Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | TENNECO INC | |
Entity Central Index Key | 1,024,725 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 51,424,625 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Net sales and operating revenues | $ 2,574,000,000 | $ 2,292,000,000 |
Costs and expenses | ||
Cost of sales (exclusive of depreciation and amortization shown below) | 2,198,000,000 | 1,929,000,000 |
Engineering, research, and development | 41,000,000 | 39,000,000 |
Selling, general, and administrative | 153,000,000 | 141,000,000 |
Depreciation and amortization of other intangibles | 59,000,000 | 52,000,000 |
Costs and expenses | 2,451,000,000 | 2,161,000,000 |
Other expense | ||
Loss on sale of receivables | (3,000,000) | (1,000,000) |
Other expense | (3,000,000) | (9,000,000) |
Total other expense | (6,000,000) | (10,000,000) |
Earnings before interest expense, income taxes, and noncontrolling interests | 117,000,000 | 121,000,000 |
Interest expense | 20,000,000 | 15,000,000 |
Earnings before income taxes and noncontrolling interests | 97,000,000 | 106,000,000 |
Income tax expense | 25,000,000 | 33,000,000 |
Net income | 72,000,000 | 73,000,000 |
Less: Net income attributable to noncontrolling interests | 14,000,000 | 14,000,000 |
Net income attributable to Tenneco Inc. | $ 58,000,000 | $ 59,000,000 |
Weighted average shares of common stock outstanding — | ||
Basic (in shares) | 51,211,643 | 53,856,352 |
Diluted (in shares) | 51,501,643 | 54,231,759 |
Basic earnings per share of common stock (in dollars per share) | $ 1.13 | $ 1.10 |
Diluted earnings per share of common stock (in dollars per share) | $ 1.13 | $ 1.09 |
Cash dividends declared (in dollars per share) | $ 0.25 | $ 0.25 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net income attributable to Tenneco Inc. | $ 58 | $ 59 |
Less: Net income attributable to noncontrolling interests | 14 | 14 |
Net Income | 72 | 73 |
Translation of foreign currency statements attributable to Tenneco | 19 | 21 |
Translation of foreign currency statements attributable to Noncontrolling Interest | 8 | 1 |
Translation of foreign currency statements | 27 | 22 |
Additional Liability for Pension and Postretirement Benefits, net of tax attributable to Tenneco | 3 | 7 |
Additional liability for pension and postretirement benefits, net of tax | 3 | 7 |
Accumulated Other Comprehensive Income (Loss) | ||
Beginning balance | 742 | |
Ending balance | 825 | 691 |
Other Comprehensive Income (Loss) | 30 | 29 |
Comprehensive Income attributable to Tenneco | 80 | 87 |
Comprehensive Income attributable to Noncontrolling Interest | 22 | 15 |
Comprehensive Income | 102 | 102 |
Tenneco Inc. | ||
Accumulated Other Comprehensive Income (Loss) | ||
Ending balance | 765 | 637 |
Other Comprehensive Income (Loss) | 22 | 28 |
AOCI Tenneco, Inc | ||
Accumulated Other Comprehensive Income (Loss) | ||
Beginning balance | (541) | (665) |
Ending balance | (519) | (637) |
Other Comprehensive Income (Loss) | 22 | 28 |
Tenneco, Inc. Cumulative Translation Adjustment | ||
Accumulated Other Comprehensive Income (Loss) | ||
Beginning balance | (241) | (338) |
Reclassification | 19 | 21 |
Ending balance | (222) | (317) |
Tenneco, Inc. Additional Liability for Pension and Postretirement Benefits | ||
Accumulated Other Comprehensive Income (Loss) | ||
Beginning balance | (300) | (327) |
Reclassification | 3 | 7 |
Ending balance | (297) | (320) |
Noncontrolling Interests | ||
Accumulated Other Comprehensive Income (Loss) | ||
Beginning balance | 46 | 47 |
Ending balance | 60 | 54 |
Other Comprehensive Income (Loss) | 8 | 1 |
AOCI Noncontrolling Interests | ||
Accumulated Other Comprehensive Income (Loss) | ||
Ending balance | 5 | (4) |
Noncontrolling Interests Cumulative Translation Adjustment | ||
Accumulated Other Comprehensive Income (Loss) | ||
Beginning balance | (3) | (5) |
Reclassification | 8 | 1 |
Ending balance | 5 | (4) |
Total | ||
Accumulated Other Comprehensive Income (Loss) | ||
Ending balance | (514) | (641) |
Total Cumulative Translation Adjustment | ||
Accumulated Other Comprehensive Income (Loss) | ||
Beginning balance | (244) | (343) |
Reclassification | 27 | 22 |
Ending balance | (217) | (321) |
Total Additional Liability for Pension and Postretirement Benefits | ||
Accumulated Other Comprehensive Income (Loss) | ||
Beginning balance | (300) | (327) |
Reclassification | 3 | 7 |
Ending balance | $ (297) | $ (320) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 288 | $ 315 |
Restricted cash | 2 | 3 |
Receivables — | ||
Customer notes and accounts, net | 1,499 | 1,294 |
Other | 25 | 27 |
Inventories — | ||
Finished goods | 358 | 349 |
Work in process | 288 | 268 |
Raw materials | 187 | 178 |
Materials and supplies | 78 | 74 |
Prepayments and other | 340 | 291 |
Total current assets | 3,065 | 2,799 |
Other assets: | ||
Long-term receivables, net | 10 | 9 |
Goodwill | 49 | 49 |
Intangibles, net | 22 | 22 |
Deferred income taxes | 206 | 204 |
Other | 154 | 144 |
Total other assets | 441 | 428 |
Plant, property, and equipment, at cost | 4,111 | 4,008 |
Less — Accumulated depreciation and amortization | (2,451) | (2,393) |
Plant, property and equipment, net | 1,660 | 1,615 |
Total Assets | 5,166 | 4,842 |
Current liabilities: | ||
Short-term debt (including current maturities of long-term debt) | 64 | 83 |
Accounts payable | 1,908 | 1,705 |
Accrued taxes | 43 | 45 |
Accrued interest | 10 | 14 |
Accrued liabilities | 293 | 287 |
Other | 126 | 132 |
Total current liabilities | 2,444 | 2,266 |
Long-term debt | 1,420 | 1,358 |
Deferred income taxes | 12 | 11 |
Pension and postretirement benefits | 266 | 268 |
Deferred credits and other liabilities | 149 | 155 |
Commitments and contingencies | ||
Total liabilities | 4,291 | 4,058 |
Redeemable noncontrolling interests | 50 | 42 |
Tenneco Inc. Shareholders’ equity: | ||
Common stock | 1 | 1 |
Premium on common stock and other capital surplus | 3,115 | 3,112 |
Accumulated other comprehensive loss | (519) | (541) |
Retained earnings (accumulated deficit) | (902) | (946) |
Total shareholders equity before treasury stock | 1,695 | 1,626 |
Less — Shares held as treasury stock, at cost | 930 | 930 |
Tenneco Inc. shareholders’ equity | 765 | 696 |
Noncontrolling interests | 60 | 46 |
Total equity | 825 | 742 |
Total liabilities, redeemable noncontrolling interests and equity | $ 5,166 | $ 4,842 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Activities | ||
Net Income | $ 72 | $ 73 |
Adjustments to reconcile net income to cash used by operating activities — | ||
Depreciation and amortization of other intangibles | 59 | 52 |
Deferred income taxes | (1) | 7 |
Stock-based compensation | 5 | 9 |
Loss on sale of assets | 3 | 1 |
Changes in components of working capital — | ||
(Increase) decrease in receivables | (223) | (159) |
(Increase) decrease in inventories | (34) | (45) |
(Increase) decrease in prepayments and other current assets | (45) | (57) |
Increase (decrease) in payables | 189 | 93 |
Increase (decrease) in accrued taxes | (3) | 3 |
Increase (decrease) in accrued interest | (3) | (5) |
Increase (decrease) in other current liabilities | (3) | (8) |
Changes in long-term assets | (9) | (1) |
Changes in long-term liabilities | (7) | 5 |
Other | 0 | 1 |
Net cash used by operating activities | 0 | (31) |
Investing Activities | ||
Proceeds from sale of assets | 2 | 3 |
Cash payments for plant, property, and equipment | (84) | (103) |
Cash payments for software related intangible assets | (5) | (6) |
Proceeds from deferred purchase price of factored receivables | 34 | 22 |
Net cash used by investing activities | (53) | (84) |
Financing Activities | ||
Repurchase of common shares | (2) | (3) |
Cash dividends | (13) | (13) |
Retirement of long-term debt | (6) | (6) |
Purchase of common stock under the share repurchase program | 0 | (16) |
Net increase (decrease) in bank overdrafts | (4) | 3 |
Net increase in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivable | 77 | 117 |
Net increase (decrease) in short-term borrowings secured by accounts receivable | (30) | 20 |
Net cash provided (used) by financing activities | 22 | 102 |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 3 | 8 |
Decrease in cash, cash equivalents and restricted cash | (28) | (5) |
Cash, cash equivalents and restricted cash, January 1 | 318 | 349 |
Cash, cash equivalents and restricted cash, March 31 (Note) | 290 | 344 |
Supplemental Cash Flow Information | ||
Cash paid during the period for interest (net of interest capitalized) | 23 | 22 |
Cash paid during the period for income taxes (net of refunds) | 25 | 15 |
Non-cash Operating and Investing Activities | ||
Period end balance of trade payables for plant, property, and equipment | 55 | 50 |
Deferred purchase price of receivables factored in the period | $ 37 | $ 26 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited) - USD ($) | Total | Common Stock | Premium on Common Stock and Other Capital Surplus | Accumulated Other Comprehensive Loss | Retained Earnings (Accumulated Deficit) | Less — Common Stock Held as Treasury Stock, at Cost | Tenneco Inc. | Noncontrolling Interests |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | $ 1,000,000 | $ 3,098,000,000 | $ (665,000,000) | $ (1,100,000,000) | $ (761,000,000) | $ 47,000,000 | ||
Ending balance | $ 1,000,000 | 3,098,000,000 | (665,000,000) | (1,100,000,000) | $ (761,000,000) | 47,000,000 | ||
Beginning balance (in shares) at Dec. 31, 2016 | 65,891,930 | 11,655,938 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issued (repurchased) pursuant to benefit plans (in shares) | 11,241 | |||||||
Restricted shares forfeited (shares) | (82,808) | |||||||
Stock options exercised (shares) | 164,863 | |||||||
Premium on common stock issued pursuant to benefit plans | 6,000,000 | |||||||
Other Comprehensive Income (Loss) | $ 29,000,000 | 28,000,000 | $ 28,000,000 | 1,000,000 | ||||
Net income attributable to Tenneco Inc. | 59,000,000 | 59,000,000 | ||||||
Cash dividends declared | (0.25) | (13,000,000) | ||||||
Purchase of common stock through stock repurchase program (shares) | 240,000 | |||||||
Purchase of common stock through stock repurchase program | $ 16,000,000 | |||||||
Net income | 7,000,000 | |||||||
Other comprehensive income | 0 | 0 | ||||||
Ending balance (in shares) at Mar. 31, 2017 | 65,985,226 | 11,895,938 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | 691,000,000 | $ 1,000,000 | 3,104,000,000 | (637,000,000) | (1,054,000,000) | $ (777,000,000) | 637,000,000 | 54,000,000 |
Ending balance | 691,000,000 | 1,000,000 | 3,104,000,000 | (637,000,000) | (1,054,000,000) | (777,000,000) | 637,000,000 | 54,000,000 |
Beginning balance | 742,000,000 | 1,000,000 | 3,112,000,000 | (541,000,000) | (946,000,000) | (930,000,000) | 46,000,000 | |
Ending balance | $ 742,000,000 | $ 1,000,000 | 3,112,000,000 | (541,000,000) | (946,000,000) | $ (930,000,000) | 46,000,000 | |
Beginning balance (in shares) at Dec. 31, 2017 | 66,033,509 | 14,592,888 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issued (repurchased) pursuant to benefit plans (in shares) | (15,906) | |||||||
Restricted shares forfeited (shares) | (5,108) | |||||||
Stock options exercised (shares) | 4,607 | 4,779 | ||||||
Premium on common stock issued pursuant to benefit plans | 3,000,000 | |||||||
Other Comprehensive Income (Loss) | $ 30,000,000 | 22,000,000 | 22,000,000 | 8,000,000 | ||||
Net income attributable to Tenneco Inc. | 58,000,000 | 58,000,000 | ||||||
Cash dividends declared | (0.25) | (13,000,000) | ||||||
Adoption of accounting standards | ASU 2014-09 | 1,000,000 | 1,000,000 | ||||||
Adoption of accounting standards | ASU 2016-16 | 2,000,000 | (2,000,000) | ||||||
Net income | 7,000,000 | |||||||
Other comprehensive income | 1,000,000 | 7,000,000 | ||||||
Ending balance (in shares) at Mar. 31, 2018 | 66,017,274 | 14,592,888 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | 825,000,000 | $ 1,000,000 | 3,115,000,000 | (519,000,000) | (902,000,000) | $ (930,000,000) | 765,000,000 | 60,000,000 |
Ending balance | $ 825,000,000 | $ 1,000,000 | $ 3,115,000,000 | $ (519,000,000) | $ (902,000,000) | $ (930,000,000) | $ 765,000,000 | $ 60,000,000 |
Consolidation and Presentation
Consolidation and Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation and Presentation | Consolidation and Presentation As you read the accompanying financial statements you should also read our Annual Report on Form 10-K for the year ended December 31, 2017 . In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of Tenneco Inc.’s results of operations, comprehensive income, financial position, cash flows, and changes in shareholders’ equity for the periods indicated. We have prepared the unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (U.S. GAAP) for annual financial statements. Our condensed consolidated financial statements include all majority-owned subsidiaries. We have eliminated all intercompany transactions. Adoption of New Accounting Standards We adopted the following new accounting standards in the first quarter of 2018: • Accounting Standard Update 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost; • Accounting Standard Update 2016-18, Statement of Cash Flows - Restricted Cash (Topic 230); • Accounting Standard Update 2016-16, Income Taxes - Intra Entity Transfers of Assets Other Than Inventory (Topic 740); • Accounting Standard Update 2016-15, Statement of Cash Flows - Classification of certain cash receipts and cash payments (Topic 230); • Accounting Standard Update Topic 606, Revenue from Contracts with Customers. See note 11 in our notes to condensed consolidated financial statements for further consideration. Segment Information In connection with the reportable segment changes announced on April 27, 2018, effective for the first quarter of 2018, the Company’s reportable segments for financial reporting purposes consist of the following three segments: Clean Air, Ride Performance and Aftermarket. See note 12 in our notes to condensed consolidated financial statements for further information. Prepayments and Other Prepayments and other included $136 million and $117 million at March 31, 2018 and December 31, 2017 , respectively, for in-process tools and dies that we are building for our original equipment customers. Accounts Payable Accounts payable included $90 million and $77 million at March 31, 2018 and December 31, 2017 , respectively, for accrued compensation and $16 million and $20 million at March 31, 2018 and December 31, 2017 , respectively, for bank overdrafts at our European subsidiaries. Redeemable Noncontrolling Interests The following is a rollforward of activities in our redeemable noncontrolling interests for the three months ended March 31, 2018 and 2017, respectively: Three Months Ended March 31, 2018 2017 (Millions) Balance January 1 $ 42 $ 40 Net income attributable to redeemable noncontrolling interests 7 8 Other comprehensive loss 1 — Balance March 31 $ 50 $ 48 |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Financial Instruments The net carrying and estimated fair values of our financial instruments by class at March 31, 2018 and December 31, 2017 were as follows: March 31, 2018 December 31, 2017 Net Carrying Amount Fair Value Net Carrying Amount Fair Value (Millions) Long-term debt (including current maturities) $ 1,424 $ 1,424 $ 1,361 $ 1,398 Equity swap agreement and foreign currency forward contracts: Asset derivative contracts (a) 4 4 4 4 (a) All derivatives are categorized within Level 2 of the fair value hierarchy. Asset and Liability Instruments — The fair value of cash and cash equivalents, short and long-term receivables, accounts payable, and short-term debt was considered to be the same as or was not determined to be materially different from the carrying amount. Long-term Debt — The fair value of our public fixed rate senior notes is based on quoted market prices (level 1). The fair value of our private borrowings under our senior credit facility and other long-term debt instruments is based on the market value of debt with similar maturities, interest rates and risk characteristics (level 2). The fair value of our level 1 debt, as classified in the fair value hierarchy, was $713 million and $749 million at March 31, 2018 and December 31, 2017 , respectively. We have classified $696 million and $634 million as level 2 in the fair value hierarchy at March 31, 2018 and December 31, 2017 , respectively, since we utilize valuation inputs that are observable both directly and indirectly. We classified the remaining $15 million , consisting of foreign subsidiary debt, as level 3 in the fair value hierarchy at both March 31, 2018 and December 31, 2017 . 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 our own assumptions. Foreign Currency Forward Contracts — We use derivative financial instruments, principally foreign currency forward purchase and sales contracts with terms of less than one year , to hedge our exposure to changes in foreign currency exchange rates. Our primary exposure to changes in foreign currency rates results from intercompany loans made between affiliates to minimize the need for borrowings from third parties. Additionally, 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. We manage counter-party credit risk by entering into derivative financial instruments with major financial institutions that can be expected to fully perform under the terms of such agreements. We do not enter into derivative financial instruments for speculative purposes. The fair value of our foreign currency forward contracts is based on an internally developed model which incorporates observable inputs including quoted spot rates, forward exchange rates and discounted future expected cash flows utilizing market interest rates with similar quality and maturity characteristics. We record the change in fair value of these foreign currency forward contracts as part of currency gains (losses) within cost of sales in the consolidated statements of income. The fair value of foreign currency forward contracts are recorded in prepayments and other current assets or other current liabilities in the consolidated balance sheet. The fair value of our foreign currency forward contracts was a net liability position of less than $1 million at both March 31, 2018 and at December 31, 2017 . The following table summarizes by major currency the notional amounts for foreign currency forward purchase and sale contracts as of March 31, 2018 (all of which mature in 2018): Notional Amount in Foreign Currency (Millions) Canadian dollars —Sell (2 ) European euro —Sell (7 ) Chinese yuan —Purchase 2 Polish Zloty —Purchase 28 —Sell (3 ) U.S. dollars —Purchase 2 Cash-settled Share Swap Transactions — In the second quarter of 2017, we entered into an equity swap agreement with a financial institution. We selectively use cash-settled share swaps to reduce market risk associated with our deferred liabilities. These equity compensation liabilities increase as our stock price increases and decrease as our stock price decreases. In contrast, the value of the swap agreement moves in the opposite direction of these liabilities, allowing us to fix a portion of the liabilities at a stated amount. As of March 31, 2018 , we had hedged our deferred liability related to approximately 250,000 common share equivalents. The fair value of the equity swap agreement is recorded in other current assets in the consolidated balance sheet. The fair value of our equity swap agreement was a net asset position of $4 million at March 31, 2018 . Guarantees —We have from time to time issued guarantees for the performance of obligations by some of our subsidiaries, and some of our subsidiaries have guaranteed our debt. All of our existing and future material domestic subsidiaries fully and unconditionally guarantee our senior credit facility and our senior notes on a joint and several basis. The arrangement for the senior credit facility is also secured by first-priority liens on substantially all our domestic assets and pledges of up to 66 percent of the stock of certain first-tier foreign subsidiaries. No assets or capital stock secure our senior notes. For additional information, refer to Note 13 of the condensed consolidated financial statements of Tenneco Inc., where we present the Supplemental Guarantor Condensed Consolidating Financial Statements. We have two performance guarantee agreements in the U.K. between Tenneco Management (Europe) Limited (“TMEL”) and the two Walker Group Retirement Plans, the Walker Group Employee Benefit Plan and the Walker Group Executive Retirement Benefit Plan (the “Walker Plans”), whereby TMEL will guarantee the payment of all current and future pension contributions in the event of a payment default by the sponsoring or participating employers of the Walker Plans. The Walker Plans are comprised of employees from Tenneco Walker (U.K.) Limited and Futaba (U.K.) Limited, formerly our Futaba-Tenneco (U.K.) joint venture. Employer contributions are funded by Tenneco Walker (U.K.) Limited, as the sponsoring employer, and were also funded by Futaba (U.K.) Limited prior to its ceasing, on April 28, 2017, to be an entity in which Tenneco has an equity interest. The performance guarantee agreements are expected to remain in effect until all pension obligations for the Walker