $ | 6,321 | $ | (11,291 | ) | $ | 2,828 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Short-term debt (including current maturities of long-term debt) | ||||||||||||||||||||
Short-term debt — non-affiliated | $ | — | $ | 49 | $ | — | $ | — | $ | 49 | ||||||||||
Short-term debt — affiliated | 174 | 371 | 10 | (555 | ) | — | ||||||||||||||
Trade payables | 332 | 594 | — | (136 | ) | 790 | ||||||||||||||
Accrued taxes | 12 | 18 | — | — | 30 | |||||||||||||||
Other | 132 | 169 | 48 | (61 | ) | 288 | ||||||||||||||
650 | 1,201 | 58 | (752 | ) | 1,157 | |||||||||||||||
Long-term debt-non-affiliated | — | 12 | 1,390 | — | 1,402 | |||||||||||||||
Long-term debt-affiliated | 4,229 | 127 | 5,124 | (9,480 | ) | — | ||||||||||||||
Deferred income taxes | 43 | 54 | — | (46 | ) | 51 | ||||||||||||||
Postretirement benefits and other liabilities | 345 | 89 | — | 4 | 438 | |||||||||||||||
Commitments and contingencies | ||||||||||||||||||||
Total liabilities | 5,267 | 1,483 | 6,572 | (10,274 | ) | 3,048 | ||||||||||||||
Redeemable noncontrolling interests | — | 7 | — | — | 7 | |||||||||||||||
Tenneco Inc. Shareholders’ equity | 17 | 1,000 | (251 | ) | (1,017 | ) | (251 | ) | ||||||||||||
Noncontrolling interests | — | 24 | — | — | 24 | |||||||||||||||
Total equity | 17 | 1,024 | (251 | ) | (1,017 | ) | (227 | ) | ||||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 5,284 | $ | 2,514 | $ | 6,321 | $ | (11,291 | ) | $ | 2,828 | |||||||||
10
TENNECO INC.
BALANCE SHEET
December 31, 2007 | ||||||||||||||||||||
Tenneco Inc. | ||||||||||||||||||||
Guarantor | Nonguarantor | (Parent | Reclass | |||||||||||||||||
Subsidiaries | Subsidiaries | Company) | & Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 6 | $ | 182 | $ | — | $ | — | $ | 188 | ||||||||||
Receivables, net | 385 | 1,090 | 148 | (866 | ) | 757 | ||||||||||||||
Inventories | 198 | 341 | — | — | 539 | |||||||||||||||
Deferred income taxes | 53 | — | 3 | (20 | ) | 36 | ||||||||||||||
Prepayments and other | 18 | 103 | — | — | 121 | |||||||||||||||
660 | 1,716 | 151 | (886 | ) | 1,641 | |||||||||||||||
Other assets: | ||||||||||||||||||||
Investment in affiliated companies | 628 | — | 1,083 | (1,711 | ) | — | ||||||||||||||
Notes and advances receivable from affiliates | 3,607 | 232 | 5,383 | (9,222 | ) | — | ||||||||||||||
Long-term receivables, net | — | 19 | — | — | 19 | |||||||||||||||
Goodwill | 136 | 72 | — | — | 208 | |||||||||||||||
Intangibles, net | 17 | 9 | — | — | 26 | |||||||||||||||
Deferred income taxes | 310 | 60 | 180 | (180 | ) | 370 | ||||||||||||||
Other | 40 | 76 | 25 | — | 141 | |||||||||||||||
4,738 | 468 | 6,671 | (11,113 | ) | 764 | |||||||||||||||
Plant, property, and equipment, at cost | 994 | 1,984 | — | — | 2,978 | |||||||||||||||
Less — Accumulated depreciation and amortization | (658 | ) | (1,135 | ) | — | — | (1,793 | ) | ||||||||||||
336 | 849 | — | — | 1,185 | ||||||||||||||||
Total assets | $ | 5,734 | $ | 3,033 | $ | 6,822 | $ | (11,999 | ) | $ | 3,590 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Short-term debt (including current maturities of long-term debt) | ||||||||||||||||||||
Short-term debt — non-affiliated | $ | — | $ | 44 | $ | 2 | $ | — | $ | 46 | ||||||||||
Short-term debt — affiliated | 274 | 439 | 10 | (723 | ) | — | ||||||||||||||