Plans’ sponsoring and participating employers have been satisfied. We did not record an additional liability for this performance guarantee since Tenneco Walker (U.K.) Limited, as the sponsoring employer of the Walker Plans, already recognizes 100 percent of the pension obligation calculated based on U.S. GAAP, for all of the Walker Plans’ participating employers on its balance sheet. As of March 31, 2018 and December 31, 2017 , these plans were in an overfunded position and shown as a pension asset on our balance sheet. At March 31, 2018 , all pension contributions under the Walker Plans were current for all of the Walker Plans’ sponsoring and participating employers. We have issued guarantees through letters of credit in connection with some obligations of our affiliates. As of March 31, 2018 , we have guaranteed $32 million in letters of credit to support some of our subsidiaries’ insurance arrangements, foreign employee benefit programs, environmental remediation activities and cash management and capital requirements. Financial Instruments — In certain instances, several of our Chinese subsidiaries receive payment from customers through the receipt of financial instruments on the date the customer payments are due. Several of our Chinese subsidiaries also satisfy vendor payments through the delivery of financial instruments on the date the payments are due. Financial instruments issued to satisfy vendor payables and not redeemed totaled $9 million and $11 million at March 31, 2018 and December 31, 2017 , respectively, and were classified as notes payable recorded in short-term debt. Financial instruments received from original equipment (OE) customers and not redeemed totaled $14 million and $10 million at March 31, 2018 and December 31, 2017 , respectively. We classify financial instruments received from our customers as other current assets, recorded in prepayments and other, if issued by a financial institution of our customers or as customer notes and accounts, net if issued by our customer. We classified $14 million and $10 million in other current assets at March 31, 2018 and December 31, 2017 , respectively. The financial instruments received by some of our Chinese subsidiaries are drafts drawn that are payable at a future date and, in some cases, are negotiable and/or are guaranteed by the banks of the customers. The use of these instruments for payment follows local commercial practice. Because certain of such financial instruments are guaranteed by our customers’ banks, we believe they represent a lower financial risk than the outstanding accounts receivable that they satisfy which are not guaranteed by a bank. Supply Chain Financing — Certain of our suppliers participate in supply chain financing programs under which they securitize their accounts receivables from Tenneco. Financial institutions participate in the supply chain financing program on an uncommitted basis and can cease purchasing receivables or drafts from Tenneco's suppliers at any time. If the financial institutions did not continue to purchase receivables or drafts from Tenneco's suppliers under these programs, the participating vendors may have a need to renegotiate their payment terms with Tenneco which in turn would cause our borrowings under our revolving credit facility to increase. Restricted Cash — Some of our Chinese subsidiaries that issue their own financial instruments to pay vendors are required to maintain a cash balance if they exceed credit limits with the financial institution that guarantees the financial instruments. A restricted cash balance was required at those Chinese subsidiaries for $1 million and $2 million at March 31, 2018 and December 31, 2017 , respectively. One of our subsidiaries in Spain is required by law to maintain a cash deposit with a financial institution to guarantee the maximum estimated loss related to a tax audit until a settlement is reached. The cash deposit required was less than $1 million which has been classified as restricted cash on the Tenneco Inc. consolidated balance sheet at March 31, 2018 . |
Long-Term Debt and Financing Ar
Long-Term Debt and Financing Arrangements | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Financing Arrangements | Long-Term Debt and Financing Arrangements Our financing arrangements are primarily provided by a committed senior secured financing arrangement with a syndicate of banks and other financial institutions. The arrangement is secured by substantially all our domestic assets and pledges of up to 66 percent of the stock of certain first-tier foreign subsidiaries, as well as guarantees by our material domestic subsidiaries. On May 12, 2017, we completed a refinancing of our senior credit facility by entering into an amendment and restatement of that facility. The amended and restated credit agreement enhances financial flexibility by increasing the size and extending the term of its revolving credit facility and term loan facility, and by adding Tenneco Automotive Operating Company Inc. as a co-borrower under the revolver credit facility. The amended and restated credit agreement also adds foreign currency borrowing capability and permits the joinder of our foreign and domestic subsidiaries as borrowers under the revolving credit facility in the future. If any foreign subsidiary of Tenneco is added to the revolving credit facility as a borrower, the obligations of such foreign borrower will be secured by the assets of such foreign borrower, and also will be secured by the assets of, and guaranteed by, the domestic borrowers and domestic guarantors as well as certain foreign subsidiaries of Tenneco in the chain of ownership of such foreign borrower. The amended and restated credit facility, which will mature on May 12, 2022, consists of a $1,600 million revolving credit facility and a $385 million term loan A facility, which replaced our former $1,200 million revolving credit facility and $264 million term loan A facility, respectively. Net carrying amount for the balance outstanding under the term loan A facility including a $2 million debt issuance cost was $383 million as of March 31, 2018 . Funds may be borrowed, repaid and re-borrowed under the revolving credit facility without premium or penalty (subject to any customary LIBOR breakage fees). The revolving credit facility is reflected as debt on our balance sheet only if we borrow money under this facility or if we use the facility to make payments for letters of credit. Outstanding letters of credit reduce our availability to borrow revolving loans under the facility. We are required to make quarterly principal payments under the term loan A facility of $5 million through June 30, 2019, $7.5 million beginning September 30, 2019 through June 30, 2020, $10 million beginning September 30, 2020 through March 31, 2022 and a final payment of $260 million is due on May 12, 2022. We have excluded the required payments, within the next twelve months, under the term loan A facility totaling $20 million from current liabilities as of March 31, 2018 , because we have the intent and ability to refinance the obligations on a long-term basis by using our revolving credit facility. The financial ratios required under the senior credit facility, and the actual ratios we achieved for the first quarter of 2018, are as follows: Quarter Ended March 31, 2018 Required Actual Leverage Ratio (maximum) 3.50 2.09 Interest Coverage Ratio (minimum) 2.75 9.87 The senior credit facility includes a maximum leverage ratio covenant of 3.50 and a minimum interest coverage ratio of 2.75 , in each case through May 12, 2022. The amended and restated senior credit facility provides us with the flexibility not to exclude certain otherwise excludable charges incurred in any relevant period from the calculation of the leverage and interest coverage ratios for such period. At March 31, 2018 , of the $1,600 million available under the revolving credit facility, we had unused borrowing capacity of $1,289 million with $311 million in outstanding borrowings and no outstanding letters of credit. As of March 31, 2018 , our outstanding debt also included (i) $385 million of a term loan which consisted of a $383 million net carrying amount including a $2 million debt issuance cost related to our Tranche A Term Facility which is subject to quarterly principal payments as described above through May 12, 2022 , (ii) $225 million of notes which consisted of a $222 million net carrying amount including a $3 million debt issuance cost related to our 5 3 / 8 percent senior notes due December 15, 2024 , (iii) $500 million of notes which consisted of a $493 million net carrying amount including a $7 million debt issuance cost related to our 5 percent senior notes due July 15, 2026 , and (iv) $75 million of other debt. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For interim tax reporting we estimate our annual effective tax rate and apply it to our 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 impact of including these jurisdictions on the quarterly effective rate calculation could result in a higher or lower effective tax rate during a particular quarter due to the mix and timing of actual earnings versus annual projections. The tax effects of certain unusual or infrequently occurring 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. We reported income tax expense of $25 million and $33 million in the three month periods ended March 31, 2018 and 2017, respectively. The tax expense recorded in the first quarter of 2017 included a net tax benefit of $1 million primarily relating to the first quarter 2017 adoption of Accounting Standard Update 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. On December 22, 2017, the Tax Cuts and Jobs Act ("TCJA") was enacted into U.S. law, which, among other provisions, lowered the corporate income tax rate effective January 1, 2018 from 35% to 21%, and implemented significant changes with respect to U.S. tax treatment of earnings originating from outside the U.S. Many of the provisions of TCJA are subject to regulatory interpretation and U.S. state conforming enactment. There has been no change in the provisional tax expense recorded as of December 31, 2017. The Company will continue to refine its estimates throughout the measurement period provided for in SEC Staff Accounting Bulletin 118, or until its accounting is complete. We believe it is reasonably possible that up to $8 million in unrecognized tax benefits related to the expiration of foreign statute of limitations and the conclusion of income tax examinations may be recognized within the next twelve months. |
Accounts Receivable Securitizat
Accounts Receivable Securitization and Factoring Programs | 3 Months Ended |
Mar. 31, 2018 | |
Accounts Receivable Additional Disclosures [Abstract] | |
Accounts Receivable Securitization and Factoring Programs | Accounts Receivable Securitization and Factoring Programs We securitize or factor some of our accounts receivable on a limited recourse basis in the U.S. and Europe. As servicer under these accounts receivable securitization and factoring programs, we are responsible for performing all accounts receivable administration functions for these securitized and factored financial assets including collections and processing of customer invoice adjustments. In the U.S., we have an accounts receivable securitization program with three commercial banks comprised of a first priority facility and a second priority facility. We securitize original equipment and aftermarket receivables on a daily basis under the bank program. In April 2017, the U.S. program was amended and extended to April 30, 2019. The first priority facility provides financing of up to $155 million and the second priority facility, which is subordinated to the first priority facility, provides up to an additional $25 million of financing. Both facilities monetize accounts receivable generated in the U.S. that meet certain eligibility requirements and the second priority facility also monetizes certain accounts receivable generated in the U.S. that would otherwise be ineligible under the first priority securitization facility. The amount of outstanding third-party investments in our securitized accounts receivable under the U.S. program was zero and $30 million , recorded in short-term debt, at March 31, 2018 and December 31, 2017 , respectively. Each facility contains customary covenants for financings of this type, including restrictions related to liens, payments, mergers or consolidations and amendments to the agreements underlying the receivables pool. Further, each facility may be terminated upon the occurrence of customary events (with customary grace periods, if applicable), including breaches of covenants, failure to maintain certain financial ratios, inaccuracies of representations and warranties, bankruptcy and insolvency events, certain changes in the rate of default or delinquency of the receivables, a change of control and the entry or other enforcement of material judgments. In addition, each facility contains cross-default provisions, where the facility could be terminated in the event of non-payment of other material indebtedness when due and any other event which permits the acceleration of the maturity of material indebtedness. On December 14, 2017, we entered into a new accounts receivable factoring program in the U.S. with a commercial bank. Under this program, we sell receivables from one of our U.S. OE customers at a rate that is favorable versus our senior credit facility. This arrangement is uncommitted and provides for cancellation by the commercial bank with no less than 30 days prior written notice. The amount of outstanding third-party investments in our accounts receivable sold under this program was $136 million and $107 million at March 31, 2018 and December 31, 2017 , respectively. We also factor receivables in our European operations with regional banks in Europe under various separate facilities. The commitments for these arrangements are generally for one year , but some may be cancelled with notice 90 days prior to renewal. In some instances, the arrangement provides for cancellation by the applicable financial institution at any time upon notification. The amount of outstanding third-party investments in our accounts receivable sold under programs in Europe was $257 million and $218 million at March 31, 2018 and December 31, 2017 , respectively. Certain programs in Europe have deferred purchase price arrangements with the banks. We received $34 million and $22 million cash to settle the deferred purchase price in the three month periods ended March 31, 2018 and March 31, 2017 , respectively. If we were not able to securitize or factor receivables under either the U.S. or European programs, our borrowings under our revolving credit agreement might increase. These accounts receivable securitization and factoring 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. In our U.S. accounts receivable securitization program, we transfer a partial interest in a pool of receivables and the interest that we retain is subordinate to the transferred interest. Accordingly, we account for our U.S. securitization program as a secured borrowing. In our European programs, we transfer accounts receivables in their entirety to the acquiring entities and satisfy all of the conditions established under ASC Topic 860, “Transfers and Servicing,” to report the transfer of financial assets in their entirety as a sale. The fair value of assets received as proceeds in exchange for the transfer of accounts receivable under our U.S. and European factoring programs approximates the fair value of such receivables. We recognized $1 million interest expense in each of the three month periods ended March 31, 2018 and 2017 , relating to our U.S. securitization program. In addition, we recognized a loss of $2 million and $1 million in the three month periods ended March 31, 2018 and 2017 , respectively, on the sale of trade accounts receivable in our U.S. and European accounts receivable factoring programs, representing the discount from book values at which these receivables were sold to our banks. The discount rate varies based on funding costs incurred by our banks, which averaged approximately two percent during both the first three months of 2018 and 2017 for the European programs and three percent during the first three months of 2018 for the US program. |
Restructuring and Other Charges
Restructuring and Other Charges | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | Restructuring and Other Charges Over the past several years, we have adopted plans to restructure portions of our operations. These plans were approved by our Board of Directors and were designed to reduce operational and administrative overhead costs throughout the business. For the full year 2017, we incurred $72 million in restructuring and related costs including asset write-downs of $3 million , primarily related to the planned closing of a Clean Air Belgian JIT plant in response to the end of production on a customer platform, closing an OE Clean Air manufacturing plant and downsizing Ride Performance operations in Australia, the accelerated move of our Beijing Ride Performance plant and other cost improvement initiatives, of which $41 million was recorded in cost of sales, $28 million in SG&A, and $3 million in depreciation and amortization expense. In the first quarter of 2018, we incurred $12 million in restructuring and related costs, primarily related to the accelerated move of our Beijing OE Ride Performance plant and other cost improvement initiatives, of which $9 million was recorded in cost of sales, $2 million in SG&A and $1 million in engineering expense. In the first quarter of 2017, we incurred $15 million in restructuring and related costs, including asset write-downs of $1 million , primarily related to closing a Clean Air Belgian JIT plant in response to the end of production on a customer platform and cost improvement initiatives in Europe, of which $11 million was recorded in cost of sales, $3 million in SG&A and $1 million in depreciation and amortization expense. Amounts related to activities that are part of our restructuring reserves are as follows: December 31, 2018 2018 Impact of Exchange Rates March 31, 2018 (Millions) Employee Severance, Termination Benefits and Other Related Costs $25 12 (16 ) — $21 On June 29, 2017, we announced a restructuring initiative to close our Clean Air manufacturing plant in O'Sullivan Beach, Australia and downsize our Ride Performance plant in Clovelly Park, Australia when General Motors and Toyota ended vehicle production in the country, which occurred in October 2017. All such restructuring activities related to this initiative were substantially completed by the first quarter 2018. We recorded total charges related to this initiative of $21 million in 2017 including asset write-downs of $2 million . The charges included severance payments to employees, the cost of decommissioning equipment, a lease termination payment and other costs associated with this action. We continued the relocation of production out of our Ride Performance plant in Beijing, for which we incurred $6 million for restructuring and related costs in 2017 and $6 million in the first quarter of 2018. Under the terms of our amended and restated senior credit agreement that took effect on May 12, 2017, we are allowed to exclude, at our discretion, (i) up to $35 million in 2017 and $25 million each year thereafter of cash restructuring charges and related expenses, with the ability to carry forward any amount not used in one year to the next following year, and (ii) up to $150 million in the aggregate of all costs, expenses, fees, fines, penalties, judgments, legal settlements and other amounts associated with any restructuring, litigation, claim, proceeding or investigation related to or undertaken by us or any of our subsidiaries, together with any related provision for taxes, incurred for any quarterly period ending after May 12, 2017 in the calculation of the financial covenant ratios required under our senior credit facility. As of March 31, 2018 , we elected not to exclude any of the $210 million of allowable cash charges and related expenses recognized in 2017 and in the first quarter of 2018 for restructuring related costs and antitrust settlements against the $35 million annual limit for 2017, $25 million for 2018 and the $150 million aggregate limit available under the terms of the senior credit facility. |
Environmental Matters, Litigati
Environmental Matters, Litigation and Product Warranties | 3 Months Ended |
Mar. 31, 2018 | |
Environmental Matters, Litigation and Product Warranties [Abstract] | |
Environmental Matters, Litigation and Product Warranties | Environmental Matters, Legal Proceedings and Product Warranties We are involved in environmental remediation matters, legal proceedings, claims (including warranty claims) and investigations. These matters are typically incidental to the conduct of our business and create the potential for contingent losses. We accrue for potential contingent losses when our review of available facts indicates that it is probable a loss has been incurred and the amount of the loss is reasonably estimable. Each quarter we assess our loss contingencies based upon currently available facts, existing technology, presently enacted laws and regulations and taking into consideration the likely effects of inflation and other societal and economic factors and record adjustments to these reserves as required. As an example, we consider all available evidence, including prior experience in remediation of contaminated sites, other companies’ cleanup experiences and data released by the United States Environmental Protection Agency or other organizations when we evaluate our environmental remediation contingencies. All of our loss contingency estimates are subject to revision in future periods based on actual costs or new information. With respect to our environmental liabilities, where future cash flows are fixed or reliably determinable, we have discounted those liabilities. We evaluate recoveries separately from the liability and, when they are assured, recoveries are recorded and reported separately from the associated liability in our consolidated financial statements. Environmental Matters We are subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which we operate. We expense or capitalize, as appropriate, expenditures for ongoing compliance with environmental regulations that relate to current operations. We expense costs related to an existing condition caused by past operations that do not contribute to current or future revenue generation. As of March 31, 2018 , we have the obligation to remediate or contribute towards the remediation of certain sites, including one Federal Superfund site. At March 31, 2018 , our aggregated estimated share of environmental remediation costs for all these sites on a discounted basis was approximately $14 million , of which $2 million is recorded in other current liabilities and $12 million is recorded in deferred credits and other liabilities in our consolidated balance sheet. For those locations where the liability was discounted, the weighted average discount rate used was 2.3 percent . The undiscounted value of the estimated remediation costs was $17 million . Our expected payments of environmental remediation costs are estimated to be approximately $1 million in 2018, $1 million in each year beginning 2019 through 2022 and $12 million in aggregate thereafter. Based on information known to us, we have established reserves that we believe are adequate for these costs. Although we believe these estimates of remediation costs are reasonable and are based on the latest available information, the costs are estimates and are subject to revision as more information becomes available about the extent of remediation required. At some sites, we expect that other parties will contribute to the remediation costs. In addition, certain environmental statutes provide that our liability could be joint and several, meaning that we could be required to pay in excess of our share of remediation costs. Our understanding of the financial strength of other potentially responsible parties at these sites has been considered, where appropriate, in our determination of our estimated liability. We do not believe that any potential costs associated with our current status as a potentially responsible party in the Federal Superfund site, or as a liable party at the other locations referenced herein, will be material to our consolidated financial position, results of operations, or liquidity. Antitrust Investigations and Litigation On March 25, 2014, representatives of the European Commission were at Tenneco GmbH's Edenkoben, Germany administrative facility to gather information in connection with an ongoing global antitrust investigation concerning multiple automotive suppliers. On March 25, 2014, we also received a related subpoena from the U.S. Department of Justice (“DOJ”). On November 5, 2014, the DOJ granted us conditional leniency pursuant to an agreement we entered into under the Antitrust Division's Corporate Leniency Policy. This agreement provides us with important benefits in exchange for our self-reporting of matters to the DOJ and our continuing full cooperation with the DOJ's resulting investigation. For example, the DOJ will not bring any criminal antitrust prosecution against us, nor seek any criminal fines or penalties, in connection with the matters we reported to the DOJ. Additionally, there are limits on our liability related to any follow-on civil antitrust litigation in the U.S. The limits include single rather than treble damages, as well as relief from joint and several antitrust liability with other relevant civil antitrust action defendants. These limits are subject to our satisfying the DOJ and any court presiding over such follow-on civil litigation. On April 27, 2017, Tenneco received notification from the European Commission (EC) that it has administratively closed its global antitrust inquiry regarding the production, assembly, and supply of complete exhaust systems. No charges against Tenneco or any other competitor were initiated at any time and the EC inquiry is now closed. Certain other competition agencies are also investigating possible violations of antitrust laws relating to products supplied by our company. We have cooperated and continue to cooperate fully with all of these antitrust investigations, and take other actions to minimize our potential exposure. Tenneco and certain of its competitors are also currently defendants in civil putative class action litigation in the United States and Canada. More related lawsuits may be filed, including in other jurisdictions. Plaintiffs in these cases generally allege that defendants have engaged in anticompetitive conduct, in violation of federal and state laws, relating to the sale of automotive exhaust systems or components thereof. Plaintiffs seek to recover, on behalf of themselves and various purported classes of purchasers, injunctive relief, damages and attorneys’ fees. However, as explained above, because we received conditional leniency from the DOJ, our civil liability in U.S. follow on actions is limited to single damages and we will not be jointly and severally liable with the other defendants, provided that we have satisfied our obligations under the DOJ leniency agreement and approval is granted by the presiding court. Typically, exposure for follow-on actions in Canada is less than the exposure for U.S. follow-on actions. Following the EC’s decision to administratively close its antitrust inquiry into exhaust systems in 2017, Tenneco’s receipt of conditional leniency from the DOJ in 2014 and discussions during the third quarter of 2017 following the appointment of a special settlement master in the civil putative class action cases pending against Tenneco and/or certain of its competitors in the U.S., Tenneco continues to vigorously defend itself and/or take actions to minimize its potential exposure to matters pertaining to the global antitrust investigation, including engaging in settlement discussions when it is in the best interests of the company and its stockholders. For example, in October 2017, Tenneco settled an administrative action brought by Brazil's competition authority for an amount that was not material. Additionally, in February 2018, Tenneco settled civil putative class action litigation in the United States brought by classes of direct purchasers, end-payors and auto dealers. No other classes of plaintiffs have brought claims against Tenneco in the United States. Based upon those earlier developments, including settlement discussions, Tenneco established a reserve of $132 million in its second quarter 2017 financial results for settlement costs that were probable, reasonably estimable, and expected to be necessary to resolve Tenneco’s antitrust matters globally, which primarily involves the resolution of civil suits and related claims. Of the $132 million reserve that was established, $45 million was paid in 2017 and $17 million was paid in April 2018, to resolve certain antitrust claims. The remaining reserve is recorded in other current liabilities. While Tenneco continues to cooperate with certain competition agencies investigating possible violations of antitrust laws relating to products supplied by Tenneco, and the company may be subject to other civil lawsuits and/or related claims, no amount of this reserve is attributable to matters with the DOJ or the EC, and no such amount is expected based on current information. Our reserve for antitrust matters is based upon all currently available information and an assessment of the probability of events for those matters where Tenneco can make a reasonable estimate of the costs to resolve such outstanding matters. Tenneco’s estimate involves significant judgment, given the number, variety and potential outcomes of actual and potential claims, the uncertainty of future rulings and approvals by a court or other authority, the behavior or incentives of adverse parties or regulatory authorities, and other factors outside of the control of Tenneco. As a result, Tenneco’s reserve may change from time to time, and actual costs may vary. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on current information, we do not expect that any such change in the reserve will have a material adverse impact on our annual consolidated financial position, results of operations or liquidity. Other Legal Proceedings, Claims and Investigations For many years we have been and continue to be subject to lawsuits initiated by claimants alleging health problems as a result of exposure to asbestos. Our current docket of active and inactive cases is less than 500 cases nationwide. A small number of claims have been asserted against one of our subsidiaries by railroad workers alleging exposure to asbestos products in railroad cars. The substantial majority of the remaining claims are related to alleged exposure to asbestos in our automotive products although a significant number of those claims appear also to involve occupational exposures sustained in industries other than automotive. We believe, based on scientific and other evidence, it is unlikely that claimants were exposed to asbestos by our 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, with the number in some cases exceeding 100 defendants from a variety of industries. Additionally, in many cases the plaintiffs either do not specify any, or specify the jurisdictional minimum, dollar amount for damages. As major asbestos manufacturers and/or users continue to go out of business or file for bankruptcy, we may experience an increased number of these claims. We vigorously defend ourselves against these claims as part of our ordinary course of business. In future periods, we could be subject to cash costs or charges to earnings if any of these matters are resolved unfavorably to us. To date, with respect to claims that have proceeded sufficiently through the judicial process, we have regularly achieved favorable resolutions. Accordingly, we presently believe that these asbestos-related claims will not have a material adverse impact on our future consolidated financial position, results of operations or liquidity. We are also from time to time involved in other legal proceedings, claims or investigations. Some of these matters involve allegations of damages against us 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, and commercial or contractual disputes, sometimes related to acquisitions or divestitures. Additionally, some of these matters involve allegations relating to legal compliance. For example, in July 2017 a complaint was filed against us in federal district court in Chicago, Illinois alleging that we misappropriated a third party's trade secrets in connection with certain of our ride control products. While we vigorously defend ourselves against all of these legal proceedings, claims and investigations and take other actions to minimize our potential exposure, in future periods, we 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 our assessment of the merits of the particular claim, except as described above under "Antitrust Investigations" and in this paragraph, we do not expect the legal proceedings, claims or investigations currently pending against us will have any material adverse impact on our consolidated financial position, results of operations or liquidity. With respect to the trade secret claim described above, we are in the process of evaluating the claim but, at this stage of the case and given the inherent uncertainly of litigation, we are unable to estimate whether a loss is reasonably possible. While we do not believe that this litigation will have a material adverse effect on our annual consolidated financial position, results of operations or liquidity, we cannot assure you that this will be the case. Warranty Matters We provide warranties on some of our products. The warranty terms vary but range from one year up to limited lifetime warranties on some of our 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 our products. These estimates are established using historical information about the nature, frequency, and average cost of warranty claims. We actively study trends of our warranty claims and take action to improve product quality and minimize warranty claims. We believe that 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 balance sheet. Below is a table that shows the activity in the warranty accrual accounts: Three Months Ended March 31, 2018 2017 (Millions) Beginning Balance January 1, $ 26 $ 20 Accruals related to product warranties 6 3 Reductions for payments made (3 ) (3 ) Ending Balance March 31, $ 29 $ 20 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Earnings per share of common stock outstanding were computed as follows: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 (Millions Except Share and Per Share Amounts) Basic earnings per share — Net income attributable to Tenneco Inc. $ 58 $ 59 Weighted Average shares of common stock outstanding 51,211,643 53,856,352 Earnings per share of common stock $ 1.13 $ 1.10 Diluted earnings per share — Net income attributable to Tenneco Inc. $ 58 $ 59 Weighted Average shares of common stock outstanding 51,211,643 53,856,352 Effect of dilutive securities: Restricted stock 216,351 145,999 Stock options 73,649 229,408 Weighted Average shares of common stock outstanding including dilutive securities 51,501,643 54,231,759 Earnings per share of common stock $ 1.13 $ 1.09 Options to purchase 175 and 834 shares of common stock were outstanding as of March 31, 2018 and 2017, respectively, but not included in the computation of diluted earnings per share respectively, because the options were anti-dilutive. |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Common Stock | Common Stock Equity Plans — We have granted a variety of awards, including common stock, restricted stock, restricted stock units, performance share units, stock appreciation rights (“SARs”), and stock options to our directors, officers, and employees. Accounting Methods — We recorded compensation expense (net of taxes) of less than $1 million in the three month period ended 2017 related to nonqualified stock options as part of our selling, general and administrative expense. This had no impact on basic or diluted earnings per share for the three month period ended March 31, 2017. There was no expense related to nonqualified stock options for the three months ended March 31, 2018. Prior to 2018, for employees eligible to retire at grant date, we immediately expensed stock options and restricted stock. In 2018, we prospectively changed our vesting policy regarding retirement eligibility and now require a retirement eligible employee (or an employee who becomes retirement eligible) to provide at least one year of service from the grant date in order for the award to vest. If an employee becomes retirement eligible after the first year of vesting but before completion of the three-year term, we amortize the expense for stock options and restricted stock over a period starting at the grant date to the date an employee becomes retirement eligible. As of March 31, 2018 , there was no unrecognized compensation cost related to our stock option awards. Compensation expense for restricted stock, restricted stock units, long-term performance units, performance share units and SARs (net of taxes) was $3 million and $6 million for the three month periods ended March 31, 2018 and 2017, respectively, and was recorded in selling, general, and administrative expense in our condensed consolidated statements of income. Cash received from stock option exercises for the three month periods ended March 31, 2018 and 2017 was less than $1 million and $6 million , respectively. Stock options exercised in the first three months of 2018 and 2017 generated a tax benefit of less than $1 million and $2 million , respectively. Stock Options — The following table reflects the status and activity for all options to purchase common stock for the period indicated: Three Months Ended March 31, 2018 Shares Under Option Weighted Avg. Exercise Prices Weighted Avg. Remaining Life in Years Aggregate Intrinsic Value (Millions) Outstanding Stock Options Outstanding, January 1, 2018 318,016 $ 43.60 2.6 $ 5 Exercised (4,607 ) 26.78 — Outstanding, March 31, 2018 313,409 $ 43.84 2.1 $ 4 There have been no stock options granted since 2015. The total fair value of shares vested from options that were granted prior to 2015 was $0 million and $2 million for the periods ended March 31, 2018 and 2017, respectively. Restricted Stock — The following table reflects the status for all nonvested restricted shares for the period indicated: Three Months Ended March 31, 2018 Shares Weighted Avg. Grant Date Fair Value Nonvested Restricted Shares Nonvested balance at January 1, 2018 410,251 $ 49.95 Granted 17,440 55.05 Vested (168,409 ) 47.08 Forfeited (5,108 ) 48.68 Nonvested balance at March 31, 2018 254,174 $ 52.23 The fair value of restricted stock grants is usually equal to the average of the high and low trading price of our stock on the date of grant. As of March 31, 2018 , approximately $7 million of total unrecognized compensation costs related to restricted stock awards is expected to be recognized over a weighted-average period of approximately 1.5 years. The total fair value of restricted shares vested was $8 million and $13 million at March 31, 2018 and 2017, respectively. Share Repurchase Program — In January 2015, our Board of Directors approved a share repurchase program, authorizing our company to repurchase up to $350 million of our outstanding common stock over a three year period. In October 2015, our Board of Directors expanded this share repurchase program, authorizing the repurchase of an additional $200 million of the Company's outstanding common stock. In February 2017, our Board of Directors authorized the repurchase of up to $400 million of the Company's outstanding common stock over the next three years. This includes $112 million that remained authorized under earlier repurchase programs. The Company anticipates acquiring the shares through open market or privately negotiated transactions, which will be funded through cash from operations. The repurchase program does not obligate the Company to repurchase shares within any specific time or situations, and opportunities in higher priority areas could affect the cadence of this program. We did not repurchase any shares through this program in the three months ended March 31, 2018 . Since we announced the share repurchase program in January 2015, we have repurchased 11.3 million shares for $607 million through March 31, 2018 . Treasury stock shares including repurchased shares were 14,592,888 shares at March 31, 2018 and December 31, 2017 , respectively. Dividends — On February 1, 2017, Tenneco announced the reinstatement of a quarterly dividend program under which we expect to pay quarterly dividends of $0.25 per share on our common stock, representing planned annual dividends of $1.00 per share. In March 2017, we paid an initial quarterly dividend of $0.25 per share, or $13 million . In March 2018, we paid a quarterly dividend of $ 0.25 per share, or $13 million . While we currently expect that comparable quarterly cash dividends will continue to be paid in the future, our dividend program and the payment of future cash dividends under the program are subject to continued capital availability, the judgment of our Board of Directors and our continued compliance with the provisions pertaining to the payment of dividends under our debt agreements. Long-Term Performance Units, Performance Share Units, Restricted Stock Units and SARs — Long-term performance units, restricted stock units granted prior to 2018 and SARs are paid in cash and recognized as a liability based upon their fair value. Performance share units and restricted stock units granted in 2018 onward are settled in shares upon vesting and recognized in equity based on their fair value. As of March 31, 2018 , $35 million of total unrecognized compensation costs is expected to be recognized over a weighted-average period of approximately 2.2 years. |
Pension Plans, Postretirement a