Trade payables | 350 | 774 | — | (137 | ) | 987 | ||||||||||||||
Accrued taxes | 27 | 16 | — | (2 | ) | 41 | ||||||||||||||
Other | 118 | 169 | 21 | (24 | ) | 284 | ||||||||||||||
769 | 1,442 | 33 | (886 | ) | 1,358 | |||||||||||||||
Long-term debt-non-affiliated | — | 7 | 1,321 | — | 1,328 | |||||||||||||||
Long-term debt-affiliated | 4,100 | 54 | 5,068 | (9,222 | ) | — | ||||||||||||||
Deferred income taxes | 213 | 81 | — | (180 | ) | 114 | ||||||||||||||
Postretirement benefits and other liabilities | 264 | 89 | — | 6 | 359 | |||||||||||||||
Commitments and contingencies | ||||||||||||||||||||
Total liabilities | 5,346 | 1,673 | 6,422 | (10,282 | ) | 3,159 | ||||||||||||||
Redeemable noncontrolling interests | — | 6 | — | — | 6 | |||||||||||||||
Tenneco Inc. shareholders’ equity | 388 | 1,329 | 400 | (1,717 | ) | 400 | ||||||||||||||
Noncontrolling interests | — | 25 | — | — | 25 | |||||||||||||||
Total equity | 388 | 1,354 | 400 | (1,717 | ) | 425 | ||||||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 5,734 | $ | 3,033 | $ | 6,822 | $ | (11,999 | ) | $ | 3,590 | |||||||||
11
TENNECO INC.
STATEMENT OF CASH FLOWS
Year Ended December 31, 2008 | ||||||||||||||||||||
Tenneco Inc. | ||||||||||||||||||||
Guarantor | Nonguarantor | (Parent | Reclass | |||||||||||||||||
Subsidiaries | Subsidiaries | Company) | & Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net cash provided (used) by operating activities | $ | 167 | $ | 130 | $ | (137 | ) | $ | — | $ | 160 | |||||||||
Investing Activities | ||||||||||||||||||||
Proceeds from sale of assets | — | 3 | — | — | 3 | |||||||||||||||
Cash payments for plant, property, and equipment | (90 | ) | (143 | ) | — | — | (233 | ) | ||||||||||||
Acquisition of business (net of cash acquired) | (19 | ) | 3 | — | — | (16 | ) | |||||||||||||
Cash payments for software related intangible assets | (9 | ) | (6 | ) | — | — | (15 | ) | ||||||||||||
Investments and other | — | — | — | — | — | |||||||||||||||
Net cash used by investing activities | (118 | ) | (143 | ) | — | — | (261 | ) | ||||||||||||
Financing Activities | ||||||||||||||||||||
Issuance of common shares | — | — | 2 | — | 2 | |||||||||||||||
Issuance of long-term debt | — | 1 | — | — | 1 | |||||||||||||||
Retirement of long-term debt | — | (4 | ) | (2 | ) | — | (6 | ) | ||||||||||||
Debit issuance cost on long-term debt | — | — | (2 | ) | — | (2 | ) | |||||||||||||
Increase (decrease) in bank overdrafts | — | (1 | ) | — | — | (1 | ) | |||||||||||||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt | — | 7 | 70 | — | 77 | |||||||||||||||
Intercompany dividends and net increase (decrease) in intercompany obligations | (39 | ) | (30 | ) | 69 | — | — | |||||||||||||
Distribution to noncontrolling interest partners | — | (13 | ) | — | — | (13 | ) | |||||||||||||
Net cash provided (used) by financing activities | (39 | ) | (40 | ) | 137 | — | 58 | |||||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | — | (19 | ) | — | — | (19 | ) | |||||||||||||
Increase (decrease) in cash and cash equivalents | 10 | (72 | ) | — | — | (62 | ) | |||||||||||||
Cash and cash equivalents, January 1 | 6 | 182 | — | — | 188 | |||||||||||||||
Cash and cash equivalents, December 31 (Note) | $ | 16 | $ | 110 | $ | — | $ | — | $ | 126 | ||||||||||
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
12
TENNECO INC.