Pension Plans, Postretirement and Other Employee Benefits | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Pension Plans, Postretirement and Other Employee Benefits | ension Plans, Postretirement and Other Employee Benefits Net periodic pension costs and postretirement benefit costs consist of the following components: Three Months Ended March 31, 2018 Pension Postretirement 2018 2017 2018 2017 US Foreign US Foreign US US (Millions) Service cost — benefits earned during the period $ — $ 3 $ — $ 2 $ — $ — Interest cost (a) 3 3 3 3 2 1 Expected return on plan assets (a) (4 ) (5 ) (4 ) (4 ) — — Net amortization: Actuarial loss (a) 1 2 1 2 1 1 Net pension and postretirement costs $ — $ 3 $ — $ 3 $ 3 $ 2 (a) Recorded in other expense. For the three months ended March 31, 2018 , we made pension contributions of less than $1 million and $3 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 2018 . Pension contributions beyond 2018 will be required, but those amounts will vary based upon many factors including, for example, the performance of our pension fund investments during 2018 . We made postretirement contributions of approximately $2 million during the first three months of 2018 . Based on current actuarial estimates, we believe we will be required to contribute approximately $7 million for the remainder of 2018 . 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 months ended March 31, 2018 and 2017 include the following components: Three Months Ended March 31, 2018 2018 2017 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 actuarial loss included in net periodic pension and postretirement cost 4 (1 ) 3 4 (1 ) 3 Settlement charge (a) — — — 6 (2 ) 4 Other comprehensive income – pension benefits $ 4 $ (1 ) $ 3 $ 10 $ (3 ) $ 7 (a) Recorded in other expense. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | ccounting Pronouncements Adoption of New Accounting Standards In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The new guidance improves the presentation of net periodic pension and postretirement benefit costs. We retrospectively adopted this standard in the first quarter of 2018. We recorded other pension and postretirement costs of $3 million in other expense for the three month period ended March 31, 2018 . Prior to adoption, this amount would have been recorded in SG&A and cost of sales. Prior year amounts of $9 million have been reclassified from SG&A and cost of sales to other expense to conform to the current year presentation. Of the $9 million adjustment for the three month period ended March 31, 2017 , $6 million was a non-cash charge related to a voluntary program to buy out active employees and retirees who had earned benefits in the U.S. pension plans. In November 2016, the FASB issued Accounting Standard Update 2016-18, Statement of Cash Flows - Restricted Cash (Topic 230) to eliminate diversity in practice in the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. We retrospectively adopted this standard in the first quarter of 2018 with no material impact. In October 2016, the FASB issued Accounting Standard Update 2016-16, Income Taxes - Intra Entity Transfers of Assets Other Than Inventory (Topic 740). The new standard changes the accounting for income taxes when a company transfers certain tangible and intangible assets, such as equipment or intellectual property, between entities in different tax jurisdictions. The new standard does not change the current accounting for the income taxes related to transfers of inventory. We adopted this standard on January 1, 2018 using the modified retrospective method. The cumulative effect of the adoption was recognized as a decrease to retained earnings (accumulated deficit) of $2 million . In August 2016, the FASB issued Accounting Standard Update 2016-15, Statement of Cash Flows - Classification of certain cash receipts and cash payments (Topic 230). This Update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. Current GAAP either is unclear or does not include specific guidance on the eight cash flow classification issues included in the amendments in this update. The amendments are an improvement to GAAP because they provide guidance for each of the eight issues, thereby reducing the current and potential future diversity in practice described above. We retrospectively adopted this standard in the first quarter of 2018. We recorded $34 million as an investing activity in the statement of cash flows for the cash we received to settle the deferred purchase price of factored receivables for the three month period ended March 31, 2018 . Prior to adoption, this amount would have been recorded as an operating activity in the statement of cash flows. The prior period amount of $22 million has been reclassified to conform to the current period presentation. In May 2014, the FASB issued Accounting Standard Update 2014-09, Revenue from Contracts with Customers (Topic 606), an amendment on revenue recognition. The amendment in this update created Topic 606, Revenue from Contracts with Customers, and supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendment supersedes the cost guidance in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts, and created a new Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers. The core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For public business entities, the standard is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted ASC Topic 606 on January 1, 2018, using the modified retrospective method. The cumulative effect of the adoption was recognized as an increase to retained earnings (accumulated deficit) of $1 million on January 1, 2018. Please refer to Note 14 in our notes to consolidated financial statements for further discussion of the adoption of this standard. Accounting Standards Issued But Not Yet Adopted In February 2018, the FASB issued Accounting Standard Update 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments allow for an election to eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this update also require certain disclosures about stranded tax effects. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We are currently evaluating the potential impact of this new guidance on the Company's consolidated financial statements. In February 2016, the FASB issued Accounting Standard Update 2016-02, Leases (Topic 842). This update supersedes the lease requirements in Topic 840, Leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flow arising from a lease. For public business entities, the standard is effective for financial statements issued for annual periods beginning after December 15, 2018, and interim periods within those annual periods. We will adopt this amendment on January 1, 2019. We are currently evaluating the potential impact of this new guidance on our consolidated financial statements. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information In connection with the reportable segment changes announced on April 27, 2018, effective for the first quarter of 2018, the Company’s reportable segments for financial reporting purposes consist of the following three segments: Clean Air, Ride Performance and Aftermarket. The new reportable segments, which are also the Company's operating segments, align with how the Chief Operating Decision Maker allocates resources and assesses performance against the Company’s key growth strategies. Costs related to other business activities, primarily corporate headquarter functions, are disclosed separately from the three operating segments as "Other." We evaluate segment performance based primarily on earnings before interest expense, income taxes, and noncontrolling interests. Products are transferred between segments and geographic areas on a basis intended to reflect as nearly as possible the “market value” of the products. Prior period segment information has been retrospectively revised to reflect our new reporting segments. These changes also resulted in changes to the Company's reporting units. The Company allocated goodwill to its new reporting units using a relative fair value approach. In addition, the Company completed an assessment of any potential goodwill impairment for all reporting units immediately before and immediately after the reallocation and determined that no impairment existed. The following table summarizes certain Tenneco Inc. segment information: Segments Clean Air Ride Performance Aftermarket Total Other Reclass & Elims Total At March 31, 2018 and for the Three Months Ended March 31, 2018 Revenues from external customers $ 1,756 $ 513 $ 305 $ 2,574 $ — $ — $ 2,574 Intersegment revenues 15 15 10 40 — (40 ) — EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests 119 8 35 162 (45 ) — 117 Total assets 3,095 1,152 861 5,108 — 58 5,166 At March 31, 2017 and for the Three Months Ended March 31, 2017 Revenues from external customers 1,555 428 309 2,292 — — 2,292 Intersegment revenues 25 15 11 51 — (51 ) — EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests 94 27 42 163 (42 ) — 121 Total assets 2,809 1,013 785 4,607 — 35 4,642 |
Supplemental Guarantor Condense
Supplemental Guarantor Condensed Consolidating Financial Statements | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Supplemental Guarantor Condensed Consolidating Financial Statements | Supplemental Guarantor Condensed Consolidating Financial Statements Basis of Presentation Substantially 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 notes due in 2024 and 2026 on a joint and several basis. However, a subsidiary’s guarantee may be released in certain customary circumstances such as a sale of the subsidiary or all or substantially all of its assets in accordance with the indenture applicable to the notes. The Guarantor Subsidiaries are combined in the presentation below. These 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 condensed 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. STATEMENT OF COMPREHENSIVE INCOME (LOSS) Three Months Ended March 31, 2018 Guarantor Subsidiaries Nonguarantor Subsidiaries Tenneco Inc. (Parent Company) Reclass & Elims Consolidated (Millions) Revenues Net sales and operating revenues — External $ 1,032 $ 1,542 $ — $ — $ 2,574 Affiliated companies 123 156 — (279 ) — 1,155 1,698 — (279 ) 2,574 Costs and expenses Cost of sales (exclusive of depreciation and amortization shown below) 1,008 1,469 — (279 ) 2,198 Engineering, research, and development 18 23 — — 41 Selling, general, and administrative 74 79 — — 153 Depreciation and amortization of other intangibles 22 37 — — 59 1,122 1,608 — (279 ) 2,451 Other income (expense) Loss on sale of receivables (2 ) (1 ) — — (3 ) Other income (expense) (12 ) 9 — — (3 ) (14 ) 8 — — (6 ) Earnings (loss) before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies 19 98 — — 117 Interest expense — External (net of interest capitalized) 8 2 10 — 20 Affiliated companies (net of interest income) (3 ) — 3 — — Earnings (loss) before income taxes, noncontrolling interests, and equity in net income from affiliated companies 14 96 (13 ) — 97 Income tax (benefit) expense 1 24 — — 25 Equity in net income (loss) from affiliated companies 45 71 (116 ) — Net income (loss) 58 72 58 (116 ) 72 Less: Net income attributable to noncontrolling interests — 14 — — 14 Net income (loss) attributable to Tenneco Inc. $ 58 $ 58 $ 58 $ (116 ) $ 58 Comprehensive income (loss) attributable to Tenneco Inc. $ 58 $ 58 $ 80 $ (116 ) $ 80 STATEMENT OF COMPREHENSIVE INCOME (LOSS) Three Months Ended March 31, 2017 Guarantor Subsidiaries Nonguarantor Subsidiaries Tenneco Inc. (Parent Company) Reclass & Elims Consolidated (Millions) Revenues Net sales and operating revenues — External $ 1,018 $ 1,274 $ — $ — $ 2,292 Affiliated companies 144 182 — (326 ) — 1,162 1,456 — (326 ) 2,292 Costs and expenses Cost of sales (exclusive of depreciation and amortization shown below) 992 1,263 — (326 ) 1,929 Engineering, research, and development 20 19 — — 39 Selling, general, and administrative 68 73 — — 141 Depreciation and amortization of other intangibles 21 31 — — 52 1,101 1,386 — (326 ) 2,161 Other income (expense) Loss on sale of receivables — (1 ) — — (1 ) Other income (expense) (17 ) 8 — — (9 ) (17 ) 7 — — (10 ) Earnings (loss) before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies 44 77 — — 121 Interest expense — External (net of interest capitalized) (1 ) — 16 — 15 Affiliated companies (net of interest income) (3 ) 1 2 — — Earnings (loss) before income taxes, noncontrolling interests, and equity in net income from affiliated companies 48 76 (18 ) — 106 Income tax expense 8 25 — — 33 Equity in net income (loss) from affiliated companies 27 — 77 (104 ) — Net income (loss) 67 51 59 (104 ) 73 Less: Net income attributable to noncontrolling interests — 14 — — 14 Net income (loss) attributable to Tenneco Inc. $ 67 $ 37 $ 59 $ (104 ) $ 59 Comprehensive income (loss) attributable to Tenneco Inc. $ 67 $ 37 $ 87 $ (104 ) $ 87 BALANCE SHEET March 31, 2018 Guarantor Subsidiaries Nonguarantor Subsidiaries Tenneco Inc. (Parent Company) Reclass & Elims Consolidated (Millions) ASSETS Current assets: Cash and cash equivalents $ 5 $ 283 $ — $ — $ 288 Restricted cash 2 — — 2 Receivables, net 465 1,648 — (589 ) 1,524 Inventories 387 524 — — 911 Prepayments and other 115 225 — — 340 Total current assets 972 2,682 — (589 ) 3,065 Other assets: Investment in affiliated companies 1,417 — 1,346 (2,763 ) — Notes and advances receivable from affiliates 792 19,712 3,960 (24,464 ) — Long-term receivables, net 9 1 — — 10 Goodwill 22 27 — — 49 Intangibles, net 5 17 — — 22 Deferred income taxes 162 44 — 206 Other 66 88 — — 154 2,473 19,889 5,306 (27,227 ) 441 Plant, property, and equipment, at cost 1,512 2,599 — — 4,111 Less — Accumulated depreciation and amortization (950 ) (1,501 ) — — (2,451 ) 562 1,098 — — 1,660 Total assets $ 4,007 $ 23,669 $ 5,306 $ (27,816 ) $ 5,166 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt (including current maturities of long-term debt) Short-term debt — non-affiliated $ — $ 49 $ 15 $ — $ 64 Short-term debt — affiliated 316 154 — (470 ) — Accounts payable 713 1,310 — (115 ) 1,908 Accrued taxes 7 36 — — 43 Other 202 222 9 (4 ) 429 Total current liabilities 1,238 1,771 24 (589 ) 2,444 Long-term debt — non-affiliated 694 11 715 — 1,420 Long-term debt — affiliated 1,092 19,570 3,802 (24,464 ) — Deferred income taxes — 12 — — 12 Pension and postretirement benefits and other liabilities 290 125 — — 415 Commitments and contingencies Total liabilities 3,314 21,489 4,541 (25,053 ) 4,291 Redeemable noncontrolling interests — 50 — — 50 Tenneco Inc. shareholders’ equity 693 2,070 765 (2,763 ) 765 Noncontrolling interests — 60 — — 60 Total equity 693 2,130 765 (2,763 ) 825 Total liabilities, redeemable noncontrolling interests and equity $ 4,007 $ 23,669 $ 5,306 $ (27,816 ) $ 5,166 BALANCE SHEET December 31, 2017 Guarantor Subsidiaries Nonguarantor Subsidiaries Tenneco Inc. (Parent Company) Reclass & Elims Consolidated (Millions) ASSETS Current assets: Cash and cash equivalents $ 7 $ 308 $ — $ — $ 315 Restricted cash — 3 — — 3 Receivables, net 402 1,567 — (648 ) 1,321 Inventories 383 486 — — 869 Prepayments and other 99 192 — — 291 Total current assets 891 2,556 — (648 ) 2,799 Other assets: Investment in affiliated companies 1,389 — 1,258 (2,647 ) — Notes and advances receivable from affiliates 791 19,119 3,967 (23,877 ) — Long-term receivables, net 8 1 — — 9 Goodwill 22 27 — — 49 Intangibles, net 5 17 — — 22 Deferred income taxes 161 43 — — 204 Other 66 78 — — 144 2,442 19,285 5,225 (26,524 ) 428 Plant, property, and equipment, at cost 1,478 2,530 — — 4,008 Less — Accumulated depreciation and amortization (934 ) (1,459 ) — — (2,393 ) 544 1,071 — — 1,615 Total assets $ 3,877 $ 22,912 $ 5,225 $ (27,172 ) $ 4,842 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt (including current maturities of long-term debt) Short-term debt — non-affiliated $ — $ 83 $ — $ — $ 83 Short-term debt — affiliated 408 148 — (556 ) — Accounts payable 562 1,232 — (89 ) 1,705 Accrued taxes 8 37 — — 45 Other 203 221 12 (3 ) 433 Total current liabilities 1,181 1,721 12 (648 ) 2,266 Long-term debt — non-affiliated 632 12 714 — 1,358 Long-term debt — affiliated 1,093 18,981 3,803 (23,877 ) — Deferred income taxes — 11 — — 11 Pension and postretirement benefits and other liabilities 296 127 — — 423 Commitments and contingencies Total liabilities 3,202 20,852 4,529 (24,525 ) 4,058 Redeemable noncontrolling interests — 42 — — 42 Tenneco Inc. shareholders’ equity 675 1,972 696 (2,647 ) 696 Noncontrolling interests — 46 — — 46 Total equity 675 2,018 696 (2,647 ) 742 Total liabilities, redeemable noncontrolling interests and equity $ 3,877 $ 22,912 $ 5,225 $ (27,172 ) $ 4,842 STATEMENT OF CASH FLOWS Three Months Ended March 31, 2018 Guarantor Subsidiaries Nonguarantor Subsidiaries Tenneco Inc. (Parent Company) Reclass & Elims Consolidated (Millions) Operating Activities Net cash provided (used) by operating activities $ (27 ) $ 32 $ (5 ) $ — Investing Activities Proceeds from sale of assets — 2 — — 2 Cash payments for plant, property, and equipment (38 ) (46 ) — — (84 ) Cash payments for software related intangible assets (2 ) (3 ) — — (5 ) Proceeds from deferred purchase price of factored receivables — 34 — — 34 Net cash used by investing activities (40 ) (13 ) — — (53 ) Financing Activities Issuance of common shares — — (2 ) — (2 ) Cash dividends — — (13 ) — (13 ) Retirement of long-term debt - net (5 ) (1 ) — — (6 ) Net increase in bank overdrafts — (4 ) — — (4 ) Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivables 97 (35 ) 15 — 77 Net decrease in short-term borrowings secured by accounts receivables (30 ) — — — (30 ) Intercompany dividend payments and net increase (decrease) in intercompany obligations 3 (7 ) 4 — Net cash provided (used) by financing activities 65 (47 ) 4 — 22 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash — 3 — — 3 Decrease in cash, cash equivalents and restricted cash (2 ) (25 ) (1 ) — (28 ) Cash, cash equivalents and restricted cash, January 1 7 311 — — 318 Cash, cash equivalents and restricted cash, March 31 (Note) $ 5 $ 286 $ (1 ) $ — $ 290 Note: Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. STATEMENT OF CASH FLOWS Three Months Ended March 31, 2017 Guarantor Subsidiaries Nonguarantor Subsidiaries Tenneco Inc. (Parent Company) Reclass & Elims Consolidated (Millions) Operating Activities Net cash provided (used) by operating activities $ (41 ) $ 24 $ (14 ) $ — $ (31 ) Investing Activities Proceeds from sale of assets 2 1 — — 3 Cash payments for plant, property, and equipment (42 ) (61 ) — — (103 ) Cash payments for software related intangible assets (2 ) (4 ) — — (6 ) Proceeds from deferred purchase price of factored receivables — 22 — — 22 Net cash used by investing activities (42 ) (42 ) — — (84 ) Financing Activities Repurchase of common shares — — (3 ) — (3 ) Cash dividends — — (13 ) — (13 ) Retirement of long-term debt - net — — (6 ) — (6 ) Purchase of common stock under the share repurchase program — — (16 ) — (16 ) Net decrease in bank overdrafts — 3 — — 3 Net increase in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivables — 20 97 — 117 Net increase in short-term borrowings secured by accounts receivable — — 20 — 20 Intercompany dividend payments and net increase (decrease) in intercompany obligations 80 (15 ) (65 ) — — Net cash provided (used) by financing activities 80 8 14 — 102 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash — 8 — — 8 Increase (decrease) in cash, cash equivalents and restricted cash (3 ) (2 ) — — (5 ) Cash, cash equivalents and restricted cash, January 1 9 340 — — 349 Cash, cash equivalents and restricted cash, March 31 (Note) $ 6 $ 338 $ — $ — $ 344 Note: Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue In May 2014, the FASB issued an amendment on revenue recognition. The amendment created Topic 606, Revenue from Contracts with Customers, and supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendment supersedes the cost guidance in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts, and created new Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers. The core principle of ASC Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We adopted ASC Topic 606 Revenue from Contracts with Customers and all the related amendments ("new revenue standard") on January 1, 2018, using the modified retrospective method. The cumulative effect of the adoption was recognized as an increase to retained earnings (accumulated deficit) of $1 million and the changes made to our consolidated January 1, 2018 opening balance sheet for the adoption of ASC Topic 606 were as follows: Balance at December 31, 2017 Adjustments Due to ASU 2014-09 Adjustments Due to ASU 2016-16 (a) Balance at January 1, 2018 (Millions) Balance Sheet Assets Inventory $ 869 $ (5 ) $ — $ 864 Prepayments and other (including contract assets) 291 6 — 297 Equity Retained earnings (accumulated deficit) (946 ) 1 (2 ) (947 ) (a) Cumulative effect of adopting Accounting Standard Update 2016-16, Income Taxes - Intra Entity Transfers of Assets Other Than Inventory (Topic 740). See note 11 for further information. Revenue from contracts with customers We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. While the majority of the contracts we enter into with original equipment (“OE”) and aftermarket customers are long-term supply arrangements, the performance obligations are established by the enforceable contract, which is generally considered to be the purchase order but in some cases could be the delivery release schedule. The purchase order, or related delivery release schedule, is of a duration less than one year. As such, the Company applies the practical expedient in ASC paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less, for which work has not yet been performed. Certain taxes assessed by governmental authorities on revenue producing transactions, such as value added taxes, are excluded from revenue and recorded on a net basis. Performance Obligations The Company generates revenue through the design, manufacture, and sale of clean air and ride performance systems and products for light vehicle, commercial truck, off-highway and other applications. We recognize revenue for sales to our OE and aftermarket customers when transfer of control of the related good or service has occurred. Revenue from most of OE and aftermarket goods and services transferred to customers occurs at point in time. Contract terms with certain of our OE customers results in products and services being transferred over time due to the customized nature of some of our products together with contractual provisions in certain of our customer contracts that provide us with an enforceable right to payment for performance completed to date. Under typical terms, we do not have the right to consideration until the time of shipment from our plants or distribution center or the time of delivery to our customers. The timing of revenue recognition from products transferred to customers over time may be slightly accelerated compared to our right to consideration at the time of shipment or delivery. We invoice the customer once transfer of control has occurred and we have a right to payment. Our typical payment terms vary based on the customer and the type of goods and services in the contract. The period of time between invoicing and when payment is due is not significant. Amounts billed and due from our customers are classified as receivables on the balance sheet. As our standard payment terms are less than one year, we have elected the practical expedient under ASC paragraph 606-10-32-18 to not assess whether a contract has a significant financing component. Original Equipment In a typical arrangement with an OE customer, purchase orders are issued for pre-production activities, which consist of engineering, design and development, tooling, and prototypes for the manufacture and delivery of component parts. We have concluded that these activities are not in the scope of ASC Topic 606 and for that reason, the Company has not made any changes to how it accounts for reimbursable pre-production costs, currently accounted for as a cost reduction. Generally, in connection with the sale of exhaust systems to certain OE manufacturers, we purchase catalytic converters and diesel particulate filters or components thereof including precious metals (“substrates”) on behalf of our customers which are used in the assembled system. These substrates are included in our inventory and are “passed through” to the customer at our cost, plus a small margin. Since we take title to the substrate inventory and have responsibility for both the delivery and quality of the finished product including the substrates, the revenues and related expenses are recorded gross. Revenues recognized for substrate sales were $652 million and $547 million for the three month periods ended March 31, 2018 and 2017 , respectively. Due to the highly customized nature of certain finished components for our OE customers, revenue is recognized over time, consistent with the transfer of control of an asset with limited alternative use, and the Company having an enforceable right to payment for performance completed to date. We consider an input measure (e.g., costs incurred to date relative to total estimated costs at completion) as a fair measure of progress for the recognition of over time revenue associated with these customized parts. A cost measure best depicts the means of transfer of goods to the customer, which occurs as we incur costs to fulfill contracts. Total revenue recognized over time for such customized parts totaled $2 million for the three month period ended March 31, 2018 . Prices for our OE customer base are generally fixed on the purchase order and allocation of consideration between goods and services is rare as the highly customized parts are considered sold at their standalone selling price. If an occasion arose whereby a finished component was not deemed sold at its standalone selling price, consideration would be allocated among different performance obligations based on an estimate, most likely cost plus margin, of the standalone selling price of each distinct good or service in the contract. Aftermarket Our aftermarket customers take delivery of finished components, which are recognized as revenue at the time the customer takes possession, which is usually at the time of shipment. This determination is based on applicable shipping terms as well as the consideration of other indicators, including timing of when the Company has a present right to payment, when physical possession of products is transferred to customers, when the customer has the significant risks and rewards of ownership of the asset and any provisions in contracts regarding customer acceptance. While unit prices are generally fixed, for certain of our aftermarket customers, we provide for variable consideration, typically in the form of promotional incentives and returns at the time of sale. Expected values are based upon the contractual terms of the incentives and historical experience with returns. In most cases, we are able to derive the expected value of variable consideration at a level to conclude it is probable that a significant revenue reversal will not occur in future periods. In cases where the high threshold for recognition is not established, such amounts will be constrained and recognized when the uncertainty underlying the constraint is resolved. Contract Balances Contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date on contracts with customers. The contract assets are transferred to the receivables when the rights become unconditional. Contract liabilities primarily relate to contracts where advance payments or deposits have been received, but performance obligations have not yet been met, and therefore, revenue has not been recognized. The Company applies the practical expedient in ASC paragraph 606-10-50-14 and does not disclose information about the remaining performance obligations that have original expected durations of one year or less. Disaggregation of revenue In connection with the reportable segment changes announced on April 27, 2018, effective for the first quarter of 2018, the Company’s reportable segments for financial reporting purposes will consist of the following three segments: Clean Air, Ride Performance and Aftermarket. The new reporting segments will be more closely aligned with key growth strategies. In the following table, revenue is disaggregated accordingly: Three Months Ended March 31, 2018 Substrate Value-add Total Revenues Sales Revenues (Millions) Clean Air $ 1,756 $ 652 $ 1,104 Ride Performance 513 — 513 Aftermarket 305 — 305 Total Tenneco Inc. $ 2,574 $ 652 $ 1,922 Changes to policies related to revenue recognition under ASC Topic 606 The most significant change upon the adoption of ASC Topic 606 was the change in the pattern of revenue recognition for certain customized parts. Under ASC Topic 605, revenue was recognized for these customized parts when title and risk of loss passed to the customers under the terms of our arrangements with those customers, which was usually at the time of shipment from our plants or distribution centers. As a result of the adoption, the revenue from these contracts will now be recognized over time because the customized parts are considered to be assets with limited alternative use and the Company has an enforceable right to payment for work completed to date. The Company considers the costs incurred (input method) as a fair measure of progress for the over time recognition of revenue associated with these customized parts. The following tables summarize the impacts of adopting ASC Topic 606 on the Company’s consolidated financial statements for the three month period ended March 31, 2018: For the three months ended March 31, 2018 As Reported Balances Without Adoption of ASC Topic 606 Effect of Change Higher/(Lower) (Millions) Income Statement Revenues Net sales and operating revenues $ 2,574 $ 2,576 $ 2 Cost and expenses Cost of sales (exclusive of depreciation and amortization) 2,198 2,200 2 March 31, 2018 As Reported Balances Without Adoption of ASC Topic 606 Effect of Change Higher/(Lower) (Millions) Balance Sheet Assets Inventory $ 911 $ 919 $ (8 ) Prepayments and other (including contract assets) 340 331 9 Equity Retained earnings (accumulated deficit) (902 ) (903 ) 1 For the three months ended March 31, 2018 As Reported Balances Without Adoption of ASC Topic 606 Effect of Change Higher/(Lower) (Millions) Cash Flows Operating Activities Increase/(decrease) in inventories $ (34 ) $ (36 ) $ 2 Increase/(decrease) in prepayments and other current assets (45 ) (43 ) (2 ) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 10, 2018, Tenneco entered into a Membership Interest Purchase Agreement (the "Purchase Agreement") with Federal-Mogul LLC ("Federal-Mogul"), American Entertainment Properties Corp.("AEP"), and Icahn Enterprises L.P.("IEP"), pursuant to which Tenneco will acquire Federal-Mogul (the “Acquisition”). Subject to the terms and conditions of the Purchase Agreement, Tenneco will (i) pay to AEP an aggregate amount in cash equal to $800 million (the “Cash Consideration”) and (ii) issue and deliver to AEP an aggregate of 29,444,846 shares (the “Stock Consideration”) of Tenneco's common stock, which shall be comprised of: (a) a number of shares of common stock (to be reclassified as Class A Voting Common Stock, par value $0.01 , at the closing of the Acquisition (“Class A Common Stock”)) equal to 9.9% of the aggregate number of shares of Class A Common Stock issued and outstanding as of immediately following the closing of the Acquisition (such number of shares of Class A Common Stock, the “Class A Common Stock Amount”), and (b) a number of shares of a newly created Class B Non-Voting Common Stock, par value $0.01 (“Class B Common Stock”), equal to (1) the Stock Consideration, minus (2) the Class A Common Stock Amount. Until the date that is ten business days prior to the anticipated closing date of the Acquisition, Tenneco may elect to conduct an offering of its common stock in order to raise funds to increase the Cash Consideration by selling up to 7,315,490 shares of common stock and decreasing the Stock Consideration by the same number of shares in accordance with the terms of the Purchase Agreement. The completion of the Acquisition is subject to certain customary closing conditions and the Purchase Agreement contains customary representations, warranties and covenants by each party that are subject, in some cases, to specified exceptions and qualifications contained in the Purchase Agreement. Following the closing of the Acquisition, Tenneco has agreed to use its reasonable best efforts to pursue the separation of the combined company’s powertrain technology business and its aftermarket & ride performance business into two separate, publicly traded companies in a spin-off transaction that is expected to be treated as a tax-free reorganization for U.S. federal income tax purposes (the "Spin-off" and, together with the Acquisition, the "Transaction"). |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Adoption of New Accounting Standards In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The new guidance improves the presentation of net periodic pension and postretirement benefit costs. We retrospectively adopted this standard in the first quarter of 2018. We recorded other pension and postretirement costs of $3 million in other expense for the three month period ended March 31, 2018 . Prior to adoption, this amount would have been recorded in SG&A and cost of sales. Prior year amounts of $9 million have been reclassified from SG&A and cost of sales to other expense to conform to the current year presentation. Of the $9 million adjustment for the three month period ended March 31, 2017 , $6 million was a non-cash charge related to a voluntary program to buy out active employees and retirees who had earned benefits in the U.S. pension plans. In November 2016, the FASB issued Accounting Standard Update 2016-18, Statement of Cash Flows - Restricted Cash (Topic 230) to eliminate diversity in practice in the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. We retrospectively adopted this standard in the first quarter of 2018 with no material impact. In October 2016, the FASB issued Accounting Standard Update 2016-16, Income Taxes - Intra Entity Transfers of Assets Other Than Inventory (Topic 740). The new standard changes the accounting for income taxes when a company transfers certain tangible and intangible assets, such as equipment or intellectual property, between entities in different tax jurisdictions. The new standard does not change the current accounting for the income taxes related to transfers of inventory. We adopted this standard on January 1, 2018 using the modified retrospective method. The cumulative effect of the adoption was recognized as a decrease to retained earnings (accumulated deficit) of $2 million . In August 2016, the FASB issued Accounting Standard Update 2016-15, Statement of Cash Flows - Classification of certain cash receipts and cash payments (Topic 230). This Update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. Current GAAP either is unclear or does not include specific guidance on the eight cash flow classification issues included in the amendments in this update. The amendments are an improvement to GAAP because they provide guidance for each of the eight issues, thereby reducing the current and potential future diversity in practice described above. We retrospectively adopted this standard in the first quarter of 2018. We recorded $34 million as an investing activity in the statement of cash flows for the cash we received to settle the deferred purchase price of factored receivables for the three month period ended March 31, 2018 . Prior to adoption, this amount would have been recorded as an operating activity in the statement of cash flows. The prior period amount of $22 million has been reclassified to conform to the current period presentation. In May 2014, the FASB issued Accounting Standard Update 2014-09, Revenue from Contracts with Customers (Topic 606), an amendment on revenue recognition. The amendment in this update created Topic 606, Revenue from Contracts with Customers, and supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendment supersedes the cost guidance in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts, and created a new Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers. The core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For public business entities, the standard is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted ASC Topic 606 on January 1, 2018, using the modified retrospective method. The cumulative effect of the adoption was recognized as an increase to retained earnings (accumulated deficit) of $1 million on January 1, 2018. Please refer to Note 14 in our notes to consolidated financial statements for further discussion of the adoption of this standard. Accounting Standards Issued But Not Yet Adopted In February 2018, the FASB issued Accounting Standard Update 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments allow for an election to eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this update also require certain disclosures about stranded tax effects. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We are currently evaluating the potential impact of this new guidance on the Company's consolidated financial statements. In February 2016, the FASB issued Accounting Standard Update 2016-02, Leases (Topic 842). This update supersedes the lease requirements in Topic 840, Leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flow arising from a lease. For public business entities, the standard is effective for financial statements issued for annual periods beginning after December 15, 2018, and interim periods within those annual periods. We will adopt this amendment on January 1, 2019. We are currently evaluating the potential impact of this new guidance on our consolidated financial statements. |
Consolidation and Presentation
Consolidation and Presentation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Redeemable Noncontrolling Interest | The following is a rollforward of activities in our redeemable noncontrolling interests for the three months ended March 31, 2018 and 2017, respectively: Three Months Ended March 31, 2018 2017 (Millions) Balance January 1 $ 42 $ 40 Net income attributable to redeemable noncontrolling interests 7 8 Other comprehensive loss 1 — Balance March 31 $ 50 $ 48 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Carrying and Estimated Fair Value | The net carrying and estimated fair values of our financial instruments by class at March 31, 2018 and December 31, 2017 were as follows: March 31, 2018 December 31, 2017 Net Carrying Amount Fair Value Net Carrying Amount Fair Value (Millions) Long-term debt (including current maturities) $ 1,424 $ 1,424 $ 1,361 $ 1,398 Equity swap agreement and foreign currency forward contracts: Asset derivative contracts (a) 4 4 4 4 (a) All derivatives are categorized within Level 2 of the fair value hierarchy. |
Summarization for Foreign Currency Forward Purchase and Sale Contracts | The following table summarizes by major currency the notional amounts for foreign currency forward purchase and sale contracts as of March 31, 2018 (all of which mature in 2018): Notional Amount in Foreign Currency (Millions) Canadian dollars —Sell (2 ) European euro —Sell (7 ) Chinese yuan —Purchase 2 Polish Zloty —Purchase 28 —Sell (3 ) U.S. dollars —Purchase 2 |
Long-Term Debt and Financing 25
Long-Term Debt and Financing Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Financial Ratios under Senior Credit Facility | The financial ratios required under the senior credit facility, and the actual ratios we achieved for the first quarter of 2018, are as follows: Quarter Ended March 31, 2018 Required Actual Leverage Ratio (maximum) 3.50 2.09 Interest Coverage Ratio (minimum) 2.75 9.87 |
Restructuring and Other Charg26
Restructuring and Other Charges (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Roll Forward of Restructuring Reserve | Amounts related to activities that are part of our restructuring reserves are as follows: December 31, 2018 2018 Impact of Exchange Rates March 31, 2018 (Millions) Employee Severance, Termination Benefits and Other Related Costs $25 12 (16 ) — $21 |
Environmental Matters, Litiga27
Environmental Matters, Litigation and Product Warranties (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Environmental Matters, Litigation and Product Warranties [Abstract] | |
Warranty Accrual Rollforward | Below is a table that shows the activity in the warranty accrual accounts: Three Months Ended March 31, 2018 2017 (Millions) Beginning Balance January 1, $ 26 $ 20 Accruals related to product warranties 6 3 Reductions for payments made (3 ) (3 ) Ending Balance March 31, $ 29 $ 20 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Summary of Earnings Per Share of Common Stock | Earnings per share of common stock outstanding were computed as follows: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 (Millions Except Share and Per Share Amounts) Basic earnings per share — Net income attributable to Tenneco Inc. $ 58 $ 59 Weighted Average shares of common stock outstanding 51,211,643 53,856,352 Earnings per share of common stock $ 1.13 $ 1.10 Diluted earnings per share — Net income attributable to Tenneco Inc. $ 58 $ 59 Weighted Average shares of common stock outstanding 51,211,643 53,856,352 Effect of dilutive securities: Restricted stock 216,351 145,999 Stock options 73,649 229,408 Weighted Average shares of common stock outstanding including dilutive securities 51,501,643 54,231,759 Earnings per share of common stock $ 1.13 $ 1.09 |
Common Stock (Tables)
Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options Status and Activity | Stock Options — The following table reflects the status and activity for all options to purchase common stock for the period indicated: Three Months Ended March 31, 2018 Shares Under Option Weighted Avg. Exercise Prices Weighted Avg. Remaining Life in Years Aggregate Intrinsic Value (Millions) Outstanding Stock Options Outstanding, January 1, 2018 318,016 $ 43.60 2.6 $ 5 Exercised (4,607 ) 26.78 — Outstanding, March 31, 2018 313,409 $ 43.84 2.1 $ 4 |
Nonvested Restricted Shares | Restricted Stock — The following table reflects the status for all nonvested restricted shares for the period indicated: Three Months Ended March 31, 2018 Shares Weighted Avg. Grant Date Fair Value Nonvested Restricted Shares Nonvested balance at January 1, 2018 410,251 $ 49.95 Granted 17,440 55.05 Vested (168,409 ) 47.08 Forfeited (5,108 ) 48.68 Nonvested balance at March 31, 2018 254,174 $ 52.23 |