STATEMENT OF CASH FLOWS — (Continued)
Year Ended December 31, 2007 | ||||||||||||||||||||
Tenneco Inc. | ||||||||||||||||||||
Guarantor | Nonguarantor | (Parent | Reclass | |||||||||||||||||
Subsidiaries | Subsidiaries | Company) | & Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net cash provided (used) by operating activities | $ | 380 | $ | 302 | $ | (524 | ) | $ | — | $ | 158 | |||||||||
Investing Activities | ||||||||||||||||||||
Proceeds from sale of assets | 1 | 9 | — | — | 10 | |||||||||||||||
Cash payments for plant, property, and equipment | (59 | ) | (118 | ) | — | — | (177 | ) | ||||||||||||
Cash payment for net assets purchased | (16 | ) | — | — | — | (16 | ) | |||||||||||||
Cash payments for software related intangible assets | (13 | ) | (6 | ) | — | — | (19 | ) | ||||||||||||
Investments and other | — | (250 | ) | 250 | — | — | ||||||||||||||
Net cash provided (used) by investing activities | (87 | ) | (365 | ) | 250 | — | (202 | ) | ||||||||||||
Financing Activities | ||||||||||||||||||||
Issuance of common shares | — | — | 8 | — | 8 | |||||||||||||||
Issuance of subsidiary equity | 41 | (41 | ) | — | — | — | ||||||||||||||
Issuance of long-term debt | — | — | 400 | — | 400 | |||||||||||||||
Retirement of long-term debt | — | (3 | ) | (588 | ) | — | (591 | ) | ||||||||||||
Debt issuance cost on long-term debt | — | — | (11 | ) | — | (11 | ) | |||||||||||||
Increase (decrease) in bank overdrafts | — | 7 | — | — | 7 | |||||||||||||||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt | — | 16 | 167 | — | 183 | |||||||||||||||
Intercompany dividends and net increase (decrease) in intercompany obligations | (384 | ) | 86 | 298 | — | — | ||||||||||||||
Distribution to noncontrolling interest partners | — | (6 | ) | — | — | (6 | ) | |||||||||||||
Net cash provided (used) by financing activities | (343 | ) | 59 | 274 | — | (10 | ) | |||||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | — | 40 | — | — | 40 | |||||||||||||||
Increase (decrease) in cash and cash equivalents | (50 | ) | 36 | — | — | (14 | ) | |||||||||||||
Cash and cash equivalents, January 1 | 56 | 146 | — | — | 202 | |||||||||||||||
Cash and cash equivalents, December 31 (Note) | $ | 6 | $ | 182 | $ | — | $ | — | $ | 188 | ||||||||||
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
13
TENNECO INC.
STATEMENT OF CASH FLOWS — (Continued)
Year Ended December 31, 2006 | ||||||||||||||||||||
Tenneco Inc. | ||||||||||||||||||||
Guarantor | Nonguarantor | (Parent | Reclass | |||||||||||||||||
Subsidiaries | Subsidiaries | Company) | & Elims | Consolidated | ||||||||||||||||
(Millions) | ||||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net cash provided (used) by operating activities | $ | 242 | $ | 249 | $ | (288 | ) | $ | — | $ | 203 | |||||||||
Investing Activities | ||||||||||||||||||||
Proceeds from sale of assets | 10 | 7 | — | — | 17 | |||||||||||||||
Cash payment for plant, property, and equipment | (78 | ) | (99 | ) | — | — | (177 | ) | ||||||||||||
Cash payment for software related intangible assets | (6 | ) | (7 | ) | — | — | (13 | ) | ||||||||||||
Investments and other | — | 1 | — | — | 1 | |||||||||||||||
Net cash used by investing activities | (74 | ) | (98 | ) | — | — | (172 | ) | ||||||||||||
Financing Activities | ||||||||||||||||||||
Issuance of common shares | — | — | 17 | — | 17 | |||||||||||||||
Retirement of long-term debt | — | (3 | ) | (1 | ) | — | (4 | ) | ||||||||||||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt | — | 3 | — | — | 3 | |||||||||||||||
Intercompany dividends and net increase (decrease) in intercompany obligations | (142 | ) | (129 | ) | 271 | — | — | |||||||||||||
Distribution to noncontrolling interest partners | — | (4 | ) | — | — | (4 | ) | |||||||||||||
Net cash provided (used) by financing activities | (142 | ) | (133 | ) | 287 | — | 12 | |||||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | — | 18 | — | — | 18 | |||||||||||||||
Increase (decrease) in cash and cash equivalents | 26 | 36 | (1 | ) | — | 61 | ||||||||||||||
Cash and cash equivalents, January 1 | 31 | 110 | — | — | 141 | |||||||||||||||
Cash and cash equivalents, December 31 (Note) | $ | 57 | $ | 146 | $ | (1 | ) | $ | — | $ | 202 | |||||||||
Note: | Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
14