Pension Plans, Postretirement30
Pension Plans, Postretirement and Other Employee Benefits (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | t periodic pension costs and postretirement benefit costs consist of the following components: Three Months Ended March 31, 2018 Pension Postretirement 2018 2017 2018 2017 US Foreign US Foreign US US (Millions) Service cost — benefits earned during the period $ — $ 3 $ — $ 2 $ — $ — Interest cost (a) 3 3 3 3 2 1 Expected return on plan assets (a) (4 ) (5 ) (4 ) (4 ) — — Net amortization: Actuarial loss (a) 1 2 1 2 1 1 Net pension and postretirement costs $ — $ 3 $ — $ 3 $ 3 $ 2 (a) Recorded in other expense. |
Amounts Recognized for Pension and Postretirement Benefits in Other Comprehensive Income | Amounts recognized for pension and postretirement benefits in other comprehensive income for the three months ended March 31, 2018 and 2017 include the following components: Three Months Ended March 31, 2018 2018 2017 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 actuarial loss included in net periodic pension and postretirement cost 4 (1 ) 3 4 (1 ) 3 Settlement charge (a) — — — 6 (2 ) 4 Other comprehensive income – pension benefits $ 4 $ (1 ) $ 3 $ 10 $ (3 ) $ 7 (a) Recorded in other expense. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | The following table summarizes certain Tenneco Inc. segment information: Segments Clean Air Ride Performance Aftermarket Total Other Reclass & Elims Total At March 31, 2018 and for the Three Months Ended March 31, 2018 Revenues from external customers $ 1,756 $ 513 $ 305 $ 2,574 $ — $ — $ 2,574 Intersegment revenues 15 15 10 40 — (40 ) — EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests 119 8 35 162 (45 ) — 117 Total assets 3,095 1,152 861 5,108 — 58 5,166 At March 31, 2017 and for the Three Months Ended March 31, 2017 Revenues from external customers 1,555 428 309 2,292 — — 2,292 Intersegment revenues 25 15 11 51 — (51 ) — EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests 94 27 42 163 (42 ) — 121 Total assets 2,809 1,013 785 4,607 — 35 4,642 |
Supplemental Guarantor Conden32
Supplemental Guarantor Condensed Consolidating Financial Statements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Statement of Comprehensive Income (Loss) | STATEMENT OF COMPREHENSIVE INCOME (LOSS) Three Months Ended March 31, 2018 Guarantor Subsidiaries Nonguarantor Subsidiaries Tenneco Inc. (Parent Company) Reclass & Elims Consolidated (Millions) Revenues Net sales and operating revenues — External $ 1,032 $ 1,542 $ — $ — $ 2,574 Affiliated companies 123 156 — (279 ) — 1,155 1,698 — (279 ) 2,574 Costs and expenses Cost of sales (exclusive of depreciation and amortization shown below) 1,008 1,469 — (279 ) 2,198 Engineering, research, and development 18 23 — — 41 Selling, general, and administrative 74 79 — — 153 Depreciation and amortization of other intangibles 22 37 — — 59 1,122 1,608 — (279 ) 2,451 Other income (expense) Loss on sale of receivables (2 ) (1 ) — — (3 ) Other income (expense) (12 ) 9 — — (3 ) (14 ) 8 — — (6 ) Earnings (loss) before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies 19 98 — — 117 Interest expense — External (net of interest capitalized) 8 2 10 — 20 Affiliated companies (net of interest income) (3 ) — 3 — — Earnings (loss) before income taxes, noncontrolling interests, and equity in net income from affiliated companies 14 96 (13 ) — 97 Income tax (benefit) expense 1 24 — — 25 Equity in net income (loss) from affiliated companies 45 71 (116 ) — Net income (loss) 58 72 58 (116 ) 72 Less: Net income attributable to noncontrolling interests — 14 — — 14 Net income (loss) attributable to Tenneco Inc. $ 58 $ 58 $ 58 $ (116 ) $ 58 Comprehensive income (loss) attributable to Tenneco Inc. $ 58 $ 58 $ 80 $ (116 ) $ 80 STATEMENT OF COMPREHENSIVE INCOME (LOSS) Three Months Ended March 31, 2017 Guarantor Subsidiaries Nonguarantor Subsidiaries Tenneco Inc. (Parent Company) Reclass & Elims Consolidated (Millions) Revenues Net sales and operating revenues — External $ 1,018 $ 1,274 $ — $ — $ 2,292 Affiliated companies 144 182 — (326 ) — 1,162 1,456 — (326 ) 2,292 Costs and expenses Cost of sales (exclusive of depreciation and amortization shown below) 992 1,263 — (326 ) 1,929 Engineering, research, and development 20 19 — — 39 Selling, general, and administrative 68 73 — — 141 Depreciation and amortization of other intangibles 21 31 — — 52 1,101 1,386 — (326 ) 2,161 Other income (expense) Loss on sale of receivables — (1 ) — — (1 ) Other income (expense) (17 ) 8 — — (9 ) (17 ) 7 — — (10 ) Earnings (loss) before interest expense, income taxes, noncontrolling interests, and equity in net income from affiliated companies 44 77 — — 121 Interest expense — External (net of interest capitalized) (1 ) — 16 — 15 Affiliated companies (net of interest income) (3 ) 1 2 — — Earnings (loss) before income taxes, noncontrolling interests, and equity in net income from affiliated companies 48 76 (18 ) — 106 Income tax expense 8 25 — — 33 Equity in net income (loss) from affiliated companies 27 — 77 (104 ) — Net income (loss) 67 51 59 (104 ) 73 Less: Net income attributable to noncontrolling interests — 14 — — 14 Net income (loss) attributable to Tenneco Inc. $ 67 $ 37 $ 59 $ (104 ) $ 59 Comprehensive income (loss) attributable to Tenneco Inc. $ 67 $ 37 $ 87 $ (104 ) $ 87 |
Balance Sheet | BALANCE SHEET March 31, 2018 Guarantor Subsidiaries Nonguarantor Subsidiaries Tenneco Inc. (Parent Company) Reclass & Elims Consolidated (Millions) ASSETS Current assets: Cash and cash equivalents $ 5 $ 283 $ — $ — $ 288 Restricted cash 2 — — 2 Receivables, net 465 1,648 — (589 ) 1,524 Inventories 387 524 — — 911 Prepayments and other 115 225 — — 340 Total current assets 972 2,682 — (589 ) 3,065 Other assets: Investment in affiliated companies 1,417 — 1,346 (2,763 ) — Notes and advances receivable from affiliates 792 19,712 3,960 (24,464 ) — Long-term receivables, net 9 1 — — 10 Goodwill 22 27 — — 49 Intangibles, net 5 17 — — 22 Deferred income taxes 162 44 — 206 Other 66 88 — — 154 2,473 19,889 5,306 (27,227 ) 441 Plant, property, and equipment, at cost 1,512 2,599 — — 4,111 Less — Accumulated depreciation and amortization (950 ) (1,501 ) — — (2,451 ) 562 1,098 — — 1,660 Total assets $ 4,007 $ 23,669 $ 5,306 $ (27,816 ) $ 5,166 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt (including current maturities of long-term debt) Short-term debt — non-affiliated $ — $ 49 $ 15 $ — $ 64 Short-term debt — affiliated 316 154 — (470 ) — Accounts payable 713 1,310 — (115 ) 1,908 Accrued taxes 7 36 — — 43 Other 202 222 9 (4 ) 429 Total current liabilities 1,238 1,771 24 (589 ) 2,444 Long-term debt — non-affiliated 694 11 715 — 1,420 Long-term debt — affiliated 1,092 19,570 3,802 (24,464 ) — Deferred income taxes — 12 — — 12 Pension and postretirement benefits and other liabilities 290 125 — — 415 Commitments and contingencies Total liabilities 3,314 21,489 4,541 (25,053 ) 4,291 Redeemable noncontrolling interests — 50 — — 50 Tenneco Inc. shareholders’ equity 693 2,070 765 (2,763 ) 765 Noncontrolling interests — 60 — — 60 Total equity 693 2,130 765 (2,763 ) 825 Total liabilities, redeemable noncontrolling interests and equity $ 4,007 $ 23,669 $ 5,306 $ (27,816 ) $ 5,166 BALANCE SHEET December 31, 2017 Guarantor Subsidiaries Nonguarantor Subsidiaries Tenneco Inc. (Parent Company) Reclass & Elims Consolidated (Millions) ASSETS Current assets: Cash and cash equivalents $ 7 $ 308 $ — $ — $ 315 Restricted cash — 3 — — 3 Receivables, net 402 1,567 — (648 ) 1,321 Inventories 383 486 — — 869 Prepayments and other 99 192 — — 291 Total current assets 891 2,556 — (648 ) 2,799 Other assets: Investment in affiliated companies 1,389 — 1,258 (2,647 ) — Notes and advances receivable from affiliates 791 19,119 3,967 (23,877 ) — Long-term receivables, net 8 1 — — 9 Goodwill 22 27 — — 49 Intangibles, net 5 17 — — 22 Deferred income taxes 161 43 — — 204 Other 66 78 — — 144 2,442 19,285 5,225 (26,524 ) 428 Plant, property, and equipment, at cost 1,478 2,530 — — 4,008 Less — Accumulated depreciation and amortization (934 ) (1,459 ) — — (2,393 ) 544 1,071 — — 1,615 Total assets $ 3,877 $ 22,912 $ 5,225 $ (27,172 ) $ 4,842 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term debt (including current maturities of long-term debt) Short-term debt — non-affiliated $ — $ 83 $ — $ — $ 83 Short-term debt — affiliated 408 148 — (556 ) — Accounts payable 562 1,232 — (89 ) 1,705 Accrued taxes 8 37 — — 45 Other 203 221 12 (3 ) 433 Total current liabilities 1,181 1,721 12 (648 ) 2,266 Long-term debt — non-affiliated 632 12 714 — 1,358 Long-term debt — affiliated 1,093 18,981 3,803 (23,877 ) — Deferred income taxes — 11 — — 11 Pension and postretirement benefits and other liabilities 296 127 — — 423 Commitments and contingencies Total liabilities 3,202 20,852 4,529 (24,525 ) 4,058 Redeemable noncontrolling interests — 42 — — 42 Tenneco Inc. shareholders’ equity 675 1,972 696 (2,647 ) 696 Noncontrolling interests — 46 — — 46 Total equity 675 2,018 696 (2,647 ) 742 Total liabilities, redeemable noncontrolling interests and equity $ 3,877 $ 22,912 $ 5,225 $ (27,172 ) $ 4,842 |
Statement of Cash Flows | STATEMENT OF CASH FLOWS Three Months Ended March 31, 2018 Guarantor Subsidiaries Nonguarantor Subsidiaries Tenneco Inc. (Parent Company) Reclass & Elims Consolidated (Millions) Operating Activities Net cash provided (used) by operating activities $ (27 ) $ 32 $ (5 ) $ — Investing Activities Proceeds from sale of assets — 2 — — 2 Cash payments for plant, property, and equipment (38 ) (46 ) — — (84 ) Cash payments for software related intangible assets (2 ) (3 ) — — (5 ) Proceeds from deferred purchase price of factored receivables — 34 — — 34 Net cash used by investing activities (40 ) (13 ) — — (53 ) Financing Activities Issuance of common shares — — (2 ) — (2 ) Cash dividends — — (13 ) — (13 ) Retirement of long-term debt - net (5 ) (1 ) — — (6 ) Net increase in bank overdrafts — (4 ) — — (4 ) Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivables 97 (35 ) 15 — 77 Net decrease in short-term borrowings secured by accounts receivables (30 ) — — — (30 ) Intercompany dividend payments and net increase (decrease) in intercompany obligations 3 (7 ) 4 — Net cash provided (used) by financing activities 65 (47 ) 4 — 22 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash — 3 — — 3 Decrease in cash, cash equivalents and restricted cash (2 ) (25 ) (1 ) — (28 ) Cash, cash equivalents and restricted cash, January 1 7 311 — — 318 Cash, cash equivalents and restricted cash, March 31 (Note) $ 5 $ 286 $ (1 ) $ — $ 290 Note: Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. STATEMENT OF CASH FLOWS Three Months Ended March 31, 2017 Guarantor Subsidiaries Nonguarantor Subsidiaries Tenneco Inc. (Parent Company) Reclass & Elims Consolidated (Millions) Operating Activities Net cash provided (used) by operating activities $ (41 ) $ 24 $ (14 ) $ — $ (31 ) Investing Activities Proceeds from sale of assets 2 1 — — 3 Cash payments for plant, property, and equipment (42 ) (61 ) — — (103 ) Cash payments for software related intangible assets (2 ) (4 ) — — (6 ) Proceeds from deferred purchase price of factored receivables — 22 — — 22 Net cash used by investing activities (42 ) (42 ) — — (84 ) Financing Activities Repurchase of common shares — — (3 ) — (3 ) Cash dividends — — (13 ) — (13 ) Retirement of long-term debt - net — — (6 ) — (6 ) Purchase of common stock under the share repurchase program — — (16 ) — (16 ) Net decrease in bank overdrafts — 3 — — 3 Net increase in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivables — 20 97 — 117 Net increase in short-term borrowings secured by accounts receivable — — 20 — 20 Intercompany dividend payments and net increase (decrease) in intercompany obligations 80 (15 ) (65 ) — — Net cash provided (used) by financing activities 80 8 14 — 102 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash — 8 — — 8 Increase (decrease) in cash, cash equivalents and restricted cash (3 ) (2 ) — — (5 ) Cash, cash equivalents and restricted cash, January 1 9 340 — — 349 Cash, cash equivalents and restricted cash, March 31 (Note) $ 6 $ 338 $ — $ — $ 344 Note: Cash and cash equivalents include highly liquid investments with a maturity of three months or less at the date of purchase. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of New Accounting Pronouncements | The cumulative effect of the adoption was recognized as an increase to retained earnings (accumulated deficit) of $1 million and the changes made to our consolidated January 1, 2018 opening balance sheet for the adoption of ASC Topic 606 were as follows: Balance at December 31, 2017 Adjustments Due to ASU 2014-09 Adjustments Due to ASU 2016-16 (a) Balance at January 1, 2018 (Millions) Balance Sheet Assets Inventory $ 869 $ (5 ) $ — $ 864 Prepayments and other (including contract assets) 291 6 — 297 Equity Retained earnings (accumulated deficit) (946 ) 1 (2 ) (947 ) (a) Cumulative effect of adopting Accounting Standard Update 2016-16, Income Taxes - Intra Entity Transfers of Assets Other Than Inventory (Topic 740). See note 11 for further information. The following tables summarize the impacts of adopting ASC Topic 606 on the Company’s consolidated financial statements for the three month period ended March 31, 2018: For the three months ended March 31, 2018 As Reported Balances Without Adoption of ASC Topic 606 Effect of Change Higher/(Lower) (Millions) Income Statement Revenues Net sales and operating revenues $ 2,574 $ 2,576 $ 2 Cost and expenses Cost of sales (exclusive of depreciation and amortization) 2,198 2,200 2 March 31, 2018 As Reported Balances Without Adoption of ASC Topic 606 Effect of Change Higher/(Lower) (Millions) Balance Sheet Assets Inventory $ 911 $ 919 $ (8 ) Prepayments and other (including contract assets) 340 331 9 Equity Retained earnings (accumulated deficit) (902 ) (903 ) 1 For the three months ended March 31, 2018 As Reported Balances Without Adoption of ASC Topic 606 Effect of Change Higher/(Lower) (Millions) Cash Flows Operating Activities Increase/(decrease) in inventories $ (34 ) $ (36 ) $ 2 Increase/(decrease) in prepayments and other current assets (45 ) (43 ) (2 ) |
Disaggregation of Revenue | The new reporting segments will be more closely aligned with key growth strategies. In the following table, revenue is disaggregated accordingly: Three Months Ended March 31, 2018 Substrate Value-add Total Revenues Sales Revenues (Millions) Clean Air $ 1,756 $ 652 $ 1,104 Ride Performance 513 — 513 Aftermarket 305 — 305 Total Tenneco Inc. $ 2,574 $ 652 $ 1,922 |
Consolidation and Presentatio34
Consolidation and Presentation - Additional Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of reportable segments | Segment | 3 | |
In process tools and dies built for original equipment customers | $ 136 | $ 117 |
Accrued compensation | 90 | 77 |
Bank overdrafts | $ 16 | $ 20 |
Consolidation and Presentatio35
Consolidation and Presentation - Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Redeemable Noncontrolling Interest [Roll Forward] | ||
Balance January 1 | $ 42 | $ 40 |
Net income attributable to redeemable noncontrolling interests | 7 | 8 |
Other comprehensive loss | 1 | 0 |
Balance March 31 | $ 50 | $ 48 |
Financial Instruments - Carryin
Financial Instruments - Carrying and Estimated Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Carrying And Estimated Fair Value [Line Items] | ||
Long-term debt (including current maturities) | $ 1,420 | $ 1,358 |
Net Carrying Amount | ||
Carrying And Estimated Fair Value [Line Items] | ||
Long-term debt (including current maturities) | 1,424 | 1,361 |
Net Carrying Amount | Equity swap agreement and foreign currency forward contracts | ||
Equity swap agreement and foreign currency forward contracts: | ||
Asset derivative contracts | 4 | 4 |
Fair Value | ||
Carrying And Estimated Fair Value [Line Items] | ||
Long-term debt (including current maturities) | 1,424 | 1,398 |
Fair Value | Equity swap agreement and foreign currency forward contracts | ||
Equity swap agreement and foreign currency forward contracts: | ||
Asset derivative contracts | $ 4 | $ 4 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value of Long Term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of long term debt | $ 713 | $ 749 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of long term debt | 696 | 634 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of long term debt | $ 15 | $ 15 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)group_retirement_planperformance_agreementshares | Dec. 31, 2017USD ($) | |
Financial Instruments [Line Items] | ||
Maximum percentage of stock of certain first tier foreign subsidiaries pledged to secure senior credit facility | 66.00% | |
Line of credit facility letters of credit outstanding | $ 32 | |
Financial Instruments not redeemed and used for vendor payment | 9 | $ 11 |
Negotiable financial instruments received from OE customer not redeemed | 14 | 10 |
Other Current Assets | ||
Financial Instruments [Line Items] | ||
Negotiable financial instruments received from OE customer not redeemed | 14 | 10 |
Subsidiaries | CHINA | ||
Financial Instruments [Line Items] | ||
Restricted cash | 1 | 2 |
Subsidiaries | SPAIN | ||
Financial Instruments [Line Items] | ||
Restricted cash | $ 1 | |
TMEL and Walker Plans | ||
Financial Instruments [Line Items] | ||
Number of performance guarantee agreements | performance_agreement | 2 | |
Number of group benefit plans under the agreement | group_retirement_plan | 2 | |
Percentage of the pension obligation recognized for participating employers | 100.00% | |
Foreign Exchange Forward Contracts | ||
Financial Instruments [Line Items] | ||
Term of foreign currency forward contracts (less than one year) | 1 year | |
Net asset position | $ 1 | $ 1 |
Equity Swap | ||
Financial Instruments [Line Items] | ||
Common share equivalents | shares | 250 | |
Net asset position fair value | $ 4 |
Financial Instruments - Summari
Financial Instruments - Summarization for Foreign Currency Forward Purchase and Sale Contracts (Details) - Mar. 31, 2018 - Foreign Exchange Forward Contracts € in Millions, ¥ in Millions, zł in Millions, $ in Millions, $ in Millions | CAD ($) | CNY (¥) | PLN (zł) | USD ($) | EUR (€) |
Long | |||||
Derivative [Line Items] | |||||
Notional Amount in Foreign Currency | zł | zł 28 | ||||
Canada, Dollars | Short | |||||
Derivative [Line Items] | |||||
Notional Amount in Foreign Currency | $ | $ 2 | ||||
European, Euro | Short | |||||
Derivative [Line Items] | |||||
Notional Amount in Foreign Currency | € | € 7 | ||||
China, Yuan Renminbi | Long | |||||
Derivative [Line Items] | |||||
Notional Amount in Foreign Currency | ¥ | ¥ 2 | ||||
Poland, Zlotych | Short | |||||
Derivative [Line Items] | |||||
Notional Amount in Foreign Currency | zł | zł 3 | ||||
U.S., Dollars | Long | |||||
Derivative [Line Items] | |||||
Notional Amount in Foreign Currency | $ | $ 2 |
Long-Term Debt and Financing 40
Long-Term Debt and Financing Arrangements - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 18 Months Ended | |||||
Jun. 30, 2022USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2022USD ($) | Dec. 31, 2017USD ($) | May 12, 2017USD ($) | May 11, 2017USD ($) | |
Debt Instrument [Line Items] | ||||||||
Maximum percentage of stock of certain first-tier foreign subsidiaries pledged to secure senior credit facility | 66.00% | |||||||
Debt outstanding | $ 1,420,000,000 | $ 1,358,000,000 | ||||||
Leverage Ratio Required (Maximum) for future quarters | 3.50 | |||||||
Interest coverage ratio (minimum) | 2.75 | |||||||
5.375% Senior Notes Due 2024 | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding debt | $ 225,000,000 | |||||||
Debt issuance costs | 3,000,000 | |||||||
Debt outstanding | 222,000,000 | |||||||
5% Senior Notes Due July 15 2026 | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding debt | 500,000,000 | |||||||
Debt issuance costs | 7,000,000 | |||||||
Debt outstanding | 493,000,000 | |||||||
Other Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Unsecured debt | 75,000,000 | |||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 1,600,000,000 | $ 1,600,000,000 | $ 1,200,000,000 | |||||
Outstanding debt | 311,000,000 | |||||||
Unused borrowing capacity | 1,289,000,000 | |||||||
Revolving Credit Facility | Tranche Term Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding debt | $ 264,000,000 | |||||||
Debt issuance costs | 2,000,000 | |||||||
Debt outstanding | 383,000,000 | $ 385,000,000 | ||||||
Principal payments excluded from current liabilities | 20,000,000 | |||||||
Revolving Credit Facility | Term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding debt | 385,000,000 | |||||||
Letter of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding debt | $ 0 | |||||||
Future payment | Revolving Credit Facility | Tranche Term Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayment of term loan | $ 260,000,000 | $ 5,000,000 | $ 7,500,000 | $ 10,000,000 | ||||
Actual | ||||||||
Debt Instrument [Line Items] | ||||||||
Leverage Ratio (maximum) | 2.09 | |||||||
Interest Coverage Ratio (minimum) | 9.87 |
Long-Term Debt and Financing 41
Long-Term Debt and Financing Arrangements - Financial Ratios under Senior Credit Facility (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Required | |
Financial Ratios Under Senior Credit Facility [Line Items] | |
Leverage Ratio (maximum) | 3.5 |
Interest Coverage Ratio (minimum) | 2.75 |
Actual | |
Financial Ratios Under Senior Credit Facility [Line Items] | |
Leverage Ratio (maximum) | 2.09 |
Interest Coverage Ratio (minimum) | 9.87 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 25 | $ 33 |
Net tax expense (benefit) for prior year tax adjustments | $ 1 | |
Reasonably possible change in unrecognized tax benefits | $ 8 |
Accounts Receivable Securitiz43
Accounts Receivable Securitization and Factoring Programs - Additional Information (Details) | 3 Months Ended | |||
Mar. 31, 2018USD ($)bank | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Apr. 30, 2017USD ($) | |
Transfers of Servicing of Financial Assets [Line Items] | ||||
Number of commercial banks with accounts receivable securitization programs | bank | 3 | |||
Proceeds from deferred purchase price of factored receivables | $ 34,000,000 | $ 22,000,000 | ||
Term of commitments (in years) | 1 year | |||
Term of commitments, cancellation period (in days) | 90 days | |||
US | ||||
Transfers of Servicing of Financial Assets [Line Items] | ||||
Outstanding third party investments in securitized accounts receivable bank program | $ 0 | $ 30,000,000 | ||
Securitization interest expense | $ 1,000,000 | 1,000,000 | ||
Financing cost related to sale of securitized receivables percentage | 3.00% | |||
Europe | ||||
Transfers of Servicing of Financial Assets [Line Items] | ||||
Outstanding third party investments in securitized accounts receivable bank program | $ 257,000,000 | 218,000,000 | ||
Proceeds from deferred purchase price of factored receivables | 34,000,000 | 22,000,000 | ||
Loss on sale of trade accounts receivable | $ 2,000,000 | $ 1,000,000 | ||
Financing cost related to sale of securitized receivables percentage | 2.00% | 2.00% | ||
Amended and Extended Accounts Receivable Securitization Program | ||||
Transfers of Servicing of Financial Assets [Line Items] | ||||
North American program maximum facility size | $ 155,000,000 | |||
Additional Financing from second priority facility | $ 25,000,000 | |||
New Accounts Receivable Factoring Program | US | ||||
Transfers of Servicing of Financial Assets [Line Items] | ||||
Outstanding third party investments in securitized accounts receivable bank program | $ 136,000,000 | $ 107,000,000 |
Restructuring and Other Charg44
Restructuring and Other Charges - Additional Information (Details) - USD ($) $ in Millions | May 12, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring cost | $ 12 | $ 15 | $ 72 | ||
Non Cash Charges Related To Restructuring Activity | 1 | 3 | |||
Restructuring and related cost allowed to be excluded from the calculation of financial covenant ratios | $ 35 | 35 | |||
Charges allowed to be excluded under debt agreement, 2018 | 25 | ||||
Charges allowed to be excluded under debt agreement, 2019 | 25 | ||||
Charges allowed to be excluded under debt agreement, 2020 | 25 | ||||
Charges allowed to be excluded under debt agreement, 2021 | 25 | ||||
Charges allowed to be excluded under debt agreement, 2022 | 25 | ||||
Restructuring and related cost and litigation costs allowed to be excluded from the calculation of financial covenant ratios | $ 150 | 210 | |||
Cost of Sales | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring cost | 9 | 11 | 41 | ||
Selling, General and Administrative Expenses | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring cost | 2 | 3 | 28 | ||
Engineering | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring cost | 1 | ||||
Depreciation and Amortization | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring cost | $ 1 | 3 | |||
Australia | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Non Cash Charges Related To Restructuring Activity | 2 | ||||
Reduction in Structural Costs | Australia | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring cost | 21 | ||||
Facility Closing | Beijing, China | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring cost | $ 6 | $ 6 | |||
Forecast | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related cost allowed to be excluded from the calculation of financial covenant ratios | $ 25 |
Restructuring and Other Charg45
Restructuring and Other Charges - Roll Forward of Restructuring Reserve (Details) - Severance $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Restructuring Reserve | $ 25 |
Restructuring charges | 12 |
Cash Payments | (16) |
Impact of exchange rates | 0 |
Restructuring Reserve | $ 21 |
Environmental Matters, Litiga46
Environmental Matters, Litigation and Product Warranties - Additional Information (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Apr. 30, 2018USD ($) | Mar. 31, 2018USD ($)defendentcasefederal_superfund_site | Dec. 31, 2017USD ($) | Jun. 30, 2017USD ($) | |
Loss Contingencies [Line Items] | ||||
Number of Federal Super Fund sites | federal_superfund_site | 1 | |||
Environmental remediation accrual, discounted basis | $ 14 | |||
Portion of environmental remediation costs recorded in other current liabilities | 2 | |||
Portion of environmental remediation costs recorded in deferred credits and other liabilities | $ 12 | |||
Weighted average discount rate | 2.30% | |||
Environmental remediation accrual, undiscounted basis | $ 17 | |||
Environmental Remediation, 2018 | 1 | |||
Environmental Remediation, 2019 | 1 | |||
Environmental Remediation, 2020 | 1 | |||
Environmental Remediation, 2021 | 1 | |||
Environmental Remediation, 2022 | 1 | |||
Environmental Remediation, Thereafter | $ 12 | |||
Litigation reserve | $ 132 | |||
Payments for litigation | $ 45 | |||
Number of legal cases (less than) | case | 500 | |||
Number of defendants in many asbestos related cases | defendent | 100 | |||
Subsequent Event | ||||
Loss Contingencies [Line Items] | ||||
Payments for litigation | $ 17 |
Environmental Matters, Litiga47
Environmental Matters, Litigation and Product Warranties - Warranty Accrual Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Beginning Balance | $ 26 | $ 20 |
Accruals related to product warranties | 6 | 3 |
Reductions for payments made | (3) | (3) |
Ending Balance | $ 29 | $ 20 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Earnings Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Basic earnings per share — | ||
Net income attributable to Tenneco Inc. | $ 58 | $ 59 |
Weighted Average shares of common stock outstanding (in shares) | 51,211,643 | 53,856,352 |
Earnings per share of common stock (in dollars per share) | $ 1.13 | $ 1.10 |
Diluted earnings per share — | ||
Net income attributable to Tenneco Inc. | $ 58 | $ 59 |
Weighted Average shares of common stock outstanding (in shares) | 51,211,643 | 53,856,352 |
Effect of dilutive securities: | ||
Restricted stock (in shares) | 216,351 | 145,999 |
Stock options (in shares) | 73,649 | 229,408 |
Weighted Average shares of common stock outstanding including dilutive securities (in shares) | 51,501,643 | 54,231,759 |
Earnings per share of common stock (in dollars per share) | $ 1.13 | $ 1.09 |
Earnings Per Share - Additiona
Earnings Per Share - Additional Information (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive stock options | 175 | 834 |
Common Stock - Additional Infor
Common Stock - Additional Information (Details) - USD ($) | Feb. 01, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Feb. 28, 2017 | Jan. 31, 2015 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Oct. 31, 2015 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||||
Share-based Compensation | $ 5,000,000 | $ 9,000,000 | ||||||||
Tax benefit from options exercised | 1,000,000 | 2,000,000 | ||||||||
Total fair value of shares vested | $ 0 | 2,000,000 | ||||||||
Treasury stock repurchased | 14,592,888 | 14,592,888 | 14,592,888 | |||||||
Dividend declared (in dollars per share) | $ 0.25 | |||||||||
Annual divided declared (in dollars per share) | $ 1 | |||||||||
Dividend paid (in dollars per share) | $ 0.25 | $ 0.25 | ||||||||
Cash dividends paid | $ 13,000,000 | $ 13,000,000 | $ 13,000,000 | 13,000,000 | ||||||
Equity Option | ||||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||||
Compensation expense | 1,000,000 | |||||||||
Stock Option | ||||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||||
Cash received from stock option exercises | 1,000,000 | 6,000,000 | ||||||||
Restricted Stock, Restricted Stock Units, Long Term Performance Units, SARs | ||||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||||
Unrecognized compensation costs | 35,000,000 | $ 35,000,000 | ||||||||
Unrecognized compensation costs, not yet recognized | 2 years 2 months 12 days | |||||||||
Share-based Compensation | $ 3,000,000 | 6,000,000 | ||||||||
Restricted Stock | ||||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||||
Unrecognized compensation costs | $ 7,000,000 | $ 7,000,000 | ||||||||
Unrecognized compensation costs, not yet recognized | 1 year 6 months | |||||||||
Total fair value of restricted shares vested | $ 8,000,000 | $ 13,000,000 | ||||||||
Common Stock | ||||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||||
Amount authorized to repurchase | $ 400,000,000 | $ 350,000,000 | $ 200,000,000 | |||||||
Period of time to repurchase common stock | 3 years | 3 years | ||||||||
Previous authorized amount to repurchase | $ 112,000,000 | |||||||||
Number of shares repurchased | 11,300,000 | |||||||||
Value of shares reprchased | $ 607,000,000 |
Common Stock - Stock Options St
Common Stock - Stock Options Status and Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2016 | |
Shares Under Option | ||
Outstanding, Beginning Balance (in shares) | 318,016 | |
Exercised (in shares) | (4,607) | |
Outstanding, Ending Balance (in shares) | 313,409 | |
Weighted Avg. Exercise Prices | ||
Outstanding, Beginning Balance (in dollars per share) | $ 43.60 | |
Exercised (in dollars per share) | 26.78 | |
Outstanding, Ending Balance (in dollars per share) | $ 43.84 | |
Weighted Avg. Remaining Life in Years | 2 years 1 month 6 days | 2 years 7 months 6 days |
Aggregate Intrinsic Value, Outstanding, Beginning Balance | $ 5 | |
Aggregate Intrinsic Value, Exercised | 0 | |
Aggregate Intrinsic Value, Outstanding, Ending Balance | $ 4 |
Common Stock - Nonvested Restri
Common Stock - Nonvested Restricted Shares (Details) - Restricted Stock | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Nonvested Restricted Shares | |
Nonvested, Beginning Balance (in shares) | shares | 410,251 |
Granted (in shares) | shares | 17,440 |
Vested (in shares) | shares | (168,409) |
Forfeited (in shares) | shares | (5,108) |
Nonvested, Ending Balance (in shares) | shares | 254,174 |
Weighted Avg. Grant Date Fair Value | |
Nonvested, Beginning Balance (in dollars per share) | $ / shares | $ 49.95 |
Granted (in dollars per share) | $ / shares | 55.05 |
Vested (in dollars per share) | $ / shares | 47.08 |
Forfeited (in dollars per share) | $ / shares | 48.68 |
Nonvested, Ending Balance (in dollars per share) | $ / shares | $ 52.23 |
Pension Plans, Postretirement53
Pension Plans, Postretirement and Other Employee Benefits - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
US | Pension | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost — benefits earned during the period | $ 0 | $ 0 |
Interest cost | 3 | 3 |
Expected return on plan assets | (4) | (4) |
Net amortization: | ||
Actuarial loss | 1 | 1 |
Net pension and postretirement costs | 0 | 0 |
US | Postretirement | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost — benefits earned during the period | 0 | 0 |
Interest cost | 2 | 1 |
Expected return on plan assets | 0 | 0 |
Net amortization: | ||
Actuarial loss | 1 | 1 |
Net pension and postretirement costs | 3 | 2 |
Foreign | Pension | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost — benefits earned during the period | 3 | 2 |
Interest cost | 3 | 3 |
Expected return on plan assets | (5) | (4) |
Net amortization: | ||
Actuarial loss | 2 | 2 |
Net pension and postretirement costs | $ 3 | $ 3 |
Pension Plans, Postretirement54
Pension Plans, Postretirement and Other Employee Benefits - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Pension | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Employer contributions, remainder of fiscal year | $ 11 |
Postretirement | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Employer contributions | 2 |
Employer contributions, remainder of fiscal year | 7 |
US | Pension | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Employer contributions | 1 |
Foreign | Pension | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
Employer contributions | $ 3 |
Pension Plans, Postretirement55
Pension Plans, Postretirement and Other Employee Benefits - Amounts Recognized for Pension and Postretirement Benefits in Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Before-Tax Amount | ||
Amortization of actuarial loss included in net periodic pension and postretirement cost | $ 4 | $ 4 |
Settlement charge (a) | 0 | 6 |
Other comprehensive income – pension benefits | 4 | 10 |
Tax Benefit | ||
Amortization of actuarial loss included in net periodic pension and postretirement cost | (1) | (1) |
Settlement charge (a) | 0 | (2) |
Other comprehensive income – pension benefits | (1) | (3) |
Net-of-Tax Amount | ||
Amortization of actuarial loss included in net periodic pension and postretirement cost | 3 | 3 |
Settlement charge (a) | 0 | 4 |
Other comprehensive income – pension benefits | $ 3 | $ 7 |
New Accounting Pronouncements56
New Accounting Pronouncements (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other pension and postretirement costs | $ 3 | $ 9 | |
Non-cash expense, pension and postretirement | 6 | ||
Proceeds from deferred purchase price of factored receivables | 34 | $ 22 | |
ASU 2016-16 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect on retained earnings | 2 | ||
ASU 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect on retained earnings | $ 1 | $ 1 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Segment Reporting [Line Items] | |||
Revenues from external customers | $ 2,574 | $ 2,292 | |
EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 117 | 121 | |
Total assets | 5,166 | 4,642 | $ 4,842 |
Intersegment Revenues | |||
Segment Reporting [Line Items] | |||
Revenues | 0 | 0 | |
Reclass and Elims | |||
Segment Reporting [Line Items] | |||
Revenues from external customers | 0 | 0 | |
EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 0 | 0 | |
Total assets | 58 | 35 | |
Reclass and Elims | Intersegment Revenues | |||
Segment Reporting [Line Items] | |||
Revenues | (40) | (51) | |
Global | |||
Segment Reporting [Line Items] | |||
Revenues from external customers | 2,574 | 2,292 | |
EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 162 | 163 | |
Total assets | 5,108 | 4,607 | |
Global | Intersegment Revenues | |||
Segment Reporting [Line Items] | |||
Revenues | 40 | 51 | |
Clean Air Division | Global | |||
Segment Reporting [Line Items] | |||
Revenues from external customers | 1,756 | 1,555 | |
EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 119 | 94 | |
Total assets | 3,095 | 2,809 | |
Clean Air Division | Global | Intersegment Revenues | |||
Segment Reporting [Line Items] | |||
Revenues | 15 | 25 | |
Ride Performance Division | Global | |||
Segment Reporting [Line Items] | |||
Revenues from external customers | 513 | 428 | |
EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 8 | 27 | |
Total assets | 1,152 | 1,013 | |
Ride Performance Division | Global | Intersegment Revenues | |||
Segment Reporting [Line Items] | |||
Revenues | 15 | 15 | |
Aftermarket | Global | |||
Segment Reporting [Line Items] | |||
Revenues from external customers | 305 | 309 | |
EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests | 35 | 42 | |
Total assets | 861 | 785 | |
Aftermarket | Global | Intersegment Revenues | |||
Segment Reporting [Line Items] | |||
Revenues | 10 | 11 | |
Other | |||
Segment Reporting [Line Items] | |||
Revenues from external customers | 0 | 0 | |
EBIT, Earnings (loss) before interest expense, income taxes, and noncontrolling interests | (45) | (42) | |
Total assets | 0 | 0 | |
Other | Intersegment Revenues | |||
Segment Reporting [Line Items] | |||
Revenues | $ 0 | $ 0 |
Supplemental Guarantor Conden59
Supplemental Guarantor Condensed Consolidating Financial Statements - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Ownership percentage of existing and future material domestic owned subsidiaries | 100.00% |
Supplemental Guarantor Conden60
Supplemental Guarantor Condensed Consolidating Financial Statements - Statement of Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net sales and operating revenues — | ||
External | $ 2,574 | $ 2,292 |
Affiliated companies | 0 | 0 |
Net sales and operating revenues | 2,574 | 2,292 |
Costs and expenses | ||
Cost of sales (exclusive of depreciation and amortization shown below) | 2,198 | 1,929 |
Engineering, research, and development | 41 | 39 |
Selling, general, and administrative | 153 | 141 |
Depreciation and amortization of other intangibles | 59 | 52 |
Total costs and expenses | 2,451 | 2,161 |
Other income (expense) | ||
Loss on sale of receivables | (3) | (1) |
Other income (expense) | (3) | (9) |
Total other income (expense) | (6) | (10) |
Earnings before interest expense, income taxes, and noncontrolling interests | 117 | 121 |
Interest expense — | ||
External (net of interest capitalized) | 20 | 15 |
Affiliated companies (net of interest income) | 0 | 0 |
Earnings (loss) before income taxes, noncontrolling interests, and equity in net income from affiliated companies | 97 | 106 |
Income tax (benefit) expense | 25 | 33 |
Equity in net income (loss) from affiliated companies | 0 | 0 |
Net income | 72 | 73 |
Less: Net income attributable to noncontrolling interests | 14 | 14 |
Net income attributable to Tenneco Inc. | 58 | 59 |
Comprehensive income (loss) attributable to Tenneco Inc. | 80 | 87 |
Reclass and Elims | ||
Net sales and operating revenues — | ||
External | 0 | 0 |
Affiliated companies | (279) | (326) |
Net sales and operating revenues | (279) | (326) |
Costs and expenses | ||
Cost of sales (exclusive of depreciation and amortization shown below) | (279) | (326) |
Engineering, research, and development | 0 | 0 |
Selling, general, and administrative | 0 | 0 |
Depreciation and amortization of other intangibles | 0 | 0 |
Total costs and expenses | (279) | (326) |
Other income (expense) | ||
Loss on sale of receivables | 0 | 0 |
Other income (expense) | 0 | 0 |
Total other income (expense) | 0 | 0 |
Earnings before interest expense, income taxes, and noncontrolling interests | 0 | 0 |
Interest expense — | ||
External (net of interest capitalized) | 0 | 0 |
Affiliated companies (net of interest income) | 0 | 0 |
Earnings (loss) before income taxes, noncontrolling interests, and equity in net income from affiliated companies | 0 | 0 |
Income tax (benefit) expense | 0 | 0 |
Equity in net income (loss) from affiliated companies | (116) | (104) |
Net income | (116) | (104) |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Tenneco Inc. | (116) | (104) |
Comprehensive income (loss) attributable to Tenneco Inc. | (116) | (104) |
Guarantor Subsidiaries | ||
Net sales and operating revenues — | ||
External | 1,032 | 1,018 |
Affiliated companies | 123 | 144 |
Net sales and operating revenues | 1,155 | 1,162 |
Costs and expenses | ||
Cost of sales (exclusive of depreciation and amortization shown below) | 1,008 | 992 |
Engineering, research, and development | 18 | 20 |
Selling, general, and administrative | 74 | 68 |
Depreciation and amortization of other intangibles | 22 | 21 |
Total costs and expenses | 1,122 | 1,101 |
Other income (expense) | ||
Loss on sale of receivables | (2) | 0 |
Other income (expense) | (12) | (17) |
Total other income (expense) | (14) | (17) |
Earnings before interest expense, income taxes, and noncontrolling interests | 19 | 44 |
Interest expense — | ||
External (net of interest capitalized) | 8 | (1) |
Affiliated companies (net of interest income) | (3) | (3) |
Earnings (loss) before income taxes, noncontrolling interests, and equity in net income from affiliated companies | 14 | 48 |
Income tax (benefit) expense | 1 | 8 |
Equity in net income (loss) from affiliated companies | 45 | 27 |
Net income | 58 | 67 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Tenneco Inc. | 58 | 67 |
Comprehensive income (loss) attributable to Tenneco Inc. | 58 | 67 |
Non-Guarantor Subsidiaries | ||
Net sales and operating revenues — | ||
External | 1,542 | 1,274 |
Affiliated companies | 156 | 182 |
Net sales and operating revenues | 1,698 | 1,456 |
Costs and expenses | ||
Cost of sales (exclusive of depreciation and amortization shown below) | 1,469 | 1,263 |
Engineering, research, and development | 23 | 19 |
Selling, general, and administrative | 79 | 73 |
Depreciation and amortization of other intangibles | 37 | 31 |
Total costs and expenses | 1,608 | 1,386 |
Other income (expense) | ||
Loss on sale of receivables | (1) | (1) |
Other income (expense) | 9 | 8 |
Total other income (expense) | 8 | 7 |
Earnings before interest expense, income taxes, and noncontrolling interests | 98 | 77 |
Interest expense — | ||
External (net of interest capitalized) | 2 | 0 |
Affiliated companies (net of interest income) | 0 | 1 |
Earnings (loss) before income taxes, noncontrolling interests, and equity in net income from affiliated companies | 96 | 76 |
Income tax (benefit) expense | 24 | 25 |
Equity in net income (loss) from affiliated companies | 0 | |
Net income | 72 | 51 |
Less: Net income attributable to noncontrolling interests | 14 | 14 |
Net income attributable to Tenneco Inc. | 58 | 37 |
Comprehensive income (loss) attributable to Tenneco Inc. | 58 | 37 |
Tenneco Inc | ||
Net sales and operating revenues — | ||
External | 0 | 0 |
Affiliated companies | 0 | |
Net sales and operating revenues | 0 | 0 |
Costs and expenses | ||
Cost of sales (exclusive of depreciation and amortization shown below) | 0 | 0 |
Engineering, research, and development | 0 | 0 |
Selling, general, and administrative | 0 | 0 |
Depreciation and amortization of other intangibles | 0 | 0 |
Total costs and expenses | 0 | 0 |
Other income (expense) | ||
Loss on sale of receivables | 0 | 0 |
Other income (expense) | 0 | 0 |
Total other income (expense) | 0 | 0 |
Earnings before interest expense, income taxes, and noncontrolling interests | 0 | 0 |
Interest expense — | ||
External (net of interest capitalized) | 10 | 16 |
Affiliated companies (net of interest income) | 3 | 2 |
Earnings (loss) before income taxes, noncontrolling interests, and equity in net income from affiliated companies | (13) | (18) |
Income tax (benefit) expense | 0 | 0 |
Equity in net income (loss) from affiliated companies | 71 | 77 |
Net income | 58 | 59 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Tenneco Inc. | 58 | 59 |
Comprehensive income (loss) attributable to Tenneco Inc. | $ 80 | $ 87 |
Supplemental Guarantor Conden61
Supplemental Guarantor Condensed Consolidating Financial Statements - Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | |||||
Cash and cash equivalents | $ 288 | $ 315 | |||
Restricted cash | 2 | 3 | |||
Receivables, net | 1,524 | 1,321 | |||
Inventories | 911 | $ 864 | 869 | ||
Prepayments and other | 340 | $ 297 | 291 | ||
Total current assets | 3,065 | 2,799 | |||
Other assets: | |||||
Investment in affiliated companies | 0 | 0 | |||
Notes and advances receivable from affiliates | 0 | 0 | |||
Long-term receivables, net | 10 | 9 | |||
Goodwill | 49 | 49 | |||
Intangibles, net | 22 | 22 | |||
Deferred income taxes | 206 | 204 | |||
Other | 154 | 144 | |||
Total other assets | 441 | 428 | |||
Plant, property, and equipment, at cost | 4,111 | 4,008 | |||
Less — Accumulated depreciation and amortization | (2,451) | (2,393) | |||
Plant, property and equipment, net | 1,660 | 1,615 | |||
Total Assets | 5,166 | 4,842 | $ 4,642 | ||
Short-term debt (including current maturities of long-term debt) | |||||
Short-term debt — non-affiliated | 64 | 83 | |||
Short-term debt — affiliated | 0 | 0 | |||
Accounts payable | 1,908 | 1,705 | |||
Accrued taxes | 43 | 45 | |||
Other | 429 | 433 | |||
Total current liabilities | 2,444 | 2,266 | |||
Long-term debt — non-affiliated | 1,420 | 1,358 | |||
Long-term debt — affiliated | 0 | 0 | |||
Deferred income taxes | 12 | 11 | |||
Pension and postretirement benefits and other liabilities | 415 | 423 | |||
Commitments and contingencies | |||||
Total liabilities | 4,291 | 4,058 | |||
Redeemable noncontrolling interests | 50 | 42 | 48 | $ 40 | |
Tenneco Inc. shareholders’ equity | 765 | 696 | |||
Noncontrolling interests | 60 | 46 | |||
Total equity | 825 | 742 | $ 691 | ||
Total liabilities, redeemable noncontrolling interests and equity | 5,166 | 4,842 | |||
Reclass and Elims | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | 0 | |||
Restricted cash | 0 | 0 | |||
Receivables, net | (589) | (648) | |||
Inventories | 0 | 0 | |||
Prepayments and other | 0 | 0 | |||
Total current assets | (589) | (648) | |||
Other assets: | |||||
Investment in affiliated companies | (2,763) | (2,647) | |||
Notes and advances receivable from affiliates | (24,464) | (23,877) | |||
Long-term receivables, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Intangibles, net | 0 | 0 | |||
Deferred income taxes | 0 | 0 | |||
Other | 0 | 0 | |||
Total other assets | (27,227) | (26,524) | |||
Plant, property, and equipment, at cost | 0 | 0 | |||
Less — Accumulated depreciation and amortization | 0 | 0 | |||
Plant, property and equipment, net | 0 | 0 | |||
Total Assets | (27,816) | (27,172) | |||
Short-term debt (including current maturities of long-term debt) | |||||
Short-term debt — non-affiliated | 0 | 0 | |||
Short-term debt — affiliated | (470) | (556) | |||
Accounts payable | (115) | (89) | |||
Accrued taxes | 0 | 0 | |||
Other | (4) | (3) | |||
Total current liabilities | (589) | (648) | |||
Long-term debt — non-affiliated | 0 | 0 | |||
Long-term debt — affiliated | (24,464) | (23,877) | |||
Deferred income taxes | 0 | 0 | |||
Pension and postretirement benefits and other liabilities | 0 | 0 | |||
Commitments and contingencies | |||||
Total liabilities | (25,053) | (24,525) | |||
Redeemable noncontrolling interests | 0 | 0 | |||
Tenneco Inc. shareholders’ equity | (2,763) | (2,647) | |||
Noncontrolling interests | 0 | 0 | |||
Total equity | (2,763) | (2,647) | |||
Total liabilities, redeemable noncontrolling interests and equity | (27,816) | (27,172) | |||
Guarantor Subsidiaries | |||||
Current assets: | |||||
Cash and cash equivalents | 5 | 7 | |||
Restricted cash | 0 | ||||
Receivables, net | 465 | 402 | |||
Inventories | 387 | 383 | |||
Prepayments and other | 115 | 99 | |||
Total current assets | 972 | 891 | |||
Other assets: | |||||
Investment in affiliated companies | 1,417 | 1,389 | |||
Notes and advances receivable from affiliates | 792 | 791 | |||
Long-term receivables, net | 9 | 8 | |||
Goodwill | 22 | 22 | |||
Intangibles, net | 5 | 5 | |||
Deferred income taxes | 162 | 161 | |||
Other | 66 | 66 | |||
Total other assets | 2,473 | 2,442 | |||
Plant, property, and equipment, at cost | 1,512 | 1,478 | |||
Less — Accumulated depreciation and amortization | (950) | (934) | |||
Plant, property and equipment, net | 562 | 544 | |||
Total Assets | 4,007 | 3,877 | |||
Short-term debt (including current maturities of long-term debt) | |||||
Short-term debt — non-affiliated | 0 | 0 | |||
Short-term debt — affiliated | 316 | 408 | |||
Accounts payable | 713 | 562 | |||
Accrued taxes | 7 | 8 | |||
Other | 202 | 203 | |||
Total current liabilities | 1,238 | 1,181 | |||
Long-term debt — non-affiliated | 694 | 632 | |||
Long-term debt — affiliated | 1,092 | 1,093 | |||
Deferred income taxes | 0 | 0 | |||
Pension and postretirement benefits and other liabilities | 290 | 296 | |||
Commitments and contingencies | |||||
Total liabilities | 3,314 | 3,202 | |||
Redeemable noncontrolling interests | 0 | 0 | |||
Tenneco Inc. shareholders’ equity | 693 | 675 | |||
Noncontrolling interests | 0 | 0 | |||
Total equity | 693 | 675 | |||
Total liabilities, redeemable noncontrolling interests and equity | 4,007 | 3,877 | |||
Nonguarantor Subsidiaries | |||||
Current assets: | |||||
Cash and cash equivalents | 283 | 308 | |||
Restricted cash | 2 | 3 | |||
Receivables, net | 1,648 | 1,567 | |||
Inventories | 524 | 486 | |||
Prepayments and other | 225 | 192 | |||
Total current assets | 2,682 | 2,556 | |||
Other assets: | |||||
Investment in affiliated companies | 0 | 0 | |||
Notes and advances receivable from affiliates | 19,712 | 19,119 | |||
Long-term receivables, net | 1 | 1 | |||
Goodwill | 27 | 27 | |||
Intangibles, net | 17 | 17 | |||
Deferred income taxes | 44 | 43 | |||
Other | 88 | 78 | |||
Total other assets | 19,889 | 19,285 | |||
Plant, property, and equipment, at cost | 2,599 | 2,530 | |||
Less — Accumulated depreciation and amortization | (1,501) | (1,459) | |||
Plant, property and equipment, net | 1,098 | 1,071 | |||
Total Assets | 23,669 | 22,912 | |||
Short-term debt (including current maturities of long-term debt) | |||||
Short-term debt — non-affiliated | 49 | 83 | |||
Short-term debt — affiliated | 154 | 148 | |||
Accounts payable | 1,310 | 1,232 | |||
Accrued taxes | 36 | 37 | |||
Other | 222 | 221 | |||
Total current liabilities | 1,771 | 1,721 | |||
Long-term debt — non-affiliated | 11 | 12 | |||
Long-term debt — affiliated | 19,570 | 18,981 | |||
Deferred income taxes | 12 | 11 | |||
Pension and postretirement benefits and other liabilities | 125 | 127 | |||
Commitments and contingencies | |||||
Total liabilities | 21,489 | 20,852 | |||
Redeemable noncontrolling interests | 50 | 42 | |||
Tenneco Inc. shareholders’ equity | 2,070 | 1,972 | |||
Noncontrolling interests | 60 | 46 | |||
Total equity | 2,130 | 2,018 | |||
Total liabilities, redeemable noncontrolling interests and equity | 23,669 | 22,912 | |||
Tenneco Inc | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | 0 | |||
Restricted cash | 0 | 0 | |||
Receivables, net | 0 | 0 | |||
Inventories | 0 | 0 | |||
Prepayments and other | 0 | 0 | |||
Total current assets | 0 | 0 | |||
Other assets: | |||||
Investment in affiliated companies | 1,346 | 1,258 | |||
Notes and advances receivable from affiliates | 3,960 | 3,967 | |||
Long-term receivables, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Intangibles, net | 0 | 0 | |||
Deferred income taxes | 0 | ||||
Other | 0 | 0 | |||
Total other assets | 5,306 | 5,225 | |||
Plant, property, and equipment, at cost | 0 | 0 | |||
Less — Accumulated depreciation and amortization | 0 | 0 | |||
Plant, property and equipment, net | 0 | 0 | |||
Total Assets | 5,306 | 5,225 | |||
Short-term debt (including current maturities of long-term debt) | |||||
Short-term debt — non-affiliated | 15 | 0 | |||
Short-term debt — affiliated | 0 | 0 | |||
Accounts payable | 0 | 0 | |||
Accrued taxes | 0 | 0 | |||
Other | 9 | 12 | |||
Total current liabilities | 24 | 12 | |||
Long-term debt — non-affiliated | 715 | 714 | |||
Long-term debt — affiliated | 3,802 | 3,803 | |||
Deferred income taxes | 0 | 0 | |||
Pension and postretirement benefits and other liabilities | 0 | 0 | |||
Commitments and contingencies | |||||
Total liabilities | 4,541 | 4,529 | |||
Redeemable noncontrolling interests | 0 | 0 | |||
Tenneco Inc. shareholders’ equity | 765 | 696 | |||
Noncontrolling interests | 0 | 0 | |||
Total equity | 765 | 696 | |||
Total liabilities, redeemable noncontrolling interests and equity | $ 5,306 | $ 5,225 |
Supplemental Guarantor Conden62
Supplemental Guarantor Condensed Consolidating Financial Statements - Statement of Cash Flows (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Activities | ||||
Net cash provided (used) by operating activities | $ 0 | $ (31) | ||
Investing Activities | ||||
Proceeds from sale of assets | 2 | 3 | ||
Cash payments for plant, property, and equipment | (84) | (103) | ||
Cash payments for software related intangible assets | (5) | (6) | ||
Proceeds from deferred purchase price of factored receivables | 34 | 22 | ||
Net cash used by investing activities | (53) | (84) | ||
Financing Activities | ||||
Repurchase of common shares | (2) | (3) | ||
Cash dividends | $ (13) | $ (13) | (13) | (13) |
Retirement of long-term debt | (6) | (6) | ||
Purchase of common stock under the share repurchase program | 0 | (16) | ||
Net increase (decrease) in bank overdrafts | (4) | 3 | ||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivables | 77 | 117 | ||
Net increase (decrease) in short-term borrowings secured by accounts receivable | (30) | 20 | ||
Intercompany dividend payments and net increase (decrease) in intercompany obligations | 0 | 0 | ||
Net cash provided (used) by financing activities | 22 | 102 | ||
Effect of foreign exchange rate changes on cash and cash equivalents | 3 | 8 | ||
Decrease in cash, cash equivalents and restricted cash | (28) | (5) | ||
Cash, cash equivalents and restricted cash, January 1 | 318 | 349 | ||
Cash, cash equivalents and restricted cash, March 31 (Note) | 290 | 344 | 290 | 344 |
Reclass and Elims | ||||
Operating Activities | ||||
Net cash provided (used) by operating activities | 0 | |||
Investing Activities | ||||
Proceeds from sale of assets | 0 | 0 | ||
Cash payments for plant, property, and equipment | 0 | 0 | ||
Cash payments for software related intangible assets | 0 | 0 | ||
Proceeds from deferred purchase price of factored receivables | 0 | 0 | ||
Net cash used by investing activities | 0 | 0 | ||
Financing Activities | ||||
Repurchase of common shares | 0 | 0 | ||
Cash dividends | 0 | 0 | ||
Retirement of long-term debt | 0 | 0 | ||
Purchase of common stock under the share repurchase program | 0 | |||
Net increase (decrease) in bank overdrafts | 0 | 0 | ||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivables | 0 | 0 | ||
Net increase (decrease) in short-term borrowings secured by accounts receivable | 0 | 0 | ||
Intercompany dividend payments and net increase (decrease) in intercompany obligations | 0 | |||
Net cash provided (used) by financing activities | 0 | 0 | ||
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | 0 | ||
Decrease in cash, cash equivalents and restricted cash | 0 | 0 | ||
Cash, cash equivalents and restricted cash, January 1 | 0 | 0 | ||
Cash, cash equivalents and restricted cash, March 31 (Note) | 0 | 0 | 0 | 0 |
Guarantor Subsidiaries | ||||
Operating Activities | ||||
Net cash provided (used) by operating activities | (27) | (41) | ||
Investing Activities | ||||
Proceeds from sale of assets | 0 | 2 | ||
Cash payments for plant, property, and equipment | (38) | (42) | ||
Cash payments for software related intangible assets | (2) | (2) | ||
Proceeds from deferred purchase price of factored receivables | 0 | 0 | ||
Net cash used by investing activities | (40) | (42) | ||
Financing Activities | ||||
Repurchase of common shares | 0 | 0 | ||
Cash dividends | 0 | 0 | ||
Retirement of long-term debt | (5) | 0 | ||
Purchase of common stock under the share repurchase program | 0 | |||
Net increase (decrease) in bank overdrafts | 0 | 0 | ||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivables | 97 | 0 | ||
Net increase (decrease) in short-term borrowings secured by accounts receivable | (30) | 0 | ||
Intercompany dividend payments and net increase (decrease) in intercompany obligations | 3 | 80 | ||
Net cash provided (used) by financing activities | 65 | 80 | ||
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | 0 | ||
Decrease in cash, cash equivalents and restricted cash | (2) | (3) | ||
Cash, cash equivalents and restricted cash, January 1 | 7 | 9 | ||
Cash, cash equivalents and restricted cash, March 31 (Note) | 5 | 6 | 5 | 6 |
Non-Guarantor Subsidiaries | ||||
Operating Activities | ||||
Net cash provided (used) by operating activities | 32 | 24 | ||
Investing Activities | ||||
Proceeds from sale of assets | 2 | 1 | ||
Cash payments for plant, property, and equipment | (46) | (61) | ||
Cash payments for software related intangible assets | (3) | (4) | ||
Proceeds from deferred purchase price of factored receivables | 34 | 22 | ||
Net cash used by investing activities | (13) | (42) | ||
Financing Activities | ||||
Repurchase of common shares | 0 | 0 | ||
Cash dividends | 0 | 0 | ||
Retirement of long-term debt | (1) | 0 | ||
Purchase of common stock under the share repurchase program | 0 | |||
Net increase (decrease) in bank overdrafts | (4) | 3 | ||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivables | (35) | 20 | ||
Net increase (decrease) in short-term borrowings secured by accounts receivable | 0 | 0 | ||
Intercompany dividend payments and net increase (decrease) in intercompany obligations | (7) | (15) | ||
Net cash provided (used) by financing activities | (47) | 8 | ||
Effect of foreign exchange rate changes on cash and cash equivalents | 3 | 8 | ||
Decrease in cash, cash equivalents and restricted cash | (25) | (2) | ||
Cash, cash equivalents and restricted cash, January 1 | 311 | 340 | ||
Cash, cash equivalents and restricted cash, March 31 (Note) | 286 | 338 | 286 | 338 |
Tenneco Inc | ||||
Operating Activities | ||||
Net cash provided (used) by operating activities | (5) | (14) | ||
Investing Activities | ||||
Proceeds from sale of assets | 0 | 0 | ||
Cash payments for plant, property, and equipment | 0 | 0 | ||
Cash payments for software related intangible assets | 0 | 0 | ||
Proceeds from deferred purchase price of factored receivables | 0 | 0 | ||
Net cash used by investing activities | 0 | 0 | ||
Financing Activities | ||||
Repurchase of common shares | (2) | (3) | ||
Cash dividends | (13) | (13) | ||
Retirement of long-term debt | 0 | (6) | ||
Purchase of common stock under the share repurchase program | (16) | |||
Net increase (decrease) in bank overdrafts | 0 | 0 | ||
Net increase (decrease) in revolver borrowings and short-term debt excluding current maturities of long-term debt and short-term borrowings secured by accounts receivables | 15 | 97 | ||
Net increase (decrease) in short-term borrowings secured by accounts receivable | 0 | 20 | ||
Intercompany dividend payments and net increase (decrease) in intercompany obligations | 4 | (65) | ||
Net cash provided (used) by financing activities | 4 | 14 | ||
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | 0 | ||
Decrease in cash, cash equivalents and restricted cash | (1) | 0 | ||
Cash, cash equivalents and restricted cash, January 1 | 0 | 0 | ||
Cash, cash equivalents and restricted cash, March 31 (Note) | $ (1) | $ 0 | $ (1) | $ 0 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net sales and operating revenues | $ 2,574 | $ 2,292 | ||
Cost of sales (exclusive of depreciation and amortization shown below) | 2,198 | 1,929 | ||
Inventory | $ 864 | 911 | $ 869 | |
Prepayments and other (including contract assets) | 297 | 340 | 291 | |
Retained earnings (accumulated deficit) | (947) | (902) | (946) | |
Increase/(decrease) in inventories | (34) | (45) | ||
Increase/(decrease) in prepayments and other current assets | (45) | $ (57) | ||
Calculated under Revenue Guidance in Effect before Adjustments | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net sales and operating revenues | 2,576 | |||
Cost of sales (exclusive of depreciation and amortization shown below) | 2,200 | |||
Inventory | 919 | 869 | ||
Prepayments and other (including contract assets) | 331 | 291 | ||
Retained earnings (accumulated deficit) | (903) | $ (946) | ||
Increase/(decrease) in inventories | (36) | |||
Increase/(decrease) in prepayments and other current assets | (43) | |||
Adjustments Due to ASU 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect on retained earnings | 1 | 1 | ||
Adjustments Due to ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Adjustments | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net sales and operating revenues | 2 | |||
Cost of sales (exclusive of depreciation and amortization shown below) | 2 | |||
Inventory | (5) | (8) | ||
Prepayments and other (including contract assets) | 6 | 9 | ||
Retained earnings (accumulated deficit) | 1 | 1 | ||
Increase/(decrease) in inventories | 2 | |||
Increase/(decrease) in prepayments and other current assets | (2) | |||
Adjustments Due to ASU 2016-16 (a) | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect on retained earnings | $ 2 | |||
Inventory | 0 | |||
Prepayments and other (including contract assets) | 0 | |||
Retained earnings (accumulated deficit) | $ (2) |
Revenue - Segment Revenue (Deta
Revenue - Segment Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 2,574 | |
Substrate Sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenue recognized | 652 | $ 547 |
Revenues | 652 | |
Value-Add Revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,922 | |
Clean Air Division | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,756 | |
Clean Air Division | Substrate Sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 652 | |
Clean Air Division | Value-Add Revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,104 | |
Ride Performance Division | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 513 | |
Ride Performance Division | Substrate Sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | |
Ride Performance Division | Value-Add Revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 513 | |
Aftermarket | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 305 | |
Aftermarket | Substrate Sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | |
Aftermarket | Value-Add Revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 305 | |
Transferred over Time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue recognized | $ 2 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ / shares in Units, $ in Millions | Apr. 10, 2018USD ($)$ / sharesshares |
Federal-Mogul | |
Subsequent Event [Line Items] | |
Cash consideration | $ | $ 800 |
Common Stock | Federal-Mogul | |
Subsequent Event [Line Items] | |
Number of shares issued (in shares) | shares | 29,444,846 |
Class A Voting Stock | Common Stock | Federal-Mogul | |
Subsequent Event [Line Items] | |
Par value (in dollars per share) | $ / shares | $ 0.01 |
Percentage of shares outstanding | 9.90% |
Class B Non-Voting | Common Stock | Federal-Mogul | |
Subsequent Event [Line Items] | |
Par value (in dollars per share) | $ / shares | $ 0.01 |
Offering | Common Stock | |
Subsequent Event [Line Items] | |
Maximum number of shares issued in stock transaction (in shares) | shares | 7,315,490 |